Austin Auto Brokers and Mohammad Assadi v. Ed Vera, Inc., D/B/A Vera Motors

• Court: Court of Appeals of Texas
• Decided: August 16, 1995
• Docket: 03-94-00524-CV
• Status: Published

Opinion

cv4-524.assadi

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

NO. 03-94-00524-CV

Austin Auto Brokers and Mohammad Assadi, Appellants

v.

Ed Vera, Inc. d/b/a Vera Motors, Appellee

FROM THE DISTRICT COURT OF TRAVIS COUNTY, 201ST JUDICIAL DISTRICT

NO. 94-04952, HONORABLE JON N. WISSER, JUDGE PRESIDING

PER CURIAM

Austin Auto Brokers and Mohammad Assadi, its chief executive officer and president, appeal a default judgment rendered against them and favoring Ed Vera, Inc. d/b/a Vera Motors. We will modify the judgment and affirm the judgment as modified.

BACKGROUND

Vera bought a vehicle from Austin Auto, obtaining an Arkansas certificate of replacement title for the vehicle. Vera sold the vehicle to another dealer. The vehicle was then sold from dealer to dealer several times.

A buyer attempting to obtain a Texas title for the vehicle discovered that the vehicle had been wrecked, salvaged, and reconditioned. Because none of the sellers knew this history, they had not disclosed it to their buyers. Each seller in the chain of sale repurchased the vehicle from its buyer all the way back to Vera. Vera repurchased the car for $14,055.43, which included the seller's $300 in transportation costs from Houston to San Antonio. Vera paid an additional $30 for transport to Austin, $125 draft fee, and twelve percent interest on the total outstanding balance of the draft.

Vera sued, complaining that the appellants failed to disclose the vehicle's past damage. Vera alleged that they expressly and wrongfully warranted that they had marketable title. Vera said that it told the appellants that it intended to resell the vehicle for profit, making the representations of the car's history material to the car's marketability. Vera sued for actual and additional damages resulting from breach of express warranties, deceptive trade practices, negligent misrepresentation, gross negligence, and breach of contract. Vera also sought attorney's fees, interest, and costs.

The court granted a default judgment on June 6, 1994 after the appellants failed to answer. Ed Vera testified regarding the company's damages and attorney's fees. The court awarded $15,038.46 in actual damages, $32,067.92 in penalty damages, $3,750 in attorney's fees (with an additional $5,000 for each level of appeal).

The appellants moved for a new trial on June 24, 1994. They admitted receiving notice of the suit. Assadi stated in his affidavit that, because their attorney had been negotiating settlement with Vera, he believed that Vera would also serve the appellants' attorney and that their attorney would file an answer. Only after receiving notice of the default judgment did the appellants contact their attorney and discover that he did not know of the suit. The appellants contended that they had a meritorious defense in that they did not intentionally mislead Vera or misrepresent the product. They claimed that they believed that they had clear title to the vehicle when they bought it. They claimed to have offered to repurchase the vehicle from Vera, but refused to pay the higher price demanded. They claimed that granting the motion for new trial would not prejudice, delay, or injure Vera because they were ready to try the case. The court denied the motion for new trial.

The parties then tried to settle the case. The appellants' attorney faxed a letter to Vera's attorney stating:

Mr. Assadi would like to cut his losses in continuing to pursue this matter, so on his behalf we offer the following Rule 11 Agreement:

If Mr. Assaadi (sic) delivers or causes to be delivered to Mr. Vera's office a cashiers, certified or official bank check, in the amount of $23,968.60 payable to Ed Vera, Inc. and [Vera's attorney] by 5:00 p.m. today or any time accepted by you, then you, on your behalf, and on Mr. Vera's behalf and that of Ed Vera, Inc., d/b/a Vera Motors, agree to execute a full and complete satisfaction of judgment, for the judgments against Mr. Assadi and Austin Auto Brokers; notwithstanding that the judgments are still disputed by Mr. Assadi and Austin Auto Brokers both as to liability and amounts.

(emphasis added). Vera's attorney indicated his client's agreement by signing the letter. That day, Austin Auto sent and Vera acknowledged receipt of a check for the specified amount. Vera sent to the appellants' attorney a document stating that the judgment against the appellants had been fully and completely satisfied. Vera instructed the appellants' attorney to sign and file the document with the court "[i]f this conforms to our settlement." The appellants never filed that document, nor did they file the second copy Vera sent.

DISCUSSION

Motion to Dismiss

Vera moves to dismiss the appeal, arguing that the $23,968.60 check satisfied the judgment. The appellants oppose dismissal, contending that their offer letter indicated that the dispute continued despite the payment.

The facts of this case do not fit neatly within the precedent for automatic dismissal. The supreme court recently reiterated that, in order to have an enforceable agreement under Rule 11, the parties must file with the trial court the documents proving the agreement. Tex. R. Civ. P. 11; Padilla v. LaFrance, 38 Tex. Sup. Ct. J. 663, 668 (May 25, 1995). Though the writing need not be a single document and need not be filed before one party withdraws its consent, the writings collectively must show that the parties entered a binding agreement. Padilla, 38 Tex. Sup. Ct. J. at 668 (letter stating that the matter "has been settled" pursuant to specific terms shows agreement even though checks had not been issued). In the case on which Vera relies heavily, the parties performed all aspects of the settlement before judgment and had their compromise included in the text of the judgment. See Elkins v. Vincik, 437 S.W.2d 49, 51 (Tex. App.--Austin 1969, no writ). This Court accordingly dismissed when a party nevertheless attempted to appeal. Id. at 52. Vera cites no cases in which partial payment of the judgment amount triggered the automatic extinction of the appeal. The cases instead speak of full payment. See, e.g., Highland Church of Christ v. Powell, 640 S.W.2d 235, 236 (Tex. 1982).

In this case, the settlement offer and payment were not included in the judgment because they occurred more than three months after judgment, almost three weeks after appeal was perfected, and several days after the motion for new trial was overruled as a matter of law; the record reflects no attempt to amend the judgment to include the settlement. The trial court record on appeal lacks documentation that Vera agreed to accept its duty under the appellants' offer and execute a satisfaction of judgment. ⁽¹⁾ Further, the appellants' payment was only slightly more than half of the judgment amount rather than the full amount.

Because the appellants did not pay the full judgment amount and the record does not show full performance of the settlement agreement, we hold that the payment did not fully satisfy the judgment. We therefore cannot dismiss the case. We overrule the motion to dismiss.

Merits of the Appeal

The appellants raise two points on appeal. They contend that the trial court erred in granting judgment for the amounts and for the measures of damages recited in the judgment because the judgment was for relief not requested in the pleadings. They also contend that the court erred in granting the judgment because it was for amounts to which Vera was not entitled under the causes of action pleaded. We review for abuse of discretion when a trial court denies a motion for new trial raised against a default judgment. Strackbein v. Prewitt, 671 S.W.2d 37, 38 (Tex. 1984); Craddock v. Sunshine Bus Lines, Inc., 133 S.W.2d 124, 126 (Tex. 1939). The trial court may set aside a default judgment and order a new trial in any case when the defendant's failure to answer before judgment was not intentional, or the result of conscious indifference, but was due to a mistake or accident. Strackbein, 671 S.W.2d at 38 (quoting Craddock, 133 S.W.2d at 126). The motion must set up a meritorious defense and must be filed when granting of the motion will occasion no delay or otherwise injure the plaintiff. Strackbein, 671 S.W.2d at 38 (quoting Craddock, 133 S.W.2d at 126).

The appellants' points of error are problematic. They attack the judgment rather than the refusal to grant the motion for new trial. They do not explicitly raise the three Craddock issues. Finally, the issues raised do not match well with the issues raised in the motion for new trial. We cannot review issues not raised before the trial court. Tex. R. App. P. 52(a). Reading both the brief and the motion for new trial broadly, the only common thread resembling a meritorious defense is the assertion that the amount of Vera's recovery exceeded that pleaded and proved.

Vera pleaded knowing violations of the Deceptive Trade Practice--Consumer Protection Act. Tex. Bus. & Com. Code Ann. § 17.46 (West 1987) ("DTPA"). The DTPA allows recovery of actual damages and twice the amount of actual damages that do not exceed $1,000. DTPA § 17.50(b) (West Supp. 1995). For knowing violations, the DTPA allows recovery of not more than three times the amount of actual damages that exceed $1,000 as punitive damages. DTPA § 17.50(b) (West Supp. 1995). The court found knowing violations of the DTPA and awarded $15,038.46 in actual damages, $2,000 in additional damages, and punitive damages of $30,067.92 for the knowing violations.

The actual damages are supported by the pleadings and the proof. Vera concedes that the judgment contains correctable calculation errors in the punitive damages. Vera asserts that the court neglected to subtract $1,000 from the actual damages before computing the punitive damages. The damages should have totalled $28,076.92. The sum of the additional damages then is $30,076.92 rather than $32,067.92. Vera requests that we modify the judgment to reflect this calculation. Because reduced damages are in accord with the appellants' request for whatever additional relief may be appropriate, we will grant Vera's request. The damage award, as modified, is supported by Vera's testimony and is within statutory guidelines.

We reject the appellants' assertion that the attorney's fee award must be modified because it is based on the amount of recovery. The attorneys' fee award, in accord with the statute, was based on testimony regarding hours spent, rather than a percentage of the recovery. DTPA § 17.50(d) (West 1987).

To the extent that Vera's concession of error coincides with the appellants' points of error, we sustain the points of error. We overrule the points of error in all remaining aspects.

Appellate Attorney's Fee Award

Vera contends that the settlement actions rendered this appeal frivolous and requests compensation for "additional and uncontemplated legal expense." It requests $1,195. The judgment of the trial court provides for $5,000 in attorney's fees on appeal. We will not award additional fees.

CONCLUSION

We modify the damage award by reducing the amount of punitive damages from $30,067.92 to $28,076.92. This modification reduces the total award of "additional damages" from $32,067.92 to $30,076.92. We affirm the judgment of the trial court as modified.

Before Justices Powers, Kidd and B. A. Smith

Modified and, as Modified, Affirmed

Filed: August 16, 1995

Do Not Publish

1.   The documents attached to the motion to dismiss indicate that Vera sent these documents to the appellants who failed to file them. These documents are not part of the trial court record on appeal.