Opinion issued November 1, 2012.
In The
Court of Appeals For The
First District of Texas ——————————— NO. 01-09-00493-CV ——————————— ALBERT MORRIS, Appellant V. LISA COFFMAN, Appellee
On Appeal from the 234th District Court Harris County, Texas Trial Court Case No. 2007-05915
MEMORANDUM OPINION ON REHEARING
Appellant Albert Morris has filed a motion for en banc reconsideration of
our August 9, 2012 opinion. In light of the motion, we withdraw our opinion and
judgment of August 9, 2012, and we issue this opinion in its stead. We overrule
the motion for reconsideration en banc as moot. See Brookshire Bros., Inc. v. Smith, 176 S.W.3d 30, 33 (Tex. App.—Houston [1st Dist.] 2004, pet. denied) (op.
on reh’g) (motion for en banc reconsideration becomes moot when panel issues
new opinion and judgment).
Morris appeals the trial court’s judgment awarding $6,396.91 in disgorged
attorney’s fees to Lisa Coffman. Coffman sued Morris, an attorney, for fraud in
connection with his representation of her in a civil suit against her employer. After
a bench trial, the trial court awarded damages to Coffman and issued findings of
fact and conclusions of law in support of its judgment. In three issues, Morris
contends that Coffman’s suit was barred by limitations, Coffman failed to offer any
admissible evidence to support her claim for fraud, and that the trial court erred by
granting a new trial to Coffman after initially granting Morris’s motion for
summary judgment. Morris also asserted in his reply to Coffman’s brief that the
trial court lacked jurisdiction over this suit. In her own appeal, Coffman contends
that evidence is insufficient to support the award of $6,396.91, because the
evidence conclusively proves damages in the amount of $15,997.27. We affirm.
Background
Coffman was terminated by her employer, the United States Postal Service,
in 2001. She filed suit pro se in federal court, alleging wrongful termination.
Coffman later retained Morris to represent her. It is undisputed that Morris and
2 Coffman agreed that Morris would be compensated through a contingent fee in an
amount equal to forty percent of Coffman’s recovery.
In late 2001, Morris negotiated a settlement that included a cash payment of
$47,500 and re-employment. For the purpose of calculating Morris’s fee, only the
cash payment was considered part of Coffman’s recovery. Accordingly, Morris
received $19,000 and Coffman received $28,500. The entire $47,500 was reported
to the Internal Revenue Service as income for Coffman. She, however, did not pay
taxes on any portion of the settlement. Some time later, the IRS charged Coffman
for unpaid taxes on the full amount of $47,500.00, or $15,992.27.
In January 2007, Coffman sued Morris, asserting violations of the DTPA,
fraud, fraudulent inducement, breach of warranty, and breach of fiduciary duty.
The primary factual basis of Coffman’s suit was her allegation that Morris told her
that no tax would be due on the settlement, but, if there was, he would be
responsible for taking care of the tax. Morris defended, in part, on the grounds that
limitations had run on Coffman’s claims before she filed suit.
After a bench trial, the trial court rendered judgment for Coffman in the
amount of $6,396.91 and issued findings of fact and conclusions of law. Among
the findings and conclusions most pertinent to this appeal were the following:
• Plaintiff [Coffman] asked Defendant [Morris] multiple times when entering the final settlement agreement in 2001 whether Plaintiff had to pay taxes on the settlement. Defendant told Plaintiff that she did
3 not have to pay taxes because the payment was in the nature of a settlement, which carried no tax liability.
• The Court finds that there is no evidence that Plaintiff knew or should have known of her tax liability for the settlement amount prior to the IRS’s proposed change to her 2001 Income Tax Return in June 2003. Regarding Defendant’s limitations defense, Defendant put on no evidence at trial demonstrating that Plaintiff knew or should have known about her tax liability before that time (if he did, then such evidence amounted to legally insufficient evidence).
• However, Plaintiff produced no evidence at trial that she suffered an injury as a result of the misrepresentation. There is no evidence demonstrating Plaintiff’s damages. There is no evidence that Plaintiff would have received more had she not entered into the Agreement. No evidence was produced at trial that Plaintiff would have recovered more value or money had she gone to trial for the underlying employment dispute. There is no evidence of what Plaintiff would have done differently had she known the truth, or what different result would have occurred. Moreover, neither Defendant nor his false statement caused Plaintiff’s tax liability—the United States Tax Code caused Plaintiff’s liability. There is no “but-for” causation regarding Defendant’s false statement and the taxability of the settlement, or any other damages— that is, if Defendant had not made his representation of no tax liability, Plaintiff’s settlement would still have been taxable. The Court, therefore, concludes that Plaintiff is not entitled to actual damages for her fraud claim.
The trial court nevertheless found that Morris breached his fiduciary duty to
Coffman and should disgorge his attorney’s fees in the amount of $6,396.91, which
was the tax payable on his forty percent of the $47,500.
Jurisdiction
In his reply to Coffman’s appellant’s brief and in his motion for en banc
reconsideration, Morris contends that the trial court lacked jurisdiction. Morris
4 asserts that Coffman’s suit was an attempt “to set aside a federal court’s judgment”
and argues that suit is therefore barred by the Full Faith and Credit Clause of the
United States Constitution. See U.S. CONST. art. IV, § 1.
First, we note that Morris has cited no authority for the proposition that a
prior federal judgment is a jurisdictional bar to bringing a suit. A prior judgment
entitled to full faith and credit may raise other problems with maintaining the
suit—for example, res judicata. Res judicata, however, is not a jurisdictional bar.
Williams v. Houston Firemen’s Relief & Ret. Fund, 121 S.W.3d 415, 437 n.21
(Tex. App.—Houston [1st Dist.] 2003, no pet.) (“[R]es judicata is an affirmative
defense on the merits, not a jurisdictional bar.”); see also Tex. Highway Dep’t v.
Jarrell, 418 S.W.2d 486, 488 (Tex. 1967) (“We observe that a plea of res judicata
is not a plea in abatement or a plea to the jurisdiction, but is a plea in bar.”).
Second, Coffman’s petition, Morris’s answer, the trial court’s findings of
fact and conclusions of law, the trial court’s judgment, and the parties’ briefing to
this court uniformly indicate that Coffman was suing based on an agreement
between herself and Morris, Morris’s misrepresentations, and Morris’s breach of
fiduciary duty. That is, nothing in the record indicates Coffman was attempting to
set aside a federal court judgment. In fact, there is no federal court judgment in the
record. With his motion for en banc reconsideration, Morris provided a copy of
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Opinion issued November 1, 2012.
In The
Court of Appeals For The
First District of Texas ——————————— NO. 01-09-00493-CV ——————————— ALBERT MORRIS, Appellant V. LISA COFFMAN, Appellee
On Appeal from the 234th District Court Harris County, Texas Trial Court Case No. 2007-05915
MEMORANDUM OPINION ON REHEARING
Appellant Albert Morris has filed a motion for en banc reconsideration of
our August 9, 2012 opinion. In light of the motion, we withdraw our opinion and
judgment of August 9, 2012, and we issue this opinion in its stead. We overrule
the motion for reconsideration en banc as moot. See Brookshire Bros., Inc. v. Smith, 176 S.W.3d 30, 33 (Tex. App.—Houston [1st Dist.] 2004, pet. denied) (op.
on reh’g) (motion for en banc reconsideration becomes moot when panel issues
new opinion and judgment).
Morris appeals the trial court’s judgment awarding $6,396.91 in disgorged
attorney’s fees to Lisa Coffman. Coffman sued Morris, an attorney, for fraud in
connection with his representation of her in a civil suit against her employer. After
a bench trial, the trial court awarded damages to Coffman and issued findings of
fact and conclusions of law in support of its judgment. In three issues, Morris
contends that Coffman’s suit was barred by limitations, Coffman failed to offer any
admissible evidence to support her claim for fraud, and that the trial court erred by
granting a new trial to Coffman after initially granting Morris’s motion for
summary judgment. Morris also asserted in his reply to Coffman’s brief that the
trial court lacked jurisdiction over this suit. In her own appeal, Coffman contends
that evidence is insufficient to support the award of $6,396.91, because the
evidence conclusively proves damages in the amount of $15,997.27. We affirm.
Background
Coffman was terminated by her employer, the United States Postal Service,
in 2001. She filed suit pro se in federal court, alleging wrongful termination.
Coffman later retained Morris to represent her. It is undisputed that Morris and
2 Coffman agreed that Morris would be compensated through a contingent fee in an
amount equal to forty percent of Coffman’s recovery.
In late 2001, Morris negotiated a settlement that included a cash payment of
$47,500 and re-employment. For the purpose of calculating Morris’s fee, only the
cash payment was considered part of Coffman’s recovery. Accordingly, Morris
received $19,000 and Coffman received $28,500. The entire $47,500 was reported
to the Internal Revenue Service as income for Coffman. She, however, did not pay
taxes on any portion of the settlement. Some time later, the IRS charged Coffman
for unpaid taxes on the full amount of $47,500.00, or $15,992.27.
In January 2007, Coffman sued Morris, asserting violations of the DTPA,
fraud, fraudulent inducement, breach of warranty, and breach of fiduciary duty.
The primary factual basis of Coffman’s suit was her allegation that Morris told her
that no tax would be due on the settlement, but, if there was, he would be
responsible for taking care of the tax. Morris defended, in part, on the grounds that
limitations had run on Coffman’s claims before she filed suit.
After a bench trial, the trial court rendered judgment for Coffman in the
amount of $6,396.91 and issued findings of fact and conclusions of law. Among
the findings and conclusions most pertinent to this appeal were the following:
• Plaintiff [Coffman] asked Defendant [Morris] multiple times when entering the final settlement agreement in 2001 whether Plaintiff had to pay taxes on the settlement. Defendant told Plaintiff that she did
3 not have to pay taxes because the payment was in the nature of a settlement, which carried no tax liability.
• The Court finds that there is no evidence that Plaintiff knew or should have known of her tax liability for the settlement amount prior to the IRS’s proposed change to her 2001 Income Tax Return in June 2003. Regarding Defendant’s limitations defense, Defendant put on no evidence at trial demonstrating that Plaintiff knew or should have known about her tax liability before that time (if he did, then such evidence amounted to legally insufficient evidence).
• However, Plaintiff produced no evidence at trial that she suffered an injury as a result of the misrepresentation. There is no evidence demonstrating Plaintiff’s damages. There is no evidence that Plaintiff would have received more had she not entered into the Agreement. No evidence was produced at trial that Plaintiff would have recovered more value or money had she gone to trial for the underlying employment dispute. There is no evidence of what Plaintiff would have done differently had she known the truth, or what different result would have occurred. Moreover, neither Defendant nor his false statement caused Plaintiff’s tax liability—the United States Tax Code caused Plaintiff’s liability. There is no “but-for” causation regarding Defendant’s false statement and the taxability of the settlement, or any other damages— that is, if Defendant had not made his representation of no tax liability, Plaintiff’s settlement would still have been taxable. The Court, therefore, concludes that Plaintiff is not entitled to actual damages for her fraud claim.
The trial court nevertheless found that Morris breached his fiduciary duty to
Coffman and should disgorge his attorney’s fees in the amount of $6,396.91, which
was the tax payable on his forty percent of the $47,500.
Jurisdiction
In his reply to Coffman’s appellant’s brief and in his motion for en banc
reconsideration, Morris contends that the trial court lacked jurisdiction. Morris
4 asserts that Coffman’s suit was an attempt “to set aside a federal court’s judgment”
and argues that suit is therefore barred by the Full Faith and Credit Clause of the
United States Constitution. See U.S. CONST. art. IV, § 1.
First, we note that Morris has cited no authority for the proposition that a
prior federal judgment is a jurisdictional bar to bringing a suit. A prior judgment
entitled to full faith and credit may raise other problems with maintaining the
suit—for example, res judicata. Res judicata, however, is not a jurisdictional bar.
Williams v. Houston Firemen’s Relief & Ret. Fund, 121 S.W.3d 415, 437 n.21
(Tex. App.—Houston [1st Dist.] 2003, no pet.) (“[R]es judicata is an affirmative
defense on the merits, not a jurisdictional bar.”); see also Tex. Highway Dep’t v.
Jarrell, 418 S.W.2d 486, 488 (Tex. 1967) (“We observe that a plea of res judicata
is not a plea in abatement or a plea to the jurisdiction, but is a plea in bar.”).
Second, Coffman’s petition, Morris’s answer, the trial court’s findings of
fact and conclusions of law, the trial court’s judgment, and the parties’ briefing to
this court uniformly indicate that Coffman was suing based on an agreement
between herself and Morris, Morris’s misrepresentations, and Morris’s breach of
fiduciary duty. That is, nothing in the record indicates Coffman was attempting to
set aside a federal court judgment. In fact, there is no federal court judgment in the
record. With his motion for en banc reconsideration, Morris provided a copy of
5 Coffman’s affidavit, which had been submitted in the trial court.1 Attached to that
affidavit is the settlement agreement that ended the federal court litigation, signed
by Coffman, her counsel Morris, and the U.S. Attorney representing the U.S Postal
Service. The settlement agreement is not a judgment. It is not signed by the
federal judge nor does the plain language reflect that it is anything other than a
settlement agreement. Because neither the law nor the evidence supports Morris’s
jurisdictional argument, we hold that the trial court did not lack jurisdiction.
We overrule Morris’s jurisdictional argument.
Statute of Limitations
In his first issue, Morris contends that Coffman’s claims are all barred by the
statute of limitations. Specifically, he asserts that Coffman should have known
that she was responsible for paying income tax on the settlement no later than
April 15, 2002, when the IRS seized her refund for past due taxes on the settlement
proceeds. Coffman, however, did not file her suit until January 31, 2007, which,
Morris argues, is beyond the limitations period.
The trial court made specific findings of fact and conclusions of law
concerning limitations and the applicability of the “discovery rule.” It found there
1 We note that, although this submission was not part of the appellate record, we may consider it for the purposes of determining this court’s jurisdiction. Sabine Offshore Serv., Inc. v. City of Port Arthur, 595 S.W.2d 840, 841 (Tex. 1979) (“Affidavits outside the record cannot be considered by the Court of Civil Appeals for any purpose other than determining its own jurisdiction.”). 6 was no evidence that Coffman “knew or should have known of her tax liability for
the settlement amount prior to the IRS’s proposed change to her 2001 Income Tax
Return in June 2003.” In this appeal, Morris contends that the evidence shows
Coffman knew or should have known that her taxes were due no later than April
15, 2002. However, Morris has not supplied this court with a reporter’s record to
review the evidence.
An appellant bears the burden to bring forward a record from the trial court
that enables this court to determine whether appellant’s complaints constitute
reversible error. See Enter. Leasing Co. of Houston v. Barrios, 156 S.W.3d 547,
549 (Tex. 2004) (per curiam); Christiansen v. Prezelski, 782 S.W.2d 842, 843
(Tex. 1990) (stating that burden is on appellant to present sufficient record to show
error requiring reversal); Mallios v. Standard Ins. Co., 237 S.W.3d 778, 781 (Tex.
App.—Houston [14th Dist.] 2007, pet. denied). If the appellant fails to bring
forward a complete record, the court will presume the missing part of the record
supports the trial court’s judgment. Mallios, 237 S.W.3d at 781 (citing Barrios,
156 S.W.3d at 550). Because Morris has not brought forward an evidentiary
record2 from which this court could review the trial court’s findings and
2 On April 24, 2012, this court issued an order setting forth the more than three-year history of this appeal, including the fact that Morris was informed as early as June 12, 2009, that no reporter’s record had been requested or paid for. In the April 24th order, this court specifically informed the parties, “The record reflects that no party has ever paid for or made arrangements to pay for the reporter’s record. 7 conclusions concerning limitations and the discovery rule, we must presume the
missing portions of the record support the trial court’s judgment. See Barrios, 156
S.W.3d at 550; Mallios, 237 S.W.3d at 781.
We overrule Morris’s first issue.
Sufficiency of the Evidence
In his second issue, Morris asserts there was no evidence to support the
judgment because Coffman did not prove one or more of the elements of each of
her causes of action. As discussed above, Morris has not presented this court with
the reporter’s record. We therefore must presume that the missing portions of the
record support the trial court’s judgment. See Barrios, 156 S.W.3d at 550;
Mallios, 237 S.W.3d at 781.
We overrule Morris’s second issue.
Granting Motion for New Trial
In his third issue, Morris contends that the trial court “abused it’s [sic]
authority in re-opening the case” after it had already granted Morris’s motion for
summary judgment. The Texas Supreme Court has held that, except in two limited
Therefore, the Court will consider and decide those issues or points that do not require a reporter’s record for a decision. See TEX R. APP. P. 37(c).” Morris has contended that the record was to be provided to him free of all costs, per the court’s finding of indigence. However, as set forth in this court’s April 24th order, the trial court sustained the contest to Morris’s affidavit of indigency that was filed by the court reporter but overruled the contest that was filed by the district clerk. Therefore, while Morris was entitled to a free clerk’s record, he was responsible for paying for the reporter’s record. 8 circumstances not applicable here, “an order granting a motion for new trial
rendered within the period of the trial court’s plenary power is not reviewable on
appeal.” Wilkins v. Methodist Health Care Sys., 160 S.W.3d 559, 563 (Tex. 2005)
(explaining that Johnson v. Fourth Court of Appeals, 700 S.W.2d 916, 918 (Tex.
1985), noted two instances when a Texas appellate court has overturned a trial
court’s grant of a new trial: (1) when the trial court’s order was wholly void, and
(2) where the trial court specified in the written order that the sole ground for
granting the motion was that the jury’s answers to special issues were
irreconcilably conflicting). Here, there is no indication that the trial court’s order
was void and, because it was a summary judgment proceeding, there were no jury
answers that could possibly conflict. See id. Therefore, the order granting a new
trial was interlocutory and not reviewable on appeal. See id.
We overrule Morris’s third issue.
Coffman’s Appeal
In a single issue, Coffman complains that the trial court erred by failing to
award her $15,997.27 in attorney’s fees because the evidence conclusively
established that she was damaged in that amount. She also contends that the trial
court’s finding that there was no evidence of causation is in error. However, just
as in Morris’s appeal, Coffman’s challenges to the evidence supporting the trial
court’s findings fail because she has not presented this court with the evidentiary
9 record. In that circumstance, we must presume the reporter’s record contains
evidence that support’s the trial court’s judgment. See Mallios, 237 S.W.3d at 781;
Barrios, 156 S.W.3d at 550.
We overrule Coffman’s sole issue.
Conclusion
We affirm the judgment of the trial court.
Rebeca Huddle Justice
Panel consists of Justices Higley, Sharp, and Huddle.