eLaws | Code of Federal Regulations | United States Code |
 All Courts
 State Courts
 Court of Appeals of Texas
 2000-03

major-help-center-inc-and-robert-berz-v-ivy-crews-elliott-pc-guy ( 2000 )


Menu:

  • TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN





    NO. 03-99-00285-CV

    Major Help Center, Inc. and Robert Berz, Appellants


    v.



    Ivy, Crews & Elliott, P.C.; Guy C. Fisher, Esq.; Earl K. Straight, Esq.; Richard T. Jones, Esq.; James P. Borne, Esq.; and McGraw, Brinkley & Irwin, Appellees





    FROM THE COUNTY COURT AT LAW NO. 1 OF TRAVIS COUNTY

    NO. 241,712, HONORABLE ORLINDA NARANJO, JUDGE PRESIDING

    Major Help Center, Inc. is a California corporation that sold television advertising to six lawyers or small law firms in Austin. When the dissatisfied Lawyers (1) sued Major Help and its Texas representative Robert Berz for violations of the Deceptive Trade Practices Act (DTPA), the defendants moved to dismiss the cause, citing a forum selection clause in their contract with the Lawyers which designated Los Angeles, California as the agreed forum. The trial court denied the motion to dismiss, and a jury found Major Help and Berz each liable for deceptive trade practices and attorneys' fees. On appeal, Major Help contends that the trial court erred in refusing to apply the forum selection clause to this dispute and that the evidence was legally or factually insufficient to support the DTPA violations, the alleged double recovery from each defendant, and the award of attorneys' fees. We will affirm the trial court's judgment.

    FACTUAL AND PROCEDURAL BACKGROUND

    In April and May of 1998, Major Help contacted each of the Lawyers for the purpose of selling them television advertising. According to Major Help's initial representations, the advertising would be a cooperative venture among twelve local attorneys or law firms. (2) Each attorney or firm would contribute a sum certain; in return, Major Help would prepare a television advertisement featuring each Lawyer's name and would purchase air time to run the ads.

    After the initial telephone contact, Berz visited the Lawyers in person and presented a video depicting the television advertisement that would be broadcast. Major Help proposed to add the names of each participating lawyer to the advertisement once they had reached an agreement. According to Berz's representations, the content of the television advertisement had been approved by the State Bar of Texas. Berz also represented to each of the Lawyers that the advertisements would air according to a particular schedule and that Major Help would spend a certain amount of money to purchase the air time.

    The advertisement included a phone number that would be answered by Major Help. Berz represented that Major Help would forward all incoming calls to the participating lawyers on a rotating basis. Major Help was not to screen the calls; rather, it represented that it would automatically forward them with a recording identifying the referral as a "Major Help Center call."

    Each of the named Lawyers agreed to participate in the cooperative advertising arrangement. Each deposited a sum of money with Major Help and agreed to deposit additional installments throughout the course of the agreement. Subsequently, each of the Lawyers discovered that Major Help had misrepresented their proposed arrangements in several respects: the television advertisement had not been approved by the State Bar of Texas; the advertisements were not identical to the one they had previewed; the ads did not air according to the promised schedule; and Major Help screened some calls rather than automatically forwarding them as it had represented.

    After Major Help failed to respond to the Lawyers' demand for a refund of the funds they had paid, the Lawyers filed suit alleging breach of contract and violations of the Deceptive Trade Practices Act. In response, Major Help filed a special appearance and a motion to dismiss based on the forum selection clause in its agreement with the Lawyers (the Agreement). (3) The Lawyers then dismissed their breach-of-contract claim and proceeded solely on their DTPA claim. The trial court denied the special appearance and the motion to dismiss, and the parties tried the case to a jury.

    At the close of evidence, Major Help moved for an instructed verdict, arguing that the only basis for the Lawyers' DTPA claim was breach of contract, which alone does not constitute a DTPA violation. The court denied the motion for an instructed verdict and submitted the issues to the jury. The jury found Major Help and its representative liable for DTPA violations and assessed $38,250 in actual damages and $18,000 in attorneys' fees against each of the two defendants.



    DISCUSSION

    On appeal, Major Help (4) first argues that the trial court erred in denying the motion to dismiss because the forum selection clause was valid and should have been applied in this case. Second, Major Help asserts that the Lawyers presented no evidence or insufficient evidence of DTPA violations and that the written contract negated any reliance by the Lawyers on the alleged deceptive misrepresentations. Third, Major Help alleges that the jury's award of damages against each of the two defendants resulted in a double recovery for the same act and that the trial court should have found Berz and Major Help jointly and severally liable. Finally, Major Help contends that the Lawyers failed to establish that the attorneys' fees they sought were reasonable and necessary.



    I. Forum Selection Clause

    Forum selection clauses are valid in Texas. See Busse v. Pacific Cattle Feeding Fund No. 1, Ltd., 896 S.W.2d 807, 812 (Tex. App.--Texarkana 1995, writ denied). "When a party contractually consents to the jurisdiction of a particular state, that state has jurisdiction over that party as long as the agreed-to state will enforce the type of forum selection clause signed by the parties." Accelerated Christian Educ., Inc. v. Oracle Corp., 925 S.W.2d 66, 72 (Tex. App.--Dallas 1996, no writ). However, forum selection clauses will not apply if construction of the rights and liabilities of the parties under the contract is not involved. See Busse, 896 S.W.2d at 813. Thus, in determining whether the forum selection clause applies in this case, we must review the nature of the Lawyers' claims to determine whether they could stand alone or are so interwoven with the Agreement that they could not be maintained without reference to the Agreement. See Valero Energy Corp. v. Wagner & Brown, II, 777 S.W.2d 564, 566 (Tex. App.--El Paso 1989, writ denied).

    Major Help contends that the Lawyers' DTPA claim specifically implicates the written contract terms. For support, Major Help relies primarily on Texas Source Group, Inc. v. CCH, Inc., 967 F. Supp. 234 (S.D. Tex. 1997), and Accelerated Christian, 925 S.W.2d at 68-69. In Accelerated Christian, the appellate court affirmed the trial court's dismissal of contractual, tort, and DTPA claims, reasoning that "pleading alternate noncontractual theories of recovery will not alone avoid a forum selection clause if those alternate claims arise out of the contractual relations and implicate the contract's terms." Accelerated Christian, 925 S.W.2d at 72. Similarly, the federal district court in Texas Source Group enforced a forum selection clause and dismissed the plaintiffs' contractual and noncontractual claims, holding that the claims arose out of the parties' contractual relationship and implicated the agreement. See Texas Source Group, 925 F. Supp. at 238.

    The Lawyers counter that their DTPA suit did not arise under the Agreement and therefore the forum selection clause does not apply. Citing Busse, the Lawyers argue that where the wrongs arise from misrepresentations inducing a party to execute the contract and not from breach of the contract, the remedies and limitations specified by the contract do not apply. See Busse, 896 S.W.2d at 813.

    Texas Source Group, Accelerated Christian, and Busse all turned on the issue of whether the claims pleaded implicated the terms of the contract, thereby triggering the forum selection clause. Accelerated Christian and Texas Source Group included contractual and noncontractual claims that necessarily implicated the terms of the contract. See Accelerated Christian, 925 S.W.2d at 72; Texas Source Group, 967 F. Supp. at 237-38. Indeed, in both cases the noncontractual claims were premised on the defendant's failure to comply with a contractual duty--a claim that could not have been maintained without reference to the terms of the contract. See Accelerated Christian, 925 S.W.2d at 69; Texas Source Group, 967 F. Supp. at 237-38. Busse, on the other hand, involved misrepresentations and fraud in the inducement to sign a contract and thus did not implicate the terms of the contract. See Busse, 896 S.W.2d at 813.

    In this case, the Lawyers assert a single noncontractual cause of action based on alleged misrepresentations made by Major Help prior to the date the parties signed the Agreement. The Lawyers do not rely on the terms of the Agreement as the basis for their claims. They do not attempt to enforce duties or obligations arising under the Agreement. These facts are analogous to those in the Busse decision, which we find persuasive. Consequently, we hold that the Lawyers' DTPA claim is independent of the Agreement, and the forum selection clause does not apply. To the extent Accelerated Christian or Texas Source Group can be read to compel a different conclusion, we decline to follow them. We overrule Major Help's first issue. (5)



    II. DTPA Violations

    In its second issue, Major Help asserts that the Lawyers presented no evidence or insufficient evidence of DTPA violations. Major Help also contends that the Lawyers failed to prove reliance on Major Help's representations because the written agreement between the parties negates any reliance on statements made prior to the signing of the Agreement.

    When a case is tried to a jury, factual-insufficiency complaints must be preserved through a motion for new trial. See Tex. R. Civ. P. 324(b); Cecil v. Smith, 804 S.W.2d 509, 510 (Tex. 1991). Major Help did not file a motion for new trial and thus has failed to preserve its factual-insufficiency issues.

    No-evidence points must be preserved through one of the following procedural steps in the trial court: (1) a motion for instructed verdict, (2) a motion for judgment notwithstanding the verdict, (3) an objection to the submission of the issue to the jury, (4) a motion to disregard the jury's answer to a vital fact issue, or, (5) a motion for new trial. See Steves Sash & Door Co. v. Ceco Corp., 751 S.W.2d 473, 477 (Tex. 1988). Major Help filed a motion for instructed verdict asserting that a breach of contract is not a deceptive trade practice violation, citing Rocky Mountain Helicopters, Inc. v. Lubbock County Hosp. Dist., 987 S.W.2d 50 (Tex. 1998). The Lawyers claim that the stated basis for the instructed verdict was not sufficiently specific to preserve Major Help's no-evidence issues. Although Major Help's motion for instructed verdict did not specifically address the no-evidence issues that Major Help now advances on appeal, it did generally draw the trial court's attention to a lack of evidence to support the DTPA violations. In the interest of justice, we will address Major Help's no-evidence claims regarding the DTPA violations.

    In deciding a no-evidence point, we must consider only the evidence and inferences tending to support the finding of the trier of fact and disregard all evidence and inferences to the contrary. See Burroughs Wellcome Co. v. Crye, 907 S.W.2d 497, 499 (Tex. 1995); Best v. Ryan Auto Group, Inc., 786 S.W.2d 670, 671 (Tex. 1990). We will uphold the finding if more than a scintilla of evidence supports it. See Crye, 907 S.W.2d at 499; Seideneck v. Cal Bayreuther Assocs., 451 S.W.2d 752, 755 (Tex. 1970); In re King's Estate, 244 S.W.2d 660, 661 (Tex. 1951). The evidence supporting a finding amounts to more than a scintilla if reasonable minds could arrive at the finding given the facts proved in the particular case. See Crye, 907 S.W.2d at 499; Transportation Ins. Co. v. Moriel , 879 S.W.2d 10, 25 (Tex. 1994); see also William Powers, Jr. & Jack Ratliff, Another Look at "No Evidence" and "Insufficient Evidence," 69 Tex. L. Rev. 515, 522 (1991); Michol O'Connor, Appealing Jury Findings, 12 Hous. L. Rev. 65 (1974).

    We first consider Major Help's argument that the written agreement between the parties negated any evidence of reliance. Specifically, Major Help emphasizes the clause in the Agreement that places on the Lawyers the sole responsibility for complying with all applicable marketing and advertising laws, rules, and regulations pertaining to the Lawyers' profession. This clause, according to Major Help, should have alerted the Lawyers of their duty to obtain approval from the State Bar of Texas for the advertisements and negated any reliance they may have placed on Major Help's representations that the ads had already been approved. We disagree.

    The Lawyers' burden was to prove that Major Help engaged in false, misleading, or deceptive acts that were the producing cause of the Lawyers' injuries. See Church & Dwight Co. v. Huey, 961 S.W.2d 560, 567 (Tex. App.--San Antonio 1997, pet. denied). The Lawyers were not required to prove reliance before they could recover under the DTPA. See Weitzel v. Barnes, 691 S.W.2d 598, 600 (Tex. 1985). Furthermore, although the Lawyers were responsible under the Agreement for complying with their professional rules regarding advertising, this fact does not negate Major Help's representations that the proposed broadcast had been examined and approved by the State Bar. The Lawyers' complaint is that their individual responsibilities would have been easier if the proposed broadcast had been preapproved by the State Bar of Texas as represented. The record reflects sufficient evidence to conclude that preapproval of the advertisements induced the Lawyers to enter the Agreement.

    Major Help also argues that the Lawyers should not have relied on the proposed broadcast or advertising schedule because they were simply proposals and depended on the participation of twelve lawyers; only six lawyers eventually signed the Agreement. As stated above, the Lawyers were not required to prove reliance in order to recover under the DTPA. Moreover, sufficient evidence exists to support a finding that Major Help represented to the Lawyers that the completed television advertisement would be identical to the proposed advertisement and that Major Help would obtain the requisite number of participants. Even if the Lawyers later learned that only six attorneys would participate in the cooperative advertising venture, it was Major Help's initial representations made prior to the Agreement that induced the Lawyers to enter into the Agreement and forms the basis for their DTPA claim.

    Major Help further contends that the Lawyers presented no evidence that the television advertisements violated the State Bar of Texas rules, that Major Help failed to expend a certain amount of funds for the purchase of air time, that Major Help modified the advertising schedule, and that Major Help improperly screened phone calls. We disagree.

    First, it was not necessary for the Lawyers to prove that the advertisement violated State Bar rules or that Major Help's method of answering phone calls was improper in order to prevail on their DTPA claim. Rather, the Lawyers' claim is that Major Help engaged in false, misleading, or deceptive acts that induced the Lawyers to enter the Agreement. We hold that more than a scintilla of evidence exists to support the Lawyers' claims, including misrepresentations regarding the manner in which Major Help would answer phone calls, alleged State Bar approval of the advertisements, the amount of funds Major Help would expend on the purchase of air time, and the advertising schedule it would run. Because we find legally sufficient evidence that Major Help violated the DTPA by several misrepresentations, we overrule appellant's second issue.



    III. Double Recovery and Unreasonable Attorneys' Fees

    In its third issue, Major Help argues that the evidence does not support recovery from both Major Help and its representative Berz and that assessing damages against both amounts to a double recovery for the same injury. Major Help requests that this Court reform the judgment to clarify that Major Help and Berz are jointly and severally liable.

    We read Major Help's third issue as a challenge to the measure of damages submitted by the trial court and as a complaint of excessiveness of the damages. However, a review of the record reveals that Major Help failed to preserve this error for appeal. Major Help failed to object to the jury charge on the alleged improper measure of damages, and although Major Help submitted a motion for instructed verdict, that motion did not address the double recovery of damages. See Tex. R. Civ. P. 274, 268; see also United Postage Corp. v. Kammeyer, 581 S.W.2d 716, 722 (Tex. Civ. App.--Dallas 1979, no writ). Major Help also failed to file a motion for new trial to preserve its excessive-damages complaint. See Tex. R. Civ. P. 324(b)(4). In no way was the trial court given an opportunity to address or correct the alleged error.

    In its fourth issue, Major Help argues that the Lawyers presented no competent evidence to establish that their attorneys' fees were reasonable and necessary. Again, Major Help has failed to preserve this error for appeal. Major Help's motion for instructed verdict did not address this alleged lack of evidence. See Tex. R. Civ. P. 268; Steves Sash & Door, 751 S.W.2d at 477. Nor did Major Help make any other attempt to preserve this issue by bringing it to the trial court's attention. Therefore, we hold that issues three and four were not preserved for appeal.

    CONCLUSION

    Because we determine that the forum selection clause did not apply to the Lawyers' DTPA claim, we hold the trial court did not err in denying Major Help's motion to dismiss. We further hold that the evidence is legally sufficient to support a violation of the DTPA and that Major Help failed to preserve its complaints about double recovery and attorneys' fees for appeal. We therefore affirm the trial court's judgment.





      

    Bea Ann Smith, Justice

    Before Chief Justice Aboussie, Justices Kidd and B. A. Smith

    Affirmed

    Filed: March 23, 2000

    Do Not Publish

    1. Appellees include Ivy, Crews & Elliot, P.C.; Guy C. Fisher, Esq.; Earl K. Straight, Esq.; Richard T. Jones, Esq.; James P. Borne, Esq.; and McGraw, Brinkley & Irwin. For convenience, we will refer to appellees as the Lawyers.

    2. Ultimately only six lawyers or law firms participated in the advertising arrangement.

    3. The forum selection clause provided: "Any action brought by either party under this agreement shall be instituted only in a court in the County of Los Angeles in the State of California having the appropriate monetary limits of jurisdiction."

    4. We will refer to the appellants collectively as Major Help because their claims on appeal are identical, except as addressed in note 5.

    5. Since we hold that the trial court was correct in deciding not to apply the forum selection clause, we reject the argument that at least the action against Berz should be dismissed because as a mere participant in the transaction, he derives some added benefit from the forum selection clause.

    Lawyers to enter the Agreement. We hold that more than a scintilla of evidence exists to support the Lawyers' claims, including misrepresentations regarding the manner in which Major Help would answer phone calls, alleged State Bar approval of the advertisements, the amount of funds Major Help would expend on the purchase of air time, and the advertising schedule it would run. Because we find legally sufficient evidence that Major Help violated the DTPA by several misrepresentations, we overrule appellant's second issue.



    III. Double Recovery and Unreasonable Attorneys' Fees

    In its third issue, Major Help argues that the evidence does not support recovery from both Major Help and its representative Berz and that assessing damages against both amounts to a double recovery for