Opinion issued September 14, 2021
In The
Court of Appeals For The
First District of Texas ———————————— NO. 01-19-00801-CV ——————————— CASH AMERICA PAWN, LP, STEPHANIE FIELDS, AND ROBERT ELDER, Appellants V. RONALD L. ALONZO, Appellee
On Appeal from the 281st District Court Harris County, Texas Trial Court Case No. 2017-54335
MEMORANDUM OPINION
This is an appeal from a judgment awarding damages in a malicious
prosecution case. A jury found in favor of appellee Ronald L. Alonzo and awarded
a total of $128,500 in damages (including $45,000 for past mental anguish), plus
$100,000 in exemplary damages from appellant Cash America Pawn, L.P. (“Cash America”). The jury also found in favor of Cash America on its counterclaims for
fraud and breach of fiduciary duty, but it awarded zero damages on those claims.
Cash America, Stephanie Fields, and Robert Elder raise four issues on appeal,
challenging: (1) the legal and factual sufficiency of the evidence to support the jury’s
liability finding on Alonzo’s malicious prosecution claim; (2) the legal and factual
sufficiency of the evidence to support the compensatory damages awarded to
Alonzo; (3) the award of exemplary damages against Cash America in the absence
of a predicate vice-principal finding; and (4) the sufficiency of the evidence to
support the jury’s finding of zero damages for fraud and breach-of-fiduciary duty.
We conclude that the evidence was insufficient to support the verdict on
Alonzo’s malicious prosecution claim. We further conclude that the jury’s verdict
finding zero dollars for lost profit damages resulting from Alonzo’s breach of
fiduciary duty and fraud was not against the great weight and preponderance of the
evidence. We reverse the trial court’s judgment awarding damages based on
malicious prosecution and render judgment that Alonzo take nothing on his claim
for malicious prosecution. We affirm the remainder of the judgment.
Background
I. Cash America operates pawn shops.
Cash America owns and operates pawn shops across the country, including
Store No. 86 in Katy, Texas. Its business model includes earning interest on pawn
2 loans of personal property, purchasing personal property directly from customers or
wholesalers for resale, and making retail sales to customers by direct purchase or by
layaway.
A pawn loan is a nonrecourse loan that is secured by personal property held
as collateral. Cash America typically loans about 50-60% of the estimated resale
value of the property based on its condition and as determined by research,
experience, and internal software. Cash America does not permit its employees to
make a loan for more than the resale value of the collateral.
The customer retains ownership of the collateral so long as the loan is not in
default. Cash America retains possession of the collateral as its sole recourse if the
customer defaults on the loan. A customer may (1) permit the loan to default and
allow Cash America to take ownership of the collateral, (2) redeem the item by
paying the principal and interest in full, (3) renew the loan by paying the accrued
interest, (4) extend the loan by making a payment in exchange for additional time,
or (5) pay down the loan by paying the accrued interest and part of the principal.
Cash America also sells property directly and by layaway. In a layaway sale,
Cash America retains ownership of the property until the customer has paid in full.
If a customer fails to make timely payments, the layaway is terminated, Cash
America retains ownership of the personal property, and the customer receives a
store credit for amounts paid.
3 II. Alonzo makes “wraparound” loans to Santana.
Alonzo was the assistant manager of Store No. 86, where Paola Santana
worked as a pawnbroker and was also a customer. In May 2016, Santana had
approximately ten pawn loans in danger of defaulting and seven items on layaway
at Store No. 86.1 Wanting to save her loans and layaways, Santana asked Alonzo for
help.
Alonzo agreed to execute a series of transactions for her, on the condition that
no money or merchandise would leave the shop. The series of transactions took
about an hour and was recorded by a camera in the store and by entries he made in
the computer. First, without receiving any money from Santana, Alonzo credited her
layaway account for the total outstanding balance of the layaways. Then he made
six new pawn loans using as collateral the property that had been on layaway. The
six loans came to a total of $6,500, which was well above the resale value of the
layaway items, which was approximately $2,000 to $3,000.2 The $6,500 was applied
first to the layaway payments on the seven items that were used as collateral on the
May 28 pawn loans, and second to renewal payments on Santana’s pre-existing
1 According to Robert Elder, an investigator for Cash America, Santana was already in default on her layaways on May 28. 2 At trial, Alonzo testified that the layaway items totaled $3,049, but Cash America employees Robert Elder and Aaron Hoffstadter testified that the remaining debt on the layaway $2,080, and the $3,049 figure was a sum of the retail value of the items, not the price for which they actually sold. 4 pawn loans. None of the property involved left the store, and all of the money
involved remained in the possession of Cash America.
III. Cash America investigates, and the district attorney charges Alonzo with theft.
Stephanie Fields began working for Cash America as a district manager in
May 2016. After completing on-the-job training, in August 2016, she assumed
responsibility for multiple stores, including Store No. 86. She noticed that Store No.
86 had made loans that exceeded the resale value on several items. On August 16,
2016, Fields requested a report showing all customers at Store No. 86 with a loan
balance exceeding $10,000. Santana appeared on this report because she had
$26,141 in outstanding pawn loans. Fields asked Robert Elder, one of Cash
America’s investigators, to help her investigate the loans to Santana. Elder had more
than 30 years’ experience in law enforcement and investigations prior to working
for Cash America. Fields and Elder reviewed documents from Store No. 86
(including the pawn and layaway tickets for the wraparound loans that Alonzo
executed for Santana) and watched the video recording that showed Alonzo and
Santana conducting the transactions in a back office. Elder interviewed Alonzo and
Santana; Fields was present and observed the interviews but did not ask questions.
Alonzo acknowledged that he made the transactions, but he maintained that
he had done nothing wrong. Alonzo said that there was no theft, “everything was
5 accounted for,” and he had previously made “overloans” for Santana. Alonzo’s
employment was immediately terminated.
Santana admitted that she and Alonzo “manipulated the transactions in order
to cover her previous loans.” Santana told Elder that she gave Cash America no
money for the layaway items. Santana’s employment was also terminated.
Fields and Elder concluded that the wraparound transactions conducted by
Alonzo and Santana were theft. Elder believed that he had probable cause that a theft
had occurred based on the admissions in the interviews and his investigation.3 He
consulted with his supervisor and with Fields, and they agreed that it was appropriate
to report a theft to law enforcement.
Elder called the Harris County Sheriff’s Office to report a theft, and Deputy
Ganaway responded to the store. Elder told Deputy Ganaway that, based on his
investigation, he believed that “items that belonged to Cash America had been
converted to loans prior to those items being paid for and that the value that was
loaned on them was over the amount that they were worth . . . .” Elder believed that
the difference between the value of the property, approximately $2,000, and the loan
made to Santana, $6,500, was the amount of money that had been appropriated from
Cash America. He told Deputy Ganaway that no money left the store. Deputy
3 Both Fields and Elder testified that in addition to the paper transactions, there was a deficit of $700 from Store No. 86 that could not be accounted for. 6 Ganaway advised Elder that he, too, believed that a felony theft had occurred and
that he would take the information to the district attorney and request criminal
charges for felony theft. At trial, Elder testified: “I advised him that wasn’t my
decision, that’s completely within the purview of the Harris County Sheriff’s Office.
And the deputy proceeded to go about his way.” Thereafter, Deputy Ganaway
contacted Elder and informed him that charges had been filed.
In late August 2016, Alonzo learned that there was a warrant for his arrest,
and he reported to a police station for booking. In January 2017, the case against him
was dismissed. In May 2017, the record was expunged.
IV. Alonzo sues Cash America, and the jury awards damages for malicious prosecution.
Alonzo sued Cash America, Fields, and Elder for malicious prosecution,
seeking compensatory and exemplary damages.4 Cash America filed counterclaims
for breach of fiduciary duty, fraud, and money had and received. It sought
compensatory and exemplary damages as well as attorney’s fees.
At trial, Alonzo admitted that he completed the wraparound transactions on
Santana’s behalf and confirmed the details. He also admitted that Santana paid
nothing toward the satisfaction of the layaway debt, and that all of the money
4 Alonzo also sued for defamation, and intentional infliction of emotional distress. The trial court granted summary judgment in favor of Cash America, Fields, and Elder on the cause of action for intentional infliction of emotion distress. Alonzo abandoned his defamation claim at trial. 7 involved in the wraparound transaction came from Cash America. Alonzo
maintained that no money was lost in the transaction because all the money that Cash
America loaned to Santana was returned to Cash America as renewal, extension, or
layaway payments. According to Alonzo, at the end of that day, all the money in his
master cash drawer was accounted for and showed no discrepancies.
Alonzo testified that the theft charge affected him professionally and
personally. He was denied unemployment benefits, and although he had been
looking, he had not found a job. Alonzo said that due to state licensing requirements,
he could not work at a pawn shop if he had a pending felony charge or a felony
conviction. However, he conceded that he had applied for a job only about once
every two months since he left Cash America. Personally, he felt like a
disappointment when explaining the felony charge to his family. He also said that
he was ostracized by people in the pawn industry, who treated him “like a thief.”
On cross-examination, Alonzo was asked what evidence he had that Elder and
Fields were trying to hurt him by notifying the police of their belief that a theft had
occurred:
The only evidence I have is that—what personally happened to me. If I broke company policy, then I should have just been terminated and that was it. I didn’t have to go through criminal charges of the—of a felony charge. I wouldn’t have had to have gone through all that.
Elder and Fields both testified at trial that based on their investigation they
believed—and continued to believe—that Alonzo had committed theft by exercising 8 control over Cash America’s money for the purpose of paying Santana’s layaway
charges. Neither Fields nor Elder had met Alonzo before the investigation, and Elder
testified that he had “no reason” to dislike or target him.
Elder testified that he did not omit any relevant information or give inaccurate
or false information to Deputy Ganaway, although he disagreed with many
statements in Deputy Ganaway’s probable cause affidavit. Elder denied having told
Deputy Ganaway that Santana owed $6,500 to the store prior to the transaction, that
her loan balance was reduced to zero after pawning the layaway items for $6,500,
and that the suggested loan amount for all the layaway items was $1700.
At trial, Aaron Hoffstadter, a regional manager for Cash America, testified
about the business, generally, and he explained a summary report, which had been
admitted into evidence and which showed the payment of the layaways and issuance
of new pawn loans in May 2016. Hofstadter explained that the total of the retail
prices for the layaway items was $3,049, but the sales price had been discounted to
a total of $2,080. Hoffstadter agreed that the layaway-to-loan transactions
constituted theft. He testified that after Santana defaulted, Cash America resold two
of the layaway items at a loss, and the other items were sent to scrap metal
reclamation. Hoffstadter testified: “Cash America ultimately lost approximately
$4,500 at the time of disposition.”
9 The jury found in favor of Alonzo on his malicious prosecution claim, and it
found the following amounts for compensatory damages: (1) $5,500 criminal
defense legal fees; (2) $45,000 past mental anguish; (3) $42,000 past loss of
earnings; (4) $24,000 past injury to reputation; (5) $12,000 future injury to
reputation. The jury found by clear and convincing evidence that the harm to Alonzo
from the malicious prosecution resulted from malice, which was defined as “a
specific intent by Defendants to cause substantial injury or harm.” The jury awarded
$100,000 in exemplary damages. The jury also found that Alonzo failed to comply
with his fiduciary duty to Cash America and committed fraud against Cash America.
The jury awarded zero dollars in damages for breach of fiduciary duty and fraud.
Analysis
In their first issue, appellants challenge the legal and factual sufficiency of the
evidence to support the judgment for Alonzo. Their second and third issues
challenge the awards of compensatory and exemplary damages. The fourth issue
asserts that the jury’s award of zero damages for fraud and breach-of-fiduciary duty
was contrary to the overwhelming weight of the evidence, which conclusively
established that Cash America sustained actual damages of $4,500.
10 I. Standards of review
A. Legal sufficiency
When an appellant challenges the legal sufficiency of the evidence supporting
an adverse finding on an issue on which it did not have the burden of proof, it must
demonstrate that no evidence supports the finding. Graham Cent. Station, Inc. v.
Peña, 442 S.W.3d 261, 263 (Tex. 2014). “In reviewing a verdict for legal
sufficiency, we credit evidence that supports the verdict if reasonable jurors could,
and disregard contrary evidence unless reasonable jurors could not.” Kroger Tex.
Ltd. P’ship v. Suberu, 216 S.W.3d 788, 793 (Tex. 2006) (citing City of Keller v.
Wilson, 168 S.W.3d 802, 827 (Tex. 2005)). We will sustain a legal sufficiency
challenge if the record shows that: (1) there is a complete absence of evidence of a
vital fact, (2) rules of law or evidence bar the court from giving weight to the only
evidence offered to prove a vital fact, (3) the evidence offered to prove a vital fact is
no more than a scintilla, or (4) the evidence establishes conclusively the opposite of
the vital fact. City of Keller, 168 S.W.3d at 810. “Evidence does not exceed a scintilla
if it is ‘so weak as to do no more than create a mere surmise or suspicion’ that the
fact exists.” Suberu, 216 S.W.3d at 793 (quoting Ford Motor Co. v. Ridgway, 135
S.W.3d 598, 601 (Tex. 2004)).
11 B. Factual sufficiency
When an appellant challenges the factual sufficiency of the evidence
supporting an adverse finding on an issue on which it did not have the burden of
proof, it must demonstrate that the adverse finding is so contrary to the
overwhelming weight of the evidence as to be clearly wrong and manifestly unjust.
See Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986); Levine v. Steve Scharn Custom
Homes, Inc., 448 S.W.3d 637, 653 (Tex. App.—Houston [1st Dist.] 2014, pet.
denied). In conducting a factual-sufficiency review, we examine, consider, and
weigh all the evidence that supports or contradicts the factfinder’s determination.
See Dow Chem. Co. v. Francis, 46 S.W.3d 237, 242 (Tex. 2001); Plas-Tex, Inc. v.
U.S. Steel Corp., 772 S.W.2d 442, 445 (Tex. 1989). The jury is the sole judge of the
witnesses’ credibility, and a reviewing court may not substitute its opinion to the
contrary. See Golden Eagle Archery, Inc. v. Jackson, 116 S.W.3d 757, 761 (Tex.
2003).
II. The evidence is insufficient to support the jury’s verdict on malicious prosecution.
The appellants challenge the sufficiency of the evidence to support the jury’s
verdict that that they are liable for malicious prosecution. They specifically argue
that the evidence is legally and factually insufficient to support three elements of a
claim for malicious prosecution: malice, lack of probable cause, and initiation or
12 procurement of a criminal proceeding. Because it is dispositive, we focus on the
element of lack of probable cause.
A. Cause of action for malicious prosecution
“Actions for malicious prosecution create a tension between the societal
interest in punishing crimes and the individual interest in protection from
unjustifiable criminal prosecution.” Richey v. Brookshire Grocery Co., 952 S.W.2d
515, 520 (Tex. 1997). “Even a small departure from the exact prerequisites for
liability may threaten the delicate balance between protecting against wrongful
prosecution and encouraging reporting of criminal conduct.” Browning–Ferris
Indus., Inc. v. Lieck, 881 S.W.2d 288, 291 (Tex. 1994). To prevail on a claim of
malicious prosecution, a plaintiff must establish: (1) the commencement of a
criminal prosecution against the plaintiff; (2) that was initiated or procured by the
defendant; (3) the termination of the prosecution in the plaintiff’s favor; (4) the
plaintiff’s innocence; (5) the defendant’s lack of probable cause to initiate the
proceedings; (6) malice in filing the charge; and (7) damage to the plaintiff. Suberu,
216 S.W.3d at 793 n.3; Richey, 952 S.W.2d at 517; Espinosa v. Aaron’s Rents, Inc.,
484 S.W.3d 533, 542 (Tex. App.–Houston [1st Dist.] 2016, no pet.).
B. Lack of probable cause
“The probable cause inquiry asks only whether the complainant reasonably
believed that the elements of a crime had been committed based on the information
13 available to the complainant before criminal proceedings began.” Richey, 952
S.W.2d at 519. “[T]here is an initial presumption in malicious prosecution actions
that the defendant acted reasonably and in good faith and had probable cause to
initiate the proceedings.” Id at 517. “The presumption disappears if a plaintiff
produces evidence that the motives, grounds, beliefs, and other evidence upon which
the defendant acted did not constitute probable cause.” Buckingham Senior Living
Cmty., Inc. v. Washington, 605 S.W.3d 800, 811 (Tex. App.—Houston [1st Dist.]
2020, no pet.) (citing Richey, 952 S.W.2d at 517–18). The burden then shifts to the
defendant to offer proof of probable cause. Buckingham Senior Living, 605 S.W.3d
at 811 (citing Richey, 952 S.W.2d at 517–18). Probable cause cannot be overcome
by evidence that the defendant failed to fully disclose all relevant facts,5 the
5 First Valley Bank of Los Fresnos v. Martin, 144 S.W.3d 466, 470 (Tex. 2004) (“Once a citizen has probable cause to report a crime, there can be no malicious prosecution, even if the subsequent report fails to fully disclose all relevant facts.”).
14 defendant failed to make additional investigation into the suspect’s state of mind,6
or the criminal charges were subsequently resolved by dismissal7 or acquittal.8
C. The evidence is legally insufficient to show that the appellants lacked probable cause when reporting the suspected theft.
The appellants argue that the evidence is legally and factually insufficient to
support a finding that they lacked probable cause when they reported the theft. They
maintain that the evidence discovered during their investigation led to their
reasonable belief that Alonzo had committed a theft. Alonzo maintains that there
was no theft, and no probable cause, because there were no cash shortages, and no
property went missing. We consider these arguments in light of the law regarding
theft.
6 Richey v. Brookshire Grocery Co., 952 S.W.2d 515, 518 (Tex. 1997); Marathon Oil Co. v. Salazar, 682 S.W.2d 624, 627 (Tex. App.—Houston [1st Dist.] 1984, writ ref’d n.r.e.) (“A private citizen has no duty to inquire of the suspect whether he has some alibi or explanation before filing charges.”). 7 Buckingham Senior Living Cmty., Inc. v. Washington, 605 S.W.3d 800, 811 (Tex. App.—Houston [1st Dist.] 2020, no pet.) (“The dismissal of criminal charges is no evidence that George lacked probable cause at the time she assisted in reporting the offense.”). 8 Kroger Tex. Ltd. P’ship v. Suberu, 216 S.W.3d 788, 794 (Tex. 2006) (“To rebut the probable cause presumption, Suberu had to produce evidence that the motives, grounds, beliefs, or other information upon which Kroger acted demonstrate that it did not reasonably believe Suberu was guilty of shoplifting. [citations omitted] While Suberu’s evidence supports the jury’s determination—consistent with her acquittal—that she did not steal groceries, it does not establish the absence of probable cause.”). 15 1. Theft is unlawful appropriation of property.
Under the Texas Penal Code, a person commits the offense of theft “if he
unlawfully appropriates property with intent to deprive the owner of property.” TEX.
PENAL CODE § 31.03(a). As relevant to this case, “[a]ppropriation of property is
unlawful if . . . it is without the owner’s effective consent . . . .” Id. § 31.03(b).
“Appropriate” means: “(A) to bring about a transfer or purported transfer of title to
or other nonpossessory interest in property, whether to the actor or another; or (B) to
acquire or otherwise exercise control over property other than real property.” Id. §
31.01(4). “[A]ppropriation encompasses conduct that does not involve possession.”
State v. Fuller, 480 S.W.3d 812, 820 (Tex. App.—Texarkana 2015, pet. ref’d). An
unlawful appropriation may be of any duration. See Davis v. State, No. 01-17-00587-
CR, 2019 WL 1179429, at *6 (Tex. App.—Houston [1st Dist.] Mar. 14, 2019, pet.
ref’d) (mem. op.; not designated for publication).
2. Application of the law to the facts.
We begin with the presumption that the appellants acted reasonably and in
good faith and had probable cause to initiate the proceeding. See Richey, 952 S.W.2d
at 517. We consider whether Alonzo produced evidence that the information and
beliefs that the appellants acted on did not constitute probable cause. See
Buckingham Senior Living, 605 S.W.3d at 811. Then, we consider whether the
appellants met their burden. To show that there was no evidence that they lacked
16 probable cause (a double negative), the appellants must demonstrate that the
evidence conclusively proves that they had probable cause to believe that Alonzo
had committed theft when they made the report to the sheriff’s office. See Richey,
952 S.W.2d at 519.
a) Evidence that the appellants relied on
The evidence adduced at trial showed that the appellants relied on
documentary proof of the wraparound transactions that showed Alonzo transferring
Cash America’s funds to pay for Santana’s layaways. They also relied on the video
recording that showed Alonzo and Santana together at the time the transactions were
made, and their interviews with Alonzo and Santana. According to Fields and Elder,
both Alonzo and Santana admitted their roles in the wraparound transactions. Alonzo
denied having admitted his role to them during the investigation.
b) Alonzo’s evidence
Alonzo relies on evidence that no property or money left the store or Cash
America’s control. On appeal, as in the trial court, Alonzo focuses on proof that no
money or goods were “taken” from Cash America or transferred to his or Santana’s
possession. None of this evidence negates probable cause. See Fuller, 480 S.W.3d
at 820.
In State v. Fuller, the Texarkana Court of Appeals considered whether there
was sufficient evidence of theft in a case where a nursing home bookkeeper had
17 made an unauthorized transfer of trust funds to an operating account. 480 S.W.3d at
814. The bookkeeper allegedly kept approximately $3,000 in cash that was intended
for deposit into a trust account and transfer to an operating account as payment for
two residents’ room and board. Id. at 814–17. She was accused of concealing this
act by transferring an equivalent amount of money from another resident’s trust
funds into the operating account.9 Id. When the deception was discovered, the
bookkeeper was charged with theft based on the transfer of trust funds. Id. at 820.
The bookkeeper maintained that she did not commit theft because she merely
transferred funds from the trust account to the operating account, the funds were still
intact at the time of the investigation, and the money was returned to the resident’s
trust fund. Id. Thus, she contended that she never took the funds. Id.
The court of appeals stated that the determinative issue is not whether the
bookkeeper “physically pocketed” the resident’s funds, but whether she “unlawfully
appropriated” the money. Id. at 820. It also rejected the bookkeeper’s argument that
because she merely transferred funds from one account to another and because the
money was ultimately refunded, there was no proof that she intended to deprive the
resident of his money. Id. at 822. The court of appeals noted that evidence of actual
deprivation is not necessary to prove intent to deprive. Id. The court concluded that
9 The other resident’s room and board were paid directly by Medicaid, and his trust fund balance was over $8,000 because he had received a lump-sum, retroactive payment for social security disability benefits. 18 the evidence was legally sufficient to support the jury’s verdict that the bookkeeper
committed theft. Id. at 823.
This case is similar to Fuller. Both cases involve a transfer of funds from one
account to another. Both cases involve an unauthorized exercise of control over
money belonging to another. In Fuller, although the bookkeeper generally had
authority to transfer money from the trust account to the operating account, she did
not have the effective consent of the resident to transfer money from the trust
account. In this case, although Alonzo, as an assistant manager, generally had some
authority over Cash America’s funds, for example for making pawn loans, he did
not have the effective consent of Cash America to use its money to pay Santana’s
layaway debt. It does not matter that neither Alonzo nor Santana physically
possessed the money or property involved in this transaction. See id.
c) Conclusive proof of probable cause
In this case, the evidence showed the existence of the wraparound transactions
and that Fields and Elder believed that both Alonzo and Santana had admitted to
engaging in conduct whereby Alonzo exercised control over Cash America’s money
in a manner for which he lacked effective consent. We conclude that as a matter of
law, based on these facts proven at trial, the appellants reasonably believed that the
elements of theft had been committed at the time they reported the alleged theft to
the sheriff’s office. See Richey, 952 S.W.2d at 519.
19 We hold that there was no evidence that the appellants acted in the absence of
probable cause, and therefore the evidence is legally insufficient to support the jury’s
malicious prosecution verdict. We sustain the appellants’ first issue, and we do not
need to consider the second and third issues. See TEX. R. APP. P. 47.1. We reverse
the judgment in favor of Alonzo for malicious prosecution and render judgment that
he take nothing on that claim.
III. The zero damages award on breach of fiduciary duty and fraud is not contrary to the overwhelming weight of the evidence.
Cash America challenges the factual sufficiency of the evidence to support
the jury’s finding of zero damages for both breach of fiduciary duty and fraud. It
argues that the overwhelming evidence showed that it suffered a financial loss of
$4,500, which is the approximate difference between the amount of the loans and
the resale value of the collateral.
When, as here, the appellant challenges the factual sufficiency of the evidence
supporting an adverse finding on which it had the burden of proof, the appellant must
demonstrate that the adverse finding is against the great weight and preponderance
of the evidence. See Dow Chem. Co., 46 S.W.3d at 242.
The jury found that Alonzo breached his fiduciary duty to Cash America and
committed fraud, but it assessed $0 in damages. The damages questions for both
breach of fiduciary duty (question 7) and fraud (question 11) submitted only past
and future lost profits as the measure of damages.
20 “Lost profits are damages for the loss of net income to a business measured
by reasonable certainty.” Miga v. Jensen, 96 S.W.3d 207, 213 (Tex. 2002). “To be
recoverable, lost profits must be proven by competent evidence with reasonable
certainty.” Texaco, Inc. v. Phan, 137 S.W.3d 763, 771 (Tex. App.—Houston [1st
Dist.] 2004, no pet.); see ERI Consulting Eng’s, Inc. v. Swinnea, 318 S.W.3d 867,
876 (Tex. 2010). “Recovery for lost profits does not require that the loss be
susceptible of exact calculation.” Holt Atherton Indus., Inc. v. Heine, 835 S.W.2d
80, 84 (Tex. 1992). “However, the injured party must do more than show that [it]
suffered some lost profits.” Id. Opinions or estimates are competent evidence of lost
profits if based on objective facts, figures, or data from which the amount of lost
profits can be ascertained. ERI Consulting Eng’rs, 318 S.W.3d at 876; Holt Atherton,
835 S.W.2d at 84.
Cash America argues that its damages were the difference between the value
of the collateral, approximately $2,000, and the amount loaned to Santana, $6,500,
or $4,500. But the evidence does not indicate that Cash America suffered $4,500 in
lost profits. To the contrary, the evidence established that Cash America could not
have earned a profit of $4,500 from the sale of the collateral because it was worth
far less.
The only mention of profit appears in Hoffstadter’s testimony. He said that
Cash America was eventually able to sell two of the seven items that had been on
21 layaway. One of those items was a watch that Santana had purchased on layaway for
$65. After Santana’s default, Cash America sold the watch for $20. This is not
evidence of lost profits due to Alonzo’s breach of fiduciary duty and fraud. The
evidence showed that before the wraparound transactions, Santana was in default or
nearing default on the layaway items. And nothing in the evidence showed that Cash
America’s sale of the watch for $20 was caused by Alonzo’s actions. Likewise, the
record does not address the possibility of future lost profits due to Alonzo’s action.
The evidence in the record does not prove with reasonable certainty any amount of
past lost profits.
We hold that the jury’s finding of zero lost-profit damages for breach of
fiduciary duty and fraud was not contrary to the great weight and preponderance of
the evidence. See Dow Chem. Co., 46 S.W.3d at 242. We overrule Cash America’s
fourth issue.
Conclusion
We reverse the trial court’s judgment awarding damages based on malicious
prosecution, and because all the damages awarded to Alonzo were based on
malicious prosecution, we render judgment that Alonzo take nothing by way of this
suit. The remainder of the trial court’s judgment is affirmed.
22 Peter Kelly Justice
Panel consists of Justices Kelly, Landau, and Hightower.