Daniel Wayne Steele and Robert Dwayne Steele v. Tyson Goddard and Mylea Goddard ( 2013 )

IN THE
TENTH COURT OF APPEALS
No. 10-12-00111-CV
DANIEL WAYNE STEELE
AND ROBERT DWAYNE STEELE,
Appellants
v.
TYSON GODDARD
AND MYLEA GODDARD,
Appellees
From the 13th District Court
Navarro County, Texas
Trial Court No. 09-18516-CV
MEMORANDUM OPINION
In this appeal, appellants, Daniel Wayne Steele and Robert Dwayne Steele,
complain about a jury verdict in a case arising from the sale of real property. In five
issues, appellants challenge various parts of the final judgment. We affirm, in part, and
reverse and render, in part. We also suggest a remittitur of $77,019.94, plus $7,860.25 in
pre-judgment interest, and modify the judgment to reflect the Goddards’ election of
recovery under the Texas Deceptive Trade Practices Act (“DTPA”).
I. FACTUAL BACKGROUND
Daniel owned a house located at 1004 Hidden Hills in Corsicana, Texas. For over
twenty years, Daniel rented this house to different people, including family members
Gale and Cathy Ramm from 2004 to 2007. However, due to Daniel’s advancing age and
deteriorating health, Robert and his sister suggested that Daniel sell the house.1 To help
facilitate the sale of the house, Robert gave the realtor his e-mail address and fax
numbers when the realtor requested contact information for the seller’s side of the
transaction.
Thereafter, the realtor provided Daniel with a Seller’s Disclosure Notice to be
completed prior to listing the house. See TEX. PROP. CODE ANN. § 5.008 (West Supp.
2012) (requiring the seller of a residential property to deliver to the potential buyer a
seller’s disclosure notice describing the character, improvements, and condition of the
property). Robert noted several times in his testimony that he filled out the disclosure
form based on Daniel’s answers to the questions. However, the realtor, Julie Teel,
testified that she completed the disclosure form that was submitted as a trial exhibit
with Daniel’s assistance. Robert later explained that he had filled out another
disclosure form, though he did not know what happened to that version. There is no
1 At the time of trial, Daniel was eighty years old. In addition, the record establishes that Robert
is Daniel’s son.
Steele v. Goddard Page 2
evidence in the record establishing that the disclosure form allegedly filled out by
Robert was provided to appellees, Tyson and Mylea Goddard.
In any event, the disclosure form, a standard form promulgated by the Texas
Association of Realtors, asked, among other things, whether Daniel was aware that the
house had wood rot, an active infestation of termites or other wood-destroying insects,
been previously treated for termites or wood-destroying insects, or had damage caused
by termites or wood-destroying insects. To each of these questions, Daniel answered,
“no.”
Subsequently, the Goddards, who were first-time homebuyers, made an offer to
purchase the house for $78,500. As part of their contract with Daniel, the Goddards
paid $25.00 for a fourteen-day termination option, which was to be credited to the sales
price at closing. During this fourteen-day period, the Goddards enlisted the services of
Don Harvey to conduct an inspection of the house and Hudine Sykes to prepare a
wood-destroying insect report. Sykes did a visual inspection of the interior and exterior
of the house and did not find an infestation of wood-destroying insects. However,
Sykes noted that the soil grade was too high—a conducive condition for wood-
destroying insects. Harvey, on the other hand, inspected the structural and electrical
aspects of the house, as well as the heating, venting, and air-conditioning systems,
appliances, and plumbing. Like Sykes, Harvey also noted that the front slab of the
house “is at, or below grade,” which was an item in need of repair. As a result of the
inspections, the Goddards requested that the Steeles trench around the house. Teel
informed Robert about the need for trenching, and Robert ensured that the trenching
Steele v. Goddard Page 3
was completed. No termites or mud tubes were found after the trenching was
completed.
When asked about his knowledge of any problems with the house prior to the
sale, Tyson noted that:
[W]hen we actually did the initial walk through and it kind of caught my
eye was the drywall. But before that it was kind of a wet day when we
went to look at it. It was like real misty, mildewy [sic], you know, out.
And when she unlocked the door, she kind of had to hit it with her
shoulder because it was sticking. And I thought that was odd, but I
figured the door swelled because it was a wooden door. And then once
we walked in I looked to the left and I seen [sic] there was a white patch
there, you know, how do you mess up a 5 foot by 3 foot white patch in the
wall? And that’s when I asked her what it was.
Tyson also stated that there was an area under the living room window that had fresh
sheetrock and had recently been taped and bedded.2 In addition, there was a Plexiglas
panel in place of one of the panes of the living room window.
With regard to repairs done to the house prior to its sale, Robert stated, in his
deposition, that:
When it became evident that [Daniel’s] health was deteriorating and he
was unable to manage the property, I suggested we will sell the house.
When I walked into the house, it was apparent that repairs were needed.
The carpets were destroyed. There were holes in some of the closet doors,
and the hollow doors, and I can’t recall what the kitchen floor was like,
but it looked like it needed repair.
Therefore, Robert hired a worker to “replace the hollowed closet doors that had been
damaged, to repair in the master bedroom in the ceiling some drywall that had water
damage, to replace the kitchen floor, and to repair or replace part of the carpet.”
2 Robert denied being proficient at taping and bedding sheetrock. On the other hand, Daniel
admitted that he has experience doing such tasks.
Steele v. Goddard Page 4
Daniel was also deposed, wherein he stated that wood rot on the exterior siding
of the house was covered with tin. And despite noting in the disclosure form that the
house had not been treated for termites, Daniel testified that he had the house treated
for termites prior to selling it to the Goddards. However, Daniel insisted that he was
unaware of any infestations of termites.
The Goddards were provided with a copy of the completed disclosure form and
eventually closed on the house. Tyson recalled that when he and Mylea first moved
into the house, they noticed the following under a window near the white kick trim:
That was all brand new when we came in there. It was not painted and it
wasn’t wood. It was the new composite, plastic composite trim. And the
wall didn’t have texture on it either. The rest of the house has like a real
rough like texture and like hand troweled and this doesn’t.
Tyson also noted that the house appeared to have been freshly painted, though it had
not been textured. In his testimony, Tyson suggested that the Steeles’ repair work was
designed to cover up damage soon to be discovered.
Within a week of moving in, the Goddards discovered major problems with the
house. After removing a three feet by four feet piece of wood paneling in the kitchen,
the Goddards observed numerous mud tubes used by termites in the walls. The
Goddards subsequently opened up several other walls in the house and discovered
extensive wood rot and termite damage. Numerous photographs admitted into
evidence showed the extensive damage that was lurking behind the walls. Both
inspectors, Harvey and Sykes, testified that they were not allowed to bore into the walls
of the house when they conducted their inspections and that they did not see any
Steele v. Goddard Page 5
termite damage or wood rot based on their visual inspections. Moreover, after the
trenching was completed, no one observed any mud tubes or termites near the house.
According to Mylea, she and Tyson spent $2,500 attempting to remedy the
damage. However, the task proved to be too much. The Goddards later moved to
Iowa, though they continue to make payments on the house. Mylea testified that, at the
date of trial, they had made $24,202.22 in house payments. Regarding the value of the
house, Tyson stated that an investor had offered him $15,000 for the land upon which
the house sits.
II. PROCEDURAL BACKGROUND
On September 17, 2009, the Goddards filed suit in Navarro County against
Daniel, Robert, Harvey, and Sykes, alleging numerous violations of the DTPA. Harvey
and Sykes were later dropped from the lawsuit.3 In their live pleading, their third-
amended original petition, the Goddards asserted that Daniel and Robert: (1) engaged
in fraud by failing to disclose and hiding defects in the house; (2) made false
representations of past or existing material fact for the purpose of inducing the
Goddards into the real-estate contract; (3) breached the real-estate contract; (4) breached
implied warranties of merchantability and habitability associated with the house; and
(5) violated the DTPA. Specifically, with regard to the DTPA, the Goddards alleged
that Daniel and Robert’s conduct was knowing and intentional and that they,
suffered mental anguish in connection with the defects in the home that
was sold to them as their residence and in connection with their inability
3 The trial court’s final judgment indicates that the Goddards settled with Sykes for $10,000.
Steele v. Goddard Page 6
to repair it to an extent that would make it habitable and as a result of the
need to continue to expend funds on the note to keep from being placed in
default and, as a young working couple with small children, having their
credit reputation ruined.
Moreover, the Goddards also requested that the transaction in question be rescinded.
This case was eventually tried to a jury. At the conclusion of the evidence, the
jury determined that: (1) Daniel entered into an agreement with the Goddards to
provide them a house free of wood rot and termite damage in exchange for the
purchase price; (2) Daniel failed to comply with the agreement; (3) Daniel and Robert
knowingly or intentionally engaged in false, misleading, or deceptive acts regarding the
quality of the house that were designed to induce the Goddards into the transaction; (4)
Daniel and Robert’s conduct was unconscionable and was the producing cause of the
Goddards’ damages; (5) Daniel and Robert committed fraud against the Goddards; (6)
Daniel and Robert were negligent and their negligence proximately caused the
Goddards’ damages; (7) Daniel and Robert’s conduct was not excused by waiver; and
(8) Daniel was 40% responsible for the Goddards’ damages, and Robert was 60%
responsible. With regard to damages, the jury awarded the Goddards $77,019.94 based
on the market-value of the house on the date of sale; $24,202.22 for the mortgage
payments made by the Goddards; $2,500 for reasonable and necessary expenses
incurred in attempting to repair the house; $75,000 in attorney’s fees; and $200,000 in
additional damages because the conduct was committed knowingly or intentionally. Of
the $200,000 in additional damages, Daniel was deemed responsible for $80,000 with
Robert responsible for the remainder.
Steele v. Goddard Page 7
On January 13, 2012, the trial court entered its final judgment, adopting the jury’s
findings on liability. Regarding damages, the trial court awarded the Goddards: (1)
$103,722.16 in actual damages, plus an additional $77,019.94, for a total amount of
$180,742.10; (2) $75,000 in attorney’s fees; (3) additional damages of $80,000 against
Daniel; (4) additional damages of $120,000 against Robert; (5) $18,455.72 in pre-
judgment interest at a rate of 5% per annum; and (6) post-judgment interest at a rate of
5% compounded annually. The trial court also allowed the Goddards to rescind the
real-estate contract. For damages not directly apportioned to either Daniel or Robert,
the trial court ordered that each are jointly and severally liable, though Daniel was
deemed responsible for 40% of the damages that were not apportioned. And finally, the
trial court reduced the Goddards’ damages award by $10,000 to account for the
settlement agreement executed with Sykes. In sum, the Goddards were awarded
$464,187.82 in damages in this case.
Thereafter, the Goddards filed a motion to remit the portion of the damages
award corresponding to the market-value of the house. Ostensibly, the Goddards
requested that the trial court eliminate $77,019.94, plus $7,860.25 of pre-judgment
interest corresponding to the market-value amount, from the damage award.4
The Steeles filed various post-judgment motions, including a motion for new
trial and a motion to modify the trial court’s judgment. All of the Steeles’ post-
4 In reviewing the trial court’s final judgment, it does not appear that the damages associated
with the jury’s market-value determination were remitted. However, in all fairness, the Goddards moved
to remit the jury’s damages award on the same day that the trial court signed its final judgment.
Steele v. Goddard Page 8
judgment motions were overruled by operation of law. See TEX. R. CIV. P. 329b(c). This
appeal followed.
III. STANDARD OF REVIEW
An appellate court may sustain a legal-sufficiency challenge only when: (1) the
record discloses a complete absence of evidence of a vital fact; (2) the court is barred by
rules of law or of evidence from giving weight to the only evidence offered to prove a
vital fact; (3) the evidence offered to prove a vital fact is no more than a mere scintilla;
or (4) the evidence establishes conclusively the opposite of a vital fact. Uniroyal Goodrich
Tire Co. v. Martinez, 977 S.W.2d 328, 334 (Tex. 1998). In determining whether there is
legally sufficient evidence to support the finding under review, we must consider
evidence favorable to the finding if a reasonable factfinder could and disregard
evidence contrary to the finding unless a reasonable factfinder could not. Cent. Ready
Mix Concrete Co. v. Islas, 228 S.W.3d 649, 651 (Tex. 2007); City of Keller v. Wilson, 168
S.W.3d 802, 807, 827 (Tex. 2005).
Anything more than a scintilla of evidence is legally sufficient to support the
finding. Cont’l Coffee Prods. Co. v. Cazarez, 937 S.W.2d 444, 450 (Tex. 1996); Leitch v.
Hornsby, 935 S.W.2d 114, 118 (Tex. 1996). 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. Kindred v.
Con/Chem., Inc., 650 S.W.2d 61, 63 (Tex. 1983). More than a scintilla of evidence exists if
the evidence furnishes some reasonable basis for differing conclusions by reasonable
Steele v. Goddard Page 9
minds about the existence of a vital fact. Rocor Int’l, Inc. v. Nat’l Union Fire Ins. Co., 77
S.W.3d 253, 262 (Tex. 2002).
When reviewing an assertion that the evidence is factually insufficient to support
a finding, we set aside the finding only if, after considering and weighing all of the
evidence in the record pertinent to that finding, we determine that the credible evidence
supporting the finding is so weak, or so contrary to the overwhelming weight of all the
evidence, that the answer should be set aside and a new trial ordered. Pool v. Ford
Motor Co., 715 S.W.2d 629, 635 (Tex. 1986) (op. on reh’g); Cain v. Bain, 709 S.W.2d 175,
176 (Tex. 1986).
Absent an objection to the jury charge, the sufficiency of the evidence is reviewed
in light of the charge submitted. Wal-Mart Stores, Inc. v. Sturges, 52 S.W.3d 711, 715 (Tex.
2001); City of Fort Worth v. Zimlich, 29 S.W.3d 62, 71 (Tex. 2000).
IV. SUFFICIENCY OF THE EVIDENCE SUPPORTING THE JURY’S LIABILITY FINDINGS
AGAINST ROBERT
In their first issue, the Steeles argue that the jury’s liability findings against
Robert are not supported by legally and factually sufficient evidence.5 Specifically, the
Steeles contend that the record does not contain any evidence demonstrating that
Robert knew about the termite issues, made any representations to the Goddards, or
attempted to conceal anything relating to the termite damage. As noted earlier, the jury
determined that Robert was liable to the Goddards for fraud, negligence, and DTPA
violations. We now turn to the alleged DTPA violations.
5 It is noteworthy to mention that the Steeles’ appellate brief is labeled “Appellants’ Brief,” yet
they only challenge the jury’s liability findings as to Robert, not Daniel.
Steele v. Goddard Page 10
A. DTPA
It is undisputed that the Goddards are “consumers” within the context of the
DTPA and that the DTPA applies in this case. See TEX. BUS. & COM. CODE ANN. §
17.45(4) (West 2011) (stating that a “consumer” is “an individual . . . who seeks or
acquires by purchase or lease, any goods or services . . .”). A consumer may bring a
DTPA cause of action for either a violation of section 17.46(b) of the DTPA (the so-called
“laundry list”) relied on by the consumer to the consumer’s detriment or for an
unconscionable action or course of action if the violation or action “constitute[s] a
producing cause of economic damages or damages for mental anguish.” Id. §
17.50(a)(1), (3) (West 2011). The “laundry list” prohibits various types of
misrepresentations. See id. § 17.46(b) (West 2011). The DTPA also defines an
unconscionable action or course of action as “an act or practice which, to the consumer’s
detriment, takes advantage of the lack of knowledge, ability, experience, or capacity of
the consumer to a grossly unfair degree.” Id. § 17.45(5). Under section 17.46(a), false,
misleading, or deceptive acts or practices in the conduct of any trade or commerce are
declared unlawful and are subject to action by the consumer protection division under
sections 17.47, 17.58, 17.60, and 17.61 of the civil practice and remedies code. Id. §
17.46(a).
With regard to the DTPA, the jury concluded that both Daniel and Robert
engaged in false, misleading, or deceptive acts or practices that the Goddards relied
upon to their detriment and that were a producing cause of the Goddards’ damages.
Steele v. Goddard Page 11
The charge provided the following fact-specific definition for “[f]alse, misleading, or
deceptive act or practice”:
a) representing that the house had characteristics that it did not have;
b) representing that the house was of a particular quality when it was of
another;
c) failing to disclose information concerning the house which was known
at the time of the transaction if such failure to disclose such
information was intended to induce the Goddards into the transaction
and into which they would not have entered had the information been
disclosed . . . .
The language used in the charge corresponds to the following provisions of
section 17.46:
the term ‘false, misleading, or deceptive acts or practices’ includes, but is
not limited to, the following acts:
...
(7) representing that goods or services are of a particular standard,
quality, or grade, or that goods are of a particular style or model, if
they are of another;
...
(13) knowingly making false or misleading statements of fact
concerning the need for parts, replacement, or repair service;
...
(24) failing to disclose information concerning goods or services
which was known at the time of the transaction if such failure to
disclose such information was intended to induce the consumer
into a transaction into which the consumer would not have entered
had the information been disclosed . . . .
Id. § 17.46(b)(7), (13), (24).
Steele v. Goddard Page 12
In their brief, the Steeles assert that Robert’s involvement in the transaction was
confined to: (1) suggesting that Daniel sell the house; (2) serving as a scrivener for a
disclosure notice that the Goddards never received; (3) providing his e-mail address to
Teel to facilitate communications with Daniel; (4) paying to have flooring replaced and
painting the house upon Teel’s suggestion; (5) installing a couple of doors in the house;
and (6) cleaning the house for sale. The Steeles emphasize that Robert was not involved
with the disclosure notice that was provided to the Goddards, nor did he participate in
or know about the repairs about which the Goddards complain. In response, the
Goddards posit that Robert wanted to see the house sold, took extensive measures to
hide obvious defects in the house, and assisted Daniel in making false disclosures about
the existence of the damage.
After reviewing the evidence adduced at trial, we do not find sufficient evidence
to support the jury’s DTPA liability finding against Robert. This is true for a number of
reasons. First, there is no evidence that Robert made any representations directly to the
Goddards regarding the condition of the house. See, e.g., Rinaldini v. Bizzelle, No. 04-00-
00865-CV, 2002 Tex. App. LEXIS 3601, at *7 (Tex. App.—San Antonio May 22, 2002, no
pet.) (refusing to hold a pest-control contractor liable under the DTPA because he had
never spoken to or met the buyers of the house; thus, “he could not have made a
representation or failed to disclose information that the Rinaldinis relied upon in
purchasing the house”). Though Robert testified that he helped Daniel fill out one of
the disclosure forms, Teel testified that she helped Daniel fill out the disclosure form
that was provided to the Goddards. No testimony was adduced regarding the
Steele v. Goddard Page 13
whereabouts of the disclosure form allegedly filled out by Robert. In any event, the
testimony of both Robert and Teel clearly establishes that the responses contained in the
disclosure form were Daniel’s. See TEX. BUS. & COM. CODE ANN. § 17.46(b)(7); see also
Dentler v. Helm-Perry, No. 04-02-00034-CV, 2002 Tex. App. LEXIS 8167, at **16-17 (Tex.
App.—San Antonio Nov. 20, 2002, no pet.) (refusing to hold listing realtors for the
property—non-parties to the transaction—liable under the DTPA based upon the
representations made by the seller in the Seller’s Disclosure Notice).6 Both Robert and
Teel stated that they were ostensibly scriveners.
In addition, with respect to section 17.46(b)(24), the nondisclosure portion of the
DTPA, we fail to see how Robert had any duty to disclose any information to the
Goddards considering he was not the seller of the house. Furthermore, other than
surmise and suspicion, the Goddards did not tender any evidence establishing that
Robert had knowledge of the termite damage.
And finally, we also note that several Texas courts have held that the mere
nondisclosure of material information is not enough to establish an actionable DTPA
claim. Head v. U.S. Inspect DFW, Inc., 159 S.W.3d 731, 744 (Tex. App.—Fort Worth 2005,
6 Specifically, the San Antonio Court of Appeals stated that:
Both Dentlers state in their affidavits that the only disclosure or representation made to
them was the information contained in the Seller’s Disclosure Notice; however, that
information was the representation by Helm-Perry, not by the Listing Realtors.
Accordingly, there is no evidence that the Listing Realtors made an actionable
representation to the Dentlers regarding the past flooding condition of the property as
required by section 17.46(b)(7), and the trial court properly granted summary judgment
in favor of the Listing Realtors as to the DTPA claim.
Dentler v. Helm-Perry, No. 04-02-00034-CV, 2002 Tex. App. LEXIS 8167, at **16-17 (Tex. App.—San
Antonio Nov. 20, 2002, no pet.).
Steele v. Goddard Page 14
no pet.) (citing Robbins v. Capozzi, 100 S.W.3d 18, 26 (Tex. App.—Tyler 2002, no pet.);
Century 21 Real Estate Corp. v. Hometown Real Estate Co., 890 S.W.2d 118, 126 (Tex.
App.—Texarkana 1994, writ denied)); see Chandler v. Gene Messer Ford, Inc., 81 S.W.3d
493, 502 (Tex. App.—Eastland 2002, pet. denied) (“Non-disclosure without evidence
that a defendant had knowledge of the undisclosed information and intentionally
withheld the information is not actionable.” (citing Robinson v. Preston Chrysler-
Plymouth, Inc., 633 S.W.2d 500, 502 (Tex. 1982))). Additionally, the plaintiff must show
that the information allegedly withheld was done so with the intent of inducing the
consumer to enter into the transaction. Willowbrook Foods, Inc. v. Grinnell Corp., 147
S.W.3d 492, 507 (Tex. App.—San Antonio 2004, pet. denied) (citing Robbins, 100 S.W.3d
at 26; Century 21 Real Estate Corp., 890 S.W.2d at 126). Here, the Goddards failed to
introduce any evidence demonstrating that Robert had a duty to disclose information as
a non-seller and that his alleged failure to disclose information was done with the
intention of inducing the Goddards to enter into or complete the transaction.
Based on the foregoing, we cannot say that the Goddards introduced more than a
scintilla of evidence establishing a DTPA violation as to Robert. See Rocor Int’l, Inc., 77
S.W.3d at 262; see also Kindred, 650 S.W.2d at 63. Accordingly, we conclude that the
DTPA-liability finding against Robert is not supported by legally sufficient evidence.
See Islas, 228 S.W.3d at 651; City of Keller, 168 S.W.3d at 807, 827, Martinez, 977 S.W.2d at
334; Kindred, 650 S.W.2d at 63.
Steele v. Goddard Page 15
B. The Jury’s Negligence and Fraud Findings
The jury also determined that Robert was negligent and engaged in fraud in the
sale of the house. The Steeles challenged these findings on appeal. Despite our
conclusion regarding the DTPA-liability finding against Robert, we must now turn to
the jury’s negligence and fraud findings against Robert.
1. Negligence
To prevail on a negligence cause of action, the plaintiff must establish the
existence of a duty, a breach of that duty, and damages proximately caused by the
breach. D. Houston, Inc. v. Love, 92 S.W.3d 450, 454 (Tex. 2002); El Chico Corp. v. Poole,
732 S.W.2d 306, 311 (Tex. 1987). The threshold inquiry in a negligence case is duty.
Poole, 732 S.W.2d at 311. The question of duty turns on the foreseeability of harmful
consequences, which is the underlying basis for negligence. Corbin v. Safeway Stores,
Inc., 648 S.W.2d 292, 296 (Tex. 1983); see Nicholson v. Smith, 986 S.W.2d 54, 59 (Tex.
App.—San Antonio 1999, no pet.). The existence of a duty is a question of law for the
court to decide from the facts surrounding the occurrence in question. Walker v. Harris,
924 S.W.2d 375, 377 (Tex. 1996); see Nicholson, 986 S.W.2d at 59.
Based on our review of the record, we fail to find any evidence addressing the
negligence elements as to Robert. As noted earlier, Robert was not the seller of the
house; rather, he was a stranger to the contract between Daniel and the Goddards. As
such, Robert owed no duty to the Goddards in this transaction, and the Goddards did
not proffer evidence establishing the contrary. See Love, 92 S.W.3d at 454; see also Poole,
732 S.W.2d at 311. Moreover, without evidence that Robert knew about the termite
Steele v. Goddard Page 16
damage, a reasonable factfinder could not have concluded that Robert breached any
duty owed to the Goddards. See Love, 92 S.W.3d at 454. We therefore conclude that the
negligence finding against Robert is not supported by legally sufficient evidence. See
Islas, 228 S.W.3d at 651; City of Keller, 168 S.W.3d at 807, 827, Martinez, 977 S.W.2d at 334;
Kindred, 650 S.W.2d at 63.
2. Fraud
The elements of a cause of action for fraud are: (1) that a material
misrepresentation was made; (2) the representation was false; (3) when the
representation was made, the speaker knew it was false or made it recklessly without
any knowledge of the truth and as a positive assertion; (4) the speaker made the
representation with the intent that the other party should act upon it; (5) the party acted
in reliance on the representation; and (6) the party suffered injury as a result. Ernst &
Young, L.L.P. v. Pac. Mut. Life Ins. Co., 51 S.W.3d 573, 577 (Tex. 2001); Bradford v. Vento,
48 S.W.3d 749, 754-55 (Tex. 2001).
As we stated earlier, the record does not reflect that the disclosure form allegedly
filled out by Robert was ever provided to the Goddards. In addition, the record does
not contain evidence establishing that Robert made a material representation that was
false and made with the intention that the Goddards would rely upon it to their
detriment. Accordingly, we cannot say that the fraud finding against Robert is
supported by legally sufficient evidence. See Islas, 228 S.W.3d at 651; City of Keller, 168
S.W.3d at 807, 827, Martinez, 977 S.W.2d at 334; Kindred, 650 S.W.2d at 63.
Steele v. Goddard Page 17
C. Robert’s Liability
In summary, under the applicable standard of review, we conclude that the
record does not contain legally sufficient evidence establishing that Robert engaged in
actionable conduct under the DTPA. We also conclude that the negligence and fraud
findings against Robert are not supported by legally sufficient evidence. Therefore,
based on the foregoing, we sustain the Steeles’ first issue on appeal.
V. THE DAMAGES AWARD
In their remaining issues, the Steeles assert numerous complaints about the
damages awarded to the Goddards. Specifically, the Steeles allege that: (1) Tyson’s
testimony that the house was worth $78,500 or, in other words, the exact amount the
Goddards paid for the house conclusively established the absence of damages; (2) the
Goddards were improperly awarded rescission of the contract; (3) the final judgment
awards the Goddards a double recovery; and (4) the attorney’s fee award is improper
because the Goddards sustained no damages.
A. The Damages Award Pertaining to Robert
At the outset of our analysis of the damages award, we note that we have
previously concluded that the record does not contain sufficient evidence to support
liability as to Robert. And because the evidence is insufficient as to Robert’s liability
under the causes of action alleged by the Goddards, we cannot uphold the portion of
the damages award pertaining to Robert. Accordingly, we reverse the portion of the
judgment assessing damages against Robert and render judgment that the Goddards
Steele v. Goddard Page 18
take nothing as to Robert. However, despite this conclusion, we must still analyze the
damages award as it pertains to Daniel.7
B. The Remaining Damages
1. Tyson’s testimony about the market value of the house
With regard to the remaining damages, the Steeles first argue that Tyson’s
testimony regarding the market value of the house at the time of purchase conclusively
disproves any damages. Tyson testified that the house was worth $78,500—the
purchase price under the contract—at the time of sale. However, implicit in Tyson’s
testimony is that this value does not account for the extensive termite damage in the
house that was discovered after the sale. This is true because Tyson was later asked
about the market value of the house at the time of trial. Tyson testified that the house
was worth $15,000 at the time of trial, which was based on a $15,000 offer made by an
investor for the land upon which the house is situated. See Redman Homes v. Ivy, 920
S.W.2d 664, 669 (Tex. 1996) (noting that a property owner is qualified to testify to the
market value of his property); see also Lawrence v. Kinser, No. 05-10-00173-CV, 2011 Tex.
App. LEXIS 9832, at *13 (Tex. App.—Dallas Dec. 15, 2011, no pet.) (mem. op.). Based on
this testimony, we disagree with the Steeles’ assertion that Tyson’s testimony about the
market value of the house at the time of sale conclusively disproves any damages in this
case.
7Despite failing to challenge Daniel’s liability under the alleged causes of action, the Steeles do
challenge the damage awards against Daniel.
Steele v. Goddard Page 19
2. Sufficiency of the evidence supporting damages
In several sub-issues, the Steeles also complain that the evidence supporting the
award of actual damages is insufficient. Most of their sub-issues are premised on a
finding that Tyson’s testimony conclusively disproved any damages—a finding we
rejected earlier. However, in one sub-issue, the Steeles challenged the award for repair
costs. In particular, the Steeles assert that, under the DTPA, the Goddards cannot
receive both repair damages and valuation damages. See Cent. Freight Lines, Inc. v.
Naztec, Inc., 790 S.W.2d 733, 734 (Tex. App.—El Paso 1990, no writ) (“Where the injury
to the property has not resulted in its total loss and the repair of the damaged property
is economically feasible, the plaintiff may elect to recover the reasonable cost of
repairs.”).
We disagree with the Steeles’ assertion that the Goddards were barred from
recovering repair damages because they also recovered valuation damages. We first
note that the Central Freight Lines case is not a DTPA case and the El Paso Court of
Appeals did not specifically hold that a plaintiff cannot recover repair damages in
addition to valuation damages. See generally id. Instead, the El Paso Court of Appeals
emphasized that “the primary objective in awarding damages in civil cases has been to
compensate the injured plaintiff . . . .” See id. Here, Mylea testified that she and Tyson
spent $2,500 to repair the house until they determined that the house was not
salvageable. Also included as exhibits are copies of the receipts supporting the
testimony about the repairs made. Furthermore, section 17.50(b)(1) of the Texas
Business and Commerce Code provides that a prevailing consumer may recover “the
Steele v. Goddard Page 20
amount of economic damages found by the trier of fact.” TEX. BUS. & COM. CODE ANN. §
17.50(b)(1). Section 17.45(11) of the Texas Business and Commerce Code defines
“[e]conomic damages” as “compensatory damages for pecuniary loss, including costs of
repair and replacement.” Id. § 17.45(11). Therefore, based on the language of the
DTPA, the Goddards were entitled to recover costs of repair, in addition to costs of
replacement.8 See id.; see Valley Nissan, Inc. v. Davila, 133 S.W.3d 702, 712-13 (Tex.
App.—Corpus Christi 2003, no pet.) (concluding that, in a DTPA case, damages sought
for loss of the fair market value of a trade-in vehicle and out-of-pocket expenses “fall
squarely within the DTPA’s definition of ‘economic damages’”).
Based on the foregoing, we overrule the Steeles’ second issue as it pertains to
Daniel.
3. Rescission
In their third issue, the Steeles contend that the judgment improperly awards
rescission of the real estate contract. This issue is broken into two parts: (1) rescission
as to Robert; and (2) rescission as to Daniel and Robert.
8 The Steeles also argue that the record does not contain testimony indicating that the repair costs
were reasonable and necessary. Though neither Tyson nor Mylea were asked whether the repairs were
reasonable and necessary, receipts supporting the repair costs were proffered, and both Tyson and Mylea
testified about the deplorable condition of the house as a result of the termite damage and the items that
needed repairing. Thus, based on the testimony and the evidence submitted, we believe that the jury was
free to infer that the repair costs were reasonable and necessary. See Bernstein v. Thomas, 298 S.W.3d 817,
826 (Tex. App.—Dallas 2009, no pet.) (“An objective valuation of services, such as a bill, receipt or, as in
this case, an estimate, is evidence from which a jury can infer reasonable cost of repair.”) (citing 2 Fat
Guys Inv., Inc. v. Klaver, 928 S.W.2d 268, 273 (Tex. App.—San Antonio 1996, no writ) (“In order to
establish that repairs and expenses are reasonable and necessary, it is not imperative that the actual terms
‘reasonable’ and ‘necessary’ be used. Instead, the damaged party is only required to present evidence of
damages sufficient and competent enough to justify the jury’s conclusion that the costs are in fact
reasonable and necessary.” (internal citations omitted))).
Steele v. Goddard Page 21
As we have noted earlier, Robert was not a party to the real-estate contract at
issue. As such, we agree with the Steeles that, in the absence of a contract between the
Goddards and Robert, there is nothing to rescind with respect to Robert. See Emmons v.
Durable Mobile Homes, Inc., 521 S.W.2d 153, 154 (Tex. Civ. App.—Dallas 1974, writ ref’d
n.r.e.) (“It is obvious that in the absence of a contract there can be no action for
rescission.” (quoting S. Methodist Univ. v. Evans, 131 Tex. 333, 115 S.W.2d 622, 624
(1938))); see also Carrow v. Bayliner Marine Corp., 781 S.W.2d 691, 696 (Tex. App.—Austin
1989, no writ) (“[W]hen there is no privity of contract between a buyer and a seller,
there is nothing to rescind, and there is no basis for rescission or restitution.”).
With regard to Daniel, the Steeles, relying on Cruz v. Andrews Restoration, Inc.,
assert that rescission is improper because the Goddards sustained no damages. 364
S.W.3d 817, 823 (Tex. 2012) (“Even a rescission award requires a showing of actual
damages.”). However, we have already rejected the Steeles’ argument that Tyson’s
testimony conclusively disproved damages. We therefore reject the Steeles’ assertion
that rescission is improper because the Goddards sustained no damages.
In the alternative, the Steeles complain that the judgment awards rescission
without any underlying jury findings. In making this argument, the Steeles do not cite
to authority requiring a jury finding on the issue of rescission. Moreover, the Steeles do
not address section 17.50(b)(3)-(4), which provides that the trial court may restore to any
party to the suit the money or property illegally acquired or award any other relief
which the trial court deems proper. See TEX. BUS. & COM. CODE ANN. § 17.50(b)(3)-(4);
Cruz, 364 S.W.3d at 824 (“The DTPA authorizes trial courts to restore to any party to the
Steele v. Goddard Page 22
suit the money or property illegally acquired. . . . Several courts of appeals (including
the court of appeals in this case) have held that this remedy incorporates the common
law of rescission.” (internal citations omitted)).
Based on the foregoing, we overrule the Steeles’ third issue pertaining to
rescission of the real-estate contract.
4. Other issues with the damages award
In their fourth issue, the Steeles argue that the judgment: (1) improperly assesses
the total amount of damages against each defendant; (2) permits a double recovery; and
(3) contains no election of remedies.
In their first sub-issue, the Steeles take issue with the following language
contained in the judgment: “IT IS, THEREFORE, ORDERED, ADJUDGED, AND
DECREED that plaintiffs have and recover $464,187.82 from defendants . . . .”
According to the Steeles, this language implies that both Robert and Daniel are equally
responsible for the total damage award despite a proportionate-responsibility finding of
60% for Robert and 40% for Daniel and different findings pertaining to “additional
damages.” Earlier, we concluded that the evidence supporting liability against Robert
is insufficient and, thus, reversed all damages attributable to Robert. As such, we
believe that the Steeles’ complaint in this sub-issue has been rectified.
In their second sub-issue, the Steeles contend that the judgment permits a double
recovery. Specifically, the Steeles argue that: “To award the Goddards their entire
purchase amount, and then award them portions of that purchase price again, amounts
to an impermissible double recovery.” According to the Steeles, the judgment
Steele v. Goddard Page 23
improperly awarded the Goddards: “$77,019.94 in market value difference, then
another $77,019.94 for rescission, and then another $24,202.22 for amounts paid toward
purchase. The Goddards get all their money back; then they get all their money back
again; then they get back all the money they paid so far.”
At the outset of our analysis of this sub-issue, we note that the Goddards filed a
motion to remit $77,019.94 of the actual damages, plus $7,860.25 in pre-judgment
interest in the trial court. Given that the judgment awards the Goddards $103,722.16 in
actual damages, which included $77,019.94 in actual damages, plus an additional
$77,019.94, we agree that the judgment provides the Goddards with a double recovery.
If we determine that part of a damages award lacks sufficient evidentiary
support, our proper course is to suggest a remittitur of that part of the damages. See
Larson v. Cactus Util. Co., 730 S.W.2d 640, 641 (Tex. 1987); see also Hannon, Inc. v. Scott,
No. 02-10-00012-CV, 2011 Tex. App. LEXIS 3624, at *30 (Tex. App.—Fort Worth May 12,
2011, pet. denied) (mem. op.). The party prevailing in the trial court should be given
the option of accepting the remittitur or having the cause remanded. See Larson, 730
S.W.2d at 641. Because we have concluded that the judgment provides the Goddards
with a double recovery, we suggest a remittitur in the amount of $77,019.94, plus
$7,860.25 in pre-judgment interest. The suggested remittitur mirrors the remittitur that
was filed, but not granted, in the trial court.
Despite the remittitur, the Steeles also argue that a consumer may not receive
both a restoration of money and economic damages, or in other words, the Goddards
cannot receive $77,019.94 in damages associated with rescission of the real-estate
Steele v. Goddard Page 24
contract in addition to $24,202.22 awarded for money paid on the mortgage for the
house and $2,500 awarded for repairs. In support of their contention, the Steeles rely
heavily on the Texas Supreme Court’s decision in Ludt v. McCollum, 762 S.W.2d 575
(Tex. 1988) (per curiam).
In Ludt, a homeowner sought to recover both repair costs and the permanent
reduction in the market value of his house based on a builder’s failure to disclose
foundation problems associated with the house. Id. at 576. In rejecting Ludt’s request
to recover damages for the permanent reduction in the market value of the house after
repairs, the Court mentioned that:
In the present case, Ludt chose not to submit an issue as to
permanent reduction in market value subsequent to the accomplishment
of repairs. The issue that was submitted merely stated, “permanent
reduction in the market value at the present time of the home because of
foundation problems.” At the time of trial, the repairs had not been made.
We hold that plaintiff failed to submit and obtain a jury finding
sufficient to establish the permanent reduction in market value after
repairs.
Id.
Nevertheless, despite this holding, we fail to see how the Ludt holding bars the
jury from awarding the Goddards damages for repair costs and the reduction in the
market value of the house.9 In fact, the Ludt Court stated the following:
9 We also find the Ludt case to be distinguishable from the case at bar, especially considering that
Ludt attempted to recover for repairs that had not been made at the time of trial, whereas the Goddards
recovered for repairs that had already been made. See Ludt v. McCollum, 762 S.W.2d 575, 576 (Tex. 1988)
(per curiam). Moreover, in the instant case, Tyson testified to the market value of the house after the
repairs were made, which comports with the Terminix case referenced by the Ludt Court. See id. (citing
Terminix Int’l, Inc. v. Lucci, 670 S.W.2d 657 (Tex. App.—San Antonio 1984, writ ref’d n.r.e.)).
Steele v. Goddard Page 25
In Texas, courts have held that an aggrieved consumer may be able to
plead, prove[,] and obtain favorable jury findings establishing both costs
to repair and permanent reduction in market value notwithstanding such
repairs, as cumulative rather than mutually exclusive measures of
damage. Brighton Homes, Inc. v. McAdams, 737 S.W.2d 340 (Tex. App.—
Houston [14th Dist.] 1987, writ ref’d n.r.e.)[;] Terminix [Int’l], Inc. v. Lucci,
670 S.W.2d 657 (Tex. App.—San Antonio 1984, writ ref’d n.r.e.). In
Terminix, the court determined that an award of diminished value is
recoverable in addition to the costs of repair, assuming that the permanent
reduction in value refers to that reduction occurring even after repairs are
made.
The Ludt Court also noted that:
We affirm the court of appeals decision, but observe that it would have
been possible for Ludt to recover both measures of damages if he had
requested issues that would have made it clear that he was asking for the
amount of reduction in value after the repairs were made.
Id.
In addition, Texas courts have noted that rescission “is an equitable remedy and,
as a general rule, the measure of damage is the return of the consideration paid,
together with such further special damage or expense as may have been reasonably
incurred by the party wronged on account of the contract.” Smith v. Nat’l Resort
Communities, Inc., 585 S.W.2d 655, 660 (Tex. 1979); see City of The Colony v. N. Tex. Mun.
Water Dist., 272 S.W.3d 699, 732 (Tex. App.—Fort Worth 2008, pet. dism’d); see also
Hannon, 2011 Tex. App. LEXIS 3624, at **26-27 (“Rescission is an equitable remedy that
extinguishes legally valid contracts that must be set aside because of, among other
things, fraud. Upon rescission, the rights and liabilities of the parties are extinguished;
any consideration paid is returned, together with such further special damage or
Steele v. Goddard Page 26
expense as may have been reasonably incurred by the party wronged; and the parties
are restored to their respective positions as if no contract had ever existed.”).
In a more recent DTPA case, the Cruz Court also noted that “‘[r]escission is one
of the principal asset-based remedies in restitution,’ and it ‘restore[s] the parties to the
status quo ante by unwinding the contractual exchange instead of pressing it forward.”
364 S.W.3d at 825 (quoting RESTATEMENT (THIRD) OF RESTITUTION AND UNJUST
ENRICHMENT § 37 cmt. a). And finally, we note that section 17.50(b)(3) authorizes the
equitable remedy of rescission and restoration, pursuant to which a consumer may
recover all consideration paid for the defective product. TEX. BUS. & COM. CODE ANN. §
17.50(b)(3); see Cruz, 364 S.W.3d at 824 n.7; Thomas v. State, 226 S.W.3d 697, 710 (Tex.
App.—Corpus Christi 2007, pet. dism’d).
Therefore, based on the foregoing authority, we cannot conclude that because the
Goddards were awarded $77,019.94 for rescission, they were barred from recovering the
consideration paid—$24,202.22 in mortgage payments—and $2,500 for repairs
associated with the house. These damages, in addition with the extinguishment of the
real-estate contract, returned the parties to the status quo ante. See TEX. BUS. & COM.
CODE ANN. § 17.50(b)(3); Cruz, 364 S.W.3d at 824 n.7; Smith, 585 S.W.2d at 660; City of
The Colony, 272 S.W.3d at 732; Thomas, 226 S.W.3d at 710; see also Hannon, 2011 Tex. App.
LEXIS 3624, at **26-27.
In their third sub-issue, the Steeles complain that the judgment does not contain
an election of remedies. In making this argument, the Steeles allege, without citing to
the record, that the Goddards stated that they were electing recovery under the DTPA,
Steele v. Goddard Page 27
rather than under common-law fraud and negligence. After combing through the
record, we find that the Goddards did, indeed, elect to recover solely under the DTPA
in their post-verdict response filed on September 7, 2011. See City of Glenn Heights v.
Sheffield Dev. Co., 55 S.W.3d 158, 165 (Tex. App.—Dallas 2001, pet. denied); see also
Krobar Drilling, L.L.C. v. Ormiston, No. 01-10-01016-CV, 2012 Tex. App. LEXIS 3478, at
*10 (Tex. App.—Houston [1st Dist.] May 3, 2012, pet. denied) (“An election of remedies
is the act of choosing between two or more inconsistent but coexistent modes of
procedure and relief allowed by law on the same state of facts. When a party thus
chooses to exercise one of them[,] he abandons his right to exercise the other remedy
and is precluded from resorting to it.”). Accordingly, we modify the judgment to reflect
the Goddards’ election of recovery under the DTPA.
In addition, the Steeles do not cite to, nor are we aware of, authority requiring
the Goddards to elect under which provision of the DTPA—section 17.50(a)(1) or
section 17.50(a)(3)—they seek to recover. As such, we reject that portion of the Steeles’
election-of-remedies complaint in this sub-issue.
Based on the foregoing, we sustain the Steeles’ fourth issue, in part.
5. Attorney’s Fees
In their final issue, the Steeles challenge the award of attorney’s fees to the
Goddards, arguing that the attorney’s fees award is improper because the Goddards
sustained no damages.
Section 17.50(d) of the Texas Business and Commerce Code mandates that each
consumer who prevails shall be awarded court costs and reasonable and necessary
Steele v. Goddard Page 28
attorney’s fees. TEX. BUS. & COM. CODE ANN. § 17.50(d). The Steeles do not argue that
the amount of attorney’s fees is unreasonable or unnecessary; instead, they premise
their attorney’s fee argument on the fact that the evidence is insufficient to support the
award of any damages to the Goddards—a contention that we have previously rejected.
Because we have concluded that the evidence is sufficient to support some of the
damages awarded to the Goddards, and because section 17.50(d) mandates the award
of attorney’s fees to a prevailing consumer under the DTPA, we affirm the portion of
the judgment awarding $75,000 in attorney’s fees to the Goddards. See id.; see also
Davila, 133 S.W.3d at 718. We overrule the Steeles’ fifth issue.
VI. CONCLUSION
In accordance with Texas Rule of Appellate Procedure 46.3, we suggest a
remittitur in the amount of $77,019.94, plus $7,860.25 in pre-judgment interest. See TEX.
R. APP. P. 46.3; see also Hannon, 2011 Tex. App. LEXIS 3624, at *31 (citing Mahon v.
Caldwell, Haddad, Skaggs, Inc., 783 S.W.2d 769, 772 (Tex. Civ. App.—Fort Worth 1990, no
writ)). If the Goddards file in this Court within fifteen days of this memorandum
opinion, a remittitur of $77,019.94, plus $7,860.25 in pre-judgment interest, then our
subsequent judgment will modify the trial court’s judgment in accordance with the
remittitur and, as modified, affirm that judgment as to Daniel. See Mahon, 783 S.W.2d at
772; see also Hannon, 2011 Tex. App. LEXIS 3624, at *31. If the suggested remittitur is not
filed, we shall reverse the trial court’s judgment and remand this entire cause to the trial
court for a new trial. See Guevara v. Ferrer, 247 S.W.3d 662, 670 (Tex. 2007); see also
Downing v. Burns, 348 S.W.3d 415, 427-28 (Tex. App.—Houston [14th Dist.] 2011, no
Steele v. Goddard Page 29
pet.) (noting that a separate trial on unliquidated damages cannot be ordered when
liability is contested (citing TEX. R. APP. P. 44.1(b))).
In addition, we reverse and render judgment in favor of Robert; therefore, all
damages assessed against Robert are deleted from the judgment. Furthermore, we
modify the judgment to reflect the Goddards’ election of recovery under the DTPA. In
all other respects, we affirm the trial court’s judgment.
AL SCOGGINS
Justice
Before Chief Justice Gray,
Justice Davis, and
Justice Scoggins
(Chief Justice Gray dissents. A separate opinion will not issue.)*
Affirmed, in part, and reversed and rendered, in part, and modified, in part,
conditioned on remittitur
Opinion delivered and filed June 13, 2013
[CV06]
Steele v. Goddard Page 30