Opinion issued December 31, 2025
In The
Court of Appeals For The
First District of Texas ———————————— NO. 01-22-00176-CV ——————————— A.H.D. HOUSTON, INC. D/B/A CENTERFOLDS, DWG FM INC. D/B/A SPLENDOR, D. HOUSTON INC. D/B/A TREASURES, A.H.D. HOUSTON, INC. D/B/A CENTERFOLDS, AND W.L. YORK, INC. D/B/A COVER GIRLS, INCORRECTLY NAMED AS A.H.D. HOUSTON, INC. D/B/A CENTERFOLDS, DWG FM INC. D/B/A SPLENDOR, D. TEXAS INVESTMENTS, INC. D/B/A TREASURES, A.H.D. HOUSTON, INC. D/B/A TREASURES, AND W.L. YORK, INC. D/B/A TREASURES, Appellants V. JAIME MIDDLETON, CORA SKINNER, JAMILLETTE GAXIOLA, JENNIFER ZHARINOVA, JESSICA HINTON, LINA POSADA, LUCY PINDER, PAOLA CANAS, SANDRA VALENCIA, TIFFANY TOTH, CIELO JEAN GIBSON, MAYSA QUI, ELIZABETH TURNER, EMILY SEARS, GEMMA LEE FARRELL, AND JACLYN SWEDBERG, Appellees
On Appeal from the 157th District Court Harris County, Texas Trial Court Case No. 2017-71429 MEMORANDUM OPINION
Appellants, A.H.D. Houston, Inc. d/b/a Centerfolds, Dwg Fm Inc. d/b/a
Splendor, D. Houston Inc. d/b/a Treasures, A.H.D. Houston, Inc. d/b/a Centerfolds,
and W.L. York, Inc. d/b/a Cover Girls, incorrectly named as A.H.D. Houston, Inc.
d/b/a Centerfolds, Dwg Fm Inc. d/b/a Splendor, D. Texas Investments, Inc. d/b/a
Treasures, A.H.D. Houston, Inc. d/b/a Treasures, and W.L. York, Inc. d/b/a
Treasures (collectively “appellants” or “the Clubs”) appeal from the trial court’s
order granting summary judgment in favor of appellees Jaime Middleton, Cora
Skinner, Jamillette Gaxiola, Jennifer Zharinova, Jessica Hinton, Lina Posada, Lucy
Pinder, Paola Canas, Sandra Valencia, Tiffany Toth, Cielo Jean Gibson, Maysa Qui,
Elizabeth Turner, Emily Sears, Gemma Lee Farrell, and Jaclyn Swedberg
(collectively “appellees” or “the Models”) on their affirmative claims of invasion of
privacy by misappropriation and negligence and awarding $1,405,000.00 in
damages. Appellants raise three issues on appeal. First, they contend that the trial
court erred in granting summary judgment on appellees’ misappropriation claim
because the evidence of commercial benefit was not conclusive and the Clubs
presented evidence that the social media posts using the Models’ images did not
confer a commercial benefit on the Clubs that they would not have otherwise
received. Second, they assert that the trial court erred in granting summary judgment
on the Models’ negligence claim because the Clubs presented evidence that a third-
2 party vendor was responsible for promoting the Clubs on social media and was
solely responsible for the social media posts at issue. Third, the Clubs assert that the
trial court improperly awarded damages to the Models in excess of $1.4 million as a
matter of law because (1) the Models’ summary judgment motion requested that
damages be determined by a jury, (2) the unliquidated damages were a fact issue for
the jury because the damages sought are highly subjective and not readily susceptible
to objective, conclusive calculation, (3) the expert reports submitted in support of
the Models’ damages claims are conclusory, speculative, unreliable, and full of
analytical gaps and unsupported inferences, (4) no evidence in the record supports
$575,000.00 of the $1,405,000.00 awarded in the judgment, and (5) the Clubs
presented evidence from each Model’s deposition testimony stating that she suffered
no damage as a result of the social media posts.
We reverse the judgment and remand for a new trial on liability and damages.
Background
Appellants own and operate the adult entertainment establishments known as
Treasures, Centerfolds, and Splendor in Harris County, Texas (“the Clubs”).
Appellees are professional models and social influencers who earn a living by
commercializing their images to endorse, promote, and advertise products and
businesses in exchange for compensation.
3 A. The Lawsuit
In October 2017, the Models sued appellants asserting claims for invasion of
privacy by misappropriation, negligence/respondeat superior liability, and theft.
Their petition alleged that appellants misappropriated the Models’ images and
likenesses over a period of several years by placing doctored images on the Internet
and the Clubs’ social media posts—making it appear as if the Models were working
as strippers in the Clubs or endorsed the Clubs—to promote the Clubs, and did so
without the Models’ consent. They alleged that appellants’ misappropriation of their
images and likenesses was neither incidental nor for a newsworthy purpose; rather,
it was done for the value associated with them. With regard to their negligence
claim, the Models alleged that appellants owed them a duty to ensure that their
advertising and promotional materials and practices did not infringe on the Models’
privacy rights, and they breached their duty of care by (1) failing to promulgate,
enforce, or adhere to policies and procedures concerning the misappropriation of
images, (2) communicate the policies and procedures to their employees, and (3)
supervise their employees to ensure compliance. The Models further alleged that
appellants had a duty to the members of the public to refrain from misappropriating
the Models’ images, they violated that duty by negligently hiring, screening,
retaining and training their employees and agents, and they were liable for the
conduct of their employees or agents under the theory of respondeat superior. With
4 regard to their theft claim, the Models alleged that appellants unlawfully
appropriated the Models’ images and unlawfully obtained their services pursuant to
Texas Civil Practices and Remedies Code section 134.002(2). The Models sought
past and future pecuniary damages resulting from the unauthorized use of their
images and likenesses as well as exemplary damages.
In their amended answer, appellants asserted a general denial and raised
several affirmative defenses, pleading that (1) the Models consented to the public
use and dissemination of their photographs and therefore relinquished their rights to
the photographs and to their likenesses, (2) any use of the Models’ photographs by
the Clubs did not involve the character, personality, or reputation of the Models, (3)
the Clubs did not use the photographs for a commercial benefit, (4) the Models
suffered no commercial harm or damages, (5) the Models’ claims were barred
because they were paid for the photographs and for a release of their rights to the
photographs and their likenesses, (6) the Models’ alleged injuries were caused in
whole or in part by the negligence of a third party, Genesis Real World Corporation
(“Genesis”), (7) the Models’ damages, if any, should be reduced because of their
comparative and/or contributory negligence and their failure to mitigate their
damages, and (8) the Models’ claims were barred by the doctrines of unclean hands,
waiver, and estoppel.
5 B. Summary Judgment Proceedings
The Models moved for traditional summary judgment on their claims of
invasion of privacy by misappropriation and negligence/respondeat superior liability
in August 2021.1 As to their misappropriation claim, the Models asserted that they
had established all three elements of their claim because the summary judgment
evidence conclusively showed that (1) appellants had appropriated the Models’
names or likenesses for their value rather than incidentally or for a newsworthy
purpose, (2) the Models could be identified from the publication, and (3) appellants
received an advantage or benefit as a result of the misappropriation. The Models
asserted that they met all of the elements of their negligence claim because the
evidence demonstrated that (1) appellants owed them a duty of care to ensure that
their advertising and promotional materials and practices did not infringe on the
Models’ privacy rights, (2) they breached their duty of care by (a) failing to
promulgate, enforce, or adhere to policies and procedures concerning the
misappropriation of images, (b) communicate the policies and procedures to their
employees, and (c) supervise their employees to ensure compliance, and (3)
appellants’ breach proximately caused damages to the Models. They asserted that
appellants were also liable under the doctrine of respondeat superior because their
agent, Genesis, was acting within the course and scope of its employment with
1 The Models did not move for summary judgment on their theft claim. 6 appellants when it posted the Models’ images on the Clubs’ websites and social
media accounts and their actions were in furtherance of appellants’ businesses. The
Models also moved for summary judgment on their negligent undertaking claim.
The summary judgment evidence attached to the Models’ motion consisted of their
sworn declarations and accompanying attachments, excerpts from the deposition
testimony of Crystal Cowart, appellants’ designated corporate representative
(“Cowart”) and accompanying exhibits, Treasures’s Image Rights Release, and the
expert reports of Stephen Chamberlin (“Chamberlin”).2
In his reports, Chamberlin stated:
• he was asked to determine the fair market value of the Models’ images used by appellants in connection with the social media accounts for their clubs;
• his opinions, analysis, and conclusions were based upon a review of the images and of supporting documentation, discussions with each Model
2 Chamberlin prepared three expert reports: the “Splendor Report” (Exhibit S), the “Centerfolds Report” (Exhibit T), and the “Treasures Report” (Exhibit U). While it is undisputed that the Splendor and Centerfolds Reports were filed in the trial court prior to the summary judgment hearing and are part of the appellate record, appellants disputed that the Treasures Report was properly filed or proffered to the trial court prior to entry of judgment.
After the Models requested that a supplemental record containing Exhibit U be filed in this Court, we abated the appeal under Texas Rule of Appellate Procedure 34.5(e), directing the trial court to hold a hearing to determine “whether Exhibit U was part of the summary judgment record.” Following a hearing, the trial court entered an order memorializing its findings that Exhibit U was properly before the court during the summary judgment hearing and that it was lost or destroyed after the summary judgment hearing. We reinstated the appeal and granted appellants thirty days to file a supplemental brief addressing Exhibit U.
7 as well as agency representatives and other individuals in the modeling and talent industries, an assessment of the Models’ current career station, and personal factors that would impact a fair market value negotiation;
• the documents he considered in calculating damages included other clients’ contracts and agreements with the Models, contractor 1099 forms, employee W-2 forms, earnings statements, and releases and related records, where available; and
• determining the fair market value of appellants’ use of the Models’ images required him to attempt to recreate a negotiation process that did not occur.
Chamberlin’s reports further stated that his determinations of fair market value for
each Model’s images used by appellants “are based on a number of factors and are
estimations in support of actual damages sustained by the Models . . . .”
In their summary judgment response, appellants asserted that the Models were
not entitled to summary judgment on their misappropriation claim because they
failed to provide any evidence that appellants had received a commercial benefit
from the complained-of posts that, without such posts, appellants would not have
otherwise received. As to the Models’ negligence/respondeat superior claims,
appellants argued that a genuine issue of material fact existed regarding whether
appellants breached any duty owed to appellees because Genesis, the third-party
vendor appellants hired to advertise the Clubs on social media, acted outside the
scope of the parties’ agreement and its authority when it posted the Models’ images
to the Clubs’ social media pages without first obtaining releases from them. They
8 further asserted that the Models had failed to provide any evidence that they suffered
injury or damage as a result of the social media posts. Appellants attached excerpts
from Cowart’s deposition and the Models’ depositions as summary judgment
evidence.
The trial court held a hearing on the Models’ motion for summary judgment
on October 22, 2021.3 At the conclusion of the hearing, the trial court asked the
parties to submit additional briefing, specifically, to address whether the
determination of the “commercial benefit” element of a misappropriation claim is a
question of fact or of law.
In their supplemental briefing, the Models argued that the summary judgment
evidence established as a matter of law that appellants received a benefit or
advantage as a result of the misappropriation of the Models’ images. They asserted
that the “benefit” element requires a plaintiff to prove that the defendant derived
some commercial benefit from the use of the plaintiff’s name or likeness as opposed
to receiving no commercial benefit because the use was incidental. The Models
asserted that appellants’ use of their images was commercial and anything but
incidental. They asserted that Cowart’s testimony demonstrated that the use of their
3 At the hearing, the trial court also heard appellants’ motion for leave to designate Genesis as a responsible third party. The court took judicial notice that appellants had designated Genesis as a potential responsible party on July 19, 2020. The lawsuit was filed in 2017. Noting that the statute of limitations barred suit against Genesis, the trial court denied appellants’ motion. 9 images was clearly intended to bring patrons into the Clubs by convincing them that
the Models would actually appear at the Clubs as dancers. The Models emphasized
that they were not required to show that appellants made money from the commercial
use of their images or likenesses. The Models argued that the uncontroverted
summary judgment evidence showing that the Models were not compensated for
appellants’ repeated use of their images over a period of years, without their
permission, to advertise their Clubs and the events taking place there met the
“commercial benefit” standard.
In their supplemental briefing, appellants asserted that the Models were not
entitled to summary judgment on their misappropriation claim because appellants
presented more than a scintilla of evidence creating a fact issue as to whether
appellants received some advantage or benefit from their use of the Models’ images
or likenesses in the Clubs’ social media posts. In support of their assertion,
appellants pointed to Cowart’s testimony that, based on her twenty years of
experience in the adult entertainment industry, the Clubs did not need to advertise.
Appellants asserted that the Models produced no evidence that more patrons came
to the Clubs or that the Clubs’ revenue increased as a result of the social media posts
using their images. Appellants argued that the social media posts were simply
inconsequential to the Clubs.
10 The trial court granted the Models’ traditional motion for summary judgment
as to liability and damages on their claims for misappropriation and
negligence/respondeat superior liability. The trial court entered its final judgment,
which stated, in part:
A. IT IS THEREFORE ORDERED that Plaintiffs[’] Motion for Summary Judgment against Defendants for Right to Privacy—Misappropriation is GRANTED.
B. IT IS FURTHER ORDERED that Plaintiffs[’] Motion for Summary Judgment against Defendants for Negligence is GRANTED.
C. IT IS FURTHER ORDERED that Plaintiffs[’] Motion for Summary Judgment against Defendants for Negligence Respondeat Superior is GRANTED.
D. IT IS FURTHER ORDERED that Plaintiffs are awarded monetary damages as presented in their Summary Judgment Evidence as follows:
Plaintiff Damages
Skinner $160,000 Middleton $60,000 Gaxiola $30,000 Zharinova $15,000 Hinton $200,000 Posada $210,000 Pinder $40,000 Canas $105,000 Valencia $45,000 Toth $240,000 Farrell $40,000 Sears $20,000 Swedberg $100,000 Quy $40,000 Gibson $60,000
11 Turner $40,000
Appellants moved for a new trial, arguing that the trial court erred in granting
summary judgment in favor of the Models and awarding more than $1.4 million in
damages. With respect to the misappropriation claim, appellants asserted that the
Models had failed to present uncontroverted evidence that appellants had received a
commercial benefit from the alleged misappropriation of the Models’ images. They
further asserted that Cowart’s testimony that the Clubs received no commercial
benefit and that the advertisements were inconsequential to the Clubs created a fact
issue precluding summary judgment on the Models’ misappropriation claim. As to
the negligence/respondeat superior claim, appellants argued that the summary
judgment record showed that appellants had hired Genesis, a third-party vendor, to
promote and market the Clubs on social media, Genesis alone handled the selection
and posting of images for advertising purposes, and Genesis acted outside the scope
of its authority when it posted the images without first obtaining releases from the
Models. Appellants argued that this evidence raised a material fact issue on the
Models’ negligence claim precluding summary judgment. Finally, appellants
asserted that the trial court erred in awarding damages to the Models for several
reasons. First, the damages in this case were unliquidated, subjective, not subject to
precise calculation, and could not be decided as a matter of law. Second, in their
summary judgment motion, the Models specifically requested that the question of
12 damages be submitted to the jury and, thus, by awarding damages in its final
judgment, the trial court impermissibly awarded more relief than was requested in
the motion. Third, the only evidence of damages was the Models’ expert reports,
which were unreliable, speculative, conclusory, and hearsay. Lastly, appellants’
summary judgment evidence included excerpts from each Model’s deposition
testimony stating that she suffered no damages as a result of the alleged
misappropriation, which directly controverted the evidence the Models produced to
support their claimed damages. Appellants asserted that the Models failed to
establish their entitlement to and the amount of damages as a matter of law.
In their response to appellants’ motion for new trial, the Models argued that
appellants were not entitled to an evidentiary hearing because their new trial motion
was merely an attempt to assert, for the first time, objections to the Models’
summary judgment evidence and challenge the Models’ expert’s qualifications.
They asserted that appellants’ motion failed to show good cause as required by
Texas Rule of Civil Procedure 320. According to the Models, they conclusively
showed that appellants received a commercial benefit from the use of the Models’
images that they would not otherwise have received. They further asserted that they
requested summary judgment on damages and conclusively proved the amount of
13 damages to which they were entitled. Lastly, they argued that appellants had waived
any Daubert4 challenge to the Models’ expert.
The trial court held a hearing on appellants’ motion for new trial on February
18, 2022. Appellants’ motion for new trial was subsequently overruled by operation
of law.
This appeal followed.
Summary Judgment Standard
We review the trial court’s grant of a summary judgment de novo. Tex. Mun.
Power Agency v. Pub. Util. Comm’n of Tex., 253 S.W.3d 184, 192 (Tex. 2007). To
prevail on a traditional summary judgment motion, the movant bears the burden of
proving that no genuine issues of material fact exist and that it is entitled to judgment
as a matter of law. TEX. R. CIV. P. 166a(c); Mann Frankfort Stein & Lipp Advisors,
Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009). Thus, a plaintiff moving for
summary judgment on its own claim must conclusively establish each element of
that claim. Clarent Energy Servs., Inc. v. Leasing Ventures, LLC, No. 01-18-00821-
CV, 2020 WL 1173706, at *6 (Tex. App.—Houston [1st Dist.] Mar. 12, 2020, no
pet.) (mem. op.). A matter is conclusively established if reasonable people could not
differ as to the conclusion to be drawn from the evidence. See City of Keller v.
Wilson, 168 S.W.3d 802, 816 (Tex. 2005).
4 Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579 (1993). 14 If the movant meets its burden, the burden then shifts to the nonmovant to
raise a genuine issue of material fact precluding summary judgment. See Centeq
Realty, Inc. v. Siegler, 899 S.W.2d 195, 197 (Tex. 1995). To determine if the
nonmovant raised a fact issue, we review the evidence in the light most favorable to
the nonmovant, crediting favorable evidence if reasonable jurors could and
disregarding contrary evidence unless reasonable jurors could not. Mann Frankfort,
289 S.W.3d at 848 (citing City of Keller, 168 S.W.3d at 827). We indulge every
reasonable inference and resolve any doubts in the nonmovant’s favor. Sw. Elec.
Power Co. v. Grant, 73 S.W.3d 211, 215 (Tex. 2002) (citing Sci. Spectrum, Inc. v.
Martinez, 941 S.W.2d 910, 911 (Tex. 1997)). A genuine issue of material fact is
raised when the nonmovant produces more than a scintilla of evidence regarding the
challenged element. Buck v. Palmer, 381 S.W.3d 525, 527 (Tex. 2012). More than
a scintilla of evidence exists when reasonable and fair-minded individuals could
differ in their conclusions. King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 751
(Tex. 2003).
Misappropriation Claim
In their first issue, appellants contend that the trial court erred in granting
summary judgment on the Models’ misappropriation claim. They assert that the
Models failed to conclusively prove that the Clubs received a commercial benefit
from the social media posts containing the Models’ images or likenesses that they
15 would not have otherwise received. Appellants assert that their summary judgment
evidence showed that the Clubs received no commercial benefit from their social
media posts, the Clubs do not need to advertise, the social media posts are
inconsequential, and Genesis was solely responsible for the posts. Thus, they argue,
a genuine issue of material fact exists on the commercial benefit element of the
Models’ invasion of privacy by misappropriation claim.
A. Applicable Law
Invasion of privacy is an intentional tort. Doggett v. Travis Law Firm, P.C.,
555 S.W.3d 127, 130 (Tex. App.—Houston [1st Dist.] 2018, pet. denied) (citing
Billings v. Atkinson, 489 S.W.2d 858, 860–61 (Tex. 1973)). Texas recognizes three
separate types of invasion of privacy: (1) intrusion upon seclusion or solitude or into
one’s private affairs; (2) public disclosure of embarrassing private facts; and (3)
wrongful appropriation of one’s name or likeness. See Cain v. Hearst Corp., 878
S.W.2d 577, 578 (Tex. 1994) (discussing cases recognizing each type of privacy
right).
The three elements of a claim for invasion of privacy by appropriation of name
or likeness are (1) the defendant appropriated the plaintiff’s name or likeness for the
value associated with it, and not in an incidental manner or for a newsworthy
purpose; (2) the plaintiff can be identified from the publication; and (3) there was
some advantage or benefit to the defendant. Matthews v. Wozencraft, 15 F.3d 432,
16 437 (5th Cir. 1994); Henley v. Dillard Dep’t Stores, 46 F. Supp. 2d 587, 590 (N.D.
Tex. 1999); United Locating Servs., LLC v. Fobbs, 619 S.W.3d 863, 871 (Tex.
App.—Houston [14th Dist.] 2021, no pet.); Doggett, 555 S.W.3d at 130; see also
Express One Int’l, Inc. v. Steinbeck, 53 S.W.3d 895, 900 (Tex. App.—Dallas 2001,
no pet.). In general, an appropriation becomes actionable when the name or likeness
is used “to advertise the defendant’s business or product, or for some similar
commercial purpose.” Watson v. Talia Heights, LLC, 566 S.W.3d 326, 330 (Tex.
App.—Houston [14th Dist.] 2018, no pet.) (quoting Express One Int’l, Inc., 53
S.W.3d at 900). If a defendant appropriates a plaintiff’s name or likeness for his
own commercial advantage, he necessarily derives a benefit from its use. Henley,
46 F. Supp. 2d at 596.
The plaintiff is not required to show that the defendant made money from the
commercial use of the name or likeness. See id. at 597 (“It is immaterial that
Defendant made little profit after the ad ran, only ran the advertisement once, and
received no feedback on the ad.”). Nor is the plaintiff required to prove the
defendant’s use of the plaintiff’s name or likeness “worked.” Id. “[The d]efendant
should not be shielded from liability because the product promoted is undesirable,
the ad [is] clumsy or somehow ineffective, or sales slump[ed] during the relevant
time period.” Id. (internal quotation omitted). “The right of publicity has been
defined as the inherent right of every human being to control the commercial use of
17 his or her identity . . . .” Souza v. Mirage Ent., Inc., No. 2:21-CV-00015, 2023 WL
8936699, at *2 (S.D. Tex. Dec. 27, 2023) (internal quotation omitted). Rather, the
plaintiff must prove that the defendant received a commercial benefit from use of
the plaintiff’s name or likeness that, without the plaintiff’s image, he would not
otherwise have received. See Henley, 46 F. Supp. 2d at 597.
B. Summary Judgment Motion
In their summary judgment motion, the Models asserted that they conclusively
established all three elements of their misappropriation claim as a matter of law.
1. Appellants appropriated the Models’ likenesses or images for their value rather than incidentally or for a newsworthy purpose.
In support of this element, the Models pointed to Cowart’s testimony that she
had viewed the Models’ images—thirty-six “Centerfolds images,” fifteen “Splendor
images,” and twenty-three “Treasures images”—and identified them as posts
appearing on the Clubs’ Facebook pages. Cowart testified that appellants hired
Genesis to manage their marketing, including their social media accounts, and to
post images on their pages. She testified that appellants paid Genesis $5,100.00 per
month for their services. Cowart testified that the Clubs’ general managers provided
Genesis with information regarding food and drink specials and promotions, and
Genesis created the advertisements for the Clubs. She testified that the Clubs’
owners had the ability to limit access to the Clubs’ social media accounts to Genesis
18 only. The owners could also direct Genesis to remove content from their social
media accounts.
The Models argued that appellants appropriated their images to sell the
experience of nude women interacting with the customer base; stated differently, the
purpose of the advertising was to get customers into the Clubs. In support of their
argument, the Models pointed to the following excerpts from Cowart’s testimony:
Q. Right. They’re all strip clubs where men can go or women can go and watch beautiful women take off their clothes, interact with them, have a drink with them, those types of things, right?
A. Correct.
Q. So is that what these clubs are selling, that experience? In other words, the ability to go and see beautiful women dance and take off their clothes and have that interaction?
A. Yeah.
Q. Okay. And that’s why you’re putting beautiful women in your advertisements, correct, in order to basically show what goes on at the club, correct?
A. I mean, I use the beautiful – in my experience, the beautiful women that we use are usually our dancers. So in that scenario, it makes sense to use them and put up an advertisement. Because if an individual comes as a result of the advertisement, they’re not going to be angry when they get there because the person they’re looking for from the photo will actually be there dancing.
Q. Right. So it’s a reasonable assumption that in the advertising, you know, I’m looking at a woman who I can actually go to one of these clubs and see and interact with. Is that a fair statement?
A. Yes. 19 Q. And that’s why you’re using women in the advertisements, correct? Because you want to portray these businesses as a place where I can go, as a male in that demographic or a female that’s interested in that sort of thing, I can go and see this beautiful woman in the ad take off her clothes and maybe talk to her, buy her champagne or whatever?
A. Yes. ...
Q. Okay. And then you testified earlier that the purpose of using the beautiful women in the advertisements was to at least let people know what goes on in the club, correct?
MR. MOSCOWITZ: Object to the form.
A. Technically my testimony earlier was that we use – we like to use our beautiful women so that the customers, if they see them and they come to the club, they’ll be able to see the girls that they saw in the advertisement.
Q. Okay. And then would you agree with me that, you know, it’s virtually impossible to make a distinction between the images of my clients and the images of your dancers with respect to these ads unless you have the behind-the-scene knowledge that you do?
Q. Okay. And then, again, the purpose of these ads in Exhibits 2, 3, and for Centerfolds, Splendor, and Treasures, was – whether it’s working or not, the purpose is to get the clubs out to the public, correct?
It is undisputed that neither appellants nor Genesis had permission to use the
Models’ images in advertisements for the Clubs.
20 2. Each model can be identified from the advertisement.
In support of this element, the Models pointed to Exhibits A through P
attached to their motion for summary judgment. These exhibits are the sworn
declarations of each of the sixteen models and include the images of each model that
appeared in the Clubs’ advertisements. In the declarations, each model identified
herself as the model whose images were inserted into the Clubs’ advertisements at
issue.
3. Appellants received an advantage or benefit from the misappropriation.
The Models argued that the summary judgment evidence established that
appellants used their images without permission and that they received a benefit
from the misappropriation of those images. They pointed to Cowart’s testimony that
the Clubs sell the experience of seeing the women who have appeared in the
advertisements and interacting with those women at the Clubs, and that the purpose
of the advertising is to get customers into the Clubs.
The Models further argued that Cowart’s testimony made clear that appellants
were aware of the fact that an image has value and that its usage must be bargained
for if it is to be used to advertise and market the Clubs. Cowart testified:
Q. I’m asking if you’ve ever spoken to any person who has appeared in advertisement for your clubs?
A. Yes.
21 Q. Okay. Who have you spoken to that [has] appeared in the advertising?
A. That I can think of right now, there was one girl who was dancing, was Crystal Star. She agreed to have her photos taken and used as our advertisement. And she was a current or not a current but at the time her photo was used, she was an active dancer. So obviously I had conversations with her because she worked on a daily basis.
Q. Okay. So when you spoke to – let’s call her Crystal – when you spoke to Crystal, did you approach her or did she approach you about appearing in the advertising?
A. No, she approached me.
Q. All right. And so she said I’d like to appear in advertising for the club. What conversations did you have or what agreement did you work out with Crystal to appear in an advertising?
A. I had her sign the required release. And the agreement was in exchange for her – the use of her image in our advertisement, she would receive 20 free floor fees. So for 20 times that she came to work, she wouldn’t have to pay a floor fee.
Q. How much is a floor fee?
A. It ranges depending on what time you get there.
Q. What’s the range?
A. Anywhere from free to $50.
Q. Okay. So can we split the difference with an average of 25 bucks?
A. True.
Q. And then that all depends on what time you get there, correct?
22 Q. So 25 times 20 – I’m not a good mathematician, but that’s 500 bucks, correct?
Q. Okay. So $500 consideration and a release was what you negotiated with Crystal to appear in the advertising, correct?
The Models asserted that despite knowing that images have value and that
their usage must be bargained for, appellants neither bargained for nor paid the
Models to use their images in the Clubs’ social media advertisements. The Models
further asserted that “[i]n addition to the benefit and advantage of getting something
for nothing, [appellants] continued to attract patrons to [their] club[s] for years with
the posting and re-posting of [the Models’] images.”
C. Summary Judgment Response
Appellants’ summary judgment response challenged only the third element of
the Models’ misappropriation claim. They argued, as they now do on appeal, that
the Models produced no evidence that appellants had received a commercial benefit
from their social media posts that, without such posts, the Clubs would not have
otherwise received. In support of their argument, appellants pointed to the following
excerpt from Cowart’s deposition testimony:
Q. Okay. Let me ask you a broader question. With respect to this advertising, what’s – why do the clubs advertise?
A. Can I be blunt here? 23 Q. Yeah. I mean, I – you’re under oath.
A. I want to be one hundred percent honest with you, we don’t need to advertise. We have our clientele. Regardless of which establishment we’re discussing, regardless of its location, if a customer is going to come to that type of establishment, I don’t need to advertise; that man is coming regardless. So advertisement is really, in my 20 years, very, very limited.
Citing Henley, appellants argued that “the mere fact that [the ad] was
published and the defendant [] intended to make a profit from the [ad] is not enough
to constitute commercial benefit.” Id. at 596. Appellants emphasized that “Ms.
Cowart, with over 20 years of experience in the male entertainment industry,
testified that Facebook posts do not increase revenue or business ‘at all.’”
When Cowart was later asked about her previous testimony, she testified:
Q. Okay. Well, let me ask you kind of an obvious question with respect to your prior answer about advertising. I mean, if Centerfolds and Splendor, Cover Girls and Treasures don’t need to advertise, then why are you paying, you know, 64 or $6,600 a month between Night Moves and Genesis to advertise?
A. I mean, realistically, I think we pay Genesis and – to do Facebook because someone told the Davari brothers that it would be a good idea to advertise on Facebook. But it generates no – it doesn’t increase our revenue, at least in my personal opinion. It doesn’t increase our business at all, these – these Facebook ads and Night Moves.
Q. Okay. And you said that that’s your personal opinion. Is that something you track or have data to support, or is that just your observation based on 20 years of doing this?
24 A. I have no data with respect to revenue, but just my observations from 20 years.
When viewed in the light most favorable to appellants, Cowart’s testimony is
more than a scintilla of evidence raising a fact issue as to whether the Clubs received
a commercial benefit in the form of increased revenue or foot traffic as a result of
appellants’ use of the Models’ images in their social media advertisements. See
Neely v. Wilson, 418 S.W.3d 52, 59 (Tex. 2013).
This conclusion, however, does not end our analysis. In support of the
commercial benefit element of their misappropriation claim, the Models also
produced evidence that appellants used the Models’ images in their social media
advertisements over several years, without their permission, and without
compensating them for the use of those images. Cowart’s testimony that appellants
had previously bargained with and compensated another dancer for the use of her
image, together with the undisputed evidence that appellants did not pay the Models
for the use of their images in the Clubs’ advertisements, is evidence that appellants
received a benefit in the form of free advertising.
In response, appellants argued that the Models’ assertion that appellants
received a benefit, based on Cowart’s testimony about appellants’ use of another
dancer’s image in an advertisement for the Clubs for which they bargained and
compensated the dancer, is nothing more than a conclusory statement that cannot
support summary judgment. We disagree. A conclusory statement is one that does 25 not provide the underlying facts to support the conclusion. See Wills v. USAA Gen.
Indem. Co., No. 01-22-00304-CV, 2023 WL 8459498, at *5 (Tex. App.—Houston
[1st Dist.] Dec. 7, 2023, no pet.) (mem. op.); see also Conclusory, BLACK’S LAW
DICTIONARY (11th ed. 2019) (defining “conclusory” as “[e]xpressing a factual
inference without stating the underlying facts on which the inference is based.”).
Here, the Models’ assertion that appellants received a benefit when they used their
images without paying for them is based on summary judgment evidence showing
that appellants recognized that images have value and must be bargained for, as
demonstrated by the fact that appellants had previously compensated another dancer
for the use of her image in the Clubs’ advertisements. By appropriating the Models’
image or likeness, appellants received the benefit of years of free advertising for
their Clubs without seeking permission or paying for their use. See Henley, 46 F.
Supp. 2d at 597 (“By appropriating Plaintiff’s name or likeness, Defendant received
the benefit of a celebrity endorsement without asking permission or paying a fee.”).
Appellants have not produced any evidence raising a material fact issue on this point.
See Buck, 381 S.W.3d at 527 (noting undisputed evidence may be conclusive of
absence of material fact issue).
The Models have conclusively proved each element of their invasion of
privacy by misappropriation claim. We hold that the trial court did not err in
26 granting summary judgment on the Models’ misappropriation claim.5 We overrule
appellant’s first issue.
5 In Souza v. Mirage Entertainment, Inc., No. 2:21-CV-00015, 2023 WL 8936699 (S.D. Tex. 2023), the district court considered a similar misappropriation claim brought by professional models, spokesmodels, actresses, and social media influencers who sued the defendant for using their likenesses in advertisements for Defendant’s strip club without authorization or compensation. See id. at *1. The plaintiffs sought judgment as a matter of law on their claims. See id. The U.S. Magistrate Judge issued a memorandum and recommendation recommending that the plaintiffs’ motion be denied in its entirety because there were disputed issues of material fact precluding judgment as a matter of law on each of the asserted claims. See id.
The district court judge disagreed, finding that the plaintiffs had demonstrated as a matter of law that they satisfied the “commercial benefit” element of their misappropriation claim. See id. at *3-4. In particular, the court noted:
As Defendant’s own witness testified, it used images for free when it might have paid $500 for them under an arm’s length negotiation (considering his limited budget). Consequently, the evidence shows that these are images of a value he could not otherwise afford or use— if Plaintiffs were to set their own price or refuse to allow it to use their images, as they testified in their affidavits. Defendant also recognized some benefit or advantage because it continually used the images in its advertising strategy to bring in customers and sell drinks.
....
It is clear that Defendant perceived value in appropriating the images for its advertising. And it obtained the advantage of using images it could not afford. Thus, Plaintiffs have demonstrated as a matter of law that the third element is satisfied: Defendant received some benefit or advantage.
Id. 27 Negligence Claim
In their second issue, appellants contend that the trial court erred in granting
summary judgment on the Models’ negligence/respondeat superior claim. They
assert that while the Models argued that appellants were negligent in failing to
implement or adhere to policies to prevent misappropriation of the Models’ images
or, if policies were in place, failing to enforce them in a manner that did not cause
injury to the Models, they did not provide any evidence that appellants created any
of the social media posts themselves, had final approval or authority over the use or
dissemination of any such advertisements, or that appellants controlled the
dissemination of any such advertisements. Appellants argue that they presented
evidence establishing the opposite—that their third-party vendor, Genesis, was
solely responsible for creating and posting the social media content. They assert that
the summary judgment evidence does not support summary judgment on a direct
liability theory (negligence or negligent undertaking).
A. Respondeat Superior
Generally, a person has no duty to control the conduct of another. Otis Eng’g
Corp. v. Clark, 668 S.W.2d 307, 309 (Tex. 1983). Under the doctrine of respondeat
superior, however, an employer may be liable vicariously for the negligent acts of
its employee if the employee’s actions are within the course and scope of his
employment. See Painter v. Amerimex Drilling I, Ltd., 561 S.W.3d 125, 131 (Tex.
28 2018). Within the “course and scope of employment” means within the scope of the
employee’s general authority, in furtherance of the employer’s business, and for the
accomplishment of the object for which he was hired. Id. at 132 (quoting Goodyear
Tire & Rubber Co. v. Mayes, 236 S.W.3d 754, 757 (Tex. 2007)). “An employer is
not responsible for what occurs when an employee deviates from the performance
of his duties for his own purposes.” Id. at 137.
Intentional torts may still meet the standard “when the act, although not
specifically authorized by the employer, is closely connected with the servant’s
authorized duties.” GTE Sw., Inc. v. Bruce, 998 S.W.2d 605, 618 (Tex. 1999). An
employer will be held liable for its employee’s intentional torts that “stem[] directly
from the employee’s exercise (however inappropriate or excessive) of a delegated
right or duty.” ANA, Inc. v. Lowry, 31 S.W.3d 765, 770 (Tex. App.—Houston [1st
Dist.] 2000, no pet.). Course and scope of employment, for purposes of determining
an employer’s vicarious liability for the acts of its employee or agent, is generally a
fact issue. See Arbelaez v. Just Brakes Corp., 149 S.W.3d 717, 720 (Tex. App.—
Austin 2004, no pet.); see also GTE Sw., Inc., 998 S.W.2d at 618; Texas Workers’
Comp. Comm’n v. Garcia, 893 S.W.2d 504, 515 (Tex. 1995). When, as here, one
entity contracts with another, there is no vicarious liability unless the one obtaining
the other to work “retains some control over the manner in which the contractor
29 performs the work that causes the damage.” See JLB Builders, L.L.C. v. Hernandez,
622 S.W.3d 860, 864–65 (Tex. 2021) (quotations omitted).
In their summary judgment motion, the Models asserted that appellants were
vicariously liable under the theory of respondeat superior because Genesis was
acting within the course and scope of its employment with appellants when the
Models’ images were posted to appellants’ social media accounts. In support of their
assertion, the Models pointed to Cowart’s testimony that Genesis was paid by D.
Texas Investments, appellants’ parent company, and all of the advertisements at
issue were advertisements for the Clubs. Each Club owned its own website and
social media account where the images were posted, and the Clubs’ owners had the
ability to order any images or posts be taken down.
With respect to appellants’ policy requiring that a signed release be obtained
prior to posting, Cowart testified:
Q. Okay. Since these allegations have become known to you – and, you know, this has been a cycle with COVID and the insurance issues, I mean, this case has gotten kicked down the road. Have y’all made any changes in your agreements with Night Moves and Genesis with respect to imagery used in your ads?
A. We – I mean, our policy, with respect to the companies, has been the same from day one. You have to have a release signed by the individual stating that it’s okay to use their image.
Q. Is that a written policy?
30 A. I think so actually.
Q. Do you know where it is?
A. If my memory is serving me correctly, there is a document that was signed by each of my managers where they acknowledge that they’re not to post or photograph anyone without a proper release.
Q. When was that signed?
A. I would have to check.
Q. Was it signed before or after the lawsuit?
A. I don’t know.
Q. Who created that document?
A. I don’t know. ....
Q. Okay. And that document has [the] signature of each manager stating that they’re not going to post content without a written release, correct?
A. That’s my general, off the top of my head, recollection of the language in the contract, but yes.
Q. Okay. And is that part of the employment agreement you have with the general managers?
A. It is not part of their actual employment agreement. It was a separate notice.
Q. Okay. And, again, you don’t remember if that’s before or after this lawsuit?
Q. Okay. Do you know why it was implemented? 31 A. I mean, it’s important to make sure that everyone is aware and remembering what our rules are and our policies are.
Q. Do you have the same agreement with Genesis?
A. With respect to posting of images?
Q: Yeah. That – in other words, if they’re going to post content advertising your clubs on your website and bring business into your clubs, that they need to have a release from the people that they’re using to advertise the clubs?
A: Yes, we do.
The Models asserted that the evidence showed that, ultimately, appellants had
control over the Clubs’ websites, including the ability to remove content, and they
had policies in place to prevent the misuse of images but they failed to monitor their
employees and agents for years, resulting in the misappropriation of the Models’
images. As such, appellants are liable for the conduct of their employees and agents
under a theory of respondeat superior.
In response, appellants asserted that the Models produced no evidence that
appellants had final approval or authority over the use or dissemination of the
advertisements at issue, or that they controlled the dissemination of such
advertisements. They further asserted that the Models failed to show that Genesis
acted within the course and scope of its authority by posting images without first
32 obtaining releases. They pointed to Cowart’s testimony, attached as summary
judgment evidence to their response, showing that Genesis alone handled both the
selection and posting of images for the Clubs’ advertisements, and that the only
content supplied by the Clubs related to food and drink specials, which Genesis
incorporated into the posts it created. They also pointed to the undisputed evidence
that appellants maintained policies applicable to Genesis, as their third-party vendor
responsible for social media posts, that required Genesis to first obtain a release prior
to posting content for the Clubs. Appellants argued that by posting images of the
Models without a release, Genesis acted outside the course and scope of its
agreement with appellants and outside the scope of its authority. Thus, they argued,
the Models failed to establish that appellants breached a duty to them because
Genesis’s actions, which fell outside the scope of the authority appellants granted to
Genesis, could not be imputed to appellants under a negligence or respondeat
superior theory of liability.
Viewing the evidence in a light most favorable to appellants, as the
nonmovants, we conclude that they have presented more than a scintilla of evidence
raising a fact question regarding whether Genesis acted within the course and scope
of its authority. See Neely, 418 S.W.3d at 59; see also Arbelaez, 149 S.W.3d 720
(noting course and scope is generally fact issue).
33 B. Negligent Undertaking
Generally, Texas law imposes no duty to take action to prevent harm to others
absent certain special relationships or circumstances. See Torrington Co. v.
Stutzman, 46 S.W.3d 829, 837 (Tex. 2000); Garcia v. Kellogg Brown & Root Servs.,
Inc., No. 01-19-00319-CV, 2020 WL 3820426, at *6 (Tex. App.—Houston [1st
Dist.] July 7, 2020, no pet.) (mem. op.). However, one who voluntarily undertakes
an affirmative course of action for the benefit of another has a duty to exercise
reasonable care that the other’s person or property will not be injured by the
undertaking. Colonial Sav. Ass’n v. Taylor, 544 S.W.2d 116, 119 (Tex. 1976). To
establish a “negligent undertaking,” a plaintiff must show that (1) the defendant
undertook to perform services that it knew or should have known were necessary for
the plaintiff’s protection,; (2) the defendant failed to exercise reasonable care in
performing those services; and either (a) the plaintiff relied upon the defendant’s
performance, or (b) the defendant’s performance increased the plaintiff’s risk of
harm. Nall v. Plunkett, 404 S.W.3d 552, 555–56 (Tex. 2013) (citing RESTATEMENT
(SECOND) OF TORTS § 324A (providing rule for liability to third person for negligent
performance of undertaking)). The critical inquiry concerning the duty element of
a negligent undertaking theory is whether a defendant acted in a way that requires
the imposition of a duty where one would not otherwise exist. Elephant Ins. Co. v.
Kenyon, 644 S.W.3d 137, 151 (Tex. 2022). Thus, to succeed on their negligent
34 undertaking theory, the Models had to show that appellants undertook, gratuitously
or for consideration, to render services that they knew or should have known were
necessary for the protection of the Models’ person or things and either (1) failed to
exercise reasonable care and increased the risk of physical harm to the Models or (2)
harm resulted because of the Models’ reliance on the undertaking. See id. at 151.
In support of their negligent undertaking claim, the Models asserted that
appellants “assumed a duty by choosing to use the images of any model for
commercial purposes and were charged with exercising that duty in accordance with
the proper standard of care,” and they “had a duty to ensure that they had all the
rights to use the materials they ultimately used and republished.” Appellants’
summary judgment evidence, however, showed that Genesis alone selected and
posted the images for the Clubs’ advertisements, and that the only content supplied
by the Clubs related to food and drink specials, which Genesis incorporated into the
posts it created. The Models have presented no evidence that appellants undertook
to render any services to them.
The Models failed to conclusively prove, and genuine issues of material fact
exist as to, both of their negligence theories. See Clarent Energy Servs., 2020 WL
1173706, at *6–7. We hold the trial court erred when it granted summary judgment
35 in favor of the Models on their negligence claims. We sustain appellants’ second
issue.6
Damages
In their third issue, appellants assert that the trial court improperly awarded
unliquidated damages to the Models in excess of $1.4 million as a matter of law.
They argue, among other things, that the damages sought are highly subjective and
not readily susceptible to objective, conclusive calculation and, as such, are a fact
issue for the jury.
In its final judgment, the trial court awarded $1,405,000.00 in damages to the
Models, divided among each of the Models as set forth below:
Skinner $160,000 Middleton $60,000 Gaxiola $30,000 Zharinova $15,000 Hinton $200,000 Posada $210,000
6 Following oral argument, with leave of court, appellees filed a supplemental brief to address the election-of-remedies doctrine and appellants filed a supplemental response brief. Both parties concluded in their supplemental briefing that the election-of-remedies doctrine does not apply in this case. In their brief, appellants request that we award them damages under Rule of Appellate Procedure 45 to compensate appellants for their attorney’s fees and costs incurred in responding to appellees’ supplemental brief which they contend is objectively frivolous. We deny appellants’ request. See Smith v. Brown, 51 S.W.3d 376, 381 (Tex. App.—Houston [1st Dist.] 2001, pet. denied) (holding decision to grant appellate sanctions is matter of discretion that appellate court exercises with prudence and caution).
36 Pinder $40,000 Canas $105,000 Valencia $45,000 Toth $240,000 Farrell $40,000 Sears $20,000 Swedberg $100,000 Quy $40,000 Gibson $60,000 Turner $40,000
The damages award was based on Chamberlin’s expert reports.
A claim is liquidated if the amount of damages caused by the defendant can
be accurately calculated from the factual, as opposed to conclusory, allegations in
the petition, and an instrument in writing.7 2017 Yale Dev. LLC v. Holtzapple Neal
7 Documents that courts have found to constitute written instruments in this context include contracts, lease agreements, tax records, receipts, and invoices. See, e.g., Ingram Indus., Inc. v. U.S. Bolt Mfg., Inc., 121 S.W.3d 31, 37 (Tex. App.—Houston [1st Dist.] 2003, no pet.) (concluding damages had “the appearance of being liquidated because they seem[ed] capable of proof by written instruments” but should have been treated as unliquidated because “written instruments, such as invoices or receipts, were not produced along with the [general manager’s] affidavit”); Aavid Thermal Techs. of Tex. v. Irving Indep. Sch. Dist., 68 S.W.3d 707, 711 (Tex. App.—Dallas 2001, no pet.) (concluding certified copies of tax rolls and tax statements were written instruments from which taxes could be calculated in suit to recover delinquent ad valorem taxes); Novosad v. Cunningham, 38 S.W.3d 767, 773 (Tex. App.—Houston [14th Dist.] 2001, no pet.) (holding suit to recover amount due for professional accounting services was liquidated claim proved by written instruments where plaintiff attached original invoices to verified petition); Mantis v. Resz, 5 S.W.3d 388, 392 (Tex. App.—Fort Worth 1999, pet. denied) (in suit on sworn account, holding claim was liquidated where trial court had before it original petition with attached sworn account and verification of sworn account by affidavit); Sheshunoff & Co., Inc. v. Scholl, 560 S.W.2d 113, 116 (Tex. Civ. App.—Houston [1st Dist.] 1977) (holding, in suit to recover damages for breach of employment contract, claim for damages was liquidated and proved by 37 Props. Grp. LLC, 01-23-00305-CV, 2025 WL 1225107, at *8 (Tex. App.—Houston
[1st Dist.] Apr. 29, 2025, no pet.) (mem. op.); Dansk Express, LLC v. IPFS Corp.,
01-22-00621-CV, 2023 WL 4937497, at *8 (Tex. App.—Houston [1st Dist.] Aug.
3, 2023, no pet.) (mem. op.); Okorafor v. Lewis, No. 14-08-00130-CV, 2010 WL
1343125, at *3 (Tex. App.—Houston [14th Dist.] Apr. 6, 2010, no pet.) (mem. op.).
Damages that do not fit into this category are unliquidated. Okorafor, 2010 WL
1343125, at *3.
Unliquidated damages encompass most personal injury damages because they
are not susceptible to precise calculation. Id. “Tort actions almost always involve
unliquidated damages.” Kennedy v. Aattaboy Termite & Pest Control, Inc., No. 09-
19-00109-CV, 2021 WL 1567225, at *3 (Tex. App.—Beaumont Apr. 22, 2021, no
pet.) (mem. op.). “[B]ecause there is no way to quantify the value of unliquidated
damages as a matter of law, an award of such damages necessarily must be decided
by the trier of fact rather than summary judgment.” Okorafor, 2010 WL 1343125,
at *3 (citing Rivera v. White, 234 S.W.3d 802, 806 (Tex. App.—Texarkana 2007, no
pet.) (“Summary judgment is rarely appropriate when the issue is inherently one for
the trier of fact to decide in cases involving unliquidated damages.”)); see Priority
One Title, LLC v. Andrado, No. 14-21-00379-CV, 2023 WL 2259092, at *8 (Tex.
employment contract attached to petition), rev’d on other grounds, 564 S.W.2d 697 (Tex. 1978). 38 App.—Houston [14th Dist.] Feb. 28, 2023, no pet.) (mem. op.) (“Rarely, if ever,
should unliquidated damages be awarded in a summary judgment.”).
Appellants argue that the Models’ damages cannot be accurately calculated
from the pleadings and summary judgment evidence. We agree. In their petition,
the Models sought “[p]ecuniary damages resulting from the unauthorized use of
[their] images and likeness[es] in the past and in the future.” The Models stated in
their declarations, attached as summary judgment evidence to their motion, that they
never worked with the Clubs or entered into any agreement with the Clubs. See Star
Elec., Inc. v. Northpark Off. Tower, LP, 01-17-00364-CV, 2020 WL 3969588, at
*16 (Tex. App.—Houston [1st Dist.] July 14, 2020, no pet.) (mem. op.) (“The term
‘liquidated damages’ generally refers to an acceptable measure of damages that the
parties stipulate in advance will be assessed in the event of a breach of their
contract.”); Kennedy, 2021 WL 1567225, at *3 (“The difference between liquidated
and unliquidated damages is clear. . . . [L]iquidated damages exist ‘when the parties
to a contract have agreed in advance on the measure of damages to be assessed in
the event of default.’ In contrast, unliquidated damages are damages ‘that have not
been previously specified or contractually provided for.’”) (quotations omitted).
Although Chamberlin stated in his reports that he reviewed documents provided by
the Models in calculating a damage award—contracts and agreements, contractor
1099 forms, employee W-2 forms, earnings statements, and releases and related
39 records—these documents pertain solely to work the Models did for other clients,
not appellants. See Kennedy, 2021 WL 1567225, at *3 (“And while Aattaboy
supported its traditional motion with an affidavit from a CPA, which describes
Aattaboy’s damages and is consistent with the summaries Aattaboy provided with
its motion, the opinions of a damage expert drawn from such evidence is not the
same as conclusive proof on which no reasonable person would disagree.”).
Chamberlin further stated that his calculations of the fair market value for each
Model’s images used by appellants “are estimations in support of actual damages
sustained by the Models . . . .”
The Models’ damages are unliquidated because they cannot be accurately
calculated from reviewing the petition or written instruments on file. See Clear Lake
Ctr., L.P. v. Garden Ridge, L.P., 416 S.W.3d 527, 545 (Tex. App.—Houston [14th
Dist.] 2013, no pet.); Okorafor, 2010 WL 1343125, at *3. The trial court thus erred
in awarding them as a matter of law. See City of Keller, 168 S.W.3d at 816. We
sustain appellants’ third issue.
Remedy on Appeal
We have concluded that fact issues precluded summary judgment in favor of
the Models on their negligence claims but that the Models were entitled to summary
judgment on their misappropriation claim. Notwithstanding, we are compelled,
under Texas law, to reverse the judgment and remand for a new trial on both
40 damages and liability. See Clear Lake Ctr., 416 S.W.3d at 545; Okorafor, 2010 WL
1343125, at *1.
Texas Rule of Appellate Procedure 44.1 states that even if error affects only
part of the trial court’s judgment, we “may not order a separate trial solely on
unliquidated damages if liability is contested.” T EX. R. APP P. 44.1(b); see also
Rancho La Valencia, Inc. v. Aquaplex, Inc., 383 S.W.3d 150, 151–52 (Tex. 2012).
This rule applies when we reverse a summary judgment because of the plaintiff’s
failure to conclusively prove damages. See Okorafor, 2010 WL 1343125, at *4; see
also Rosales v. Williams, No. 01-09-00454-CV, 2010 WL 457536, at *6 (Tex.
App.—Houston [1st Dist.] Feb. 11, 2010, no pet.) (mem. op.) (reversing summary
judgment for landlord and remanding to trial court because damages were not
conclusively established for breach of residential lease, liability was contested by
filing general denial, and damages were unliquidated).
Appellants contested liability by filing a general denial. See Estrada v. Dillon,
44 S.W.3d 558, 562 (Tex. 2001) (“If a party files a general denial in the trial court,
that pleading puts a plaintiff to his or her proof on all issues, including liability; its
effect extends to contesting liability in the event of remand on appeal.”). And the
damages in this case are unliquidated because they cannot be determined from
reviewing the petition and written instruments on file. See Clear Lake Center, 416
S.W.3d at 545; Okorafor, 2010 WL 1343125, at *3. Because Rule 44.1(b)
41 proscribes a separate trial on unliquidated damages when liability is contested, we
must reverse the trial court’s judgment on liability as well as damages.8 See TEX. R.
APP. P. 44.1(b); Estrada, 44 S.W.3d at 562.
Conclusion
In accordance with Texas Rule of Appellate Procedure 44.1, we reverse the
trial court’s judgment and remand the case for a new trial on liability and damages.
We dismiss any pending motions as moot.
Kristin Guiney Justice
Panel consists of Justices Rivas-Molloy, Guerra, and Guiney.
8 We do not address appellants’ argument that we should decline to consider Exhibit U as it is unnecessary to the disposition of the appeal. See TEX. R. APP. P. 47.1.