Penhollow Custom Homes, LLC and Steven J. Penhollow v. Cornelius Kim and Jong Kim ( 2010 )


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  •                                    COURT OF APPEALS
    EIGHTH DISTRICT OF TEXAS
    EL PASO, TEXAS
    §
    PENHOLLOW CUSTOM HOMES, LLC                                    No. 08-08-00029-CV
    and STEVEN J. PENHOLLOW,                        §
    Appeal from
    Appellants,              §
    County Court at Law No. 3
    v.                                              §
    of Dallas County, Texas
    CORNELIUS KIM and JONG KIM,                     §
    (TC # 04-5247)
    Appellees.               §
    OPINION
    Penhollow Custom Homes, LLC and Steven J. Penhollow appeal from a judgment entered
    in favor of Cornelius and Jong Kim. For the reasons that follow, we affirm in part and reverse in
    part.
    FACTUAL SUMMARY
    Penhollow Custom Homes (PCH) is a custom home builder. Steven Penhollow is the owner
    and sole employee of PCH. He is not paid a salary by the corporation but takes an owner’s draw
    from the profits. On May 8, 2000, the Kims entered into a contract with PCH for the construction
    of a new home. At the closing on December 5, 2000, PCH provided the Kims with a limited
    warranty and assurance that there would be no construction defects, but if there were any defects,
    they would be fixed at PCH’s expense. The Kims moved into the home and soon began to notice
    problems with the construction, including a leaky roof, slow drains, incomplete interior trim, and a
    drainage problem in the yard. They contacted PCH regarding their complaints and a dispute arose
    as to which items PCH had a duty to repair. Some items were repaired but others were not.
    The Kims filed suit against PCH and Penhollow seeking equitable rescission, or alternatively,
    damages for breach of contract, breach of warranty, and unjust enrichment. In a subsequent
    amendment, the Kims dismissed the equitable rescission claim. The amended petition included
    claims for breach of contract, violation of the Residential Construction Liability Act,1 breach of
    warranty, fraud, conspiracy, alter ego, and unjust enrichment.2 The jury determined that PCH and
    Penhollow breached the contract with the Kims, failed to make a timely settlement offer, and
    breached the warranty. It also found that Penhollow is the alter ego of PCH. The jury found against
    the Kims on the statutory fraud claim. The trial court entered judgment on the jury’s verdict and
    awarded damages in the amount of $46,100, attorney’s fees in the amount of $60,971.75, and
    prejudgment interest.
    RULE 11 AGREEMENT
    In their first issue on appeal, Appellants argue that their acceptance on the record of the
    Kim’s request to rescind the contract created a binding Rule 11 agreement which should have been
    enforced by the trial court. Rule 11 provides that: “Unless otherwise provided in these rules, no
    agreement between attorneys or parties touching any suit pending will be enforced unless it be in
    writing, signed and filed with the papers as part of the record, or unless it be made in open court and
    entered of record.” TEX .R.CIV .P. 11. To comply with Rule 11, the agreement must comply with
    general contract principles, including a valid offer and acceptance. Two Brothers Trucking v.
    1
    The RCLA is found in Chapter 27 of the Texas Property Code. T EX .P RO P .C O D E A N N . §§ 27.001-.007
    (Vernon 2000 & Vernon Supp. 2009). The RCLA modifies causes of action for damages resulting from construction
    defects in residences by limiting and controlling causes of action that otherwise exist. See Gentry v. Squires Constr.,
    Inc., 188 S.W .3d 396, 404 (Tex.App.--Dallas 2006, no pet.). The RCLA does not create a cause of action, but provides
    defenses, limitations on damages, and determines the standard of causation. 
    Id. at 404.
    The limitations on damages do
    not apply if the contractor fails to make a reasonable offer of settlement or repair. See T EX .P RO P .C O D E A N N . § 27.004(f)
    (Vernon Supp. 2009).
    2
    The Kims withdrew the unjust enrichment cause of action at trial.
    Modine Manufacturing Company, No. 13-07-00427-CV, 
    2009 WL 2192682
    at *2 (Tex.App.--
    Corpus Christi, July 23, 2009, no pet.); Alcantar v. Oklahoma National Bank, 
    47 S.W.3d 815
    , 819
    (Tex.App.--Fort Worth 2001, no pet.). The made-in-open-court exception to Rule 11 requires a
    statement into the record of the terms of the agreement and the agreement of the parties or their
    counsel to be bound by it affirmatively stated on the record. Two Brothers Trucking, 
    2009 WL 2192682
    at *2, citing Anderegg v. High Standard, Inc., 
    825 F.2d 77
    , 81 (5th Cir.1987).
    Appellants assert that a Rule 11 agreement was entered into at a hearing on June 7, 2006
    when their attorney stated on the record:
    Judge, the plaintiffs have come forth with pleadings, I guess it is, have requested an
    equitable decision whereby we buy back the house minus the fair rent and property.
    We will do that. We will request judgment right now for that, the house price of
    $315,000. We will buy it back for that price, plus all the property taxes that they’ve
    paid to date. Not property taxes that would be due later, but property taxes they’ve
    paid to date minus the fair market rental value of that home for the time they’ve been
    in the house. They’ve been in the house about 69 months now. Both sides eat their
    attorney’s fees and costs. Fair market rental value can be determined by three
    appraisers. Take the average of three appraisers and use that as a loan value. Short
    circuits the whole trial.
    The Kims’ attorney expressed surprise at this offer and stated, in essence, that it was unacceptable.
    He informed the court that attorneys’ fees were an issue and the Kims wanted to go to trial and make
    an election after seeing the jury’s verdict. The court concluded the hearing by noting they were
    perhaps “getting close to being able to work out a settlement with this offer, and as you know, juries
    can be unpredictable.”
    Appellants cite no authority, and we are aware of none, for their assertion that an offer to
    confess judgment on one of the Kims’ causes of action creates a Rule 11 agreement. We further find
    that the parties did not enter into a valid Rule 11 agreement because the Kims’ attorney refused to
    accept the offer on the record. Even if it could be said there was an agreement, Appellants never
    requested that the trial court enforce it. Consequently, their complaint regarding the court’s failure
    to enforce the Rule 11 agreement is waived. TEX .R.APP .P. 33.1; see Rammah v. Abdeljaber, 
    235 S.W.3d 269
    , 273 (Tex.App.--Dallas 2007, no pet.)(appellant waived his claim that trial court erred
    in refusing to enforce Rule 11 agreement where appellant failed to move the trial court to enforce
    the agreement with sufficient specificity and failed to obtain a ruling). We overrule Issue One.
    ALTER EGO FINDING
    In their second issue, Appellants challenge the legal sufficiency of the evidence to support
    the jury’s finding that Penhollow is the alter ego of PCH.3 Appellants argue that there is no evidence
    to prove that Penhollow used any corporate funds to purchase personal items or to pay personal
    debts.
    In a legal sufficiency review, we credit evidence favorable to the finding if a reasonable
    fact-finder could, disregard contrary evidence unless a reasonable fact-finder could not, and reverse
    the fact-finder’s determination only if the evidence presented would not enable a reasonable and
    fair-minded person to reach the judgment under review. City of Keller v. Wilson, 
    168 S.W.3d 802
    ,
    827 (Tex. 2005). We will sustain the legal-sufficiency challenge if the record reveals: (1) the
    complete absence of evidence supporting the finding; (2) the court is barred by rules of law or of
    3
    In their brief, Appellants purport to challenge both the legal and factual sufficiency of the evidence. They do
    not include the standards of review for either sufficiency challenge and their brief contains no argument specifically
    pertaining to the factual sufficiency issue. Further, their argument is directed at the complete absence of evidence to
    prove alter ego and Appellants request at the conclusion of the issue that the judgment be reversed as to Penhollow.
    The prayer requests only reversal of the trial court’s judgment and does not request that the cause be remanded for a new
    trial. Under the circumstances, Appellants have waived the factual sufficiency argument by failing to brief it. See
    T EX .R.A PP .P. 38.1(i); Public, Inc. v. County of Galveston, 264 S.W .3d 338, 341 (Tex.App.--Houston [14th Dist.] 2008,
    no pet.)(appellant waived factual sufficiency issue where it failed to argue evidence was factually insufficient in the
    “Argument” section of its brief, although brief provided the standard of review for a factual sufficiency review); see also
    Varkonyi v. State, 276 S.W .3d 27, 36 n.5 (Tex.App.--El Paso 2008, pet. ref’d)(on appeal from conviction for obscenity,
    court of appeals would construe defendant’s brief as raising only a legal sufficiency argument; although defendant alleged
    that the evidence was legally and factually insufficient to prove that the material was obscene, the brief did not include
    an argument demonstrating how the evidence was factually insufficient, and in his prayer, defendant only requested
    reversal of the judgment of the trial court and a judgment of acquittal).
    evidence from giving weight to the only evidence offered to support the finding; (3) the evidence
    offered to prove the finding is no more than a mere scintilla; or (4) the evidence conclusively
    establishes the opposite of the finding. 
    Id. at 810-11.
    More than a scintilla of evidence exists when
    the evidence presented rises to a level that would enable reasonable and fair-minded people to differ
    in their conclusions. Ford Motor Co. v. Ridgway, 
    135 S.W.3d 598
    , 601 (Tex. 2004).
    A corporation is a separate legal entity from its shareholders, officers, and directors. Sparks
    v. Booth, 
    232 S.W.3d 853
    , 868 (Tex.App.--Dallas 2007, no pet.). A bedrock principle of corporate
    law is that an individual can incorporate a business and thereby normally shield himself from
    personal liability for the corporation’s contractual obligations. Willis v. Donnelly, 
    199 S.W.3d 262
    ,
    271 (Tex. 2006); 
    Sparks, 232 S.W.3d at 868
    . Under Section 21.223(a)(2) of the Texas Business
    Organizations Code, a shareholder may not be held liable to the corporation or its obligees with
    respect to any contractual obligation of the corporation or any matter relating to or arising from the
    obligation on the basis that the shareholder is or was the alter ego of the corporation or on the basis
    of actual or constructive fraud, a sham to perpetrate a fraud, or other similar theory. TEX .BUS.
    ORGS.CODE ANN . § 21.223(a)(2)(Vernon Pamph. 2009); 
    Willis, 199 S.W.3d at 272
    . The liability
    of a shareholder for a contractual corporate obligation “is exclusive and preempts any other liability
    imposed for that obligation under common law or otherwise.” TEX .BUS.ORGS.CODE ANN . § 21.224;
    
    Willis, 199 S.W.3d at 272
    . Subsection (b) provides that the statutory limitation on a shareholder’s
    liability under subsection (a) does not protect the shareholder if the obligee demonstrates the
    shareholder caused the corporation to be used for the purpose of perpetrating and did perpetrate an
    actual fraud on the obligee primarily for the direct personal benefit of the shareholder. TEX .BUS.
    ORGS.CODE ANN . § 21.223(b); 
    Willis, 199 S.W.3d at 272
    . This proposition generally is referred to
    as piercing the corporate veil. 
    Sparks, 232 S.W.3d at 868
    , citing Castleberry v. Branscum, 
    721 S.W.2d 270
    , 278 (Tex. 1986)(superseded in part by TEX .BUS.ORGS.CODE ANN . § 21.223(a)(2)).
    The alter ego doctrine is one theory used to pierce the corporate veil. 
    Sparks, 232 S.W.3d at 868
    , citing 
    Castleberry, 721 S.W.2d at 272
    . The theory may be applied if there is a unity between
    the corporation and the individual to the extent that the corporation’s separateness has ceased, and
    holding only the corporation liable would be unjust. 
    Id. As proof
    of alter ego, a court may consider:
    (1) the payment of alleged corporate debts with personal checks or other commingling of funds; (2)
    representations that the individual will financially back the corporation; (3) the diversion of company
    profits to the individual for his personal use; (4) inadequate capitalization; and (5) other failure to
    keep corporate and personal assets separate. Mancorp Inc. v. Culpepper, 
    802 S.W.2d 226
    , 228 (Tex.
    1990); 
    Sparks, 232 S.W.3d at 868
    ; Carone v. Retamco Operating, Inc., 
    138 S.W.3d 1
    , 13
    (Tex.App.--San Antonio 2004, pet. denied). Under Section 21.223(a)(3), the failure of a corporation
    to observe any corporate formality is no longer a factor in considering whether alter ego exists.
    TEX .BUS.ORGS.CODE ANN . § 21.223(a)(3); 
    Sparks, 232 S.W.3d at 868
    -69; Howell v. Hilton Hotels
    Corp., 
    84 S.W.3d 708
    , 714 (Tex.App.--Houston [1st Dist.] 2002, pet. denied)(op. on reh’g). An
    individual’s standing as an officer, director, or majority shareholder of an entity in and of itself is
    insufficient to support a finding of alter ego. 
    Sparks, 232 S.W.3d at 869
    ; 
    Carone, 138 S.W.3d at 13
    ;
    Goldstein v. Mortenson, 
    113 S.W.3d 769
    , 781 (Tex.App.--Austin 2003, no pet.).
    In Question No. 7, the jury was asked whether Penhollow was responsible for the conduct
    of PCH. Consistent with the above authority, the trial court instructed the jury that Penhollow was
    responsible for the conduct of PCH if:
    Penhollow Custom Homes, LLC was organized and operated as a mere tool
    or business conduit of Steven Penhollow; there was such unity between Penhollow
    Custom Homes, LLC and Steven Penhollow that the separateness of Penhollow
    Custom Homes, LLC had ceased and holding only Penhollow Custom Homes, LLC
    responsible would result in injustice; and Steven Penhollow caused Penhollow
    Custom Homes, LLC to be used for the purpose of perpetuating and did perpetuate
    an actual fraud on Plaintiffs primarily for the direct personal benefit of Steven
    Penhollow.
    In deciding whether there was such unity between Penhollow Custom Homes,
    LLC and Steven Penhollow that the separateness of Penhollow Custom Homes, LLC
    had ceased, you are to consider the total dealings of Penhollow Custom Homes, LLC
    and Steven Penhollow, including:
    1. the degree to which Penhollow Custom Homes, LLC’s property
    had been kept separate from that of Steven Penhollow;
    2. the amount of financial interest, ownership, and control Steven
    Penhollow maintained over Penhollow Custom Homes, LLC; and
    3. whether Penhollow Custom Homes, LLC had been used for
    personal purposes of Steven Penhollow.
    In their briefing, the Kims skip over significant portions of the charge. They argue that
    “[t]his instruction supports a finding of alter ego on the basis that (1) it would be an injustice to
    Appellees if Penhollow was not responsible for PCH, and, that (2) Penhollow caused PCH to be used
    for the purpose of perpetuating [sic] and did perpetuate [sic] an actual fraud on Appellees primarily
    for his direct personal benefit.” But a finding of alter ego also requires evidence that PCH was
    organized and operated as a mere tool or business conduit of Penhollow and that there was such
    unity between PCH and Penhollow that the separateness of PCH had ceased. The Kims cite to the
    following evidence as supporting the jury’s determination:
    ! Penhollow testified that he is the owner and sole employee of PCH.
    ! Penhollow also referred to himself as being a “self employed” home builder.
    ! Penhollow does not withhold for federal income tax or medicare tax purposes.
    ! Penhollow is not paid a salary by the corporation but instead takes an owner’s draw from
    the profits.
    ! Penhollow draws all of the money down.
    From this evidence, the jury could have inferred that Steven Penhollow, as the sole shareholder and
    owner of PCH, had complete control over the corporation. But mere control and ownership of all
    the stock of a corporation is not a sufficient basis for ignoring the corporate fiction. Grain Dealers
    Mutual Insurance Company v. McKee, 
    943 S.W.2d 455
    , 458 (Tex. 1997). The record belies the
    assertion in the Kims’ briefing that Penhollow regularly drew down all of the profits. There is no
    evidence that PCH was organized and operated as a mere tool or business conduit of Penhollow.
    Nor is there any evidence that PCH’s property had not been kept separate from Penhollow’s personal
    property or that PCH had been used for his personal purposes. In short, we are left with the Kims
    reliance upon Penhollow’s practice of taking an owner’s draw [which would require the payment of
    quarterly estimates to the Internal Revenue Service] rather than a salary [which would be subject to
    withholding for federal income tax and medicare tax purposes]. Yet the Kims offer no authority that
    a shareholder who chooses an owner’s draw as opposed to a salary must suffer personal liability.
    Indeed, a sister court has rejected such an argument. Morris v. Powell, 
    150 S.W.3d 212
    , 220
    (Tex.App.--San Antonio 2004, no pet.)(testimony that husband and wife corporate officers took
    draws rather than salary on the basis of “seeing our financial circumstances, what we need money
    for and what our accountant tells us we should do” did not demonstrate such unity between the
    couple and the corporate entity that the separateness of the corporation had ceased to exist).
    Here, as in Morris, the alter ego finding cannot stand. Accordingly, we need not address
    Appellants’ arguments related to the sufficiency of the evidence to prove that Penhollow used PCH
    for the purpose of perpetrating fraud and that he perpetrated actual fraud on the Kims primarily for
    his direct personal benefit. We sustain Issue Two.
    ATTORNEYS’ FEES
    In Issue Three, Appellants challenge the attorneys’ fees award on the ground that the Kims
    failed to segregate the recoverable fees from the non-recoverable. A party seeking attorneys’ fees
    must show that the fees were incurred on a claim that allows recovery of such fees, and thus is
    ordinarily required to segregate fees incurred on claims allowing recovery of fees from those that do
    not. Stewart Title Guaranty Company v. Aiello, 
    941 S.W.2d 68
    , 73 (Tex. 1997); Adams v.
    McFadden, 
    296 S.W.3d 743
    , 759 (Tex.App.--El Paso 2009, pet. granted, judgment vacated, and
    remanded by agreement). There is an exception to this rule. 
    Adams, 296 S.W.3d at 759
    . When
    discrete legal services advance both recoverable claims and unrecoverable claims, attorneys are not
    required to segregate fees to recover the total amount covering all claims. See Tony Gullo Motors
    I, L.P. v. Chapa, 
    212 S.W.3d 299
    , 313 (Tex. 2006); 
    Adams, 296 S.W.3d at 759
    ; CA Partners v.
    Spears, 
    274 S.W.3d 51
    , 81 (Tex.App.--Houston [14th Dist.] 2008, pet. denied). In Tony Gullo
    Motors, the Supreme Court eliminated the exception to the segregation requirement for fees incurred
    solely on a separate but intertwined claim. Tony Gullo 
    Motors, 212 S.W.3d at 313-14
    . If any
    attorneys’ fees relate solely to a claim for which such fees are unrecoverable, the claimant must
    segregate recoverable from unrecoverable fees. 
    Id. at 313.
    This standard does not require attorneys
    to keep separate time records when drafting the breach of contract and fraud paragraphs of a petition.
    See 
    id. at 314.
    The amount of recoverable attorneys’ fees is sufficiently segregated if, for example,
    the attorney testifies that a given percentage of the drafting time would have been necessary even if
    the claim for which attorneys’ fees are recoverable had not been asserted. 
    Id. at 314;
    see CA
    
    Partners, 274 S.W.3d at 82
    ; 7979 Airport Garage, L.L.C. v. Dollar Rent A Car Systems, Inc., 
    245 S.W.3d 488
    , 509 (Tex.App.--Houston [14th Dist.] 2007, pet. denied). The need to segregate
    attorneys’ fees is a question of law, while the extent to which claims can or cannot be segregated is
    a mixed question of law and fact. Tony Gullo 
    Motors, 212 S.W.3d at 312-13
    ; CA 
    Partners, 274 S.W.3d at 82
    .
    By agreement of the parties, the trial court determined the attorneys’ fees issue. The Kims’
    attorney, Jack B. Peacock, Jr., testified that he agreed to represent the Kims on a fixed hourly basis
    at the initial rate of $275 per hour but he reduced the hourly rate to $250 when the case became more
    complicated and litigious. Peacock recognized that the case involved both claims for which
    attorneys’ fees were recoverable and claims for which they were not. In his billing statement
    admitted into evidence as Plaintiff’s Exhibit 42, Peacock had reduced certain areas by a percentage
    which represented the amount of time he worked on a non-recoverable claim only. Peacock went
    through Plaintiff’s Exhibit 42 and pointed out each area he had so reduced. Plaintiff’s Exhibit 42
    showed that, at the time the Kims received the jury verdict in their favor, they had incurred attorneys’
    fees in the amount of $58,827.75. At the time of the hearing on attorney’s fees, the Kims had paid
    $52,272.75. Peacock stressed that the amount reflected in Plaintiff’s Exhibit 42 did not represent
    the total amount of attorney’s fees incurred by the Kims because of the amounts deducted for non-
    recoverable fees. Peacock estimated that the post-trial matters would require an additional sixteen
    hours of time, or $4,000, so the total fees through the post-trial motions would be $62,827.75.
    Appellants cross-examined Peacock but did not present any controverting evidence. Counsel’s
    testimony established that the attorney’s fees are sufficiently segregated. See Tony Gullo 
    Motors, 212 S.W.3d at 314
    ; see CA 
    Partners, 274 S.W.3d at 82
    ; 7979 Airport 
    Garage, 245 S.W.3d at 509
    .
    Appellants next argue that the attorneys’ fee award should be reduced because the Kims did
    not recover all of the damages sought in their petition, and therefore, they did not substantially
    prevail on their breach of contract action. Section 38.001 of the Civil Practice and Remedies Code
    provides that a party in a breach of contract action may recover reasonable attorneys’ fees.
    TEX.CIV.PRAC.&REM .CODE ANN. § 38.001(8)(Vernon 2008). To recover fees under Section 38.001,
    a party must (1) prevail on a cause of action for which fees are recoverable, and (2) recover damages.
    Mustang Pipeline Co., Inc. v. Driver Pipeline Co., Inc., 
    134 S.W.3d 195
    , 201 (Tex. 2004). The jury
    found in favor of the Kims on the breach of contract action and awarded damages. The Kims are not
    required to “substantially” prevail on their breach of contract cause of action in order to recover
    attorney’s fees.
    Citing Panizo v. Young Men’s Christian Association of Greater Houston Area, 
    938 S.W.2d 163
    (Tex.App--Houston [1st Dist.] 1996, no writ), Appellants also argue that the amount of
    attorneys’ fees should be reduced because the Kims only prevailed on the breach of contract cause
    of action and did not prevail on the fraud claim. In Panizo, the court of appeals affirmed the trial
    court’s ruling that the plaintiff, who brought breach of contract and fraud claims against the
    defendant, had the duty to segregate her attorney’s fees because the claims were not inextricably
    intertwined. 
    Panizo, 938 S.W.2d at 169-70
    . The court also rejected the plaintiff’s argument that she
    did not have to segregate because the fraud claim arose from the breach of contract claim. 
    Id. at 170.
    The plaintiff relied on two cases4 which held that, when a party proves fraud arising from a breach
    of contract, the party may recover attorney’s fees for the fraud. 
    Id. Panizo is
    inapplicable because
    it involved the separate-but-intertwined-claim test eliminated by Tony Gullo Motors. Under that
    case, the total amount of the attorney’s fees covering all claims is recoverable when discrete legal
    services advance both recoverable claims and unrecoverable claims. See Tony Gullo 
    Motors, 212 S.W.3d at 313
    .
    Finally, Appellants argue that the Kims failed to prove that a fee agreement existed or that
    the fees had actually been paid. This argument is contrary to the record. Peacock expressly testified
    that he had a fee agreement with the Kims and they had paid a substantial portion of the fees incurred
    4
    Schindler v. Austwell Farmers Coop., 829 S.W .2d 283, 288 (Tex.App.--Corpus Christi), aff’d as modified,
    841 S.W .2d 853 (Tex. 1992); Gill Savings Association v. Chair King, Inc., 783 S.W .2d 674, 680 (Tex.App.--Houston
    [14th Dist.] 1989), aff’d in part and modified in part, 797 S.W .2d 31 (Tex. 1990).
    to that point in the trial. Issue Three is overruled.
    MITIGATION
    In Issue Four, Appellants contend that the trial court erred by failing to instruct the jury on
    mitigation of damages. Appellants have not cited any authority in support of this argument in their
    brief or reply brief nor have they provided any substantive analysis of the issue. The Rules of
    Appellate Procedure require an appellant’s brief to contain a clear and concise argument for the
    contentions made with appropriate citations to authorities and the record. TEX .R.APP .P. 38.1(i).
    Failure to cite applicable authority or advance any substantive analysis waives an issue on appeal.
    Torres v. GSC Enterprises, Inc., 
    242 S.W.3d 553
    , 559 (Tex.App.--El Paso 2007, no pet.); Velasquez
    v. Waste Connections, Inc., 
    169 S.W.3d 432
    , 436 (Tex.App.--El Paso 2005, no pet.). We overrule
    Issue Four.
    INCIDENTAL AND CONSEQUENTIAL DAMAGES AWARD
    In Issue Five, Appellants raise two challenges to the jury’s award of damages for the time
    expended by Mr. Kim in attempting to make repairs to the property. First, they allege there is no
    statutory basis for the award. Second, they argue that Mr. Kim’s “fees” were not shown to be
    reasonable and necessary.
    With respect to the first argument, the Kims respond that Appellants failed to preserve it.
    We agree. Appellants did not object to the damages issue submitted by the trial court which included
    three types of damages: reasonable and necessary cost to repair the property, the reasonable value
    of the time spent by the Kims correcting or attempting to correct the problems with the property, and
    reasonable and necessary engineering and consulting fees.5 Consequently, Appellants’ complaint
    5
    The jury awarded $40,000 for cost to repair the property, $1,850 for the reasonable value of the time spent
    by the Kims attempting to repair the property, and $4,250 for engineering and consulting fees.
    that the trial court submitted an improper measure of damages to the jury is waived. See
    TEX .R.CIV .P. 274 (providing that a party objecting to a charge must point out distinctly the
    objectionable matter and the grounds of the objection; any complaint as to a question, definition, or
    instruction, on account of any defect, omission, or fault in pleading, is waived unless specifically
    included in the objections); Equistar Chemicals, L.P. v. Dresser-Rand Co., 
    240 S.W.3d 864
    , 868
    (Tex. 2007)(argument that charge submitted improper measure of damages was waived by failure
    to present to trial court).
    Citing Ebby Halliday Real Estate, Inc. v. Murnan, 
    916 S.W.2d 585
    (Tex.App.--Fort Worth
    1996, writ denied), Appellants also argue that Mr. Kim’s “fees” were not shown to be reasonable and
    necessary. We have construed Appellants’ second argument to raise a challenge to the legal
    sufficiency of the evidence supporting this portion of the damages award. In Ebby Halliday, the
    appellant challenged the jury’s finding regarding the “reasonable and necessary” cost of past repairs
    incurred by the appellees. 
    Id. at 588.
    The Fort Worth Court of Appeals noted that a claimant is not
    required to use the words “reasonable” and “necessary”, but is only required only to present
    sufficient evidence to justify to justify a jury’s finding that the costs were reasonable and the repairs
    necessary. Mr. Kim testified that as a result of the leaky roof, water came into the master bedroom
    and the guest bedroom. Water also leaked into the frame of a window. Mr. Kim spent three to four
    days attempting to find and repair the leaks. He owns an auto body repair shop and his hourly rate
    is $65 per hour. We conclude that the evidence is legally sufficient to support the jury’s damages
    award in the amount of $1,850 for the reasonable value of the time spent by the Kims repairing or
    attempting to repair the property. Issue Five is overruled.
    ARBITRATION
    In their final issue, Appellants complain that the trial court erred by failing to order the parties
    to arbitration. The Kims respond that Appellants waived the issue by not obtaining a ruling from
    the trial court on their motion to compel arbitration. Appellants first filed a motion to compel
    arbitration on December 6, 2005. They filed an amended motion on December 22, 2005. Appellants
    allege that they raised the arbitration issue with the trial court at a docket call on January 9, 2006 and
    the court refused to order arbitration, but they do not provide a record citation. As a prerequisite to
    presenting a complaint for appellate review, the record must show that the party raised the complaint
    with the trial court by a timely and specific request, objection, or motion. TEX .R.APP .P. 33.1(a)(1).
    Further, the record must reflect that the trial court ruled on the request, objection, or motion, either
    expressly or implicitly, or the trial court refused to rule and the complaining party objected to the
    refusal. TEX .R.APP.P. 33.1(a)(2). While Appellants filed a motion to compel arbitration, the record
    does not show that Appellants obtained a hearing on the motion or that the trial court denied it.
    Consequently, the issue is waived. See Williams Industries, Inc. v. Fry’s Electronics, Inc.,
    No. 01-02-00735-CV, 
    2003 WL 21357441
    at *1-2 (Tex.App.--Houston [1 Dist.] 2003, no pet.)
    (holding that appellant did not preserve issue regarding court’s failure to refer fraudulent transfer
    claim to ongoing arbitration proceeding, where record did not reflect ruling on motion to compel
    arbitration or court’s refusal to rule). Issue Six is overruled.
    Having found the evidence legally insufficient to support the alter ego finding, we reverse
    that portion of the judgment imposing individual liability on Penhollow and render a take-nothing
    judgment in his favor. We affirm the judgment against Penhollow Custom Homes, LLC.
    March 24, 2010
    ANN CRAWFORD McCLURE, Justice
    Before Chew, C.J., McClure, and Rivera, JJ.