Alamo Country Club Owners Association and Melvin Staples, Individually and as Alamo Country Club Owners Association Board Member v. James Shelton ( 2012 )

NUMBER 13-10-00300-CV
COURT OF APPEALS
THIRTEENTH DISTRICT OF TEXAS
CORPUS CHRISTI - EDINBURG
ALAMO COUNTRY CLUB OWNERS ASSOCIATION,
MELVIN STAPLES, INDIVIDUALLY AND AS
ALAMO COUNTRY CLUB OWNERS ASSOCIATION
BOARD MEMBER, Appellants,
v.
JAMES SHELTON, Appellee.
On appeal from the 389th District Court
of Hidalgo County, Texas.
MEMORANDUM OPINION
Before Chief Justice Valdez and Justices Garza and Benavides
Memorandum Opinion by Chief Justice Valdez
By seven issues, consisting of 21 sub-issues, appellants, Alamo Country Club
Owners Association (ACCOA) and Melvin Staples, appeal from a final judgment in favor
of appellee, James Shelton. We reverse and render in part and affirm in part.
I. BACKGROUND
In 1995, Shelton and his wife Cheryl purchased Lot #260 located at 332 Diana
Drive in Alamo, Texas.1 Lot #260 is located in Alamo Country Club (ACC), an “over-55”
community. The Declaration of Covenants, Conditions, and Restrictions of Record
states that every person who acquires title, legal or equitable, to any lot in the
subdivision shall thereby become a member of ACCOA. Membership entitles owners to
use the amenities at ACC, which include a championship golf course, driving range,
putting green, lighted tennis courts, heated swimming pool, clubhouse and pro shop,
shuffleboard, picnic areas, and bicycle and jogging trails. If a member leases a
residence in ACC, the lessee is entitled to use the amenities. Under such
circumstances, “[t]he member relinquishes all rights to use the various facilities for the
duration of the rental period.”
In February 1998, Shelton signed a warranty deed, conveying lot #260 to Dale
Winter for $93,000. The deed states that it “does not include the voting rights or the
common ground rights or values. These rights and values will be retained by James E.
Shelton.” Mrs. Shelton did not sign the deed, but she was aware of it. Winter began
paying property taxes in 1998, but did not live on the property. The Sheltons continued
to live in the home, and they continued to pay the ACC assessments. Winter continued
to reside in his home in McAllen.
In late 2003, a member of ACCOA discovered Shelton’s deed to Winter. ACCOA
manager Sandra Moravitz and ACCOA president Melvin Staples were informed of the
discovery and consulted with ACCOA’s attorney, Mark Walker, about the deed. Walker
1
The Sheltons also owned a home on Kiwi Street in McAllen, Texas, the deed to which is in the
name of Cheryl Shelton only. Their daughter and son-in-law use the home as their residence. The
Sheltons’ driver’s licenses gave the Kiwi street address as their residence.
2
believed that ownership had changed. Walker did not believe Shelton’s reservation in
the deed was valid.
On February 10, 2004, Moravitz wrote Winter, stating that she had learned he
was the legal owner of Lot #260 and he must provide proof of being over age 55. In
order to find out Shelton’s status, she enclosed a renter’s form to verify a lease. The
letter was sent to Winter at his McAllen residence. Winter called Shelton about the
letter, but the Sheltons took no action in response.
In April 2004, Moravitz wrote a follow-up letter to Winter, asking again for the
same information. Again, the letter was sent to Winter at his McAllen residence. Winter
did not respond.
In June 2004, the Sheltons went on a long vacation to Colorado, and Winter
moved into their house in the ACC. At this time, Winter provided proof of his age and
began paying the monthly assessment, but he gave no information about Shelton or the
renter’s forms. Staples and Moravitz heard rumors from members that the Sheltons had
moved out, but Shelton was still playing golf at the ACC golf course.
On October 8, 2004, Winter sent Staples a letter stating that he was the resident
at lot #260, he had executed a power of attorney in favor of Shelton, and “[a]s everyone
knows James Shelton and Cheryl Shelton have been residents in Alamo Country club
for the past 10+ years.”
On October 11, 2004, Walker delivered a letter to Winter at his office and left a
copy for Shelton at the Kiwi street address. The letter advised Winter and Shelton that:
(1) Shelton has no rights as a member or owner under the power of attorney or under
the reservation in the deed; (2) Winter was the only resident at Lot #260; (3) Shelton
3
had failed to fill out forms showing how or why he resided there; (4) Winter had refused
to confirm Shelton was a guest; and (5) it no longer appeared that Shelton owned a
home or resided at ACC. Walker asked that Winter or Shelton provide proof that
Shelton resided there or was a guest. Otherwise, Shelton would be allowed to play golf
only as a guest upon payment of the fees and only when accompanied by a member. If
he did not do so and attempted to play golf, the police would be called and he would be
reported as a trespasser.
On the morning of October 12, 2004, Shelton went to the ACC pro shop,
identified himself to the clerk, informed her that he lived at Lot #260, and stated that he
was there to play golf. Staples appeared and attempted to give Shelton a second copy
of Walker’s letter, which Shelton refused to accept. Shelton told Staples he would abide
by the rules and was going to play golf. Staples asked Shelton to discuss the matter,
but he refused and left for the tee. Staples asked Charles Wilmoth, another ACC
member, to sponsor Shelton as a guest, but Wilmoth refused.
Staples then asked Moravitz to call the police because he thought Shelton was a
trespasser. Shelton told Staples he did not care if he called the police and offered
Staples his cell phone to make the call.
Officer Jose Rodriguez of the Alamo Police Department responded to the call.
Staples and Moravitz pointed out Shelton as a trespasser. They informed Officer
Rodriguez that Shelton had been warned by Walker’s letter not to be there, had refused
to accept a second copy of the letter, had caused problems for years, and now refused
to leave. Moravitz told Officer Rodriguez that Shelton was not an ACC owner and had
4
no right to be there. Staples told Officer Rodriguez that they wanted Shelton removed
from the golf course.
Officer Rodriguez asked Shelton to leave the golf course, but Shelton refused.
Officer Rodriguez asked again, and again, Shelton refused. Then, Officer Rodriguez
told Shelton that charges would be filed if he did not leave and he would be taken to the
police station. Shelton refused to leave. At this point, Officer Rodriguez asked Staples
to sign a complaint form to press charges, which he did, and Shelton was then arrested
and escorted off the golf course to Officer Rodriguez’s police cruiser. Shelton was
transported to the police station, where he was booked for trespass and put into a
holding cell. Shelton was released that afternoon. Later that day, the police called
Moravitz to advise that this was a civil matter and that the police would not do anything
without a temporary restraining order. A few days later, the police investigator
suspended the case “due to insufficient probable cause.”
On October 14, 2004, ACCOA sued Shelton for declaratory and injunctive relief
and for damages for trespass, quantum meruit, unjust enrichment, and fraud. On
October 26, 2004, Winter signed a deed conveying Lot #260 to himself and Shelton.
On November 8, 2004, Shelton countersued ACCOA for breach of contract and
declaratory relief. ACCOA’s claims were nonsuited in August 2008. Shelton later sued
Staples as a third-party defendant and asserted claims against ACCOA and Staples
(“appellants”) for false imprisonment and malicious prosecution.
A jury trial was held, and a verdict was reached in favor of Shelton on his claims
against appellants for breach of contract, false imprisonment, and malicious
prosecution. The jury awarded Shelton $500 on his breach of contract claim and
5
attorney’s fees in the amount of $95,000. On his claims for false imprisonment and
malicious prosecution, the jury awarded Shelton $200,000 for physical pain and mental
anguish, $1,500 for disfigurement, and $1,950 for medical care expenses. In addition,
the jury awarded Shelton punitive damages in the amount of $600,000. The trial court
reduced the punitive damages award to $201,500. This appeal ensued.
II. MALICIOUS PROSECUTION
In their first issue, which consists of six sub-issues, appellants argue the
following: (1) question 3 of the jury charge failed to properly submit the elements of
malicious prosecution; (2) the evidence is insufficient to support a finding of malicious
prosecution; and (3) Shelton’s claim for malicious prosecution is barred by the statute of
limitations.
A. Jury Charge Error
In their first sub-issue, appellants argue that the jury charge failed to instruct the
jury on the correct meaning of “procure” or “initiate” a criminal proceeding.
1. Applicable Law
It is fundamental to our system of justice that parties have the right to be judged
by a jury properly instructed in the law. Crown Life Ins. Co. v. Casteel, 22 S.W.3d 378,
388 (Tex. 2000). Accordingly, the trial court is required to submit such instructions and
definitions as shall be proper to enable the jury to render a verdict. See TEX. R. CIV. P.
277. “An instruction is proper if it (1) assists the jury, (2) accurately states the law, and
(3) finds support in the pleadings and evidence.” Union Pac. R.R. Co. v. Williams, 85
S.W.3d 162, 166 (Tex. 2002) (citing TEX. R. CIV. P. 278).
6
A plaintiff in a malicious criminal prosecution claim must establish seven
elements: (1) the commencement of a criminal prosecution against the plaintiff; (2)
causation (initiation or procurement) of the action by the defendant; (3) termination of
the prosecution in the plaintiff’s favor; (4) the plaintiff’s innocence; (5) the absence of
probable cause for the proceedings; (6) malice in filing the charge; and (7) damage to
the plaintiff. Richey v. Brookshire Grocery Co., 952 S.W.2d 515, 517 (Tex. 2007).
2. Standard of Review
When the content of a trial court’s definition is challenged as legally incorrect, our
standard of review is de novo. See Transcon. Ins. Co. v. Crump, 330 S.W.3d 211, 221
(Tex. 2010) (citing St. Joseph Hosp. v. Wolff, 94 S.W.3d 513, 525 (Tex. 2002)).
3. Discussion
In sub-issue one, which is composed of four sub-parts, appellants argue that the
trial court erred by submitting a jury charge that failed to: (a) instruct the jury that a
prosecution is “initiated” by filing a formal charge with law enforcement authorities; (b)
instruct the jury that a prosecution is “procured” by intentionally providing information to
the police officer that they knew was false; (c) instruct the jury that a person does not
“procure” a criminal prosecution if the decision was left to the discretion of another; and
(d) properly define what it means to “initiate” or “procure” a prosecution.
With regard to sub-part (a), Shelton points out that the jury question on malicious
prosecution was submitted verbatim from the Texas Pattern Jury Charge, which is
based on the seven elements for malicious prosecution articulated in Richey. See
Richey, 952 S.W.2d at 517. According to Shelton, it was not necessary for the jury
charge to define “initiate,” as the Texas Supreme Court explained in Lieck, because “it
7
would be demonstrated by evidence that defendant filed formal charges against
plaintiff.” Browning-Ferris Indus., Inc. v. Lieck, 881 S.W.2d 288, 293 (Tex. 1994).
Based on Lieck, we conclude that the trial court did not commit error by failing to
define “initiate,” because the evidence demonstrated that appellants “signed a complaint
form and provided an affidavit” and that “[t]hey filed charges and they signed a
complaint” against Shelton. See id. Accordingly, sub-part (a) is overruled.
With regard to sub-part (b), Shelton contends that appellants waived any
complaint about the alleged failure to provide a definition for “procure” by failing to
submit a substantially correct definition or instruction. The rules of civil procedure state,
“Failure to submit a definition or instruction shall not be deemed a ground for reversal of
the judgment unless a substantially correct definition or instruction has been requested
in writing and tendered by the party complaining of the judgment.” TEX. R. CIV. P. 278.
Appellants concede that the definition for “procure” that they tendered to the trial
court did not track the definition set forth in Lieck. See Lieck, 881 S.W.2d at 293.
However, appellants argue that Shelton has failed to “identify any important deviation.”
Appellants requested the following instruction: “[Appellants] did not procure a
criminal prosecution if the decision whether to prosecute was left to the discretion of
another, including a law enforcement official or the grand jury, unless [appellants]
provided information which [they] knew was false.” In Lieck, the Texas Supreme Court
explained that in cases involving a claim for malicious prosecution, procurement should
be defined as follows:
A person procures a criminal prosecution if his actions were enough to
cause the prosecution, and but for his actions the prosecution would not
have occurred. A person does not procure a criminal prosecution when
the decision whether to prosecute is left to the discretion of another,
8
including a law enforcement official or the grand jury, unless the person
provides information which he knows is false. A criminal prosecution may
be procured by more than one person.
Id.
The definition proposed by appellants consisted of only one of the three
sentences that make up the definition of procurement articulated in Lieck. Id. It is not,
in our view, a substantially correct definition. See TEX. R. CIV. P. 278. Accordingly, sub-
part (b) is overruled.
With regard to sub-part (c), Shelton also contends that appellants waived any
complaint about the alleged failure to provide a definition for “procure” by failing to
submit a substantially correct definition or instruction. We agree. Again, we note that
the definition proposed by appellants consisted of only one of the three sentences that
make up the definition of procurement articulated in Lieck. See Lieck, 881 S.W.2d at
293. One-third of a correct definition is not, in our view, a substantially correct
definition. See TEX. R. CIV. P. 278. Accordingly, sub-part (c) is overruled.
In sub-part (d), appellants argue, in the alternative to sub-parts (a)-(c), that
question 3 of the jury charge was defective because it did not properly define what it
means to “initiate” or “procure” a prosecution. In overruling sub-part (a), we explained
that, based on Lieck, the trial court did not commit error by failing to define “initiate,”
because the evidence demonstrated that appellants “signed a complaint form and
provided an affidavit” to press charges against Shelton. See Lieck, 881 S.W.2d at 293.
Moreover, in overruling sub-parts (b)-(c), we explained that, in light of appellants’ failure
to tender a substantially correct definition of “procure,” the trial court’s failure to submit a
definition or instruction on “procure” cannot be deemed a ground for reversal of the
9
judgment. See TEX. R. CIV. P. 278. Accordingly, sub-part (d) is overruled for the same
reasons.
B. Sufficiency of the Evidence
In sub-issues two through six, appellants challenge the legal and factual
sufficiency of the evidence with regard to the jury’s verdict on malicious prosecution.
1. Standard of Review
a) Legal Sufficiency
The test for legal sufficiency is “whether the evidence at trial would enable
reasonable and fair-minded people to reach the verdict under review.” City of Keller v.
Wilson, 168 S.W.3d 802, 827 (Tex. 2005). We review the evidence in the light most
favorable to the verdict, crediting any favorable evidence if a reasonable fact-finder
could and disregarding any contrary evidence unless a reasonable fact-finder could not.
Id. at 821-22, 827.
b) Factual Sufficiency
When considering a factual sufficiency challenge to a jury’s verdict, courts of
appeals must consider and weigh all of the evidence, not just that evidence which
supports the verdict. Mar. Overseas Corp. v. Ellis, 971 S.W.2d 402, 406-07 (Tex.
1998). A court of appeals can set aside the verdict only if it is so contrary to the
overwhelming weight of the evidence that the verdict is clearly wrong and unjust. Id. at
407. When a party attacks the factual sufficiency of an adverse finding on an issue on
which it has the burden of proof, it must demonstrate on appeal that the adverse finding
is against the great weight and preponderance of the evidence. Dow Chem. Co. v.
Francis, 46 S.W.3d 237, 242 (Tex. 2001).
10
2. Probable Cause
In sub-issue two, appellants argue that the evidence is insufficient to prove that
they lacked probable cause to believe Shelton was trespassing.
a) Applicable Law
The Texas Supreme Court has defined probable cause as “the existence of such
facts and circumstances as would excite belief in a reasonable mind, acting on the facts
within the knowledge of the prosecutor [complainant], that the person charged was
guilty of the crime for which he was prosecuted.” Richey, 952 S.W.2d at 517 (citing
Akin v. Dahl, 661 S.W.2d 917, 921 (Tex. 1983)). The probable-cause determination
asks whether a reasonable person would believe that a crime had been committed
given the facts as the complainant honestly and reasonably believed them to be before
the criminal proceedings were instituted. Id. (citing Akin, 661 S.W.2d at 920-21).
“Malicious prosecution actions involve a delicate balance between society’s
interest in the efficient enforcement of the criminal law and the individual's interest in
freedom from unjustifiable and oppressive criminal prosecution.” Id. (citing Lieck, 881
S.W.2d at 290-91). “Accordingly, there is an initial presumption in malicious prosecution
actions that the defendant acted reasonably and in good faith and had probable cause
to initiate the proceedings.” Id. (citing Ellis County State Bank v. Keever, 888 S.W.2d
790, 794 (Tex. 1994)). “That presumption disappears once a plaintiff produces
evidence that the motives, grounds, beliefs, and other evidence upon which the
defendant acted did not constitute probable cause.” Id. at 518 (citing Keever, 888
S.W.2d at 794). “The burden then shifts to the defendant to offer proof of probable
cause.” Id. (citing Keever, 888 S.W.2d at 794).
11
“Whether probable cause is a question of law or a mixed question of law and fact
depends on whether the parties dispute the underlying facts.” Id. “When the facts
underlying the defendant’s decision to prosecute are disputed, the trier of fact must
weigh evidence and resolve conflicts to determine if probable cause exists, as a mixed
question of law and fact.” Id. (citing Akin, 661 S.W.2d at 920). “It has long been true,
however, that ‘when the facts are not contested, and there is no conflict in the evidence
directed to that issue, the question of probable cause is a question of law which is to be
decided by the court.’” Id. (quoting Ramsey v. Arrott, 64 Tex. 320, 323 (1885) (citing
Landa v. Obert, 45 Tex. 539, 543 (1876) (“what facts and circumstances amount to
probable cause is a pure question of law”))).
b) Discussion
Appellants argue that the facts known to them supported the objective elements
of trespass under section 30.05(a) of the Texas Penal Code, which provides:
A person commits an offense if the person enters or remains on or in
property of another, including residential land, agricultural land, a
recreational vehicle park, a building, or an aircraft or other vehicle, without
effective consent and the person:
(1) had notice that the entry was forbidden; or
(2) received notice to depart but failed to do so.
TEX. PENAL CODE ANN. § 30.05(a) (West Supp. 2011).
According to appellants, the evidence showed that they knew: (1) Shelton had
conveyed his lot to Winter who claimed to be the 100% owner; (2) owners complained
that Shelton had moved but was still golfing on the ACC golf course; (3) Winter was
paying the taxes and assessments; (4) Shelton and Winter gave no explanation that
12
would authorize Shelton to use the golf course; (5) Shelton refused to discuss or explain
why he thought he could use the facilities; (6) Shelton had been warned that if he
appeared and could not explain his status, the police would be summoned; and (7)
Shelton refused to comply with the officer’s requests to leave. In addition, appellants
relied on attorney Walker’s conclusion that the reservation in Shelton’s deed and the
purported power of attorney were invalid. Appellants argue that it was “entirely
reasonable to rely on counsel in this area.”
According to Shelton, the evidence established that appellants could not have
reasonably and honestly believed that he was a trespasser because the evidence
showed that they knew: (1) he had purchased a home at ACC in 1995; (2) Staples
never personally saw Shelton move out of ACC; (3) Staples admitted that he knew
Shelton was living at ACC; (4) Staples knew that Mrs. Shelton had not conveyed away
her interest in the property at ACC, and that as an owner, Mrs. Shelton and her spouse,
Shelton, were entitled to full use of ACC amenities including the golf course; (5) Staples
had Winter’s letter dated October 8, 2004, that said Shelton was residing at ACC as he
had been for the prior ten years; (6) appellant Staples never spoke with Shelton about
where he was living; (7) Staples never knocked on Shelton’s door at ACC to see if he
was there; (8) Staples agreed based upon documents he has now seen that Shelton
was not a trespasser on the day of arrest; (9) ACCOA Rules require that three infraction
letters be sent before legal action is taken, and none were sent to Shelton; (10) Staples
did not investigate where Shelton lived; and (11) Staples knew that golf was very
important to Shelton, and that he played every day.
13
Shelton points out that a defendant’s motives, grounds, beliefs, or other
information upon which the defendant acted will support lack of probable cause. See
Kroger Tex. Ltd. P’ship v. Suberu, 216 S.W.3d 788, 793 (Tex. 2006) (“To rebut this
presumption, the plaintiff must produce evidence that the motives, grounds, beliefs, or
other information upon which the defendant acted did not constitute probable cause.”).
According to Shelton, Staples “disliked [him] from the very first day he met him in April
2001.” “[Staples’s] very first act as president was to have Moravitz write a letter to
Winter about Shelton’s residency status.”
Finally, Shelton notes that, to the extent appellants are attempting to rely upon
advice of counsel as a defense, they failed to plead advice of counsel as an affirmative
defense and it is therefore waived. Furthermore, Shelton argues, “[t]here was no jury
instruction requested or given that advice of counsel supported lack of probable cause.”
Moreover, Shelton argues, “Staples approved the October 11, 2004 threatening letter
written by ACCOA’s lawyer addressed to Winter and Shelton, which stated that if
Shelton played golf he would be reported to the police as a trespasser.” According to
Shelton, “ACCOA’s attorney’s time records show that he did not provide any legal
advice on ownership or perform any type of title search prior to the arrest.” Shelton
states, “He was not asked to do either.”
Appellants disagree, arguing that “Shelton’s glaring problem is that in 2009[2] he,
his wife, and Winter all believed that his deed to Winter was valid and Winter owned
100% of the lot. If the Sheltons did not own the lot, they could not be members.”
With respect to the contention that Staples knew Shelton was residing at ACC,
appellants argue that mere residency did not give him a right to use the amenities.
2
“2009” appears to be a typographical error, the intended year of reference being 2004.
14
According to appellants, Shelton “needed to establish some other basis, e.g., he was a
renter, etc.” Moreover, appellants argue that Staples had reason to believe the
Sheltons no longer resided there. The Sheltons left the house for an extended period;
other owners told Moravitz and Staples that the Sheltons moved out when Winter
moved in.
With respect to the contention that because Staples knew Mrs. Shelton had not
signed the deed to Winter and therefore knew she remained an owner, thus entitling
Shelton to use the amenities as her spouse, appellants argue that Staples did not know
the legal effect of her failure to sign because he knew nothing about community
property law. According to appellants, in 2004, Staples “did not know if that meant she
continued to legally own the lot or if the deed might be void.”
With respect to Shelton’s contention that Staples agreed that based on
documents Staples later saw, Shelton was not a trespasser, appellants argue that
Shelton is incorrect. According to appellants, “[Staples] said that if Mrs. Shelton had
retained her interest in the lot and the trial court finds the documents true, then Shelton
was not a trespasser.” In any event, appellants argue, “[l]ater events and knowledge
are not material to what [appellants] knew or believed in 2004; probable cause is
determined only by the events prior to instituting any criminal proceedings.”
Finally, with respect to the advice of counsel, appellants argue that Shelton “cites
no authority that it is an affirmative defense that must be pled or requires a jury finding.”
Appellants point out that the evidence was admitted without objection. Appellants argue
that Shelton is incorrect in asserting that Walker did not advise appellants about
ownership. According to appellants, Walker prepared a memorandum for Staples and
15
Moravitz in January 2004, advising them about the deed. Furthermore, before the
arrest, Walker obtained Shelton’s deed to Winter and the address on Shelton’s driver’s
license, which was the Kiwi Street address in McAllen. In Walker’s opinion, the deed
transferred ownership from Shelton to Winter and Shelton was therefore trespassing.
It is clear from the foregoing that the jury was presented with sharply conflicting
evidence and arguments on the issue of appellants’ probable cause for believing
Shelton was committing criminal trespass by playing golf on the ACC golf course on the
morning of October 12, 2004. The probable-cause determination required the jury to
decide (1) the facts that appellants could have “honestly and reasonably believed” to be
true before they called the police and (2) whether, given those facts, a reasonable
person would believe that a crime had been committed. See Richey, 952 S.W.2d at
517. These facts were hotly disputed at trial. Therefore, the jury was required to weigh
the evidence and resolve conflicts to make the probable-cause determination. See id.
at 518. We are reminded that “[j]urors are the sole judges of the credibility of the
witnesses and the weight to give their testimony.” City of Keller, 168 S.W.3d at 819.
“They may choose to believe one witness and disbelieve another.” Id. “Reviewing
courts cannot impose their own opinions to the contrary.” Id.
Under the circumstances of this case, given that the jury was presented with
evidence and testimony that sharply conflicted in virtually every material respect, we
conclude that the test for legal sufficiency is met because “the evidence at trial would
enable reasonable and fair-minded people to reach the verdict under review.” See
Keller, 168 S.W.3d at 827. Specifically, reasonable and fair-minded people could have
concluded from the evidence that appellants did not honestly, or did not reasonably,
16
believe that Shelton was committing criminal trespass before they called the police. We
further conclude that the test for factual sufficiency is met because the verdict is not
contrary to the overwhelming weight of the evidence such that it is clearly wrong and
unjust. See Ellis, 971 S.W.2d at 406-07.
Accordingly, sub-issue two is overruled.
3. Initiation of Criminal Prosecution
In their third sub-issue, appellants argue that the evidence is legally and factually
insufficient to prove that a criminal prosecution was initiated against Shelton. According
to appellants, prosecution of a misdemeanor offense, such as the offense in this case,
begins with the filing of a sworn complaint in justice court or municipal court. See TEX.
CODE CRIM. PROC. ANN. art. 45.018 (West 2006) (“Complaint”); id. art. 45.019 (West
2006) (“Requisites of Complaint”). In relevant part, the Texas Code of Criminal
Procedure defines a “complaint” to mean “a sworn allegation charging the accused with
the commission of an offense.” See id. art. 45.018. A complaint must be sworn to
before an “officer authorized to administer oaths.” Id. art. 45.019(d). Appellants argue
that a criminal prosecution against Shelton was never initiated because the complaint
that Staples signed and delivered to Officer Rodriguez was not sworn to and was never
filed in justice court or municipal court. Thus, according to appellants, no criminal
prosecution of Shelton was ever “initiated.”
The Texas Supreme Court’s decision in Lieck, which drew extensively from the
relevant portions of the Restatement (Second) of Torts, is instructive, if not controlling,
for purposes of our analysis with respect to the elements of malicious prosecution. In
17
Lieck, the Texas Supreme Court cited with approval the following formulation found in
the Restatement:
A private person who initiates or procures the institution of criminal
proceedings against another who is not guilty of the offense charged is
subject to liability if (a) he initiates or procures the proceedings without
probable cause and primarily for a purpose other than that of bringing an
offender to justice; and (b) the proceedings have terminated in favor of the
accused.
Lieck, 881 S.W.2d at 292 (citing RESTATEMENT (SECOND) OF TORTS § 653).
Section 654 of the Restatement (Second) of Torts defines the term “criminal
proceedings” and explains when “criminal proceedings are instituted” for purposes of
malicious prosecution:
(1) The term “criminal proceedings” includes any proceeding in which a
government seeks to prosecute a person for an offense and to impose
upon him a penalty of a criminal character.
(2) Criminal proceedings are instituted when
(a) process is issued for the purpose of bringing the person
accused of a criminal offense before an official or tribunal whose
function is to determine whether he is guilty of the offense charged,
or whether he shall be held for later determination of his guilt or
innocence; or
(b) without the issuance of process an indictment is returned or an
information filed against him; or
(c) he is lawfully arrested on a criminal charge.
RESTATEMENT (SECOND) OF TORTS § 654 (2012).
Although appellants argue that Shelton’s arrest is insufficient to initiate a criminal
proceeding, this is not the position taken in the Restatement (Second) of Torts, as
comment e to section 654 clarifies:
Even without the issuance of any process, or indictment or information,
criminal proceedings may be instituted by lawful and valid arrest of the
18
accused on a criminal charge. If the arrest is not a valid one, an action for
malicious prosecution will not lie unless some further step is taken, such
as bringing the accused before a magistrate for determination whether he
is to be held. If there is nothing more than the false arrest and the
accused is released without any further proceeding, his remedy is an
action for false imprisonment. If the arrest is valid and lawful, false
imprisonment will not lie. But the arrest is then an initial step in a criminal
proceeding; and if it is made or instigated without probable cause, the
remedy is by an action for malicious prosecution.
Id. § 654, comment e.
The parties agree that, at the time of Shelton’s arrest, Officer Rodriguez told
Shelton that he was taking him to the police station because “they filed charges and
they signed a complaint.” See Lieck, 881 S.W.2d at 292 (“A person initiates a criminal
prosecution if he makes a formal charge to law enforcement authorities.”); All Am. Tel.,
Inc. v. USLD Communs., Inc., 291 S.W.3d 518, 533 (Tex. App.—Fort Worth 2009, pet.
denied) (“A defendant initiates a prosecution when it files formal charges against the
plaintiff.”).
The specific information given to Officer Rodriguez was that Shelton was
trespassing on the golf course and that appellants wanted him removed. Based on this
information, Officer Rodriguez believed Shelton was committing an offense in his
presence, prompting him to lawfully arrest Shelton without a warrant. See TEX. CODE
CRIM. PROC. ANN. art. 14.01(b) (West 2005). This constitutes the initiation of a criminal
proceeding, as explained in the illustration given in the Restatement (Second) of Torts:
A, maliciously and without probable cause, informs a police officer that B
has committed a felony. Acting on this information, the officer makes a
valid arrest of B. He then discovers that B is innocent and releases him
without any further steps to prosecute him. A is subject to liability to B for
malicious prosecution.
RESTATEMENT (SECOND) OF TORTS § 654, comment e, Illustration 1 (2012).
19
We conclude that the test for legal sufficiency is met because “the evidence at
trial would enable reasonable and fair-minded people to reach the verdict under review.”
See Keller, 168 S.W.3d at 827. Specifically, reasonable and fair-minded people could
have concluded from the evidence that appellants initiated a criminal prosecution of
Shelton. We further conclude that the test for factual sufficiency is met because the
verdict is not contrary to the overwhelming weight of the evidence such that it is clearly
wrong and unjust. See Ellis, 971 S.W.2d at 406-07.
Accordingly, appellants’ third sub-issue is overruled.
4. Procurement of Prosecution
In sub-issue four, appellants argue that the evidence is insufficient to prove
appellants procured prosecution of Shelton. According to appellants, assuming there
was a prosecution, they could not have procured it because “the person procures the
prosecution by providing information he knows to be false; negligence or failing to
provide all information is insufficient.”
In Lieck, the Texas Supreme Court compared the “initiation” and “procurement”
elements of a claim for malicious prosecution to the element of causation for other torts,
concluding that the approach taken by the Restatement (Second) of Torts was
preferable to traditional principles of common law causation:
The RESTATEMENT concepts of initiation and procurement are better
suited to malicious prosecution cases than the more general idea of
causation. In such cases in the future, the jury should be asked, not
whether the defendant “caused” criminal proceedings, but whether he
either “initiated” or “procured” them, depending on the nature of the case.
See Lieck, 881 S.W.2d at 293. In this passage, the Court suggests that the relevant
inquiry is disjunctive, rather than conjunctive: whether the defendant either initiated or
20
procured criminal proceedings. Id. This is the approach of the Restatement (Second)
of Torts, which provides in relevant part: “A private person who initiates or procures the
institution of criminal proceedings against another who is not guilty of the offense
charged is subject to liability . . . .” RESTATEMENT (SECOND) OF TORTS § 653.
In deciding appellants’ third sub-issue, we concluded that the evidence was
legally and factually sufficient to support the jury’s finding that appellants initiated a
criminal proceeding against Shelton. Therefore, it is unnecessary to address
appellants’ contention that the evidence was legally and factually insufficient to prove
that appellants procured criminal proceedings. See TEX. R. APP. P. 47.1. Accordingly,
appellants’ fourth sub-issue is overruled.
5. Malice
In their fifth sub-issue, appellants argue that the evidence is legally and factually
insufficient to prove appellants acted with malice. According to appellants, “Here, the
only actor was Staples and there is no evidence he acted with ill will, evil motive, or
gross indifference to the rights of others so as to amount to a willful or wanton act.”
Appellants argue that Staples “consulted counsel about Shelton’s status several times
over a period of months . . . [and] [t]he advice of counsel is evidence of lack of malice.”
Furthermore, according to appellants, “Staples did not ask the officer to arrest Shelton;
he submitted a statement only after Shelton demanded it and the officer requested it.”
Appellants argue that there is no evidence of malice because they “did everything
possible to avoid a confrontation.”
“Malice may be established by either direct or circumstantial evidence.” Thrift v.
Hubbard, 974 S.W.2d 70, 80 (Tex. App.—San Antonio 1998, pet. denied). “Malice has
21
been defined as ill will or evil motive, or such gross indifference or reckless disregard for
the rights of others as to amount to a knowing, unreasonable, wanton, and willful act.”
Luce v. Interstate Adjusters, Inc., 26 S.W.3d 561, 566 (Tex. App.—Dallas 2000, no pet.)
(citing Ellis, 870 S.W.2d at 69). “To establish malice, it is not necessary to prove that
the defendant acted with personal spite or ill will; it is sufficient to show the defendant
committed wrongful acts in reckless disregard of another's rights and with indifference
as to whether the party would be injured.” Id. “This element of malice may be inferred
from a lack of probable cause.” Id. (citing Fisher v. Beach, 671 S.W.2d 63, 67 (Tex.
App.—Dallas 1984, no writ)). “However, lack of probable cause may not be inferred
from a finding of malice.” Id. at 566 n. 2.
In Guernsey Community Federal Credit Union v. Gonzalez, 539 S.W.2d 896
(Tex. Civ. App.—El Paso 1976, writ ref’d n.r.e.), the El Paso Court of Appeals adopted
Dean Prosser’s approach to malice in the context of malicious prosecution:
The defendant’s improper purpose usually is proved by circumstantial
evidence. The plaintiff must establish malice in addition to the absence of
probable cause; but, since there can be no legitimate purpose in a
prosecution unless there is an honest belief in the guilt of the accused, it is
generally agreed that the lack of probable cause may give rise to an
inference of malice, sufficient to carry the question to the jury.
Id. at 900 (citing Prosser, LAW OF TORTS, 4th ed., at 848-849); see also Digby v. Texas
Bank, 943 S.W.2d 914, 922 (Tex. App.—El Paso 1997, writ denied).
We begin by noting that Staples admitted that, from the very first day he met
Shelton in April 2001, he did not like him. The evidence presented to the jury at trial
established that Staples was not the only actor, however, as appellants argue on
appeal. Rather, both Staples and Moravitz participated in the conduct that initiated a
criminal proceeding against Shelton. Staples and Moravitz pointed out Shelton as a
22
trespasser. They informed Officer Rodriguez that Shelton had been warned by
Walker’s letter not to be there, had refused to accept a second copy of the letter, had
caused problems for years, and had refused to leave. Moravitz told Officer Rodriguez
that Shelton was not an owner and had no right to be there. Staples told Officer
Rodriguez that they wanted Shelton removed from the golf course.
Appellants knew Shelton was continuing to assert a right to use the golf course
under the reservation clause in his deed to Winter, but they did not disclose this material
information to Officer Rodriguez. See Forbes v. Lanzl, 9 S.W.3d 895, 899 (Tex. App.—
Austin 2000, pet. denied) (“[A] failure to fully and fairly disclose all material information
or knowingly providing false information . . . are relevant to the issue[] of malice . . . in a
malicious prosecution claim.”). Moreover, although Winter’s letter advised that “[a]s
everyone knows James Shelton and Cheryl Shelton have been residents in Alamo
Country club for the past 10+ years,” appellants did not inform Officer Rodriguez that
Shelton resided at ACC or that they were confused or uncertain about whether Shelton
resided at ACC. See id.
Finally, in deciding appellant’s second sub-issue, we concluded that the evidence
was legally and factually sufficient to support the jury’s finding that appellants lacked
probable cause. See Luce, 26 S.W.3d at 566 (“This element of malice may be inferred
from a lack of probable cause.”); Gonzalez, 539 S.W.2d at (“it is generally agreed that
the lack of probable cause may give rise to an inference of malice”).
Based on the evidence of personal animosity of Staples toward Shelton,
appellants’ failure to disclose material information to Officer Rodriguez, and the absence
of probable cause, we conclude that the test for legal sufficiency is met because “the
23
evidence at trial would enable reasonable and fair-minded people to reach the verdict
under review.” See Keller, 168 S.W.3d at 827. Specifically, reasonable and fair-minded
people could have concluded from the evidence that appellants acted with malice when
they initiated a criminal prosecution of Shelton. We further conclude that the test for
factual sufficiency is met because the verdict is not contrary to the overwhelming weight
of the evidence such that it is clearly wrong and unjust. See Ellis, 971 S.W.2d at 406-
07.
Accordingly, appellant’s fifth sub-issue is overruled.
6. Statute of Limitations
In their sixth sub-issue, appellants argue that the evidence established as a
matter of law that Shelton’s claim for malicious prosecution was barred by the statute of
limitations.
Limitations is an affirmative defense, see TEX. R. CIV. P. 94, and appellants
therefore had the burden to “plead, prove, and secure findings to sustain [their] plea of
limitations.” Woods v. William M. Mercer, Inc., 769 S.W.2d 515, 517 (Tex. 1988). At
trial, appellants did not request that the trial court submit their limitations defense to the
jury, and they did not object to the trial court’s failure to submit the limitations issue.
See Ogu v. C.I.A. Servs., No. 01-09-01025-CV, 2011 Tex. App. LEXIS 1979, at *16 n.4
(Tex. App.—Houston [1st Dist.] Mar. 17, 2011, no pet.) (mem. op.) (“[T]he statute of
limitations is an affirmative defense that must be pleaded and tried in the trial court or it
is waived; it may not be raised for the first time after trial.”) (citing Hollingsworth v.
Hollingsworth, 274 S.W.3d 811, 814-15 (Tex. App.—Dallas 2008, no pet.) (holding that
limitations defense is waived when first raised in motion for new trial)). Accordingly,
24
appellants waived the limitations defense. See Pitts & Collard, L.L.P. v. Schechter, 01-
08-00969-CV, 2011 Tex. App. LEXIS 10214, at *52 (Tex. App.—Houston [1st Dist.]
Dec. 29, 2011, no pet.) (mem. op. on reh’g) (“No issue on limitations was submitted to
the jury, and [defendant] did not object to this omission or request that a question on
limitations be submitted. He has therefore waived his limitations defense.”) (citing
Roberts v. Holmes, 412 S.W.2d 947, 949 (Tex. Civ. App.—Eastland 1966, no writ)
(holding that appellants waived limitations defense by failing to request jury question or
object to trial court’s failure to submit limitations issue)). Accordingly, appellants’ sixth
sub-issue is overruled.
We have considered each of the six sub-issues fairly included in appellants’ first
issue and have overruled each. Accordingly, appellants’ first issue is overruled.
III. FALSE IMPRISONMENT
In appellants’ second issue, which consists of two sub-issues, they argue that (1)
question 2 failed to properly submit the elements of false imprisonment and (2) Shelton
failed to prove its elements.
A. Jury Charge Error
In their first sub-issue, appellants argue that the jury question failed to instruct the
jury that appellants must direct the officer to arrest or knowingly provide false
information.
1. Applicable Law
“The essential elements of a cause of action for false imprisonment are: (1) willful
detention; (2) without consent; and (3) without authority of law.” See Sears, Roebuck &
Co. v. Castillo, 693 S.W.2d 374, 375 (Tex. 1985).
25
2. Standard of Review
When the content of a trial court’s definition is challenged as legally incorrect, our
standard of review is de novo. See Crump, 330 S.W.3d at 221.
3. Discussion
The charge instructed the jury that “‘[f]alsely imprison’ means to willfully detain
another without legal justification, against his consent, whether such detention be
affected by violence, by threat, or by any other means that restrains a person from
moving from one place to another.” The instruction, which tracks the Texas Pattern
Jury Charge, includes the essential elements of the offense, as articulated by the Texas
Supreme Court in Castillo. Castillo, 693 S.W.2d at 375. Accordingly, appellants’ first
sub-issue is overruled.
B. Sufficiency of the Evidence
In their second and third sub-issues, appellants argue that the evidence is legally
and factually insufficient to prove that they (1) lacked probable cause; and (2) instigated
Shelton’s arrest.
1. Applicable Law
“Although a private citizen may be liable for directing an arrest that results in a
false imprisonment, the law will not generally permit inferring such direction simply from
a report of crime made to the authorities.” Wal-Mart Stores, Inc. v. Rodriguez, 92
S.W.3d 502, 510 (Tex. 2002). “Such an inference is justified when a party provides
information in its report that it knows is false.” Id.
26
2. Discussion – Probable Cause
In the second sub-issue to their second issue, appellants challenge the legal and
factual sufficiency of the evidence to prove lack of probable cause by incorporating by
reference the arguments they made in support of the second sub-issue to their first
issue, which we have overruled based our conclusion that the evidence is legally and
factually sufficient to support the jury’s finding that appellants lacked probable cause to
believe that Shelton was committing criminal trespass by playing golf at the ACC golf
course on the morning of October 12, 2004. For the same reasons given in our
discussion of appellants’ second sub-issue to their first issue, we overrule appellants’
second sub-issue to their second issue. See TEX. R. APP. P. 47.1.
3. Discussion – Instigation of Arrest
In the third sub-issue to their second issue, appellants challenge the legal and
factual sufficiency of the evidence to prove that appellants instigated Shelton’s arrest.
Appellants argue that they did not detain Shelton; it was Officer Rodriguez who detained
him. According to appellants, there is no evidence that they requested that Officer
Rodriguez arrest Shelton. Appellants argue that their identification of Shelton as the
perpetrator of an offense was not sufficient to instigate his arrest.
“In Texas, . . . liability for false imprisonment extends beyond those who willfully
participate in detaining the complaining party to those who request or direct the
detention.” Wal-Mart Stores, Inc. v. Rodriguez, 92 S.W.3d 502, 507 (Tex. 2002). “False
imprisonment’s first element may thus be satisfied by conduct that is intended to cause
one to be detained, and in fact causes the detention, even when the actor does not
27
participate in the detention.” Id. The Texas Supreme Court has “sometimes referred to
this causation standard as ‘instigation’ of the false imprisonment.” Id.
“When the alleged detention results from an unlawful arrest, to prove instigation a
plaintiff must show that the defendant clearly directed or requested the arrest.” Id. “As
the Restatement explains, ‘in the case of an arrest, [instigation] is the equivalent, in
words or conduct, of ‘Officer, arrest that man!’’” Id. (quoting Restatement (Second) of
Torts § 45A, cmt. c). “To hold a third party liable for instigating the detention, then, ‘the
act of arrest [must be] made by the officer, not of his or her own volition, but to carry out
the request of the defendant.’” Id. (quoting 32 AM. JUR. 2D False Imprisonment § 41
(1995)).
The uncontroverted evidence is that appellants summoned the police to the ACC
golf course and identified Shelton as a criminal trespasser to Officer Rodriguez for the
purpose of having Shelton arrested and removed from the golf course, which is what
subsequently happened. At trial, Officer Rodriguez testified that he had no discretion to
refuse to arrest Shelton once Staples’s signed the criminal complaint alleging Shelton
was a trespasser. In a written statement made after the detention and arrest, Staples
confirmed the sequence of events and appellants’ role in instigating Shelton’s arrest,
stating, “When [Shelton] refused my request to leave and not play golf, we called the
police and had him arrested.”
We conclude that the test for legal sufficiency is met because “the evidence at
trial would enable reasonable and fair-minded people to reach the verdict under review.”
See Keller, 168 S.W.3d at 827. Specifically, reasonable and fair-minded people could
have concluded from the evidence that appellants instigated Shelton’s arrest. We
28
further conclude that the test for factual sufficiency is met because the verdict is not
contrary to the overwhelming weight of the evidence such that it is clearly wrong and
unjust. See Ellis, 971 S.W.2d at 406-07. Accordingly, appellants’ third sub-issue is
overruled.
We have considered the three sub-issues fairly included in appellants’ second
issue and have overruled each. Accordingly, appellants’ second issue is overruled.
IV. MALICE
In their third issue, which consists of two sub-issues, appellants argue that there
is no evidence or insufficient evidence to support an award of exemplary damages.
A. Applicable Law
Chapter 41 of the Texas Civil Practice and Remedies Code permits exemplary
damages where the plaintiff proves by clear and convincing evidence that harm resulted
from “malice.” See TEX. CIV. PRAC. & REM. CODE ANN. § 41.003(a)(2) (West Supp.
2011). “‘Malice’ means a specific intent by the defendant to cause substantial injury or
harm to the claimant.” Id. § 41.001(7) (West 2008). Malice may be proven by direct or
circumstantial evidence. See Mobil Oil Corp. v. Ellender, 968 S.W.2d 917, 921 (Tex.
1998).
B. Standard of Review
In reviewing the legal sufficiency of evidence to support a finding that must be
proved by clear and convincing evidence, an appellate court must “look at all the
evidence in the light most favorable to the finding to determine whether a reasonable
trier of fact could have formed a firm belief or conviction that its finding was true.” Sw.
Bell Tel. Co. v. Garza, 164 S.W.3d 607, 609 (Tex. 2004) (citing In re J.F.C., 96 S.W.3d
29
256, 266 (Tex. 2002)); see also Bennett v. Reynolds, 315 S.W.3d 867, 872 n.1 (Tex.
2010).
C. Specific Intent to Cause Substantial Harm
In their first sub-issue, appellants argue that Shelton failed to prove that
appellants acted with specific intent to cause Shelton substantial harm. Specific intent
means that the actor desires to cause the consequences of his act, or he believes the
consequences are substantially certain to result from it. In re Estate of Russell, 311
S.W.3d 528, 535 (Tex. App.—El Paso 2009, no pet.) (citing Reed Tool Co. v. Copelin,
689 S.W.2d 404, 406 (Tex. 1985)).
According to appellants, Shelton failed to prove specific intent because there is
no evidence that they anticipated that Shelton’s arrest for criminal trespass would cause
substantial harm. At most, appellants argue, they intended for Shelton to suffer “a brief
detention and some financial burden,” but not substantial harm. The evidence at trial,
however, established that appellants acted with the desire to cause Shelton to be
arrested, jailed, prosecuted, and fined for the crime of criminal trespass. The jury found
that appellants acted without probable cause. The jury also found that Shelton (1)
suffered physical pain and mental anguish, for which it awarded $200,000; (2) suffered
disfigurement, for which it awarded $1,500; and (3) required medical care, for which it
awarded $1,980. Assuming the foregoing is substantial harm, the question is whether
the evidence is sufficient to establish that appellants acted with specific intent to cause
Shelton to suffer substantial harm. We conclude that it is not.
In cases involving punitive damages, “evidence contrary to a verdict cannot be
disregarded.” See City of Keller, 168 S.W.3d at 817. “This is not to say a reviewing
30
court may credit a losing party’s explanations or excuses if jurors could disregard them.”
Id. at 818. “But a reviewing court cannot review whether jurors could reasonably
disregard a losing party’s explanations or excuses without considering what they were.”
Id.
In this case, appellants argue that the evidence negated the possibility that they
acted with specific intent to cause substantial harm. We agree.
First, appellants point to the fact that, before they summoned police to the ACC
golf course to arrest Shelton, they and their counsel, Walker, corresponded with Shelton
in writing, seeking clarification from Shelton regarding his status with respect to
ownership, residence, and use of the ACC amenities. Appellants note that Shelton
could have, but did not, provide them with clarification on those issues.
Second, before calling the police to report Shelton as a criminal trespasser,
appellants gave Shelton written notice, advising him of their conclusion that he was no
longer a member of ACC and therefore had no right to use the golf course or other
amenities of ACC. In their written notice, appellants informed Shelton of the legal and
factual grounds for their conclusion. Appellants warned Shelton that if he returned to
the ACC golf course, he would be reported as a trespasser. Again, Shelton could have,
but did not, attempt to dispute the assertions made by appellants in their written notice,
except by proceeding to play golf on the ACC golf course.
Third, on the day of his arrest, Shelton refused Staples’ request to discuss the
matter, proceeding instead to play golf. Appellants did not immediately call the police,
as they warned Shelton in their letter, but instead sought to have other members who
31
were present sponsor Shelton as a guest. Only after that attempt failed did appellants
resort to calling the police.
Fourth, before the police were called, appellants warned Shelton they were going
to call the police. Shelton told Staples he did not care if the police were called and even
offered Staples his cell phone to make the call.
Fifth, when Officer Rodriguez arrived, Shelton told the officer, “Please, do give
them their show.” He told the officer to arrest him if he had a warrant. Officer
Rodriguez asked Shelton to leave the golf course, but Shelton refused. Officer
Rodriguez testified that he would not have arrested Shelton if he had left the golf
course. Officer Rodriguez also testified that he might not have arrested Shelton if he
had explained his right to be there.
In our discussion of the first sub-issue in appellant’s first issue, we concluded that
the evidence is legally and factually sufficient to support the jury’s finding that appellants
acted without probable cause. Subsequently, in deciding the fifth sub-issue in
appellant’s first issue, we noted that, for purposes of malicious prosecution, “malice may
be inferred from a lack of probable cause.” See Luce, 26 S.W.3d at 566. This,
however, does not hold true for establishing malice for purposes of exemplary
damages. As we previously noted, in the former context, “Malice has been defined as ill
will or evil motive, or such gross indifference or reckless disregard for the rights of
others as to amount to a knowing, unreasonable, wanton, and willful act.” Id. In the
context of exemplary damages, however, malice means “a specific intent by the
defendant to cause substantial injury or harm to the claimant.” See TEX. CIV. PRAC. &
REM. CODE ANN. § 41.001(7). Moreover, in the context of exemplary damages, malice
32
must be proven by clear and convincing evidence, not merely by a preponderance of
the evidence. Sw. Bell Tel. Co., 164 S.W.3d at 609.
Applying these standards, we conclude that the foregoing evidence tends to
prove that appellants acted with the intent to enforce what they believed to be their
valid, albeit tenuous, authority to exclude Shelton from the ACC golf course, which they
based on the limited facts known to them, the advice they received from counsel, and
their interpretation of the deed to Winter and the declaration, articles, bylaws, and rules
and regulations for the ACCOA. The jury disbelieved and rejected appellants’ assertion
of probable cause in having Shelton arrested for criminal trespass based on the
foregoing, and we will not disturb its finding in that regard; however, we are compelled
to conclude that the evidence is not legally sufficient to prove that appellants acted with
specific intent to cause substantial harm under the much more demanding definition and
standard of proof required to establish malice in the context of exemplary damages.
Accordingly, appellants’ first sub-issue is sustained.
D. Suffered Substantial Harm
In their second sub-issue, appellants argue that the evidence is insufficient to
prove Shelton suffered substantial harm. Given our disposition of appellants’ first sub-
issue, there is no need to address the merits of appellants’ second sub-issue. See TEX.
R. APP. P. 47.1. Accordingly, we dismiss appellants’ second sub-issue as moot.
V. BREACH OF CONTRACT
In their fourth issue, which consists of four sub-issues, appellants argue that (1)
question 1 failed to properly submit Shelton’s claim for breach of contract and (2) the
evidence is insufficient to prove breach of contract.
33
A. Jury Charge Error
In their first sub-issue, appellants argue that the trial court erred in submitting
Shelton’s claim for breach of contract to the jury in broad form.
1. Applicable Law
“[W]hen a trial court submits a single broad-form liability question incorporating
multiple theories of liability, the error is harmful and a new trial is required when the
appellate court cannot determine whether the jury based its verdict on an improperly
submitted invalid theory.” Crown Life Ins. Co. v. Casteel, 22 S.W.3d 378, 388 (Tex.
2000). “[W]hen a jury bases a finding of liability on a single broad-form question that
commingles invalid theories of liability with valid theories, the appellate court is often
unable to determine the effect of this error.” Id. “It is essential that the theories
submitted be authorized and supported by the law governing the case. If they are not,
the appellate court must, at a minimum, be able to determine whether properly
submitted theories constituted the basis of the jury’s verdict.” Id.
2. Standard of Review
We review a challenge to the trial court’s jury charge under an abuse of
discretion standard. Tex. Dep't of Hum. Servs. v. E.B., 802 S.W.2d 647, 649 (Tex.
1990); Moss v. Waste Mgmt. of Tex., Inc., 305 S.W.3d 76, 81 (Tex. App.—Houston [1st
Dist.] 2009, pet. denied) (citing European Crossroads’ Shopping Ctr., Ltd. v. Criswell,
910 S.W.2d 45, 54 (Tex. App.—Dallas 1995, writ denied)). A trial court abuses its
discretion when it acts in an arbitrary or unreasonable manner, or if it acts without
reference to any guiding rules or principles. Tex. Dep’t of Hum. Servs., 802 S.W.2d at
649; Moss, 305 S.W.3d at 81. A trial court has wide discretion in submitting instructions
34
and jury questions. Moss, 305 S.W.3d at 81 (citing Howell Crude Oil Co. v. Donna Ref.
Partners, Ltd., 928 S.W.2d 100, 110 (Tex. App.—Houston [14th Dist.] 1996, writ
denied)).
3. Discussion
Question 1 of the jury charge asked, “Did ALAMO COUNTRY CLUB fail to
comply with the terms of the agreement?” The jury was given the following instruction
with respect to the agreement:
The Agreement between James Shelton and the Alamo Country Club
consists of the Declarations of Record Phase III, Lots 252 through 641,
First Amendment to the Covenants, Conditions, and Restrictions
Applicable to Alamo Country Club Subdivision, City of Alamo, Hidalgo
County, Texas, the deeds, the Articles of Incorporation and the Articles of
Amendment to the Articles of Incorporation of Alamo Country Club
Owners Association.
A trial court errs by submitting to the jury theories of liability that are not legally
viable, e.g., liability theories that have not been pled, are not supported by the legally
sufficient evidence, or are not supported by operative law. See TEX. R. CIV. P. 277
(requiring that the trial court submit issues that are raised by the pleadings and the
evidence); Casteel, 22 S.W.3d at 390 (stating that Rule 277 implicitly mandates that the
jury be able to base its verdict on legally valid questions and instructions); see also
Romero v. KPH Consol., Inc., 166 S.W.3d 212, 215 (Tex. 2003) (“[B]road-form
submission cannot be used to put before the jury issues that have no basis in the law or
the evidence.”). Thus, although Rule 277 of the Texas Rules of Civil Procedure
requires the trial court to submit broad-form questions whenever feasible, submission of
broad-form liability question may be infeasible when the trial court is uncertain about
whether particular theories of liability should be submitted. TEX. R. CIV. P. 277; Casteel,
35
22 S.W.3d at 390. In that circumstance, judicial economy may favor separate
submission of liability theories to prevent the need to re-try the cause of action if the trial
court reaches an incorrect decision with regard to which theories of liability should be
submitted to the jury. Casteel, 22 S.W.3d at 390.
Here, Shelton alleged three breaches: (1) ACCOA hired attorneys and sued
Shelton without approval by the membership or the Board; (2) ACCOA failed to give
Shelton three written warnings before calling the police; and (3) ACCOA prevented him
from using ACC amenities. Appellants argue that broad-form submission prevents them
from showing that the jury based their “yes” answer on an invalid or unproven theory.
Although Shelton’s live pleading alleged three ways in which appellants breached
their agreement with him, our review of the record shows that the jury was asked to
consider only one of the three as a basis for awarding damages. Specifically, the jury
was asked to decide whether appellants breached their agreement with Shelton by
preventing him from using the ACC golf course. This is clear from the charge, which
asked the jury to decide whether there was a breach of the agreement and, if so, to
decide what sum of money would fairly and reasonably compensate Shelton for “loss of
use of property.”
During closing arguments, counsel for Shelton told the jury the following:
Question number one is the question concerning the contract. Did Alamo
Country Club fail to comply with the terms of agreement? That is, did they
fail to give him the benefits of membership? Did they fail to treat him as a
member? Did they breach their agreement with him? And I submit to you
the evidence is uncontroverted, that, yes, they breached their agreement
to him. Yes, they did not let him play golf. And yes, they did not let him
use the common areas. And yes, these were all violations. . . . So I will
submit to you the [answer] to question . . . number one is yes.
Counsel for appellants told the jury the following:
36
Let’s start with question one . . . . This is the one that asks about whether
we failed to comply with an agreement with Mr. Shelton. We didn’t even
know what Mr. Shelton’s status was. That’s what this was all about, trying
to find out was he an owner? Was he a renter? Was he a guest? Was
he a resident? What are they claiming?
And let me just make one brief comment about this business about being
a resident and the residence rule. There is a document in evidence that
they referred to throughout the case as the residence rule. That document
does not say a thing about what a resident can do. It has a definition of a
resident, but nowhere does it say a resident can play golf or do anything
else. I encourage you to look for that document because it does not say a
resident can play golf.
You heard from our witnesses that under some circumstances someone
can come in and register as a resident and they can use the facilities but
Mr. Shelton would never do that. And, in fact, this question you’ve got it’s
tailor made for Mr. Shelton. Because Mr. Shelton concealed material facts
from Alamo Country Club. Mr. Shelton had knowledge of those facts.
Alamo Country Club did not have knowledge of those facts.
That’s why we are in this situation. Because Mr. Shelton has reasons why
he thinks he’s entitled to play golf but he won’t share them with anyone.
And just before he is arrested when there is one last chance and [Staples]
comes up to him and says, sir, have you seen our letter? Can we sit down
and talk about this? Mr. Shelton says, no, I’m going to go play golf.
Having seen the letter knowing that means the police are going to be
called he still says, no, I’m going to go play golf.
...
Now, let’s get to the questions that talk about money. The first one asked
you for an amount for loss of use of the property. This has to do with
those few weeks that Mr. Shelton was not allowed to use the golf course
at Alamo Country Club.
From the foregoing it is clear that the only theory the jury was asked to decide
was whether appellants breached their agreement with Shelton by preventing him from
using the ACC facilities and specifically the golf course. The award of damages on
Shelton’s breach of contract claim in the amount of $500 was based on “loss use of
property,” which is consistent with only one theory of breach of contract being submitted
37
to the jury. Therefore, the trial court did not submit Shelton’s breach of contract claim to
the jury in broad form, as appellants argue. Accordingly, appellants’ first sub-issue is
overruled.
B. Sufficiency of the Evidence
1. Approval of Suit Against Shelton
In their second sub-issue, appellants argue that the evidence is insufficient to
establish breach of contract because the Declarations and Articles did not require either
the membership or board to approve filing suit or hiring the attorneys. In relevant part,
Shelton’s live petition alleged the following:
[Shelton] would show that ACC brought this lawsuit without a majority vote
of its membership in support of a lawsuit or majority vote of its board of
directors in violation of its Articles of Incorporation and amendments, and
its Bylaws and amendments, and [Shelton] sues for resulting damages,
including, but not limited to loss of use of Alamo Country Club facilities,
wrongful arrest damages, and attorney’s fees, and for enforcement of the
Articles of Incorporation and amendments.
[Shelton] references ACC’s Article 2(c) which states:
To make and perform contracts of every kind for any lawful
purpose within limits as to amount, determined by a majority
of the members of the corporation, with any person, firm,
association, corporation, municipality, state, government, or
municipal or political subdivision.
There was no membership vote to hire or contract with attorney(s) to
represent ACC to sue [Shelton]. There was no membership vote to sue
[Shelton]. There was no board of directors vote to sue [Shelton].
As set forth above in our discussion of appellants’ first sub-issue, we have
concluded that this theory of liability, though alleged in Shelton’s live pleading, was
ultimately not submitted to the jury. The jury’s award of damages on Shelton’s breach
of contract claim was for “loss use of property,” not for failure to secure approval for the
38
lawsuit against Shelton by a vote of the board or by a vote of the membership.
Accordingly, appellants’ second sub-issue is overruled.
2. Three Written Warnings
In their third sub-issue, appellants argue that the evidence is legally and factually
insufficient to support the jury’s verdict on Shelton’s claim for breach of contract
because the Declarations and Articles did not require ACCOA to give Shelton three
written notices of violations before calling the police.
In relevant part, Shelton’s live petition alleged the following:
ACC’s rules and regulations set forth a specific procedure it must follow
when it comes to enforcing the restrictions and conditions of ACC. This
procedure includes the application of penalties for violations of ACC’s
governing rules and regulations. Specifically, the rules and regulations
outline a three-step process in applying penalities. These are:
1. VIOLATION, 1st OFFENSE
Violator will be advised by the manager, in writing, of the
infraction.
2. VIOLATION, 2nd OFFENSE
Violator will be advised, in writing, by the manager and
violator will be suspended from use of all amenities for a
period of two weeks from date of written advisement. In
addition, the violator’s name will be posted on the club
bulletin board and published in the Chatterbox.
3. VIOLATION, 3rd OFFENSE
Violator will be advised, in writing, by the manager and
violator will be suspended from use of all amenities for 30
days from the date of written advisement. In addition, the
violator’s name be posted on the club bulletin board and
published in the Chatterbox, with possible legal action to
follow.
ACC did not follow its own three-step process and instead had [Shelton]
arrested and filed suit against him to enjoin him from using Alamo Country
Club facilities.
39
Again, as set forth above in our discussion of appellants’ first sub-issue, we have
concluded that this theory of liability, though alleged in Shelton’s live pleading, was
ultimately not submitted to the jury. The jury’s award of damages on Shelton’s breach
of contract claim was for “loss use of property,” not for failure to give Shelton three
written warnings before calling the police or filing suit. Accordingly, appellants’ third
sub-issue is overruled.
3. Use of ACC Amenities
In their fourth sub-issue, appellants argue that the evidence is legally and
factually insufficient to support the jury’s finding of breach of contract because the
declarations and articles of incorporation do not give owners the right to use any of the
common areas of the ACC, such as the golf course. At trial, the uncontroverted
evidence established that the ACC amenities, such as the golf course, are owned and
maintained by ACCOA for the benefit of ACCOA members. There was also
uncontroverted evidence that defined ACCOA members to include all persons who
acquire title, legal or equitable, to any lot in the subdivision. Finally, the uncontroverted
evidence established that Shelton and his wife acquired title to lot #260 in 1995,
whereby they became ACCOA members with the right to use ACC amenities.
At trial, appellants maintained that Shelton was divested of his status as an
ACCOA member in February 1998, when he signed a warranty deed, purporting to
convey lot #260 to Winter for $93,000. Although Shelton included a reservation in the
deed stating that the conveyance did “not include the voting rights or the common
ground rights or values,” appellants argued that the reservation was invalid and void.
Appellants also argued that, although Shelton’s wife did not sign the deed, the
40
conveyance was nonetheless valid at least as to Shelton’s one-half interest in the
community property, thus stripping Shelton of his membership in the ACCOA even
though his wife remained a member.
Shelton took the position that the deed was void and of no effect because he and
his wife acquired lot #260 together, as husband and wife, and the property was
therefore acquired as community property, which could only be conveyed by a deed
signed by both spouses. In support of this, he offered expert testimony from attorney
John King. Additionally, an expert report from King evaluating the validity of the deed
from Shelton to Winter was admitted into evidence. In the report, King opined, in
relevant part, as follows:
Mr. Shelton’s attempted conveyance to Mr. Winter under Dalton would
have been invalid as an illegal partition of community property. See
Dalton v. Jackson, 691 S.W.2d 765, 768 (Tex. App.—Austin 1985, no writ)
(one spouse may not convey to a third party, so as to effectuate a partition
by creating a tenancy-in-common between the remaining spouse and the
third party); see also Tex. Fam. Code Ann. § 3.102(c) (Vernon 2005).
Under Vallone, one spouse cannot alone convey or encumber joint
management community property unless spouses have otherwise agreed.
Vallone v. Miller, 663 S.W.2d 97, 99 (Tex. App.—Houston [14th Dist.]
1983, writ ref’d n.r.e.). No power of attorney in writing or other agreement
has been provided to me showing that Mrs. Shelton agreed to the
attempted conveyance.
Standard 14.60 of the Texas Title Examination Standards states that if
property is acquired during marriage by a deed naming both spouses as
grantees, an examiner may not give effect to a subsequent conveyance of
the property unless (1) it is joined by both spouses or (2) it was made by
the husband before January 1, 1968, and did not convey homestead
property.
The pleadings I have reviewed indicated that Mr. Shelton was arrested on
Alamo Country Club premises on October 12, 2004 while playing golf. It is
my opinion that Mr. Shelton had a legal right to be on the premises of the
Alamo Country Club at the time of his arrest for criminal trespass.
41
We agree with the conclusions reached in King’s report. Appellants argue that
the deed to Winter was valid at least as to Shelton’s interest in the property, thus
creating a tenancy-in-common between Winter and Shelton’s wife. The Austin Court of
Appeals rejected that position in its decision in Dalton, where the court held that “one
spouse may not convey his or her interest in joint community property to a third party,
so as to effectuate a partition by creating a tenancy-in-common between the remaining
spouse and the third party.” Dalton v. Don J. Jackson, Inc., 691 S.W.2d 765, 768 (Tex.
App.—Austin 1985, no writ). We reach the same conclusion, noting that this result
preserves the character of the property, which was acquired by Shelton and his wife as
community property. See Carter v. Carter, 736 S.W.2d 775, 780 (Tex. App.—Houston
[14th Dist.] 1987, no writ) (“The separate or community nature of property is determined
by the time and circumstances of its acquisition.”).
Although appellants are correct in noting that a spouse may change community
property into separate property, we have recognized this only when a spouse gifts or
conveys his interest in community property to his spouse as her separate property.
Pankhurst v. Weitinger & Tucker, 850 S.W.2d 726, 730 (Tex. App.—Corpus Christi
1993, writ denied) (“A gift by the husband to the wife of his interest in community
property would become the separate property of the donee [spouse].”) (citing Hilley v.
Hilley, 342 S.W.2d 565, 568 (Tex. 1961)). That is not what took place in this case, as
the conveyance at issue purported to be from one spouse to a third party, not from one
spouse to another.
Finally, appellants cite Vallone v. Miller, 663 S.W.2d 97, 99 (Tex. App.—Houston
[14th Dist.] 1983, writ ref’d n.r.e.) in support of their contention that “other courts have
42
concluded a spouse may convey his undivided half interest to a third party without the
spouse’s consent, resulting in a co-tenancy.” We conclude that Vallone does not
support their position.
In Vallone, which was an appeal from a take-nothing judgment on appellant’s suit
seeking specific performance of a contract to convey real property, the court was
presented with “a completed written agreement to convey property [that] had been
executed by appellant as purchaser and appellee [husband] as seller.” Id. at 97-98.
The court noted that in the blank for the name of the “sellers” were the names of both
the husband and his wife, but only the husband signed the agreement. Id. at 98. The
husband and wife “contended that the property was joint management community
property which could not be conveyed or encumbered by one spouse alone; and
asserted the contract was incomplete on its face and it had no force or effect because
[the wife’s] signature did not appear on the document.” Id. After a jury found “that the
property was joint management community property, the trial judge entered [a take
nothing] judgment in favor of [husband and wife].” Id.
On appeal, the court noted that “[i]t is clear that a husband has the right to
convey his one-half interest in non-homestead joint management community property
without the signature of his wife on the conveyance.” Id. Then, the court explained:
The earnest money contract is incomplete on its face and is not capable of
being enforced by specific performance. While both husband and wife are
named as sellers only the husband’s signature appears on the contract.
The description of the property to be sold is not in terms of the husband’s
“undivided one-half interest” or other words to indicate that only [the
husband’s] interest was involved. From the terms of the document it is
evident the parties intended that the agreement would be effective only
upon execution by both [husband] and [wife] as sellers. Once there was
the proper execution, the contract was to involve the interests of both
[husband and wife].
43
Id.
Similarly, in this case, the deed to Winter was not stated in terms of Shelton’s
“undivided one-half interest” or other words to indicate that only Shelton’s interest was
involved. On the contrary, from the terms of the deed, it appears that the conveyance
purported to involve the interests of both Shelton and his wife, though only Shelton’s
signature appears on the document.
In Vallone, the court was faced with the same question presented in this case:
“whether the signature of one spouse was binding upon both husband and wife.” Id. at
99. The court noted that “[o]ne spouse cannot alone convey or encumber joint
management community property unless the spouses have otherwise agreed.” Id. The
court concluded “[w]ithout a ‘power of attorney in writing or other agreement’ to the
contrary, [the husband] had no authority to contract to dispose of the entire joint
management community property without his wife joining in the contract.” Id. We reach
the same conclusion. There was no evidence offered at trial of a power of attorney or
other written agreement between Shelton and his wife authorizing Shelton to dispose of
lot #260 to Winter, as set forth in the deed. Accordingly, we conclude that the deed was
void.
The evidence was legally and factually sufficient to establish that, at all relevant
times, Shelton and his wife were members of the ACCOA, had the right to use ACC
amenities, including the ACC golf course, and that appellants deprived Shelton of his
right to use the ACC amenities by having him arrested on the golf course for criminal
trespass. Accordingly, appellants’ fourth sub-issue is overruled.
44
We have considered the four sub-issues fairly included in appellants’ fourth issue
and have overruled each. Accordingly, appellants’ fourth issue is overruled.
VI. ATTORNEY’S FEES
In their fifth issue, which consists of three sub-issues, appellants argue that there
is no evidence or insufficient evidence to support the jury’s award of $95,000 for
reasonable and necessary attorney’s fees.
A. Conclusory Opinion Testimony
In their first sub-issue, appellants argue that the evidence is legally and factually
insufficient to support an award of attorney’s fees in the amount of $95,000 because the
only evidence is the testimony by Shelton’s attorney, Katie Klein, who gave a
conclusory opinion on the total fee for the entire case and the client ledger for Shelton’s
file, which did not document who worked on the file or what they did.
Klein testified that she was licensed 31 years ago and is board certified in civil
trial law and family law. Her resume was admitted into evidence. Two other lawyers in
Klein’s firm also represented Shelton in this matter. They have been practicing for close
to 20 years and over 25 years, respectively. Klein charged Shelton a contractual hourly
rate of $150, which, Klein testified, is below her normal rate of $325. According to Klein,
anything in the $300 hourly range would be reasonable in the community. Klein
charged Shelton an hourly rate of $60 for legal assistants. According to Klein, a
reasonable hourly rate for legal assistants in Hidalgo County is between $50 and $85.
Klein testified that she had performed legal work for Shelton in this matter for five
years leading up to trial. Her firm defended Shelton against ACCOA’s claims and
45
prosecuted his claims against appellants for breach of contract, malicious prosecution,
false imprisonment, intentional infliction of emotional distress, and civil conspiracy.
Klein’s client ledger for Shelton was admitted into evidence. It showed the total
hours worked by the attorneys and legal assistants. For the period through December
13, 2009, the ledger showed that total fees were $87,313.64, of which $68,533.84 had
been paid. Unbilled fees were $18,799.80. Klein estimated that attorney’s fees for trial
would be $3,000 per day. That brought the total to approximately $100,000 through
verdict.
According to Klein, “All of the facts having to do with the breach of the covenants
and having to do with the contract claims have the same facts that have to do with the
tort claims.” In Klein’s opinion, “to prove one you have to prove them all.” According to
Klein, this was also true of the defense of the claims brought by ACCOA: “his defense
is that he had a contractual right to be where he was and to do what he was doing.” On
cross examination, Klein testified that she did not believe it was possible to segregate
the tort claims and the claim for attorneys’ fees relating to breach of contract. According
to Klein, they are inextricably intertwined and cannot be separated. She testified, “I
believe that they cannot be separated because they’re all the same issues of his right to
be there [on the golf course], his being a resident, his being arrested, and his being
mistreated by the country club. I don’t think you can separate them.” Klein was later re-
called as a witness, and she testified that, after reviewing invoices for Shelton’s case,
she had determined that approximately 5% of the fees were related solely to the tort
claims.
46
Appellants did not offer any evidence to controvert Klein’s testimony or the client
ledger.
1. Applicable Law
Generally, the party seeking to recover attorney’s fees carries the burden of
proof. Stewart Title Guar. Co. v. Sterling, 822 S.W.2d 1, 10 (Tex. 1991). “A reasonable
fee is one that is not excessive or extreme, but rather moderate or fair.” Garcia v.
Gomez, 319 S.W.3d 638, 642 (Tex. 2010). The reasonableness of attorney’s fees is
ordinarily left to the fact-finder, and a reviewing court may not substitute its judgment for
the jury’s. Barker v. Eckman, 213 S.W.3d 306, 314 (Tex. 2006).
2. Discussion
Appellants argue that the evidence is legally and factually insufficient to support
the jury’s award of attorney’s fees in the amount of $95,000 because Klein’s testimony
was conclusory. Specifically, appellants complain that Klein “did not describe any
specific tasks, when they were done, who did them, or how they supported the contract
claim.”
“An attorney’s testimony about the reasonableness of his or her own fees is not
like other expert witness testimony.” Garcia v. Gomez, 319 S.W.3d 638, 641 (Tex.
2010). “Although rooted in the attorney’s experience and expertise, it also consists of
the attorney’s personal knowledge about the underlying work and its particular value to
the client.” Id. According to the Texas Supreme Court, “The testimony is similar to that
of a property owner whose personal knowledge qualifies him to give an opinion about
his own property’s value.” Id. (citing State v. Cent. Expressway Sign Assocs., 302
S.W.3d 866, 874 (Tex. 2009); Gulf States Utils. Co. v. Low, 79 S.W.3d 561, 566 (Tex.
47
2002)). “The attorney’s testimony is not objectionable as merely conclusory because
the opposing party, or that party’s attorney, likewise has some knowledge of the time
and effort involved and if the matter is truly in dispute, may effectively question the
attorney regarding the reasonableness of his fee.” Id. “[W]here the testimony of an
interested witness is not contradicted by any other witness, or attendant circumstances,
and the same is clear, direct and positive, and free from contradiction, inaccuracies, and
circumstances tending to cast suspicion thereon, it is taken as true, as a matter of law.”
Id. at 642.
In this case, the award of attorney’s fees was not based merely on a conclusory
statement that a $95,000 fee was reasonable, as appellants suggest. The evidence
established an hourly rate of $150, which went uncontested as a reasonable hourly rate
for the attorneys representing Shelton based on their professional experience,
qualifications, and reputations in the community. The 35-page client ledger established
the number of hours worked on Shelton’s case and when those hours were worked.
There was no dispute as to the authenticity of the ledger as a business record or to the
accuracy of the information it contained. Thus, the ledger provided a non-conclusory
and reliable basis for establishing the amount of time the attorneys spent working on
Shelton’s case.
To the extent that appellants contend that Shelton was required to put on specific
evidence concerning each individual task performed by his attorneys during the course
of their 5-year representation, as well as testimony to establish exactly why each
individual task was reasonable and necessary, their contention is made without
appropriate citation to supporting authority. See TEX. R. APP. P. 38.1(i). There was no
48
dispute at trial about the actual number of hours Shelton’s attorneys spent performing
necessary services or the reasonableness of the hourly rate charged. See Ford Motor
Co. v. Garcia, 363 S.W.3d 573, 580 (Tex. 2012) (“[A] reasonable hourly rate multiplied
by the number of hours spent performing necessary services within the guardian ad
litem’s role yields a reasonable fee.”). The only contested issue was whether it was
possible to segregate the services rendered to establish the total number of hours spent
performing services relating solely to Shelton’s tort claims. Klein testified that it was
5%. We note that in their third sub-issue, appellants have made a separate challenge
to the sufficiency of the evidence on the issue of segregation of attorney’s fees.
Accordingly, we will address that contention in connection with appellants’ third sub-
issue.
We conclude that the test for legal sufficiency is met because “the evidence at
trial would enable reasonable and fair-minded people to reach the verdict under review.”
See Keller, 168 S.W.3d at 827. Specifically, reasonable and fair-minded people could
have concluded from the evidence that $95,000 was a reasonable amount for attorney’s
fees. We further conclude that the test for factual sufficiency is met because the verdict
is not contrary to the overwhelming weight of the evidence such that it is clearly wrong
and unjust. See Ellis, 971 S.W.2d at 406-07. Accordingly, appellants’ first sub-issue is
overruled.
B. Per Se Unreasonable
In their second sub-issue, appellants argue that under any rational standard,
$95,000 is not a reasonable fee to collect $500. Appellants argue that “[t]he jury must
49
consider the amount involved and the result obtained; the degree of success on the
contract claim is the most critical factor on what fee is reasonable.”
In this case, the jury charge asked the jury to decide what amount would be “a
reasonable fee for the necessary services of [Shelton’s] attorneys in this case.” The
jury was instructed “to consider attorney’s fees necessary for James Shelton’s claim for
breach of agreement only and not attorney’s fees incurred in connection with any other
claims.” The jury was not instructed that it “must consider the amount involved and the
result obtained,” as appellants argue. Nor was the jury instructed that “the degree of
success on the contract claim is the most critical factor on what fee is reasonable,” as
appellants contend. Moreover, appellants did not object to this portion of the charge or
request that the jury be given either of those instructions.
Our mandate is to review the sufficiency of the evidence based on the charge
actually submitted. Barker v. Eckman, 213 S.W.3d 306, 313 (Tex. 2006) (citing Wal-
Mart Stores, Inc. v. Sturges, 52 S.W.3d 711, 715 (Tex. 2001) (“[A]n appellate court is to
review the evidence according to the jury charge given and the jury findings in response
to that charge.”)). We have already reviewed sufficiency of the evidence in connection
with appellants’ first sub-issue and concluded that it was both legally and factually
sufficient to support the award of $95,000 in attorney’s fees. Appellants’ second sub-
issue presents nothing further for the Court to review. Accordingly, appellants’ second
sub-issue is overruled.
50
C. Segregation
In their third sub-issue, appellants argue that the evidence is legally and factually
insufficient to support the jury’s award of attorney’s fees because Shelton failed to prove
what services advanced both the contract and tort claims.
“[T]he need to segregate fees is a question of law.” Tony Gullo Motors I, L.P. v.
Chapa, 212 S.W.3d 299, 312 (Tex. 2006). The courts of appeals have generally
(though not always) applied a de novo standard of review. Id. Nonetheless, “it may
often be impossible to state as a matter of law the extent to which certain claims can or
cannot be segregated; the issue is more a mixed question of law and fact for the jury.”
Id.
As noted above, Klein initially testified that the services could not be segregated
and then later testified that she had determined that 5% of the services were related
solely to the tort claims. This is precisely the type of testimony courts have required in
other cases involving similar issues. See Flagship Hotel, Ltd. v. City of Galveston, 117
S.W.3d 552, 566 n.7 (Tex. App.—Texarkana 2003, pet. denied) (“Flagship argues that
the segregation standard is difficult to meet. We disagree and note that segregated
attorney’s fees can be established with evidence of unsegregated attorney’s fees and a
rough percent of the amount attributable to the breach of contract claim.”); see also
Tony Gullo Motors, 212 S.W.3d at 314 (“Here, Chapa’s attorneys did not have to keep
separate time records when they drafted the fraud, contract, or DTPA paragraphs of her
petition; an opinion would have sufficed stating that, for example, 95 percent of their
drafting time would have been necessary even if there had been no fraud claim.”);
Stewart Title Guar. Co. v. Aiello, 941 S.W.2d 68, 73 (Tex. 1997) (noting that claimant’s
51
attorney "testified that approximately twenty-percent of his time and fifteen-percent of
his paralegal’s time concerned issues predating the agreed judgment”); Med. Specialist
Group, P.A. v. Radiology Assocs., L.L.P., 171 S.W.3d 727, 738 (Tex. App.—Corpus
Christi 2005, pet. denied) (“In his affidavit, Radiology Associates’ counsel. . . testified
that his fees for the defense of the case totaled $460,087.00, and approximately forty
percent of these fees were directly related to Saratoga’s antitrust claims.”). Appellants’
third sub-issue is overruled.
We have considered the three sub-issues fairly included in appellants’ fifth issue
and have overruled each. Accordingly, appellants’ fifth issue is overruled.
VII. ACTUAL DAMAGES
In their sixth issue, which consists of three sub-issues, appellants argue that
there is insufficient evidence to support the jury’s award of actual damages.
A. Damages for Breach of Contract
In their first sub-issue, appellants argue that the evidence is insufficient to
establish that Shelton suffered $500 loss of use damages from any breach of contract.
The jury heard uncontroverted evidence that Shelton was barred from using ACC
amenities from October 12, 2004 through November 8, 2004. Shelton testified that he
regularly played golf at ACC and would play three rounds per day. There was testimony
that the fee for a non-member to play on the ACC golf course as a guest was $8. From
this evidence, the jury could have found that Shelton was deprived of using the golf
course for 27 days, the lost use of the golf course was worth $24 per day, and Shelton’s
total loss was $648 for the entire period. On this record, the jury’s award of $500 for
52
Shelton’s lost use of the facilities is just compensation for which the evidence is legally
and factually sufficient. See Qaddura v. Indo-European Foods, Inc., 141 S.W.3d 882,
888 (Tex. App.—Dallas 2004, pet. denied) (“The universal rule for measuring damages
for the breach of a contract is just compensation for the loss or damage actually
sustained.”). Accordingly, appellants’ first sub-issue is overruled.
B. Damages for Pain, Suffering, Mental Anguish
In their second sub-issue, appellants argue that the evidence is insufficient to
establish that malicious prosecution or false imprisonment caused Shelton pain,
suffering, and mental anguish to support a jury award of $200,000.
Mental anguish damages cannot be awarded without either “direct evidence of
the nature, duration, or severity of [plaintiff’s] anguish, thus establishing a substantial
disruption in the plaintiff's daily routine,” or other evidence of “a high degree of mental
pain and distress” that is “more than mere worry, anxiety, vexation, embarrassment, or
anger.” Parkway Co. v. Woodruff, 901 S.W.2d 434, 444 (Tex. 1995). Compensation
can only be for mental anguish that causes “substantial disruption in daily routine” or “a
high degree of mental pain and distress.” Saenz v. Fidelity & Guar. Ins. Underwriters,
925 S.W.2d 607, 614 (Tex. 1996). Courts should “closely scrutinize” awards of mental
anguish damages. Universe Life Ins. Co. v. Giles, 950 S.W.2d 48, 54 (Tex. 1997).
There must also be evidence that the amount of mental anguish damages awarded is
fair and reasonable, and the appellate court must perform a “meaningful evidentiary
review” of the amount found. Saenz, 925 S.W.2d at 614.
In Saenz, which appellants cite in support of their argument, the Texas Supreme
Court held that the plaintiff’s testimony—“I worried about that lot”—was an insufficient
53
basis for awarding mental anguish damages because it did not establish a “substantial
disruption in daily routine” or “a high degree of mental pain and distress.” Id. In this
case, in contrast, there was direct evidence of the nature, duration, and severity of
Shelton’s mental anguish, establishing that there was a substantial disruption in his
daily routine. As noted above, Shelton is an avid golfer, who played up to three times a
day on the ACC golf course prior to his arrest. He testified that he enjoyed playing golf
and did it for the exercise. The arrest struck at the core of Shelton’s day-to-day routine,
affecting his lifestyle and his means of maintaining physical health and emotional well-
being.
Shelton testified that “it is by far the most stressful event that ever took place in
my life, and I thought that I always worked under high stress circumstances for every
employment job I had.” Being handcuffed was a “big emotional” event. He was publicly
humiliated by being arrested in front of 15 of his neighbors. He felt hurt. He felt that he
had been placed in jeopardy and his pulse went up and he had difficulty calming down.
According to his wife, Shelton remained in a state of disbelief after his release from jail.
He did not sleep well at night. He would wake up clenching his jaw. The back of his
mouth hurt from grinding his teeth. Clumps of his hair started falling out. He lost
approximately 20% of his hair following the arrest. He attributed the teeth-grinding and
hair loss to stress caused by the arrest.
Appellants argue that expert testimony is necessary to establish that Shelton’s
emotional distress caused his teeth-grinding and hair loss; however, other courts have
permitted lay testimony on similar issues and we are not persuaded that this is an area
reserved exclusively for expert witness testimony. See, e.g., Toles v. Toles, 45 S.W.3d
54
252, 263 (Tex. App.—Dallas 2001, pet. denied) (“According to Wife, she suffered from
an ulcer, and Husband's treatment of her caused her great emotional distress, caused
her to feel worthless and ashamed, and caused her to grind her teeth so hard that some
are cracked.”).
Shelton’s social life and family life were also disrupted. He believed he “had
better just lay back from this and just be quiet.” He quit attending board meetings. He
completely withdrew from activities at ACC other than playing golf. He quit playing in
the men’s golf league. He quit attending social dinners at ACC. Shelton’s wife testified
that they were no longer welcome at ACC, which affected both of them.
Shelton also testified that the arrest itself was physically painful. He felt
discomfort when his hands were handcuffed. According to Shelton, the handcuffs were
put on very tightly and he suffered bruising around the wrists that lasted six weeks.
We conclude that this is evidence of mental pain and distress that was more than
mere worry, anxiety, vexation, embarrassment, or anger. See Goodman v. Page, 984
S.W.2d 299, 306-07 (Tex. App.—Fort Worth 1998, pet. denied) (holding that testimony
regarding stomach problems, harm to reputation, public and private humiliation, being
devastated, feeling betrayed, and subjection to derogatory comments constituted high
degree of mental pain and distress); see also Latham v. Castillo, 972 S.W.2d 66, 70
(Tex. 1998) (plaintiffs’ testimony that conduct “made me throw up . . . sick, nervous,
mad,” “hurt me a lot,” and “my heart was broken. I was devastated, I felt physically ill”
held “some evidence that conduct caused a high degree of mental pain and distress”).
Accordingly, appellants’ second sub-issue is overruled.
55
C. Damages for Disfigurement
In their third sub-issue, appellants argue that the evidence is insufficient to
establish that Shelton suffered any disfigurement and the award of damages in the
amount of $1,500 for disfigurement was excessive. According to appellants, the hair
loss and dental problems suffered by Shelton are simply not disfiguration. As
appellants note in their brief, the Texas Supreme Court has observed that
“[d]isfigurement has been defined as that which impairs or injures the beauty, symmetry,
or appearance of a person or thing; that which renders unsightly, misshapen or
imperfect, or deforms in some manner.” Goldman v. Torres, 341 S.W.2d 154, 160 (Tex.
1960). As Shelton points out, this Court has previously upheld a $500,000 award for
disfigurement caused by the loss of two front teeth. See Pentes Design, Inc. v. Perez,
840 S.W.2d 75, 81 (Tex. App.—Corpus Christi 1992, writ denied). We disagree with
appellants’ assertion that the hair loss and dental problems suffered by Shelton are
categorically outside the scope of a legally-compensable injury. The jury’s award of
$1,500 in damages was “within the discretion of the fact finder.” See id. at 80. The
amount of damages is “not excessive.” See id. at 81. We conclude that the evidence is
legally and factually sufficient to support the award. Accordingly, appellants’ third sub-
issue is overruled.
We have considered the three sub-issues fairly included in appellants’ sixth issue
and have overruled each. Accordingly, appellants’ sixth issue is overruled.
VIII. PUNITIVE DAMAGES
In their seventh issue, appellants argue that the jury’s award of punitive damages
is excessive and violates due process. As set forth above in our discussion of
56
appellants’ third issue, we have concluded that the evidence is legally insufficient to
support an award of exemplary damages based on the jury’s finding of malice.
Accordingly, it is unnecessary to decide appellants’ seventh issue pertaining to the size
of the award. See TEX. R. APP. P. 47.1.
IX. CROSS-ISSUE
In his cross-issue, Shelton argues that the trial court erred in modifying its
February 23, 2010 judgment and entering its May 24, 2010 modified final judgment in
reducing the $500,000 award in punitive damages against ACCOA to $201,500 to
conform to the punitive damages cap. Having sustained appellants’ third issue
challenging the sufficiency of the evidence to support the jury’s finding of malice, the
only basis for its award of exemplary damages, we vacate the award in its entirety and
overrule Shelton’s cross issue.
X. CONCLUSION
We reverse the trial court’s award of $201,500 in exemplary damages, render
judgment that Shelton take nothing by way of his claim for exemplary damages, and
affirm the remainder of the judgment.
____________________
ROGELIO VALDEZ
Chief Justice
Delivered and filed the
31st day of August, 2012.
57