Don R. Johnson and Freddie L. Oliver v. Texas Serenity Academy, Inc. D/B/A Texas Serenity Academy Charter School ( 2015 )

Opinion issued March 12, 2015
In The
Court of Appeals
For The
First District of Texas
————————————
NO. 01-14-00438-CV
———————————
DON R. JOHNSON AND FREDDIE L. OLIVER, Appellants
V.
TEXAS SERENITY ACADEMY, INC. D/B/A TEXAS SERENITY
ACADEMY CHARTER SCHOOL, Appellee
On Appeal from the 215th District Court
Harris County, Texas
Trial Court Case No. 2010-78587
MEMORANDUM OPINION
This case arises from a dispute between the board of directors of a not-for-
profit corporation and one of its co-founders. Texas Serenity Academy, the
corporation, operates a state-chartered, open-enrollment school. Don Johnson, the
co-founder, also had served as superintendent and board president. The suit arises
from Johnson’s conduct while in office and his interference with the school’s
operations and finances after resigning his positions.
Don Johnson and Freddie Oliver, Johnson’s assistant, appeal the trial court’s
summary judgment in favor of Academy. Johnson and Oliver contend that the trial
court erred in granting relief to Academy, based on its claims for injunctive relief,
fraud, and breach of fiduciary duty, and in awarding compensatory and exemplary
damages and attorney’s fees. We affirm in part and reverse and remand in part.
Background
Texas Serenity Academy Charter School is an open-enrollment charter
school pursuant to Chapter 12 of the Texas Education Code. Academy is a non-
profit charitable corporation governed by a board of directors and incorporated
under Texas law to operate the school under a contract for charter granted by the
Texas State Board of Education.
In 2006, Johnson served as both superintendent of the school and chairman
of the Academy board of directors.1 In May 2006, Johnson accepted a $208,000
loan, purportedly on behalf of Academy, from Vernon Huggans. Johnson signed a
loan agreement designating Academy as the recipient of the proceeds from the
loan. Johnson received the cash in installments from Huggans, but he did not
1
The record refers to the position as “chairman” or “president,” titles which, for the
purpose of this dispute, are interchangeable.
2
deposit the money in an Academy bank account, refused to account for the funds,
and did not make any payments on the loan. Academy ultimately repaid Huggans
for the loan and a transaction fee—a total of $249,600—despite not having
received any benefit from it.
In 2007, Johnson resigned as superintendent but remained on the board of
directors, serving as its president. In exchange for his resignation, Johnson
demanded more than $200,000 from Academy in the form of a “buyout”
agreement. At that time, Academy was in a dire financial condition: it was
borrowing funds to keep its doors open and was unable to make payments on
outstanding loans. Because of these problems, the Texas Education Agency (TEA)
appointed a monitor for Academy’s instructional program. Despite the financial
insecurity of the school, Johnson accelerated the school’s payments on his
“buyout”; from October 2007 to May 2008 Johnson extracted $243,000 in
payments.
In June 2008, Johnson wrote to Academy’s board of directors, informing
them that he had resigned from the board. Shortly afterward, however, Johnson
contacted the school and stated that he was still a board member by virtue of
having been a founder. He attempted to establish and operate a competing board.
Because of the school’s continuing academic and financial problems, the
TEA monitor became the conservator in November 2008. On March 21, 2009, the
3
TEA conservator, pursuant to her authority, called a board meeting for Wednesday,
March 25. The day before the scheduled meeting, Johnson submitted a written
resignation letter, which he addressed to the TEA commissioner. The text of the
resignation letter reads:
It is with great sorrow that I must inform you that effective
immediately I resign as Chairman of the Board of the Texas Serenity
Academy, Corporation Governing Board. It is my view that my
resignation at this time is in the best interest of the Charter School and
due to my failing health.
I have enjoyed being the founder and Chairman. I have immensely
enjoyed representing the wonderful students, parents, faculty and staff
over the years. I will not stand in the way of the present leadership.
The letter shows that it was copied to, among others, the secretary of Academy’s
board and the school superintendent. Johnson also attached the letter to an email
he sent to Academy’s interim board president and the board president.
When Johnson resigned, he was aware that Academy owed a $300,000 IRS
lien and was obligated to return $600,000 to the TEA because of irregularities in its
attendance reports.
At the March 25, 2009 meeting, which Johnson did not attend, Academy’s
board of directors issued a resolution accepting Johnson’s resignation from the
board of directors. It further directed that the TEA receive written notice that “Don
R. Johnson is no longer a board member, agent, or duly authorized representative
of Texas Serenity Academy, Inc. or Texas Serenity Academy Charter School.”
4
On November 29, 2010, Johnson visited the bank that held Academy’s
accounts. Representing that he was Academy’s agent, Johnson removed the names
of its authorized signatories from its existing accounts and opened new accounts.
Johnson instructed the officer to open the accounts without funding them, but he
could not provide the bank officer with a reason for this deviation from the bank’s
standard requirement of a $100 deposit for each new account. As the transaction
ended, Johnson walked out of and back into the bank building several times. The
bank officer became suspicious of Johnson’s behavior.
Alerted by the bank, Academy discovered that its accounts had been closed
and that its funds were scheduled to transfer from them at midnight. On the advice
of a higher-level bank representative, Academy had the accounts frozen so the
transfers would not occur. However, Johnson’s actions prevented the school from
meeting its payroll obligations on November 30.
The day after Johnson’s bank visit, Johnson and Oliver, assisted by off-duty
police officers and others, entered Academy’s campus and forcibly removed
administrators and staff from the buildings. They changed the locks on the district
office and school campus, disrupting school operations.
Academy brought this suit against Johnson and Oliver, alleging that they had
engaged in fraudulent efforts to usurp the school’s operations and finances. It
applied for and received a temporary injunction prohibiting Johnson from entering
5
the school’s premises, holding himself out as an employee, or interfering with its
operations. Academy sought declaratory relief and damages for fraud and breach
of fiduciary duty. Johnson counterclaimed for defamation and sought a declaration
that he served as a member of Academy’s board and that Academy’s lawsuit
violated its charter.
Academy moved for summary judgment. A written opinion from a
corporate governance expert accompanied Academy’s summary-judgment motion.
Based on his review of the corporate by-laws, board meeting minutes, and other
evidence, including interviews with Academy board members and others, the
expert opined that Johnson’s June 2008 resignation “had the effect of permanently
and decidedly separating [Johnson] from any official capacity with [Academy].”
Further, the expert opined that, while superfluous, Johnson’s March 2009
resignation letter “clearly referenced him resigning from the Corporation
Governing Board, which further solidifies the fact that he should have no post-
March 2009 rights or privileges with the Academy.”
The expert also concluded that
 The $200,000 “buyout” Johnson sought after resigning from the
superintendent position was an uncommon benefit in the non-profit
sector and “put the Academy at some financial risk.” The expert also
observed that Johnson “apparently broke the terms of the buyout,
which called for payments to be made over two years to protect the
financial health of the Academy, by taking it upon himself to draw up
6
checks to himself over the course of several months instead of two
years.”
 Johnson’s November 2010 attempt to withdraw funds from the
Academy’s bank account is “indicative of an individual who sees
himself more as an owner of the organization rather than a trustee.”
 Johnson’s involvement in forcibly removing the school administration
in November 2010 “without making arrangements for substitute
leadership is yet another indication that Mr. Johnson is more
interested in his own claims to the organization than in the success of
the school itself.”
Johnson and Oliver did not respond to Academy’s summary-judgment
motion or appear for the hearing on the motion. The trial court granted the motion,
specifically finding that Johnson breached his fiduciary duty to Academy and that
both Johnson and Oliver had committed fraud. The order declares that “Johnson is
not a current member of the Texas Serenity Academy, Inc. Board of Directors, and
was not a member of the Texas Serenity Academy, Inc. Board of Directors on
November 29, 2010, nor at any time subsequent to March 24, 2009.” The court
awarded compensatory damages of $249,600 against Johnson and exemplary
damages of $200,000 against Johnson and Oliver, jointly and severally, as well as
attorney’s fees and pre- and post-judgment interest on the compensatory damage
award.
7
When Johnson did not appear for the scheduled docket call a week later, the
trial court granted Academy’s motion to dismiss Johnson’s counterclaims with
prejudice.
Discussion
I. Standing
Liberally construed, Johnson and Oliver’s pro se brief2 brings a challenge to
Academy’s “standing” to bring this suit. Specifically, Johnson and Oliver
challenge the board’s selection process for obtaining counsel and the consequent
authority of Academy’s counsel to represent it in this proceeding. “Standing,” as
used by Johnson and Oliver, is a misnomer. The issue of standing focuses on
whether a party has a sufficient relationship with the lawsuit so as to have a
“justiciable interest” in its outcome. Austin Nursing Center, Inc. v. Lovato, 171
S.W.3d 845, 848 (Tex. 2005). Johnson and Oliver challenge the validity of
counsel’s appointment based on issues of corporate governance; they do not
dispute that Academy has a stake in the outcome of the proceeding. While
standing directly affects whether a court has subject-matter jurisdiction over a
dispute and may be raised at any stage of the proceedings, Johnson and Oliver’s
collateral attack on the validity of Academy’s appointment of counsel may not.
2
Both Johnson and Oliver signed the brief pro se. See TEX. R. APP. P. 38.9; Perry
v. Cohen, 272 S.W.3d 585, 587 (Tex. 2008) (citing Verburgt v. Dorner, 959
S.W.2d 615, 616 (Tex. 1997)).
8
This issue was not timely raised or decided in the trial court. As a result, we do not
consider it here. See TEX. R. APP. P. 33.1.
II. Challenges to Temporary Injunctive Relief
Johnson and Oliver complain that the trial court erred in granting a
temporary restraining order and a temporary injunction in favor of Academy. The
temporary injunction is unreviewable for two reasons: (1) through counsel, all
parties agreed to it, and (2) the trial court has already entered a final judgment in
this case, rendering the temporary relief inoperative. When a temporary injunction
becomes inoperative, the issue of its validity is moot. See Perry Bros., Inc. v.
Perry, 734 S.W.2d 211, 212 (Tex. App.—Dallas 1987, no writ); Tex. City v.
Cmnty. Pub. Serv. Co., 534 S.W.2d 412, 414 (Tex. Civ. App.—Beaumont 1976,
writ ref’d n.r.e.). We may not review a temporary injunction that is moot because
such a review would constitute an impermissible advisory opinion. Nat’l
Collegiate Athletic Ass’n v. Jones, 1 S.W.3d 83, 86 (Tex.1999).
III. Timing of Summary Judgment Hearing
According to the record, Academy served Johnson and Oliver on April 2,
2014 with a notice that the summary-judgment motion was set for a hearing six
weeks later, on May 16th. Johnson admitted that he received an email with an
attached PDF file entitled “the Academy Motion for Summary Judgment” on April
3rd, but he claims he could not open the PDF file. Johnson did not suggest that he
9
lacked timely notice of the hearing date; he filed a notice of hearing on the same
date for one of his own motions. Nor does Johnson claim that he was unable to
retrieve the electronically-filed motion from the court clerk’s website.
On April 29, 2014, Johnson filed a letter with the trial court complaining that
he could not open the summary-judgment motion PDF file that he had received
from Academy’s counsel. In an affidavit addressing the issue, Johnson explained
that on April 15th, he asked Academy to send him a copy of the motion by regular
mail; he received the mailed copy on April 25th. He asked the trial court to
disregard Academy’s certificate of service. The record does not show that Johnson
moved for a continuance of the summary-judgment hearing to allow him additional
time to file a response. Nor did Johnson offer any explanation for his delay in
obtaining the motion.
Johnson did not file a response to Academy’s motion. He did not appear for
the hearing on either the summary judgment motion or his own motion. Johnson
filed a late response to Academy’s motion on May 19th, three days after the
hearing and the day that the trial court entered its summary judgment. Johnson did
not request leave of the trial court to file a late response. See Benchmark Bank v.
Crowder, 919 S.W.2d 657, 663 (Tex. 1996) (“Summary judgment evidence may
be filed late, but only with leave of court.”). The record is devoid of any
10
explanation for Johnson’s failure to appear at the hearing or his failure to file a
timely response.3
Courts hold pro se litigants to the same standards as licensed attorneys and
require them to comply with applicable laws and rules of procedure. Mansfield
State Bank v. Cohn, 573 S.W.2d 181, 184–85 (Tex. 1978); Washington v. Bank of
N.Y., 362 S.W.3d 833, 854 (Tex. App.—Dallas 2012, no pet.). To do otherwise
would give a pro se litigant an unfair advantage over a litigant who is represented
by counsel. Shull v. United Parcel Serv., 4 S.W.3d 46, 53 (Tex. App.—San
Antonio 1999, pet. denied). The record does not show that Johnson requested any
relief to delay consideration of the summary-judgment motion sufficient to make
the trial court aware of his complaint, nor did he secure a ruling on any such
request. See TEX. R. APP. P. 33.1. We hold that, by failing to timely request a
continuance or leave to file a late response in the trial court, Johnson waived any
complaint that the trial court erred by proceeding with the May 16th hearing on
Academy’s summary-judgment motion.
IV. Propriety of Summary Judgment
A. Right to jury trial
Johnson and Oliver contend that they were entitled to a jury trial on their
claims. In civil cases, the constitutional right to a jury trial is not absolute, but
3
Oliver similarly did not file a response to the summary-judgment motion or appear
at the hearing.
11
rather is regulated by those rules that specify its availability. See Green v. W.E.
Grace Mfg. Co., 422 S.W.2d 723, 725 (Tex. 1968). Johnson and Oliver rely on
Citizens State Bank v. Caney Invs., 746 S.W.2d 477 (Tex. 1988), to claim that they
were denied a right to a jury trial on the permanent injunction. Unlike the party in
that case, however, neither Johnson nor Oliver perfected his right to a jury trial.
See id. at 478 (“To exercise his right to a trial by jury, a civil litigant must follow
Tex. R.Civ. P. 216 to make application and pay a jury fee no less than ten (10)
days before trial.”).
Further, summary judgment under Texas Rule of Civil Procedure 166a does
not deprive a party of the constitutional right to a jury trial. See Fid. & Dep. Co. of
Md. v. United States, 187 U.S. 315, 319–21 (1902) (summary judgment does not
violate Seventh Amendment); Lattrell v. Chrysler Corp., 79 S.W.3d 141, 150–51
(Tex. App.—Texarkana 2002, pet. denied) (discussing Texas Rule of Civil
Procedure 166a(i)). “When a party cannot show a material fact issue, there is
nothing to submit to a jury.” Fertic, 247 S.W.3d at 251. Because summary
judgment proceedings address questions of law in absence of material fact
disputes, our courts have consistently held that the procedure does not deny a
party’s right to a jury trial or due course of law. Id.; Lattrell, 79 S.W.3d at 149;
Carrabba v. Employers Cas. Co., 742 S.W.2d 709, 716–17 (Tex.App.—Houston
[14th Dist.] 1987, no writ).
12
B. Summary judgment standard of review
We review a trial court’s summary judgment de novo. Valence Operating
Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005); Provident Life Accid. Ins. Co. v.
Knott, 128 S.W.3d 211, 215 (Tex. 2003). In a traditional motion for summary
judgment, the movant has the burden to show that no genuine issue of material fact
exists and that the trial court must grant a judgment as a matter of law. TEX. R.
CIV. P. 166a(c); KPMG Peat Marwick v. Harrison Cnty. Hous. Fin. Corp., 988
S.W.2d 746, 748 (Tex. 1999). We review the evidence in a light favorable to the
nonmovant and indulge every reasonable inference in the nonmovant’s favor.
Dorsett, 164 S.W.3d at 661; Knott, 128 S.W.3d at 215; Sci. Spectrum, Inc. v.
Martinez, 941 S.W.2d 910, 911 (Tex. 1997).
Even without a response, traditional summary judgments must stand on their
own merits. M.D. Anderson Hosp. & Tumor Inst. v. Willrich, 28 S.W.3d 22, 23
(Tex. 2000). The nonmovant has no burden to respond to a traditional summary
judgment motion unless the movant conclusively establishes its cause of action.
See id.; Rhône-Poulenc, Inc. v. Steel, 997 S.W.2d 217, 222–23 (Tex. 1999); City of
Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678 (Tex. 1979); see also
Grace v. Titanium Electrode Prods., Inc., 227 S.W.3d 293, 297 (Tex. App.—
Houston [1st Dist.] 2007, no pet.).
13
C. Did Academy meet its burden of proof?
1. Permanent injunctive relief
Johnson and Oliver first challenge the validity of Academy’s evidence in
support of its request for injunctive relief. Relying on Kerlin v. Arias, 274 S.W.3d
666 (Tex. 2008), Johnson and Oliver complain that the affidavits submitted with
the initial request for injunctive relief were deficient because the affiants did not
swear that the facts presented in the affidavits reflected their personal knowledge.
See id. at 668. But those affidavits served only as the basis for requesting
temporary injunctive relief; in its motion for summary judgment, Academy
submitted deposition excerpts and exhibits, new affidavits, and authenticated
business records to support its request for permanent injunctive relief. Johnson and
Oliver do not raise any substantive objection to the summary-judgment evidence,
and they waived any challenge to defects of form by failing to timely object and
secure a ruling from the trial court. See TEX. R. APP. P. 33.1; Mansions in the
Forest, L.P. v. Montgomery Cnty., 365 S.W.3d 314, 317 (Tex. 2012). Johnson and
Oliver’s remaining complaints about the summary judgment granting Academy’s
request for declaratory relief rely on Johnson’s late-filed evidence, which was not
before the trial court and, as a result, does not raise a fact issue controverting the
evidence that Academy adduced in support of its claim.
14
2. Proof of breach of fiduciary duty
Johnson and Oliver claim that the trial court erred in granting Academy’s
summary judgment on its breach of fiduciary duty claim because Academy failed
to furnish sufficient evidence and the statute of limitations bars the claim.
A claim that the statute of limitations bars an opponent’s cause of action is
an affirmative defense. See TEX. R. CIV. P. 94. Johnson and Oliver were required
to do more than plead limitations in response to Academy’s summary-judgment
evidence. A pleaded affirmative defense cannot defeat summary judgment without
responsive controverting evidence. Brownlee v. Brownlee, 665 S.W.2d 111, 112
(Tex. 1984); Brown v. Aztec Rig Equip., Inc., 921 S.W.2d 835, 845 (Tex. App.—
Houston [14th Dist.] 1996, writ denied). Johnson and Oliver waived any objection
to Academy’s summary-judgment evidence in support of this claim by failing to
timely raise it in the trial court. See TEX. R. APP. P. 33.1.
To recover on a breach of fiduciary duty claim, the plaintiff must establish:
(1) the existence of a duty—that is, the existence of a fiduciary relationship; (2) a
breach of that duty; and (3) damages as a result of the breach. See Abetter
Trucking Co. v. Arizpe, 113 S.W.3d 503, 508 (Tex. App.—Houston [1st Dist.]
2003, no pet.); see also Trousdale v. Henry, 261 S.W.3d 221, 228 n.2 (Tex. App.—
Houston [14th Dist.] 2008, pet. denied) (surveying breach-of-fiduciary duty cases).
Academy established in its summary-judgment motion that Johnson, as
15
superintendent and board director, owed Academy a fiduciary duty and that he had
responsibility for and control over Academy’s management and finances. Among
other things, Academy introduced a TEA audit supporting its allegation that
Johnson accepted a loan from Huggans on behalf of the school but did not deposit
the funds into an Academy account, and he refused to account for expenditure of
the funds. Academy was damaged by Johnson’s self-dealing because it was
required to repay the loan even though it did not receive any benefit from it.
Academy also showed that Johnson insisted on a “buyout” agreement and then,
contrary to that agreement and in spite of Academy’s dire financial condition, he
accelerated the timing of the school’s payment of the buyout.
This evidence, which is undisputed, satisfies the elements of a breach of
fiduciary duty claim. As a result, we hold that the trial court did not err in granting
summary judgment on Academy’s claim for breach of fiduciary duty.
3. Proof of fraud
Johnson and Oliver complain that no evidence supports the summary
judgment on Academy’s fraud claim. Academy sought relief under a fraudulent
misrepresentation theory, based on Johnson’s misrepresentation to the bank that he
was authorized to act as Academy’s agent, and on Oliver’s similar
misrepresentation to the off-duty police officers who assisted him in removing the
Academy staff from their offices. The elements of a fraudulent misrepresentation
16
claim include proof by the plaintiff that (1) the defendant made a material
misrepresentation; (2) the representation was false; (3) the defendant knew the
representation was false when made or made it recklessly without any knowledge
of the truth and as a positive assertion; (4) the defendant made the representation
with the intention that it should be acted upon; (5) the representation was in fact
justifiably relied upon; and (6) damage to the plaintiff resulted. See Grant
Thornton LLP v. Prospect High Income Fund, 314 S.W.3d 913, 923 (Tex. 2010);
see also Ernst & Young, L.L.P. v. Pac. Mut. Life Ins. Co., 51 S.W.3d 573, 575
(Tex. 2001).
Academy adduced evidence that, in November 2010, after Johnson had
resigned from the board, he held himself out to a bank employee as a board
member with authority to draw on Academy’s existing bank accounts and open
new Academy accounts. Johnson submitted fraudulent documents to the bank to
remove the authorized signatories from Academy accounts, and he opened new
accounts in Academy’s name. The bank acted upon those requests in reliance on
Johnson’s misrepresentations. These actions resulted in the freezing of the
accounts and the temporary unavailability of Academy’s funds for payroll and
other purposes. Johnson and Oliver falsely represented that they had the authority
to secure the assistance of off-duty police officers and to effect the removal of
Academy employees from their offices; together, they changed locks throughout
17
the building. These actions disrupted the school’s operations for several days and
also prevented Academy from timely meeting its payroll obligations. These
uncontroverted facts satisfy the elements of Academy’s fraud claim.
Johnson and Oliver misplace their reliance on Aquaplex, Inc. v. Rancho La
Valencia, Inc., 297 S.W.3d 768 (Tex. 2009), in contending that they are entitled to
a jury trial on Academy’s fraud claim. In that case, the Texas Supreme Court
reviewed the legal sufficiency of the evidence presented at trial in support of the
jury’s verdict on a fraud claim; it did not preclude affirmative relief based on
uncontroverted facts and a motion for summary judgment. See id. at 774–76. We
hold that the trial court did not err in granting summary judgment in Academy’s
favor on its fraud claim.4
4. Proof of entitlement to declaratory relief
The final judgment declares that “Don R. Johnson . . . was not a member of
Texas Serenity Academy Board of Directors on November 29, 2010, []or at any
time subsequent to March 24, 2009.” Johnson claims that the trial court erred in
granting that declaratory relief because he showed “he was a board member and
President of Texas Serenity Academy Inc. on November 29, 2010.”
4
Johnson and Oliver also complain about the district clerk’s designation of case as
a “fraud” claim. This complaint does not involve the appellees and thus is not
cognizable. Moreover, an officer of a court is absolutely immune from liability
for the services performed for the court. Dallas Cnty. v. Halsey, 87 S.W.3d 552,
554 (Tex. 2002).
18
Johnson cites to his own opinion, which was never presented in a timely
response before the trial court ruled on Academy’s summary-judgment motion.
The undisputed evidence before the trial court, which is buttressed by the opinion
of a corporate governance expert, proves as a matter of law that on March 24,
2009, Johnson resigned from the board and has not been affiliated with Academy
since that date. We hold that the trial court properly made the challenged
declaration.
5. Proof of damages
Johnson and Oliver complain that the evidence is insufficient to support the
trial court’s compensatory and exemplary damages award, but their only record
reference is to the trial court’s final judgment. Johnson and Oliver’s brief, with
regard to actual and punitive damages, states in its entirety:
B. The 215th district court abused its discretion by granting Texas
Serenity Academy compensatory damages when they did not plead
merits that would show loss or injury that is presume to have been
foreseen or contemplated by the Appellant/Defendant Johnson and
Oliver as a consequence of acting upon the advice of their three
attorneys.
C. The 215th district court abused its discretion by granting Texas
Serenity Academy exemplary (or punitive) damages in a motion
for summary judgment that was granted with insufficient evidence
and without grounds.
D. The Appellants conduct in this case was neither, outrageous,
malicious, nor morally culpable Mr. Johnson and Mr. Oliver
simply followed the law as advised by counsel and what they
19
personally understood to be incompliance with the law These
damages and all interest should be reversed and dismissed.
Because of the limited record reference and lack of citation to authority, we limit
our consideration to error that appears on the face of the judgment. See TEX. R.
APP. P. 38.1(i) (requiring appellant’s brief to make appropriate citations to
authorities and the record to support contentions); Huey v. Huey, 200 S.W.3d 851,
854 (Tex. App.—Dallas 2006, no pet.) (failure to cite applicable authority waives
an issue on appeal); Richard v. Cornerstone Constructors, Inc., 921 S.W.2d 465,
469 (Tex. App.—Houston [1st Dist.] 1996, writ denied) (“[A] point of error
unsupported by the citation of any authority presents nothing for this Court to
review.”); see also Saudi v. Brieven, 176 S.W.3d 108, 120 (Tex. App.—Houston
[1st Dist.] 2004, pet. denied) (holding appellant’s failure to cite authority and
provide analysis in initial brief waived issue on appeal).
The judgment awards exemplary damages jointly and severally against
Johnson and Oliver. The trial court’s judgment did not, however, find Oliver liable
for any actual damages. A plaintiff must prove a distinct injury with actual
damages to support an award of exemplary damages against a defendant. Fed.
Express Corp. v. Dutschmann, 846 S.W.2d 282, 284 (Tex. 1993). Thus, it was
error to assess exemplary damages against Oliver. Further, the joint and several
award of exemplary damages to include both Johnson and Oliver violates section
41.006 of the Texas Civil Practice and Remedies Code, which requires that an
20
award of exemplary damages be specific as to each defendant. See TEX. CIV.
PRAC. & REM. CODE ANN. § 41.006 (West 2015); Pollitt v. Computer Comforts,
Inc., No. 01-13-00785-CV, 2014 WL 7474073, at *4 (Tex. App.—Houston [1st
Dist.] Dec. 30, 2014, no pet. h.); Computek Computer & Office Supplies, Inc. v.
Walton, 156 S.W.3d 217, 224 (Tex. App.—Dallas 2005, no pet.).
We reverse the trial court’s summary-judgment award of punitive damages
against Johnson and Oliver. Because the brief otherwise contains no citation to
authority or to the record for their complaint as to the sufficiency of the damages,
we hold that any remaining complaint as to the trial court’s award of damages is
waived. See TEX. R. APP. P. 38.1(i); Fredonia State Bank v. Gen. Am. Life Ins.
Co., 881 S.W.2d 279, 284 (Tex. 1994).
6. Proof of attorney’s fees award
Johnson and Oliver contend that Academy’s attorney’s affidavit was
insufficiently detailed to support the award of attorney’s fees, citing Long v.
Griffin, 442 S.W.3d 253 (Tex. 2014). In Long, the Supreme Court characterized
the attorney affidavit at issue as “only offer[ing] generalities”:
It indicates that one attorney spent 300 hours on the case, another
expended 344.50 hours, and the attorneys’ respective hourly rates.
The affidavit posits that the case involved extensive discovery, several
pretrial hearings, multiple summary judgment motions, and a four and
one-half day trial, and that litigating the matter required understanding
a related suit that settled after ten years of litigation. But no evidence
accompanied the affidavit to inform the trial court the time spent on
21
specific tasks. See El Apple [Ltd. v. Olivas], 370 S.W.3d [757,] 763
[(Tex. 2012).] The affidavit does claim that 30% of the aggregate
time was expended on the assignment claim (part of which the
Griffins prevailed on) and that the assignment issue was inextricably
intertwined with matters that consumed 95% of the two attorneys’
time on the matter. But without any evidence of the time spent on
specific tasks, the trial court had insufficient information to
meaningfully review the fee request. [City of Laredo v.] Montano,
414 S.W.3d [731,] 736–37 [(Tex. 2013)]; El Apple, 370 S.W.3d at
764.
Id. at 255–56.
Based on Academy’s attorney’s affidavit, the trial court awarded $250,000
in attorney’s fees to it. Academy’s attorney’s affidavit, which covers slightly more
than one page, recites her hourly fee, states that Academy has incurred fees in the
amount of $185,930 through the date of the affidavit’s execution, and avers that the
reasonable value of fees that Academy would continue to incur is $50,000 through
entry of judgment; $50,000 through appeal to this court; and $100,000 through
appeal to the Texas Supreme Court, and does not condition the appellate fee
requests on the future outcome of those proceedings. The attorney affidavit
provides less detail than the affidavit that the Texas Supreme Court rejected in
Long. It also does not specify the basis for the request, which presumably is under
Chapter 37 of the Civil Practice and Remedies Code. See TEX. R. CIV. P. 37.009
(providing for discretionary award of reasonable and necessary attorney’s fees for
proceeding under Declaratory Judgment Act). Because the affirmative proof of
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reasonable and necessary fees is insufficient to support the fee award, we reverse
the award and remand the claim for fees to the trial court for a determination of
attorney’s fees consistent with Long’s requirements.
V. Dismissal of Counterclaims
Johnson relies on Alexander v. Lynda’s Boutique to assert that the trial court
erred by failing to hold a hearing before dismissing his counterclaims for want of
prosecution. 134 S.W.3d 845 (Tex. 2004). “A court may dismiss a case for want
of prosecution under either Rule 165a or under its common law inherent
authority.” Id. at 850. Rule 165a(1) of the Texas Rules of Civil Procedure
provides that:
A case may be dismissed for want of prosecution on failure of any
party seeking affirmative relief to appear for any hearing or trial of
which the party had notice. . . . At the dismissal hearing, the court
shall dismiss for want of prosecution unless there is good cause for the
case to be maintained on the docket.
TEX. R. CIV. P. 165a(1).
On February 24, 2014 and April 2, 2014, the trial court sent notice to the
parties that the case was set for trial for the two-week period beginning June 2,
2014, that docket call was set for May 27, 2014, and that failure to appear for
docket call would be grounds for dismissal for want of prosecution.
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As in Alexander, the parties in this case were told to appear on a specific day
at a specific time and that if they did not, their claims could be dismissed for want
of prosecution. Johnson complained in his motion to reconsider that when he tried
to confirm the setting he found that it did not appear on the court’s website and
when he telephoned the trial court the court coordinator also was unable to confirm
the date. The trial court warned Johnson that dismissal of his claims could result
from a failure to appear on the noticed date, and Johnson also failed to appear for
the summary-judgment hearing the previous week. Based on these circumstances,
the trial court acted within its discretion when it rejected Johnson’s proffered
explanation and refused to reverse its dismissal ruling. See TEX. R. CIV. P.
165a(1).
Conclusion
We hold that the trial court did not err in granting summary judgment on
Academy’s claims for declaratory and injunctive relief, its causes of action for
fraud and breach of fiduciary duty, and its claim for actual damages against
Johnson. We further hold that the trial court did not err in dismissing Johnson’s
counterclaims. The trial court, however, erred in imposing punitive damages on
Oliver, in failing to individually assess punitive damages against Johnson, and in
awarding attorney’s fees without sufficient proof. We therefore reverse the
punitive damages award and remand for further proceedings to consider the
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amount of punitive damages to assess against Johnson only. We also reverse the
award of attorney’s fees and remand that claim for further proceedings. We affirm
the remainder of the trial court’s judgment.
Jane Bland
Justice
Panel consists of Justices Keyes, Bland, and Massengale.
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