Karen Ann Cervantes Gatlin v. Joey Moore, Representative of the Estate of Joe Sam Irvine ( 2013 )

Opinion issued February 21, 2013.
In The
Court of Appeals
For The
First District of Texas
———————————
NO. 01-11-00738-CV
———————————
KAREN ANN CERVANTES GATLIN, Appellant
V.
JOEY MOORE, REPRESENTATIVE OF THE ESTATE OF JOE SAM
IRVINE, DECEASED, Appellee
On Appeal from the 10th District Court
Galveston County, Texas
Trial Court Case No. 09-CV-0187
MEMORANDUM OPINION
Appellant Karen Gatlin appeals a judgment entered against her in favor of
Joey Moore, appellee. Moore, on behalf of the estate of her deceased father, Joe
Sam Irvine, sued Karen and Chris Gatlin for breach of contract, statutory fraud,
misrepresentation, violation of Texas Property Code Subchapter D, and quantum
meruit. Sitting without a jury, the trial court awarded Moore $22,527.89 based on
the theory of quantum meruit. In three points of error, Gatlin contends: (1) Moore
lacked standing to bring this suit; (2) the evidence is legally and factually
insufficient to support the judgment; and (3) the trial court erred by admitting
Moore’s damages evidence because Moore did not disclose the evidence in
discovery. We affirm.
Background
In 2004, Irvine moved into a house in Crystal Beach, which was owned by
Gatlin. On April 13, 2005, Irvine and Gatlin signed a handwritten document
reflecting the sale of the house by Gatlin to Irvine. This document reflects the
address of the house, a “down payment” of $10,000, a balance of $75,000, and the
signatures of Irvine and Gatlin, both of which are dated April 13, 2005. The
document also shows that Irvine later made payments of $20,000 and $5,000 and
that the balance remaining as of July 1, 2005, was $50,000. Bank records show
that Irvine made additional periodic payments to Gatlin. While Irvine lived in the
house, he hired his neighbor, Lynn Stansbury, to make various improvements to
the house.
After Irvine’s death in 2007, Moore and her husband collected Irvine’s
possessions from the house and found the handwritten document reflecting Irvine’s
2
purchase of the house. Eventually, Moore opened probate proceedings in
Louisiana and obtained a Judgment of Possession, which recognized Moore as the
sole heir of Irvine’s estate, but did not include the Crystal Beach house in the
estate’s property. The Gatlins moved back into the Crystal Beach house, but the
home was later destroyed by Hurricane Ike.
Moore, on behalf of Irvine’s estate, sued the Gatlins for breach of contract,
statutory fraud, misrepresentation, violation of Texas Property Code Subchapter D,
and quantum meruit. At the bench trial, Stansbury testified that Irvine hired him to
make several improvements to the house, including building a deck, screening in a
porch, framing a bathroom, and installing a dumbwaiter. He explained that these
improvements were not necessary for the structure of the house, but were made
because Irvine wanted to improve the house and make it nicer. According to
Stansbury, he received payments for his work directly from Irvine. Stansbury was
also under the impression that Irvine had bought the house from the Gatlins.
Gatlin testified that she drew up the handwritten document reflecting the sale
of the house that she and Irvine signed. She explained that she received, and
cashed, several checks from Irvine, but that Irvine stopped making payments for
several months and, therefore, the later checks she received were rent payments,
not payments toward the purchase price of the house. Gatlin also testified that
Irvine made certain improvements to the house while he was living there, but that
3
those improvements were not necessary. She explained that she and her husband
moved back into the house after Irvine’s death and that she collected insurance
proceeds on the house after it was destroyed by Hurricane Ike.
At the conclusion of the bench trial, the trial court determined that if there
was an enforceable contract for deed, it was breached by Irvine’s failure to make
consistent payments. Additionally, the court found that Irvine made improvements
to the property, which increased its value, and that Gatlin benefited from those
improvements while living there and through the collection of insurance proceeds
after the house was destroyed in Hurricane Ike. The court also found that:
(1) Moore is the proper representative of Irvine’s estate and has standing to bring
this lawsuit; (2) Moore’s claims for breach of contract and rescission are not
supported by evidence and the issue of whether the alleged contract violates the
Statute of Frauds is moot; (3) Gatlin testified that Irvine was a renter with no
rights; however, the handwritten document indicates that Irvine thought he was
purchasing the property and the evidence shows that Irvine’s payments to Gatlin
totaled $47,350; (4) Gatlin signed the handwritten document and that fostered a
mistaken belief that Irvine had greater interest in the property than that of a renter;
and (5) reasonably believing he was purchasing the property, Irvine made and paid
for significant improvements to the house exceeding $22,527.89, and Gatlin
wrongfully benefitted from those improvements.
4
According to the trial court, Moore was entitled to recover based on the
equitable theory of quantum meruit because Irvine was led to believe that he
possessed a greater interest in the property than that of a renter and Gatlin
encouraged that belief. Acting on that belief, Irvine made significant repairs to the
property in excess of $22,527.89. Therefore, the court entered judgment for Moore
in that amount. Gatlin appeals.
Discussion
A. Standing
Before we reach the merits, we consider Gatlin’s contention that Moore
lacks standing to bring this claim. Standing is a component of subject matter
jurisdiction. Tex. Ass’n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 445 (Tex.
1993). Subject-matter jurisdiction is a question of law and subject to de novo
review. Tex. Dept. of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226 (Tex.
2004).
A plaintiff has standing when she is personally aggrieved by the alleged
wrong. Stephens v. City of Houston, 260 S.W.3d 163, 167 (Tex. App.—Houston
[1st Dist.] 2008, no pet.). Generally, a suit to recover estate property may be
brought only by a personal representative. Shepherd v. Ledford, 962 S.W.2d 28,
31 (Tex. 1998). Citing no authority, Gatlin contends that Moore lacked standing to
bring this suit because she failed to identify any claim to the Crystal Beach house
5
in the Louisiana probate proceedings. However, it is undisputed that Moore was
the representative of Irvine’s estate. Therefore, Moore had standing to sue in that
capacity for the recovery of any property belonging to Irvine’s estate. See Frazier
v. Wynn, 472 S.W.2d 750, 752 (Tex. 1971) (finding that general rule that personal
representative of estate of decedent is ordinarily only person entitled to sue for
recovery of property belonging to estate applies to suits to recover damages for
breach of contract entered into by decedent during his lifetime); see also TEX.
PROB. CODE ANN. § 233A (West 2008) (administrators may institute “[s]uits for
the recovery of personal property, debts, or damages and suits for title or
possession of lands or for any right attached to or growing out of the same or for
injury or damage done thereto.”). We conclude that Moore, having been named
representative of Irvine’s estate, had standing to bring this suit. See Frazier, 472
S.W.2d at 752; see also TEX. PROB. CODE ANN. § 233A.
We overrule Gatlin’s second point of error.
B. Quantum Meruit
In her first point of error, Gatlin contends there is no evidence or,
alternatively, insufficient evidence to support an award for quantum meruit.
1. Standard of Review
In an appeal from a bench trial, the trial court’s findings of fact have the
same weight as a jury verdict. Catalina v. Blasdel, 881 S.W.2d 295, 297 (Tex.
6
1994); Nguyen v. Yovan, 317 S.W.3d 261, 269–70 (Tex. App.—Houston [1st Dist.]
2009, pet. denied). We review a trial court’s findings of fact under the same legal
and factual sufficiency of the evidence standards used when determining whether
sufficient evidence exists to support an answer to a jury question. Catalina, 881
S.W.3d at 297; Nguyen, 317 S.W.3d at 270.
We consider the legal sufficiency of the evidence in the light most favorable
to the prevailing party, according every reasonable inference in that party’s favor
and disregarding contrary evidence unless a reasonable factfinder could not do so.
See Tricon Tool & Supply, Inc. v. Thumann, 226 S.W.3d 494, 500–01 (Tex.
App.—Houston [1st Dist.] 2006, pet. denied); see also City of Keller v. Wilson,
168 S.W.3d 802, 827 (Tex. 2005). “If there is any evidence of probative force to
support the finding, i.e., more than a mere scintilla, we will overrule the issue.”
City of Houston v. Hildebrandt, 265 S.W.3d 22, 27 (Tex. App.—Houston [1st
Dist.] 2008, pet. denied) (citing Haggar Clothing Co. v. Hernandez, 164 S.W.3d
386, 388 (Tex. 2005)).
All the evidence must be considered when reviewing a factual sufficiency
complaint. Lofton v. Texas Brine Corp., 720 S.W.2d 804, 805 (Tex. 1986). The
verdict should be set aside only if it is so contrary to the overwhelming weight of
the evidence that it is clearly wrong and unjust. Cain v. Bain, 709 S.W.2d 175,
176 (Tex. 1986). We cannot “substitute our opinion for that of the trier of fact
7
merely because we might have reached a different conclusion.” Glockzin v. Rhea,
760 S.W.2d 665, 666 (Tex. App.—Houston [1st Dist.] 1988, writ denied).
2. Analysis
Quantum meruit is an equitable remedy generally available when there is no
express contract covering the services or materials furnished. See Fulgham v.
Fischer, 349 S.W.3d 153, 159 (Tex. App.—Dallas 2011, no pet.) (citing Truly v.
Austin, 744 S.W.2d 934, 936 (Tex. 1988)). This remedy “is based upon the
promise implied by law for beneficial services rendered and knowingly accepted.”
Vrott Exploration Co., Inc. v. Chevron U.S.A., Inc., 787 S.W.2d 942, 944 (Tex.
1990) (quoting Truly, 744 S.W.2d at 936). Recovery in quantum meruit prevents
unjust enrichment to the party who benefited from the work. Pepi Corp. v.
Galliford, 254 S.W.3d 457, 465 (Tex. App.—Houston [1st Dist.] 2007, pet.
denied). To recover under quantum meruit, the plaintiff must prove:
(1) that valuable services were rendered or materials were furnished;
(2) for the person sought to be charged; (3) which services and
materials were accepted by the person sought to be charged, used and
enjoyed by him; (4) under such circumstances as reasonably notified
the person sought to be charged that the plaintiff, in performing such
services, was expecting to be paid by the person sought to be charged.
Id.
Gatlin does not dispute that Irvine made improvements to the house, but
contends the evidence is legally and factually insufficient to support the judgment
because the improvements were made for the sole benefit of Irvine (not for her),
8
and because Irvine did not expect Gatlin to pay him for the improvements. We
disagree.
Irvine made and paid for improvements to the house beginning in 2005,
when Irvine believed he had bought the house from Gatlin. Gatlin acknowledged
originally agreeing to sell the house to Irvine, and she acknowledged accepting
more than half of the purchase price of the house. But Gatlin testified that Irvine
later breached the agreement by failing to make payments toward the principal as
agreed, and thus become a tenant whose subsequent payments to Gatlin were for
rent only. There was no evidence that Irvine believed he was merely a renter. The
record thus supports the trial court’s findings that Irvine paid for improvements to
the house reasonably believing he owned the house, and that Gatlin fostered
Irvine’s belief that his interest in the house was more than that of a tenant. We
conclude this evidence is sufficient to support the trial court’s implied finding that
the improvements were made under circumstances that notified Gatlin that she
would be expected to pay for the improvements. See Campbell v. Northwestern
Nat’l Life Ins. Co., 573 S.W.2d 496, 498 (Tex. 1978) (upholding quantum meruit
claim and damages for reasonable value of services rendered where plaintiff made
improvements to apartment complex with expectation that he would be given
option to purchase apartment complex).
9
The evidence is also sufficient to support the third element—acceptance,
use, and enjoyment by the person sought to be charged. It is undisputed that Gatlin
used and enjoyed the improvements by asserting ownership of and moving back
into the improved house after Irvine’s death. Gatlin also collected the insurance
proceeds on the house, as improved by Irvine, after it was destroyed in Hurricane
Ike.
In sum, we conclude there is more than a scintilla of evidence that Gatlin
accepted, enjoyed, and benefitted from the improvements, and that the
circumstances were such that Gatlin was reasonably notified that Irvine, whose
status changed from owner to tenant, would expect to be compensated for these
improvements. See Haggar Clothing Co., 164 S.W.3d at 388. Having considered
all of the evidence, we likewise conclude that the trial court’s finding that Moore
was entitled to recover under quantum meruit is no so contrary to the
overwhelming weight of the evidence that it is clearly wrong and unjust. See Cain,
709 S.W.2d at 176.
We overrule Gatlin’s first point of error.
C. Damages
In her third point of error, Gatlin contends that the trial court erred by
admitting testimony regarding Irvine’s checks as evidence of economic damages.
Gatlin objected to testimony regarding Moore’s economic damage model on the
10
basis that Moore failed to disclose the evidence in response to a request for
disclosure.
A party may request disclosure of the amount and any method of calculating
economic damages. TEX. R. CIV. P. 194.2(d); Harris County v. Inter Nos, Ltd., 199
S.W.3d 363, 367 (Tex. App.—Houston [1st Dist.] 2006, no pet.). Rule 193.6(a) of
the Texas Rules of Civil Procedure states:
A party who fails to make, amend, or supplement a discovery
response in a timely manner may not introduce in evidence the
material or information that was not timely disclosed, or offer the
testimony of a witness (other than a named party) who was not timely
identified, unless the court finds that: (1) there was good cause for the
failure to timely make, amend, or supplement the discovery response;
or (2) the failure to timely make, amend, or supplement the discovery
response will not unfairly surprise or unfairly prejudice the other
parties.
TEX. R. CIV. P. 193.6(a). A party’s failure to provide complete responses to
discovery results in automatic exclusion of the evidence, unless the trial court finds
good cause or lack of unfair surprise or prejudice. See Dyer v. Cotton, 333 S.W.3d
703, 717 (Tex. App.—Houston [1st Dist.] 2010, no pet.); Norfolk S. Ry. Co. v.
Bailey, 92 S.W.3d 577, 581 (Tex. App.—Austin 2002, no pet.). The burden of
establishing good cause, lack of unfair surprise, or lack of unfair prejudice is on the
party seeking to introduce the evidence or call the witness. TEX. R. CIV. P.
193.6(b); Dyer, 333 S.W.3d at 717. The trial court has discretion in determining
11
whether good cause or lack of unfair surprise exists, but such a finding must be
supported by the record. TEX. R. CIV. P. 193.6(b); Dyer, 333 S.W.3d at 717.
Here, Moore’s petition reflects that she sought a “. . . full refund of all . . .
the costs of improvements to the property . . . .” And Moore produced copies of
Irvine’s checks which reflected amounts Irvine paid for those improvements. We
conclude this was sufficient to provide notice to Gatlin of the amount for which
Moore would seek reimbursement for the improvements. See Marin v. IESI TX
Corp., 317 S.W.3d 314, 323 (Tex. App.—Houston [1st Dist.] 2010, pet. denied)
(affirming trial court’s admission of accounting summary of fees incurred during
investigation based on finding of no unfair surprise, even though summary was not
timely disclosed, where plaintiff’s petition specifically sought damages based on
costs of investigation into and correction of false accounting entries); Williams v.
County of Dallas, 194 S.W.3d 29, 33 (Tex. App.—Dallas 2006, pet. denied)
(affirming trial court’s admission of delinquent tax statement based on lack of
unfair surprise, even though taxing unit did not disclose tax statement in response
to request for disclosure, because original petition gave notice that lawsuit included
all claims for taxes currently delinquent and those becoming delinquent on
property after lawsuit was filed); see also MeGehee v. Campbell, No. 01-08-1023-
CV, 2010 WL 1241300, at *4 (Tex. App.—Houston [1st Dist.] March 25, 2010, no
pet.) (mem. op.) (upholding award of damages in partition case, where appellant
12
contended discovery responses were not sufficient to give notice of claimed
damages, because appellee specifically stated in response that he sought damages
for wrongful exclusion from property and alleged reasonable value of rent). We
conclude the trial court did not abuse its discretion by admitting Moore’s damages
evidence based on its finding that Gatlin was not unfairly surprised.
We overrule Gatlin’s third point of error.
Conclusion
We affirm the trial court’s judgment.
Rebeca Huddle
Justice
Panel consists of Chief Justice Radack and Justices Bland and Huddle.
13