Doyle Jones v. Frank Kent Motor Company D/B/A Frank Kent Cadillac

• Court: Court of Appeals of Texas
• Decided: August 21, 2015
• Docket: 02-14-00216-CV
• Status: Published

Opinion

COURT OF APPEALS SECOND DISTRICT OF TEXAS FORT WORTH

NO. 02-14-00216-CV

DOYLE JONES APPELLANT

V.

FRANK KENT MOTOR COMPANY APPELLEE D/B/A FRANK KENT CADILLAC

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FROM THE 67TH DISTRICT COURT OF TARRANT COUNTY TRIAL COURT NO. 067-247167-10

MEMORANDUM OPINION 1

Appellant Doyle Jones appeals the trial court’s take-nothing judgment in

this discrimination case. We affirm.

Background Facts

In 2010, Jones was working as a car salesman at appellee Frank Kent

Motor Company d/b/a Frank Kent Cadillac. In May 2010, he left his position with

1 See Tex. R. App. P. 47.4. the dealership. He then sued Frank Kent, claiming that Frank Kent had

discriminated against him based on his age and disability and that he had been

constructively discharged in retaliation for signing an affidavit stating that he

believed Frank Kent had discriminated against another employee. Frank Kent

filed counterclaims against Jones, claiming that he had participated in a

fraudulent scheme to increase bonuses for himself and the dealership based on

customer satisfaction surveys.

Frank Kent then moved for partial summary judgment on all of Jones’s

claims against it. The trial court granted the motion. Frank Kent then nonsuited

its counterclaims, but when the trial court reinstated Jones’s retaliation claim,

Frank Kent reasserted its counterclaims. Jones also added a retaliation claim

based on Frank Kent’s counterclaims, arguing that they were frivolous. Frank

Kent specially excepted to Jones’s retaliation claim based on its counterclaims,

claiming that no such post-termination retaliation cause of action exists under

Texas law. After a hearing (of which no record was made), the trial court granted

Frank Kent’s special exception to Jones’s third amended petition, striking Jones’s

retaliation claim relating to Frank Kent’s counterclaim. Jones subsequently filed

a fifth amended petition 2 that pleaded the same retaliation claim.

After a bench trial, the trial court rendered judgment in favor of Frank Kent

on Jones’s claims against it and in favor of Jones on Frank Kent’s claims against

2 Jones had filed a fourth amended petition prior to the hearing on the special exception to the third amended petition.

2 him. It ordered that both parties take nothing. Jones filed a motion for new trial

to apply for an award of attorney’s fees and costs under the Texas Theft Liability

Act (the Theft Act). The trial court denied the motion, and this appeal followed.

Discussion

1. Post-termination retaliation

In his first issue, Jones argues that the trial court erred by concluding that

Texas law does not recognize post-termination retaliation as a cause of action.

In his third amended petition, Jones alleged that Frank Kent retaliated

against him by bringing a frivolous counterclaim against him. Frank Kent

specially excepted to that claim, arguing that no such cause of action exists

under Texas law. The trial court granted the special exception and struck

Jones’s counterclaim.

Jones filed a fourth amended petition and a fifth amended petition, both

including the same allegations regarding the counterclaim and adding,

The purpose of the filing of the counterclaim against Jones was to bully and punish Jones for asserting his rights under the statute. This action was materially adverse to Jones because such action would dissuade any reasonable employee from making or supporting a charge of discrimination. Moreover, the counterclaim has had a tangible effect on the terms and conditions of the plaintiff’s prospective employment.

Frank Kent specially excepted again to the claim, and again the trial court

granted the special exception.

On appeal, Jones argues that the trial court erred by granting the special

exception to his third amended petition. He does not challenge the grant of

3 Frank Kent’s special exception to the live pleading at the time of trial, thereby

waiving this issue. See Ford v. Performance Aircraft Servs., Inc., 178 S.W.3d

330, 334 (Tex. App.—Fort Worth 2005, pet. denied). Even if Jones had not

waived this issue, we note that there is no cause of action in Texas for post-

employment retaliation by filing of a counterclaim. See Stewart v. Sanmina Tex.

L.P., 156 S.W.3d 198, 209 (Tex. App.—Dallas 2005, no pet.) (“An employer’s

filing of a counterclaim after the employee has already been discharged cannot

support a retaliation claim.”) (citing Hernandez v. Crawford Bldg. Material Co.,

321 F.3d 528, 532–33 (5th Cir. 2003) (distinguishing Fifth Circuit’s “more

skeptical view” of “ultimate employment decision” from other circuits’

interpretation), cert. denied, 540 U.S. 817 (2003)). 3 We overrule Jones’s first

issue.

2. Frank Kent’s counterclaims

In his second issue, Jones argues that the trial court erred by finding that

Frank Kent’s counterclaims were not frivolous. A “frivolous” suit is generally

understood to mean one that does not have a reasonable basis in law or fact.

See Gen. Elec. Credit Corp. v. Midland Cent. Appraisal Dist., 826 S.W.2d 124,

125 (Tex. 1991) (stating that suit is not frivolous so long as it has “reasonable

3 Jones argues that Hernandez has been abrogated by the Supreme Court’s holding in Burlington N. & Santa Fe Ry. Co. v. White, 548 U.S. 53, 126 S. Ct. 2405 (2006). However, the Fifth Circuit continues to cite Hernandez with approval. See Ellis v. Principi, 246 Fed. Appx. 867, 872 (5th Cir. 2007); see also Anderson v. Sikorsky Support Servs., Inc., 66 F. Supp. 3d 863, 869 (S.D. Tex. 2014); Lopez v. Kempthorne, 684 F. Supp. 2d 827, 885 (S.D. Tex. 2010).

4 basis in law and constituted an informed, good-faith challenge”); see also Tex.

Civ. Prac. & Rem. Code Ann. § 9.001(3) (West 2002) (defining groundless as

having no basis in fact or not warranted by existing law or a good faith argument

for the extension, modification, or reversal of existing law).

Frank Kent sued Jones for civil theft, common law fraud, mail fraud, breach

of fiduciary duty, and money had and received. All of Frank Kent’s claims stem

from Jones’s participation in the survey scheme. General Motors had a program

in which dealerships received bonuses when their customers were highly

satisfied with their car-buying experience. Customers’ satisfaction was recorded

by surveys that were mailed to their home after they bought a car.

Jones testified that salespeople would receive bonuses at the end of every

month that their customer service index, as determined by the surveys, was

above a certain number. One of Frank Kent’s owners also testified that the

salespeople bonuses were paid by the dealership based on the salesperson’s

customer satisfaction score. Jones said he filled out surveys for customers and

gave them to his supervisors. He also admitted that eight or nine of the surveys

were routed to his home address. He testified that he knew that his supervisor

would take the completed surveys and mail them to General Motors. Frank Kent

introduced evidence showing that it paid Jones $8,800 in bonuses that were

based on his customer survey scores. There was ample basis for Frank Kent’s

allegations, and they were therefore not frivolous. We overrule Jones’s second

5 3. Attorney’s fees

In his third issue, Jones argues that the trial court erred by refusing to

award him attorney’s fees. Jones claims that as the prevailing party on Frank

Kent’s counterclaim under the Theft Act, he was entitled to recover his attorney’s

fees. See Tex. Civ. Prac. & Rem. Code Ann. § 134.005(b) (West 2011) (“Each

person who prevails in a suit under this chapter shall be awarded court costs and

reasonable and necessary attorney’s fees.”). When a statute provides that a

party “shall be awarded” attorney’s fees, as it does in the Theft Act, the trial court

has no measure of discretion in determining whether to award attorney’s fees.

Bocquet v. Herring, 972 S.W.2d 19, 20 (Tex. 1998). But even a mandatory fee

award must be supported by the pleadings and the record. Garcia v. Gomez,

319 S.W.3d 638, 644 (Tex. 2010).

The trial court issued the following findings of fact relevant to the issue of

attorney’s fees:

1. The Plaintiff/Counter-Defendant did not plead for attorney fees and costs as a prevailing party on Frank Kent’s counterclaim under the Texas Theft Liability Act (the “Theft Act”), Tex. Civ. Prac. & Rem. Code § 134.005(b), and it was not tried by consent.

2. The Plaintiff’s/Counter-Defendant’s pleadings did not provide sufficient notice to Frank Kent that the Plaintiff/Counter- Defendant was seeking to recover his attorney fees and costs as a prevailing party on Frank Kent’s counterclaim under the Theft Act.

3. An attorney of reasonable competence would interpret the Plaintiff’s/Counter-Defendant’s Fifth Amended Petition and Answer to Counterclaim as seeking attorney fees for the retaliation claims under the Texas Labor Code and for defending a frivolous filing only, and not for a prevailing party under the Theft Act.

6 4. The Plaintiff/Counter-Defendant was not a prevailing party under the Theft Act because he did not assert any counterclaim under the Theft Act or recover any damages under the Theft Act.

5. Even if the Plaintiff/Counter-Defendant did plead for attorney fees and costs as a prevailing party under the Theft Act (which he didn’t) and was in fact a prevailing party under the Theft Act (which he wasn’t), the Plaintiff/Counter-Defendant still is not entitled to recover any attorney fees and costs because he did not segregate his attorney fees and costs in defending the Theft Act claim from his attorney fees and costs in pursuing his other claims for retaliation and defending the other counterclaims for common law fraud, mail fraud, breach of fiduciary duty, and money had and received.

6. Even if the Plaintiff/Counter-Defendant did plead for attorney fees and costs as a prevailing party under the Theft Act (which he didn’t), was in fact a prevailing party under the Theft Act (which he wasn’t), and did properly segregate his attorney fees and costs (which he didn’t), the Plaintiff’s/Counter-Defendant’s attorney fees in the amount of $141,277.50 and costs in the amount of $5,564.48 were not necessary or reasonable in defending the Theft Act claim.

Although the trial court found that Jones was not a prevailing party

because he did not recover damages under the Theft Act, the law is clear that a

party who successfully defends against an action under the Theft Act is a

prevailing party under the statute. See, e.g., Arrow Marble, LLC v. Estate of

Killion, 441 S.W.3d 702, 706 (Tex. App.—Houston [1st Dist.] 2014, no pet.) (“A

party prevails if he ‘successfully prosecutes the action or successfully defends

against it.’”) (quoting Johns v. Ram–Forwarding, Inc., 29 S.W.3d 635, 637–38

(Tex. App.—Houston [1st Dist.] 2000, no pet.); see also In re Corral-Lerma,

451 S.W.3d 385, 386 (Tex. 2014) (“[T]he Texas Theft Liability Act provides for

7 attorney’s fees even without an underlying damages recovery . . . .”). Jones

successfully defended against Frank Kent’s Theft Act claim and was therefore

the prevailing party. However, a party seeking recovery of attorney’s fees under

the Theft Act must sufficiently notify the court and opposing party of his intent to

recover his attorney’s fees under the Act. See Shaw v. Lemon, 427 S.W.3d 536,

540 (Tex. App.—Dallas 2014 pet. denied), cert. denied, 135 S. Ct. 1563 (2015)

(“[A] pleading that does not ask for an award of attorney’s fees under a

mandatory statute does not give notice to the opposing party of all the relief

sought.”); Prize Energy Res., L.P. v. Cliff Hoskins, Inc., 345 S.W.3d 537, 569

(Tex. App.—San Antonio 2011, no pet.). Jones did not specifically plead for

attorney’s fees under the Theft Act, but he argues that his pleadings were

sufficient to notify Frank Kent that he intended to seek attorney’s fees under the

Act. See Horizon/CMS Healthcare Corp. v. Auld, 34 S.W.3d 887, 897 (Tex.

2000) (“A petition is sufficient if it gives fair and adequate notice of the facts upon

which the pleader bases his claim. The purpose of this rule is to give the

opposing party information sufficient to enable him to prepare a defense.”).

Although Jones’s prayer for relief contains a general request for attorney’s

fees, in his answer to Frank Kent’s counterclaims in a section labelled

“Affirmative Defenses,” Jones stated, “This counterclaim is a frivolous claim and

should be dismissed[,] and Counter-Defendant Doyle Jones should be awarded

his costs and attorneys’ fees incurred in defending it.” Jones pleaded for

recovery of attorney’s fees for defending against a frivolous claim, see Tex. Civ.

8 Prac. & Rem. Code Ann. § 9.012(e)(3) (West 2002) (allowing a sanction for a

frivolous filing to include reasonable attorney’s fees), and he elsewhere pleaded

for recovery of attorney’s fees under the Texas Commission on Human Rights

Act for his retaliation claim, see Tex. Lab. Code Ann. § 21.259(a) (West 2015)

(allowing a trial court to award a reasonable attorney’s fees to the prevailing party

under the Act). Nowhere did he plead for the recovery of attorney’s fees under

the Theft Act. In such instances when a party pleads specific grounds for the

recovery of attorney’s fees, he cannot recover attorney’s fees on another,

unpleaded ground. 4 See Smith v. Deneve, 285 S.W.3d 904, 916 (Tex. App.—

Dallas 2009, no pet.); see also Nat’l City Mortg. Co. v. Adams, 310 S.W.3d 139,

143 n.4 (Tex. App.—Fort Worth 2010, no pet.) (following Smith).

The trial court found that Jones did not sufficiently put Frank Kent on notice

that he was seeking attorney’s fees under the Theft Act and that this issue was

4 That Frank Kent was the party that put into play the Theft Act cause of action in the first place does nothing to put it on notice that Jones’s general request for attorney’s fees was to now be understood to cover a request under the Theft Act that it previously had not included, especially in light of the fact that Jones amended his petition in response to Frank Kent’s counterclaim to specifically request attorney’s fees for defending against a frivolous claim. See Heritage Gulf Coast Props., Ltd. v. Sandalwood Apartments, Inc., 416 S.W.3d 642, 661–62 (Tex. App.—Houston [14th Dist.] 2013, no pet.) (“An opposing party would conclude Sandalwood would have expressly mentioned the ‘prevailing party’ provision of the contract if it were seeking fees for successful defense under that theory. This conclusion is further supported by the fact that (1) Sandalwood expressly pleaded one theory for recovering fees for successful defense of appellants’ claims; and (2) . . . Woodbridge pleaded a specific contractual provision under which it was seeking attorney’s fees concerning the Taft Circle Apartments.”).

9 not tried by consent. 5 The trial court therefore did not abuse its discretion by

denying Jones’s request for attorney’s fees under the Theft Act. See Shaw,

427 S.W.3d at 540 (“Because Shaw pleaded specifically for an award of

attorney’s fees for his breach of contract claim, but not for an award of attorney’s

fees under the Theft Act, we conclude that the trial court did not err by denying

an award of attorney’s fees under the Theft Act on that basis.”); Cricket

Commc’ns, Inc. v. Trillium Indus., Inc., 235 S.W.3d 298, 310 (Tex. App.—Dallas

2007, no pet.) (holding that trial court did not err in denying request for attorney’s

fees because cross-appellees did not specifically plead for attorney’s fees under

the Theft Act); see also Kreighbaum v. Lester, No. 05-06-01333-CV, 2007 WL

1829729, at *3 (Tex. App.—Dallas June 27, 2007, no pet.) (mem. op.) (“Although

appellants’ prayer for relief contains a nonspecific request for attorney’s fees,

appellants’ counterclaim specifically sets forth the basis for the request for

attorney’s fees, section 17.50(c) of the business and commerce code. An

opposing attorney of reasonable competence reading appellants’ pleading would

conclude the request for attorney’s fees in the prayer was based on the

statement in the counterclaim that appellants are entitled to attorney’s fees

pursuant to section 17.50(c) of the business and commerce code.”). We overrule

Jones’s third issue.

5 Jones makes no argument on appeal that that issue was tried by consent.

10 4. Discrimination claim

In his fourth issue, Jones argues that the trial court erred by granting

partial summary judgment and dismissing his claim for discrimination.

After Jones filed his first amended petition, Frank Kent moved for partial

summary judgment on Jones’s claims of age discrimination, disability

discrimination, and retaliation. The trial court granted the motion. It later

reinstated the retaliation claim. After those rulings, Jones amended his petition

four times. None of the later-amended petitions contained age discrimination or

disability discrimination causes of action, including the fifth amended petition,

which was the live pleading at the time of trial.

Generally, filing an amended petition that does not include a cause of

action effectively dismisses the omitted claim as of the time the amended

pleading is filed. FKM P’ship, Ltd. v. Bd. of Regents of Univ. of Houston Sys.,

255 S.W.3d 619, 632 (Tex. 2008). This is so even when the trial court has

denied the claim through partial summary judgment. See Dolenz v. All Saints

Episcopal Hosp., 638 S.W.2d 141, 142 (Tex. App.—Fort Worth 1982, writ ref’d

n.r.e.) (holding that plaintiff could not complain on appeal of summary judgment

denying his request for injunctive relief when his subsequently amended petitions

did not include injunction claims). Because Jones’s amended petitions did not

include claims for age discrimination or disability discrimination, he abandoned

those claims and waived any error by the trial court in rendering summary

judgment for Frank Kent on those claims. See Akin v. Santa Clara Land Co.,

11 34 S.W.3d 334, 339 (Tex. App.—San Antonio 2000, pet. denied) (“Akin waived

any error by the trial court when she amended her pleadings after the partial

summary judgments were granted and abandoned her DTPA and negligence

claims.”). We overrule Jones’s fourth issue.

Conclusion

Having overruled Jones’s four issues, we affirm the trial court’s judgment.

/s/ Lee Gabriel

LEE GABRIEL JUSTICE

PANEL: WALKER, GABRIEL, and SUDDERTH, JJ.

DELIVERED: August 20, 2015