MBR & Associates, Inc. and Marion Brian Ramon v. William S. Lile
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Opinion
COURT OF APPEALS SECOND DISTRICT OF TEXAS FORT WORTH
NO. 02-11-00431-CV
MBR & ASSOCIATES, INC. AND APPELLANTS MARION BRIAN RAMON
V.
WILLIAM S. LILE APPELLEE
----------
FROM THE 352ND DISTRICT COURT OF TARRANT COUNTY
MEMORANDUM OPINION1
I. INTRODUCTION
Appellants MBR & Associates, Inc. and Marion Brian Ramon appeal from
the trial court’s judgment for Appellee William S. Lile, signed after a bench trial.
For the reasons set forth below, we will affirm the trial court’s judgment.
1 See Tex. R. App. P. 47.4. II. FACTUAL OVERVIEW
Lile hired MBR Guaranteed Foundation Repair (MBR-GFR)2 to repair the
foundation of his home based on MBR-GFR’s representations that the company
had master plumbers and engineers on staff, that the company had liability
insurance to cover his property in the event of any damage to his property, and
that a master plumber and engineer would oversee the job at his house. Ramon
instructed the salespersons involved in obtaining Lile’s contract to make these
representations. Each of these representations was false. A forged and fake
copy of a certificate of liability insurance was included in MBR-GFR’s sales
packet.
When MBR-GFR performed the “mudjacking” procedure on Lile’s home, its
workers negligently lifted the foundation too high, causing multiple fractures in
the foundation and causing the sewer system pipes to crack and pull loose from
sewer pipes in the foundation. No engineer or master plumber was supervising
the job. The sewer system was filled with mudjacking concrete, which the
workers did not notice until it was coming up through the toilet bowl in one
bathroom, the drain of one bathtub, and the toilet opening in another bathroom.
Upon discovering the mudjacking concrete rising through Lile’s home’s sewer
system, the MBR-GFR workers left. Eventually, MBR-GFR sent Douglas
Provenzano to Lile’s home to attempt to clean the now-hardened mudjacking
2 The trial court found that MBR-GFR was a trade name used by Ramon individually.
2 concrete out of sewer system pipes at Lile’s house. Provenzano represented
himself to be—but was not—a master plumber. Provenzano jackhammered five
holes into Lile’s foundation inside his house looking for the main sewer line but
could not find it. Ramon told Lile that he had liability insurance but that he was
not going to turn in a claim because what had happened was not his fault and
that he was not going to do anything further to help Lile. Appellants3 then
abandoned all efforts to complete or repair Lile’s foundation. The mudjacking
concrete injected into Lile’s sewer system remained there through the date of
trial. Lile’s sewer system was inoperable, and his home was uninhabitable.
Lile asserted causes of action against Appellants for breach of contract,
negligence, violations of the Deceptive Trade Practices-Consumer Protection Act
(DTPA), fraud, and gross negligence. The trial court’s findings of fact indicate
that the trial court found for Lile on each element of each of these causes of
action. The trial court found that the conduct of Appellants, including Ramon
individually, was a direct, proximate, and producing cause of extreme emotional
distress to Lile; he suffered physical illnesses—such as upset stomach,
headaches, high blood pressure, depression, bouts of crying, loss of sleep, and
loss of appetite. The trial court also found that this extreme emotional anguish
3 MBR-GFR is not reflected as an Appellant in the style of this case. The trial court found that “MBR & Associates, Inc. was held out to the public and Lile as the entity responsible for and controlling MBR-GFR, when in reality Ramon was operating and controlling both entities, while hiding the truth from Lile” and that “MBR & Associates, Inc. and Ramon doing business as MBR-GFR, are one and the same and that’s the way Ramon treated them.”
3 has been constant, consistent, and ongoing on a daily basis since the
mudjacking procedure occurred. The trial court awarded Lile the same amount
of damages for each of his causes of action—including breach of contract,
negligence, violations of the DTPA, and fraud. The total damages awarded
included $2,000.00 for loss of the benefit of the bargain; $132,469.04 for the
reasonable and necessary costs to repair Lile’s house; $69,150.00 for temporary
housing during the loss of the use of his house; $1,967.04 for reasonable and
necessary mitigation expenses incurred by Lile in protecting his property from
damage; $250,000.00 for mental anguish sustained by Lile in the past; and
$50,000.00 for mental anguish damages which in reasonable probability will be
sustained by Lile in the future. These damages were awarded against MBR &
Associates, Inc. and Ramon, jointly and severally.
III. STANDARD OF REVIEW WHEN TRIAL COURT ISSUES FINDINGS OF FACT
Findings of fact entered in a case tried to the court have the same force
and dignity as a jury’s answers to jury questions. Anderson v. City of Seven
Points, 806 S.W.2d 791, 794 (Tex. 1991). In a bench trial, the trial court, as
factfinder, is the sole judge of the credibility of the witnesses. Sw. Bell Media,
Inc. v. Lyles, 825 S.W.2d 488, 493 (Tex. App.—Houston [1st Dist.] 1992, writ
denied). If a complete reporter’s record exists in an appeal, the trial court’s
findings of fact are challengeable for legal and factual sufficiency of the evidence
to support them by the same standards that are applied in reviewing evidence
supporting a jury’s finding. See Catalina v. Blasdel, 881 S.W.2d 295, 297 (Tex.
4 1994). But unchallenged findings of fact are binding on an appellate court unless
contrary findings are established as a matter of law or no evidence supports
them. Milton M. Cooke Co. v. First Bank & Trust, 290 S.W.3d 297, 303 (Tex.
App.—Houston [1st Dist.] 2009, no pet.) (citing McGalliard v. Kuhlmann, 722
S.W.2d 694, 696 (Tex. 1986)). Conclusions of law are not challengeable for
factual sufficiency, but they may be reviewed to determine their correctness
based upon the facts. Rogers v. City of Fort Worth, 89 S.W.3d 265, 277 (Tex.
App.—Fort Worth 2002, no pet.). A challenge to fact findings that form the basis
of a conclusion of law or disposition will be overruled when the appellant does
not challenge other fact findings that support that conclusion or disposition.
Milton M. Cooke Co., 290 S.W.3d at 303; Raman Chandler Props., L.C. v.
Caldwell’s Creek Homeowners Ass’n, Inc., 178 S.W.3d 384, 397 (Tex. App.—
Fort Worth 2005, pet. denied); see also Oliphant Fin. L.L.C. v. Hill, 310 S.W.3d
76, 77 (Tex. App.—El Paso 2010, pet. filed) (explaining that an appellant must
attack all independent bases or grounds that fully support a complained-of ruling
or judgment, or appellate court must affirm judgment or ruling).
Here, following the bench trial, the trial court issued 215 findings of fact
and 33 conclusions of law comprising 39 pages in the clerk’s record. Appellants,
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COURT OF APPEALS SECOND DISTRICT OF TEXAS FORT WORTH
NO. 02-11-00431-CV
MBR & ASSOCIATES, INC. AND APPELLANTS MARION BRIAN RAMON
V.
WILLIAM S. LILE APPELLEE
----------
FROM THE 352ND DISTRICT COURT OF TARRANT COUNTY
MEMORANDUM OPINION1
I. INTRODUCTION
Appellants MBR & Associates, Inc. and Marion Brian Ramon appeal from
the trial court’s judgment for Appellee William S. Lile, signed after a bench trial.
For the reasons set forth below, we will affirm the trial court’s judgment.
1 See Tex. R. App. P. 47.4. II. FACTUAL OVERVIEW
Lile hired MBR Guaranteed Foundation Repair (MBR-GFR)2 to repair the
foundation of his home based on MBR-GFR’s representations that the company
had master plumbers and engineers on staff, that the company had liability
insurance to cover his property in the event of any damage to his property, and
that a master plumber and engineer would oversee the job at his house. Ramon
instructed the salespersons involved in obtaining Lile’s contract to make these
representations. Each of these representations was false. A forged and fake
copy of a certificate of liability insurance was included in MBR-GFR’s sales
packet.
When MBR-GFR performed the “mudjacking” procedure on Lile’s home, its
workers negligently lifted the foundation too high, causing multiple fractures in
the foundation and causing the sewer system pipes to crack and pull loose from
sewer pipes in the foundation. No engineer or master plumber was supervising
the job. The sewer system was filled with mudjacking concrete, which the
workers did not notice until it was coming up through the toilet bowl in one
bathroom, the drain of one bathtub, and the toilet opening in another bathroom.
Upon discovering the mudjacking concrete rising through Lile’s home’s sewer
system, the MBR-GFR workers left. Eventually, MBR-GFR sent Douglas
Provenzano to Lile’s home to attempt to clean the now-hardened mudjacking
2 The trial court found that MBR-GFR was a trade name used by Ramon individually.
2 concrete out of sewer system pipes at Lile’s house. Provenzano represented
himself to be—but was not—a master plumber. Provenzano jackhammered five
holes into Lile’s foundation inside his house looking for the main sewer line but
could not find it. Ramon told Lile that he had liability insurance but that he was
not going to turn in a claim because what had happened was not his fault and
that he was not going to do anything further to help Lile. Appellants3 then
abandoned all efforts to complete or repair Lile’s foundation. The mudjacking
concrete injected into Lile’s sewer system remained there through the date of
trial. Lile’s sewer system was inoperable, and his home was uninhabitable.
Lile asserted causes of action against Appellants for breach of contract,
negligence, violations of the Deceptive Trade Practices-Consumer Protection Act
(DTPA), fraud, and gross negligence. The trial court’s findings of fact indicate
that the trial court found for Lile on each element of each of these causes of
action. The trial court found that the conduct of Appellants, including Ramon
individually, was a direct, proximate, and producing cause of extreme emotional
distress to Lile; he suffered physical illnesses—such as upset stomach,
headaches, high blood pressure, depression, bouts of crying, loss of sleep, and
loss of appetite. The trial court also found that this extreme emotional anguish
3 MBR-GFR is not reflected as an Appellant in the style of this case. The trial court found that “MBR & Associates, Inc. was held out to the public and Lile as the entity responsible for and controlling MBR-GFR, when in reality Ramon was operating and controlling both entities, while hiding the truth from Lile” and that “MBR & Associates, Inc. and Ramon doing business as MBR-GFR, are one and the same and that’s the way Ramon treated them.”
3 has been constant, consistent, and ongoing on a daily basis since the
mudjacking procedure occurred. The trial court awarded Lile the same amount
of damages for each of his causes of action—including breach of contract,
negligence, violations of the DTPA, and fraud. The total damages awarded
included $2,000.00 for loss of the benefit of the bargain; $132,469.04 for the
reasonable and necessary costs to repair Lile’s house; $69,150.00 for temporary
housing during the loss of the use of his house; $1,967.04 for reasonable and
necessary mitigation expenses incurred by Lile in protecting his property from
damage; $250,000.00 for mental anguish sustained by Lile in the past; and
$50,000.00 for mental anguish damages which in reasonable probability will be
sustained by Lile in the future. These damages were awarded against MBR &
Associates, Inc. and Ramon, jointly and severally.
III. STANDARD OF REVIEW WHEN TRIAL COURT ISSUES FINDINGS OF FACT
Findings of fact entered in a case tried to the court have the same force
and dignity as a jury’s answers to jury questions. Anderson v. City of Seven
Points, 806 S.W.2d 791, 794 (Tex. 1991). In a bench trial, the trial court, as
factfinder, is the sole judge of the credibility of the witnesses. Sw. Bell Media,
Inc. v. Lyles, 825 S.W.2d 488, 493 (Tex. App.—Houston [1st Dist.] 1992, writ
denied). If a complete reporter’s record exists in an appeal, the trial court’s
findings of fact are challengeable for legal and factual sufficiency of the evidence
to support them by the same standards that are applied in reviewing evidence
supporting a jury’s finding. See Catalina v. Blasdel, 881 S.W.2d 295, 297 (Tex.
4 1994). But unchallenged findings of fact are binding on an appellate court unless
contrary findings are established as a matter of law or no evidence supports
them. Milton M. Cooke Co. v. First Bank & Trust, 290 S.W.3d 297, 303 (Tex.
App.—Houston [1st Dist.] 2009, no pet.) (citing McGalliard v. Kuhlmann, 722
S.W.2d 694, 696 (Tex. 1986)). Conclusions of law are not challengeable for
factual sufficiency, but they may be reviewed to determine their correctness
based upon the facts. Rogers v. City of Fort Worth, 89 S.W.3d 265, 277 (Tex.
App.—Fort Worth 2002, no pet.). A challenge to fact findings that form the basis
of a conclusion of law or disposition will be overruled when the appellant does
not challenge other fact findings that support that conclusion or disposition.
Milton M. Cooke Co., 290 S.W.3d at 303; Raman Chandler Props., L.C. v.
Caldwell’s Creek Homeowners Ass’n, Inc., 178 S.W.3d 384, 397 (Tex. App.—
Fort Worth 2005, pet. denied); see also Oliphant Fin. L.L.C. v. Hill, 310 S.W.3d
76, 77 (Tex. App.—El Paso 2010, pet. filed) (explaining that an appellant must
attack all independent bases or grounds that fully support a complained-of ruling
or judgment, or appellate court must affirm judgment or ruling).
Here, following the bench trial, the trial court issued 215 findings of fact
and 33 conclusions of law comprising 39 pages in the clerk’s record. Appellants,
in their brief, do not challenge any specific finding of fact or conclusion of law.
Additionally, although Appellants raise nine issues,4 many of their issues do not
4 Appellants’ nine issues are as follows:
5 1. What is the proper measure of damages when the cost to repair real property exceeds the value of the property itself?
a. Is cost of repair the proper measure of damages when the undisputed evidence shows that repairs are economically unfeasible?
b. Is loss of use the proper measure of damages for permanent injury to real property?
2. Did the trial court err in denying, as a matter of law, Marion Brian Ramon’s affirmative defense of limitations?
3. Did the Plaintiff suffer the type of injury for which mental anguish damages are recoverable?
4. Did the Plaintiff present sufficient evidence to support the award of past and future mental anguish?
5. Are the trial court’s vicarious liability findings supported by sufficient evidence?
a. Did the Plaintiff present sufficient evidence that MBR & Associates, Inc. is the alter ego of Marion Brian Ramon?
b. Did the Plaintiff present sufficient evidence that either Frank Creed or Justin Bryant was the agent of Marion Brian Ramon?
6. Did the Plaintiff present sufficient evidence of proximate cause to support his fraud or DTPA claims?
7. Did the trial court err in concluding that no responsible third parties were liable for Plaintiff’s damages?
8. Did the trial court miscalculate pre-judgment interest as to Marion Brian Ramon?
6 articulate alleged error by the trial court, and none of them set forth the standard
of review that Appellants desire this court to apply. The argument portions of
Appellants’ brief on the issues raised by Appellants that generically query
whether the trial court’s findings are supported by “sufficient evidence” or
whether Lile presented “sufficient evidence” do not identify any specifically
challenged findings of fact, do not set forth a standard of review, and do not
purport to analyze the evidence in the 11-volume reporter’s record, the 278
exhibits, or the 6-volume clerk’s record contained in this appeal as it relates to
any finding of fact.
During oral argument, the court questioned Appellants’ counsel regarding
the unchallenged findings of fact. Following oral argument, Appellants filed a
motion requesting to file, and we allowed Appellants to file, a supplemental brief
setting forth the relevant findings of fact challenged in each of the issues raised
in their appellate brief without any further analysis or additional issues. Because
Appellants filed a supplemental brief listing the relevant findings of fact
challenged in each of the issues they raised, we will address the issues
necessary for final disposition of this appeal. See Tex. R. App. P. 47.1.
9. Is remand for a new hearing on exemplary damages appropriate in the event this Court reduces the amount of the Plaintiff’s actual damages?
7 IV. PROPER MEASURE OF REAL PROPERTY DAMAGES
In their first issue, Appellants claim that Lile can recover only diminution in
value damages. Appellants base their argument on their conclusion that the
damage to Lile’s property involved a permanent injury because the cost to repair
exceeded the decrease in market value of the property. Appellants further argue
that due to the permanent injury to Lile’s property, he cannot recover loss of use
damages.
When, as here, damage to real property is involved, the correct measure of
damages is a fact-specific inquiry. Hall v. Hubco, Inc., 292 S.W.3d 22, 32 (Tex.
App.—Houston [14th Dist.] 2006, pet. denied). If repair is feasible and does not
cause economic waste, then the plaintiff may recover the cost of repair;
otherwise, the plaintiff is entitled to the decrease in market value caused by the
injury. See id.; Samuel v. KTVU P’ship, No. 08-02-00010-CV, 2003 WL
22405384, at *1 (Tex. App.—El Paso Oct. 22, 2003, no pet.) (mem. op. on reh’g)
(“Texas courts have recognized that the proper measure of damages when the
injury to realty is repairable is the reasonable cost of repairs necessary to restore
the property to its prior condition.”).
Here, Lile testified that the fair market value of his home when it was in
good condition was $165,000 to $170,000. There was no evidence offered
regarding the decrease in the fair market value of Lile’s home after it was
damaged. Based on the stipulation of the parties and on the testimony of Lile’s
expert Robert Nicholas, the trial court found that the reasonable and necessary
8 cost to repair Lile’s home to rental status was $132,469.04.5 Measuring the
$132,469.04 cost to repair to rental status against the fair market value of
$165,000 to $170,000 (because there was no evidence of the decrease in the fair
market value of Lile’s home), it is clear that the cost to repair to rental status is
less than the home’s fair market value. Lile thus proved that the house could be
repaired to rental status without economic waste and that he is therefore entitled
to cost of repair damages. See Coastal Transp. Co. v. Crown Cent. Petroleum
Corp., 136 S.W.3d 227, 235 (Tex. 2004) (holding that Crown Central was entitled
to recover amount necessary to rebuild its facility because evidence at trial
supported jury’s finding that Crown Central could rebuild its facility to its former
condition; market value damages were unavailable because cost to rebuild
damaged property was significantly less than the decrease in market value
caused by damage); Control Solutions, Inc. v. Gharda USA, Inc., No. 01-10-
00719-CV, 2012 WL 3525372, at *35 (Tex. App.—Houston [1st Dist.] Aug. 16,
2012, no pet. h.) (holding that CSI was entitled to recover the amount necessary
to rebuild its facility and to compensate for its loss of use during the interim time
5 This total consists of $105,864.00, which the parties stipulated was the cost to repair the interior of Lile’s house; $38,000.00 to repair the sewer lines, less $11,394.96, which Lile had available for buildback that never took place due to Appellants’ conduct.
9 period because testimony established that property was not a total loss and was
rebuilt for less than its value).6
Lile was not required to prove both cost of repair and diminution in value;
he, instead, had an election of which measure of damages to plead or prove.
See Miller v. Dickenson, 677 S.W.2d 253, 258 (Tex. App.—Fort Worth 1984, writ
ref’d n.r.e.). The record is clear that Lile elected to proceed under the cost of
repair measure of damages. If Appellants disagreed with the application of the
cost of repair measure of damages, they had the burden of proving that the
diminution in value was a smaller sum. See id. Appellants, however, do not
point us to any evidence in the record of the diminution in value.
Appellants instead attempt to argue that economic waste would occur by
awarding Lile cost of repair damages because Lile’s expert Robert Nicholas
testified that it would cost more to fix the house than what it would be worth. In
their reply brief, Appellants set forth the relevant trial testimony from Nicholas,
including his opinion that the house could be repaired to a state that it would be
6 In his brief, Lile relied on Hennen v. McGinty, 335 S.W.3d 642 (Tex. App.—Houston [14th Dist.] 2011), which was overruled after his brief was filed. See McGinty v. Hennen, 372 S.W.3d 625, 629 (Tex. 2012). In McGinty, the trial court held that the evidence was legally insufficient to support the jury’s finding that $651,230.72 was a reasonable and necessary cost to repair Hennen’s home and that Hennen did not produce evidence of the difference in market value as of the date of closing. Id. at 626. Here, as discussed below, Appellants failed to timely challenge the reasonableness of Lile’s cost of repair damages, and Lile did not pursue diminution in value damages. Thus, McGinty is distinguishable from the case before us.
10 presentable as rental or investment property.7 Nicholas’s report, which was
admitted into evidence, is consistent with his trial testimony and contains the
following conclusion:
Based on my inspections, I believe that the house can be salvaged. The foundation and plumbing will require extensive repairs and completely leveling the foundation is probably not feasible. After renovations, the house would be considered more in the rental property category rather than primary residence. The renovation will include adding new steel piling, re-shimming some of the existing steel pilings, repairing or replacing the sewer system, backfilling the openings in and around the foundation, patching the holes in the slab, instilling the gyp-board on the interior and finishing out the interior with new paint and texture, new floorings, new fixtures and new cabinets.
Based on the evidence presented at trial, including Nicholas’s testimony
and his report, the trial court made finding of fact 110:
The condition of the foundation cracks inside the house and the foundation could be permanently repaired, but the costs would exceed the value of the Lile house. The cracks could be epoxied, but then the Lile house would be suitable only as a rental house,
7 Appellants in their reply brief also challenge for the first time on appeal whether there was evidence that the repairs were economically feasible, arguing that “the only testimony regarding the economic feasibility of repairs compels a rejection of the award for cost of repairs based upon the economic waste rule.” However, an issue raised for the first time in a reply brief is ordinarily waived and need not be considered by this court. See McAlester Fuel Co. v. Smith Int’l, Inc., 257 S.W.3d 732, 737 (Tex. App.—Houston [1st Dist.] 2007, pet. denied); see also City of San Antonio v. Schautteet, 706 S.W.2d 103, 104 (Tex. 1986) (noting that appellate court should not have addressed issues raised for first time in reply brief on appeal). Moreover, Appellants did not object, but rather stipulated, to the $105,864.00 cost to repair the interior of Lile’s house. See, e.g., Weitzel v. Barnes, 691 S.W.2d 598, 601 (Tex. 1985) (stating that there was no objection to reasonableness and necessity when trial judge admitted into evidence plaintiff’s exhibit reflecting cost of repairs and holding that error, if any, had been waived by failure to make a proper objection).
11 because a homeowner would not reasonably be expected to live in a house with a foundation in this condition, but Lile intends to live in the house after it is repaired.
As demonstrated by the expert’s testimony and report and as summarized in
finding of fact 110, this is a unique situation in which Lile, the homeowner,
wanted to be back in his house so badly that he was willing to have it repaired to
a rental property status at a cost less than the fair market value of the home,
rather than have it repaired to a homeowner status at a cost that would exceed
the fair market value of the home. Because Lile elected to pursue the cost of
repair damage model; because the only evidence of the fair market value of Lile’s
home was his testimony that it was worth $165,000 to $170,000 in good
condition; because the evidence supported the $132,469.04 cost of repair to
rental status, which was comprised of $105,864.00 of costs to repair the interior,
plus $38,000.00 of costs to repair the sewer lines, less $11,394.96 of costs that
were available for buildback; because the $132,469.04 cost of repair to rental
status was less than the $165,000 to $170,000 value of the home; and because
there was no evidence of diminution in value measure of damages; the trial court
did not err by awarding Lile cost of repair to rental status damages. See Coastal
Transp. Co., 136 S.W.3d at 235; Control Solutions, Inc., 2012 WL 3525372, at
*35. We therefore overrule Appellants’ first issue.
V. VICARIOUS AND INDIVIDUAL LIABILITY
In the fifth issue, Ramon argues that the trial court erred by finding him
vicariously liable for the acts of MBR & Associates, Inc. Ramon challenges the
12 trial court’s findings that MBR-GFR is the trade name of Ramon and that Ramon
is the alter ego of MBR & Associates, Inc. Lile responds that Ramon d/b/a MBR-
GFR is the alter ego of MBR & Associates, Inc.
A corporation is a separate legal entity that normally insulates its owners or
shareholders from personal liability. Schlueter v. Carey, 112 S.W.3d 164, 169
(Tex. App.—Fort Worth 2003, pet. denied). The corporate fiction is disregarded
based on alter ego, however, when a corporation is organized and operated as a
mere tool or business conduit of another. Id. An alter ego relationship may be
shown from the total dealings of the corporation and the individual, such as
evidence of the degree to which corporate and individual property have been
kept separate; the amount of financial interest, ownership, and control the
individual has maintained over the corporation; and whether the corporation has
been used for personal purposes. Id. (citing Mancorp, Inc. v. Culpepper, 802
S.W.2d 226, 228 (Tex. 1990)). In a tort case, the financial strength of the
corporate tort-feasor is an important consideration. Id. (citing Lucas v. Tex.
Indus., Inc., 696 S.W.2d 372, 375 (Tex. 1984)). If the corporation sued is not
reasonably capitalized in light of the nature and risk of its business, the need
might arise to attempt to pierce the corporate veil. Id.
Here, the trial court made numerous findings of fact related to its
determination that Ramon was the alter ego of MBR & Associates, Inc., and the
record supports the trial court’s findings. Our review of the record reveals that
Ramon testified that he treated MBR & Associates, Inc. and MBR-GFR as “one in
13 the same” and agreed when asked if “[a]ll of you are just one entity, right?” The
two entities shared the same phone number and office, and MBR-GFR did not
file a separate tax return, nor did it have its own federal tax identification number.
Ramon owned 100% of MBR & Associates, Inc. and was the president and CEO
of MBR-GFR. The individuals who worked on Lile’s house under the auspices of
MBR-GFR were paid with checks written on MBR & Associates, Inc.’s account.
Of the alter ego findings of fact that the trial court made, Ramon does not
challenge finding of fact 190, in which the trial court found that MBR &
Associates, Inc. has no employees, assets, equipment, vehicles, telephone
number, or business office address, yet it pays all bills for MBR-GFR, carries all
MBR-GFR employees and workers as the corporation’s employees and workers
for banking and income tax purposes, and accepts all accounts receivable to
MBR-GFR. Nor does Ramon challenge finding of fact 191, in which the trial
court found that MBR & Associates, Inc. owned a house valued at $1.8 million on
Joe Pool Lake, a house in which Ramon and his family live and that was
transferred out of the corporation’s name shortly before the trial.
Analyzing the factors from Schlueter that are set forth above—including
that Ramon’s individual property was not kept separate from the corporation’s,
that the corporation was used for the personal purpose of holding Ramon’s
home, and that Ramon was the sole shareholder and owner of MBR &
Associates, Inc.—the evidence supports the trial court’s findings of fact and the
correctness of its conclusions of law that Ramon and MBR & Associates, Inc. are
14 alter egos of one another. See 112 S.W.3d at 169 (holding evidence legally
sufficient to support trial court’s finding that Schlueter was Entertainment
Properties’s [EP’s] alter ego because evidence showed that Schlueter owned all
of the stock of EP, was one of its two officers, and referred to himself and EP
interchangeably during testimony). We hold that the trial court therefore did not
err by finding Ramon vicariously liable for the acts of MBR & Associates, Inc.
In the alternative, as Lile argued in his brief, the judgment in this case
would not change even if the trial court had erred by making its trade name and
alter ego findings because the trial court found Ramon individually liable for fraud
and DTPA violations.
The DTPA creates a cause of action when a consumer suffers from
“[f]alse, misleading, or deceptive acts or practices in the conduct of any trade or
commerce.” Tex. Bus. & Com. Code Ann. § 17.46(a) (West 2011). Such “acts or
practices” include “representing that goods or services have . . . characteristics
. . . which they do not have.” Id. § 17.46(b)(5); see Commonwealth Lloyds Ins.
Co. v. Downs, 853 S.W.2d 104, 116 (Tex. App.—Fort Worth 1993, writ denied).
Moreover, “there can be individual liability on the part of a corporate agent for
misrepresentations made by him.” Weitzel, 691 S.W.2d at 601.
Here, Frank Creed, who worked for MBR-GFR, testified that Ramon
trained him and instructed him to represent to potential customers that MBR-GFR
had master plumbers and engineers that would oversee the job and that MBR-
GFR had liability insurance. Ramon testified that he had not told anyone to make
15 such representations; he agreed that any such representations were not true.
The record, however, contains evidence of statements made by Ramon—that is,
that he instructed Creed to represent to potential customers that MBR-GFR had
master plumbers and engineers that would oversee the job and that MBR-GFR
had liability insurance—upon which the trial court could have relied in concluding
that Ramon had made oral misrepresentations. Such evidence supports the trial
court’s findings of fact that Ramon is personally liable for the misrepresentations
that he made.
We therefore alternatively hold that even if the trial court’s trade name and
alter ego fact findings are supported by insufficient evidence, the evidence
supports the trial court’s findings that Ramon was individually liable for the
misrepresentations that he made in violation of the DTPA. See id. (upholding
individual liability on part of two corporate officers because record contained
evidence of statements of both men that supported trial court’s findings that each
had made oral misrepresentations that were actionable under DTPA). Thus, the
judgment against Ramon individually is supportable based not only on the trial
court’s trade name and alter ego findings but also, alternatively, based on the
trial court’s findings supporting DTPA violations by Ramon himself.
We overrule Appellants’ fifth issue.
16 VI. EVIDENCE ESTABLISHED THAT MISREPRESENTATIONS WERE PRODUCING CAUSE OF LILE’S DAMAGES
In their sixth issue, Appellants argue that Lile failed to establish the
proximate cause element of his fraud and DTPA claims. Appellants do not
provide a single citation to the record in support of their arguments on this issue.
We begin with Lile’s DTPA cause of action.
To prevail on a DTPA claim, a plaintiff must prove that the defendant’s
misrepresentation was the producing cause of the plaintiff’s injuries. Tex. Bus. &
Com. Code Ann. § 17.50(a) (West 2011); Alexander v. Turtur & Assocs., Inc.,
146 S.W.3d 113, 117 (Tex. 2004); Main Place Custom Homes, Inc. v. Honaker,
192 S.W.3d 604, 616 (Tex. App.—Fort Worth 2006, pet. denied). Producing
cause requires that the defendant’s acts be both a cause-in-fact and a
“substantial factor in bringing about injury which would not otherwise have
occurred.” Transcon. Ins. Co. v. Crump, 330 S.W.3d 211, 223 (Tex. 2010)
(quoting Prudential Ins. Co. of Am. v. Jefferson Assocs., Ltd., 896 S.W.2d 156,
161 (Tex. 1995)). Unlike proximate cause, producing cause does not require
proof of foreseeability. See Transcon. Ins. Co., 330 S.W.3d at 223; S & I Mgmt.,
Inc. v. Choi, 331 S.W.3d 849, 856 (Tex. App.—Dallas 2011, no pet.). The
plaintiff must also prove that it relied on the defendants’ misrepresentation to his
detriment. Tex. Bus. & Com. Code Ann. § 17.50(a)(1)(B).
As set forth above, Lile was not required to prove proximate cause, only
producing cause, with respect to his DTPA claim. Appellants, in their initial brief,
17 failed to challenge the producing cause element of Lile’s DTPA cause of action,
raising producing cause only in their reply brief. Because the trial court awarded
the same damages under Lile’s DTPA and fraud causes of action,8 if we
determine that Lile established the producing cause element of his DTPA claim,
we need not address Appellants’ proximate cause challenge to Lile’s fraud claim.
During the bench trial, Lile testified that Creed told him that MBR-GFR
carried liability insurance and had a master plumber and an engineer that would
be overseeing the work on Lile’s home. Lile glanced at the sales packet that
Creed showed him, including what appeared to be a certificate of liability
insurance, and testified that Creed’s representation that MBR-GFR carried
liability insurance was important to him. It was also important to Lile that a
master plumber and an engineer would be overseeing the work.9 Lile relied on
Creed’s representations and said he would not have allowed workers from MBR-
GFR to “step foot on” his property if he had known that MBR-GFR did not have
insurance to cover damage to his property. Prior to this incident, Lile did not
have knowledge of how the foundation industry operated, had never watched a
foundation be repaired, and had no knowledge of the pitfalls in lifting a
8 The judgment awards Lile $150,000 from MBR & Associates, Inc. and $150,000 from Ramon. The findings of fact state that this amount is assessed as exemplary damages based on the gross negligence, fraud, and knowing and intentional conduct under the DTPA. 9 Ramon testified that a licensed plumber and an engineer were not on site when the work on Lile’s home started.
18 foundation. Lile trusted the representations made by Creed about liability
insurance and supervision of the work by a master plumber and engineer; in
addition, Creed represented that he was going to do a good job and was going to
“fix [Lile’s foundation] where [Lile] couldn’t tell it had ever been repaired.”
This evidence factually supports the trial court’s conclusion that but for
Appellants’ misrepresentations, Lile would not have incurred the mudjacking
damages in connection with his property. See Main Place Custom Homes, Inc.,
192 S.W.3d at 619–20 (holding that homeowners’ DTPA claims were based on
the causal connection between construction company’s owner’s
misrepresentations and their damages); see also Choi, 331 S.W.3d at 856
(holding that there was some evidence of DTPA causation because there was
testimony that broker’s representations about a vacant gas station remaining
vacant were a substantial factor in appellant’s purchasing the businesses and
that appellant would not have purchased the businesses if the broker had told
him that Quiktrip was moving into vacant gas station). We therefore hold that the
record contains legally and factually sufficient evidence of the producing cause
element of Lile’s DTPA claim. See Carpenter v. Holmes Builders, Inc., No. 11-
02-00132-CV, 2004 WL 306130, at *7 (Tex. App.—Eastland Feb. 19, 2004, pet.
denied) (order and mem. op.) (holding that evidence was legally and factually
sufficient to support determination that appellee’s DTPA violations were a
producing cause of appellants’ damages because appellee deficiently selected
slab-on-grade foundation for appellants’ home despite soil report stating that
19 slab-on-grade floor system should not be used due to excessive shrink/swell
movement potential of high plasticity clays found at site). We overrule
Appellants’ sixth issue.
VII. MENTAL ANGUISH DAMAGES ARE RECOVERABLE
In their third issue, Appellants argue that Lile cannot recover mental
anguish damages in a suit based solely on damage to real property. Appellants
rely on City of Tyler v. Likes, 962 S.W.2d 489 (Tex. 1997), in arguing that the
supreme court has held as a matter of law that mental anguish damages are not
recoverable for a claim involving damages to real property.
Appellants fail to acknowledge that the supreme court in Likes specifically
noted that “mental anguish based solely on negligent property damage is not
compensable as a matter of law” and that “[b]ecause the injury to Likes’s
property was not intentional or malicious, or even grossly negligent, we need not
decide whether mental anguish arising out of property damage may be legally
compensable when a heightened degree of misconduct is found.” Id. at 497
(emphasis added). Likes specifically states that mental anguish damages are
recoverable for some common law torts that generally involve intentional or
malicious conduct such as libel, battery, and by analogy, for knowing violations of
certain statutes such as the DTPA. Id. at 495; see also Tex. Bus. & Com. Code
Ann. § 17.50(b)(1) (permitting award of mental anguish damages on a DTPA
claim if the trier of fact finds that the conduct of the defendant was committed
“knowingly”); Luna v. N. Star Dodge Sales, Inc., 667 S.W.2d 115, 117 (Tex.
20 1984) (holding that a DTPA plaintiff may recover mental anguish damages when
there is proof of a willful tort, willful and wanton disregard, or gross negligence).
Where a claim of mental anguish is based solely upon property damage resulting
from gross negligence, recovery is contingent upon evidence of some ill-will,
animus, or design to harm the plaintiff personally; such rationale is more
consistent with the general principle that emotional distress is not usually
recoverable as an element of property damages unless an improper motive is
involved. Accord Seminole Pipeline Co., Mapco, Inc. v. Broad Leaf Partners,
Inc., 979 S.W.2d 730, 757 (Tex. App.—Houston [14th Dist.] 1998, no pet.).
Thus, Lile, as a DTPA plaintiff, may recover mental anguish damages if he
established that Appellants knowingly engaged in conduct that violated the
DTPA.
Here, with regard to whether Appellants knowingly engaged in conduct that
violated the DTPA that would entitle Lile to recover mental anguish damages, the
trial court made numerous findings of fact, some of which Appellants failed to
challenge, related to Appellants’ knowing conduct. In findings of fact 139, 140,
and 151, among others, the trial court found that the conduct of Appellants was
knowing and intentional and rose to the level of gross negligence and malice.
Appellants, however, challenge only seven of the trial court’s findings of facts:
71, 129, 134, 138, 152, 153, and 161; they do not challenge findings of fact 139,
140, or 151 in connection with this issue. Our review of the record reveals that
these unchallenged findings of fact are supported by ample evidence in the
21 record. Because the record supports the unchallenged findings of fact and
because such unchallenged findings of fact are binding on us, we hold that Lile
established that Appellants knowingly engaged in conduct that violated the
DTPA, and thus Lile was entitled to recover mental anguish damages in
connection with his DTPA claim for Appellants’ knowing conduct. See Luna, 667
S.W.2d at 117 (holding that jury’s finding—that the unconscionable actions of a
car dealership were committed “knowingly”—was sufficient to support recovery of
mental anguish damages in suit involving DTPA claims); Milton M. Cooke Co.,
290 S.W.3d at 303 (citing McGalliard, 722 S.W.2d at 696). We overrule
Appellants’ third issue.
VIII. SUFFICIENT EVIDENCE EXISTS TO SUPPORT MENTAL ANGUISH DAMAGES
In their fourth issue, Appellants argue that Lile did not present sufficient
evidence of past or future mental anguish damages.
A. Legal Sufficiency Standard of Review
We may sustain a legal sufficiency challenge only when (1) the record
discloses a complete absence of evidence of a vital fact; (2) the court is barred
by rules of law or of evidence 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
mere scintilla; or (4) the evidence establishes conclusively the opposite of a vital
fact. Uniroyal Goodrich Tire Co. v. Martinez, 977 S.W.2d 328, 334 (Tex. 1998),
cert. denied, 526 U.S. 1040 (1999); Robert W. Calvert, “No Evidence” and
“Insufficient Evidence” Points of Error, 38 Tex. L. Rev. 361, 362–63 (1960). In
22 determining whether there is legally sufficient evidence to support the finding
under review, we must consider evidence favorable to the finding if a reasonable
factfinder could and disregard evidence contrary to the finding unless a
reasonable factfinder could not. Cent. Ready Mix Concrete Co. v. Islas, 228
S.W.3d 649, 651 (Tex. 2007); City of Keller v. Wilson, 168 S.W.3d 802, 807, 827
(Tex. 2005). Anything more than a scintilla of evidence is legally sufficient to
support the finding. Cont’l Coffee Prods. Co. v. Cazarez, 937 S.W.2d 444, 450
(Tex. 1996); Leitch v. Hornsby, 935 S.W.2d 114, 118 (Tex. 1996).
B. Factual Sufficiency Standard of Review
When reviewing an assertion that the evidence is factually insufficient to
support a finding, we set aside the finding only if, after considering and weighing
all of the evidence in the record pertinent to that finding, we determine that the
credible evidence supporting the finding is so weak, or so contrary to the
overwhelming weight of all the evidence, that the answer should be set aside and
a new trial ordered. Pool v. Ford Motor Co., 715 S.W.2d 629, 635 (Tex. 1986)
(op. on reh’g); Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986); Garza v. Alviar,
395 S.W.2d 821, 823 (Tex. 1965).
C. Law on Mental Anguish Damages
The supreme court has admonished appellate courts to closely scrutinize
awards for mental anguish damages. Universe Life Ins. Co. v. Giles, 950 S.W.2d
48, 54 (Tex. 1997). An award of mental anguish damages “will survive a legal
sufficiency challenge when the plaintiffs have introduced direct evidence of the
23 nature, duration, and severity of their mental anguish, thus establishing a
substantial disruption in the plaintiffs’ daily routine.” Parkway Co. v. Woodruff,
901 S.W.2d 434, 444 (Tex. 1995). If there is no direct evidence, we apply
“traditional ‘no evidence’ standards to determine whether the record reveals any
evidence of ‘a high degree of mental pain and distress’ that is ‘more than mere
worry, anxiety, vexation, embarrassment, or anger’ to support any award of
damages.” Id.; see also Latham v. Castillo, 972 S.W.2d 66, 70 (Tex. 1998)
(holding that plaintiff’s testimony—that defendant’s DTPA violations made him
“sick, nervous, [and] mad,” that his “heart was broken,” and that he “felt
physically ill” and vomited—constituted some evidence that defendant’s conduct
caused plaintiff a “high degree of mental pain and distress” that a jury could
consider). It is not necessary, however, for a party to have suffered any physical
injury to recover damages for mental anguish. Star Houston v. Shevack, 886
S.W.2d 414, 418 (Tex. App.—Houston [1st Dist.] 1994), writ denied, 907 S.W.2d
452 (Tex. 1995). Texas courts have held that evidence of a claimant’s physical
and emotional state, coupled with his inability to eat and sleep, constitutes legally
and factually sufficient evidence to support the award of mental anguish
damages. See CA Partners v. Spears, 274 S.W.3d 51, 76–77 (Tex. App.—
Houston [14th Dist.] 2008, pet. denied) (citing four cases from throughout Texas).
Further, in certain categories of cases, the inherent problems of
foreseeability and genuineness associated with mental anguish damages are
largely mitigated. See Likes, 962 S.W.2d at 495. These include some common
24 law torts that generally involve intentional or malicious conduct such as libel, and
by analogy, knowing DTPA violations. Id.
Moreover, translating mental anguish damages into dollars is necessarily
an arbitrary process. Lone Star Ford v. Hill, 879 S.W.2d 116, 121 (Tex. App.—
Houston [14th Dist.] 1994, no writ). Damages for future mental anguish are
recoverable “if there is a reasonable probability that they will be suffered in the
future.” Lubbock Cnty. v. Strube, 953 S.W.2d 847, 857 (Tex. App.—Austin 1997,
pet. denied). In the absence of any objective guidelines, we should defer to the
factfinder’s discretion in determining mental anguish damages. Lone Star Ford,
879 S.W.2d at 121.
D. Sufficient Evidence to Support Mental Anguish Damages
Appellants challenge the following findings of fact in connection with their
fourth issue:
Finding of fact 71:
On the evening of April 17, 2003, after mudjacking concrete entered the sewer system, Rosales and crew suddenly loaded their tools and equipment and left Lile with a house with water and mudjacking concrete all over the walls and floors. Lile was left to try to get the water mixed with mudjacking concrete off the floor by himself. He was stunned and shocked by what he had been told and what he saw. He mopped awhile, then went outside and walked around his house and started to cry. He stayed until early the following morning mopping water mixed with mudjacking concrete and crying. Lile became physically ill, his blood pressure rose, he could not sleep and he worried about what he and his family would do, and how he would tell them what had happened. His house was destroyed. He experienced severe mental anguish as a result of this occurrence. He had just had the mold removed from inside his
25 house and now his house had water mixed with mudjacking concrete on the walls and floors.
Finding of fact 129:
The conduct of Defendant was a direct, proximate and producing cause of extreme emotional anguish which Lile has suffered since April 17, 2003. He has suffered severe anxiety and worry about how he and his family will continue to survive with a house that is paid for, but uninhabitable; he suffers from physical illness such as upset stomach and headaches; he suffers from high blood pressure; depression; bouts of crying; loss of sleep; loss of appetite; and, hours awake in the early morning hours worrying about what he and his family will do to survive if his house isn’t rebuilt, and duration of his extreme emotional anguish has been constant, consistent and ongoing on a daily basis since his ordeal began on the evening of April 17, 2003, and has enveloped his very life.
Appellants also challenge findings of fact 134, 138, 152, 153, and 161, in which
the trial court found that $250,000.00 would fairly and reasonably compensate
Lile for his emotional anguish in the past and $50,000.00 will in reasonable
probability fairly and reasonably compensate Lile for the extreme and severe
emotional anguish, which, in reasonable probability, he will sustain in the future.
The record contains legally and factually sufficient evidence to support the
above findings of fact. Lile testified that he was told by the foreman not to go in
his house because they had destroyed his foundation and his home by filling up
all of the sewer lines and drain lines with concrete. Lile wanted to see the extent
of the damage and disregarded the foreman’s instruction; he entered his home
and found it full of standing water. Lile was “absolutely stunned.” After the
foreman said that they could not repair the foundation and left the house in total
26 disarray, Lile was “just absolutely exasperated. I just -- excuse me. I almost
can’t -- can’t describe how I felt.” Later in the testimony, he explained,
I went ahead and attempted to [use a broom to sweep water out of the house], but I was so exasperated, so absolutely stunned that what I found myself doing was just -- was walking around outside of the house. And -- And I hate to say it, you know, it -- it’s upsetting me right now. It upset me. I need to stop.
It upset me a great deal. A great deal. . . .
Lile further explained,
I was going to try to get some of that -- that water and mud and concrete out of the house. And what I found myself doing was walking around the outside, and as I did a while ago, became quite upset trying to think what I was going to tell my family.
And what -- you know, a man usually tries to control his emotions, and it didn’t work. It didn’t work a while ago. I was just -- and I don’t like to admit it, but I was crying. And for me it’s embarrassing, but -- so I was trying to figure out what -- what I was going to tell my family, my wife and my daughter that was still at home.
And trying to determine what -- what in the world I was going to do. And the more I approached those, the more emotional I got about it. And I probably spent 45 minutes at the house just emotionally upset and emotionally drained. Trying to give myself enough time so I could go back to the house and I didn’t want Charlotte and Jennifer to be aware of that.
....
You know, I was trying to do stuff [e.g., rolling the garden hoses and putting them away]. I don’t know about other people, but when -- when I come to that point, I try to start doing things to -- to -- not too many times in my life have I been that emotional. And -- And I was extremely emotional.
27 Throughout the record, Lile testified that he was stunned and devastated, that it
was very upsetting to his family, and that it was very upsetting to not be able to
maintain his house and to have to live like hermits. Lile explained that he felt
guilty and embarrassed that he could not put a roof over his family.
In addition to the emotional problems listed above, Lile testified that he had
experienced physical problems after his house was destroyed, including stomach
problems, extremely high blood pressure, severe heart problems, sleeplessness,
dizziness, lightheadedness, and depression. Lile explained that he experiences
extremely high blood pressure, “especially when [he] begin[s] to get upset as [he
does] because this is in front of [him] every day, every night, 3:00 or 4:00 in the
morning.” Lile said that he had not encountered problems with his blood
pressure, nor had he experienced dizziness, prior to the mudjacking damage to
his home. In 2005, the year following the mudjacking, Lile was diagnosed with
“extremely serious” health problems. He was told that he had “possibly six
months” to live. He lost four teeth in the years following the mudjacking incident
because he did not have money for dental work. Lile became upset while he was
testifying and said that he had been upset when he saw his house, “just like I am
today”; he said he was “in a lot of turmoil, still am to this day.”
Lile’s testimony constitutes “direct evidence of the nature, duration, and
severity of [his] mental anguish” and establishes “a substantial disruption in [his]
daily routine.” See Parkway, 901 S.W.2d at 444. Lile’s testimony revealed that
he suffered from more than just “worry and anxiety” as argued by Appellants; he
28 experienced physical and emotional suffering, in addition to an inability to sleep.
See CA Partners, 274 S.W.3d at 76–77. And he was continuing to experience
such physical and emotional suffering at the time of the trial, with no end in the
foreseeable future. We therefore hold that the evidence is legally sufficient to
support the trial court’s award of past and future mental anguish damages under
the DTPA. See id. at 78 (holding evidence legally sufficient to support award of
mental anguish damages under DTPA); Carpenter, 2004 WL 306130, at *6
(holding jury’s award of mental anguish damages was supported by legally
sufficient evidence because appellants’ testimony—that problems with their
dream home’s foundation caused anxiety, embarrassment, feelings of
helplessness, recurring eye infection from the stress, sleepless nights, and daily
bouts of crying—constituted evidence that the ordeal caused a substantial
disruption of their daily lives over an extended period of time).
Moreover, after considering and weighing all of the evidence in the record
pertinent to the mental anguish findings, we hold that the credible evidence
supporting the finding is not so weak, or so contrary to the overwhelming weight
of all the evidence, that the findings should be set aside and a new trial ordered.
Appellants did not present evidence contradicting Lile’s testimony. Absent such
evidence, Lile’s testimony is factually sufficient to support the trial court’s award
of past and future mental anguish damages under the DTPA. See CA Partners,
274 S.W.3d at 78 (holding evidence factually sufficient to support award of
mental anguish damages under DTPA); Carpenter, 2004 WL 306130, at *6
29 (holding jury’s award of mental anguish damages was supported by factually
sufficient evidence).
Furthermore, in light of Lile’s testimony that he suffered mental anguish on
a daily basis from the time of the incident through the time of trial and deferring to
the trial court’s discretion in determining the amount of mental anguish damages,
we hold that the amounts awarded are reasonable based on the frequency and
duration of his mental suffering. See Carpenter, 2004 WL 306130, at *6.
Additionally, the mental anguish damages are not unreasonable when compared
to the other damages awarded by the trial court. See id. We therefore overrule
Appellants’ fourth issue.
IX. STATUTE OF LIMITATIONS DEFENSE NOT A BAR TO CLAIMS AGAINST RAMON
In the second issue, Ramon argues that the trial court erred by denying his
limitations defense. Specifically, Ramon argues that Lile’s Second Amended
Petition filed January 30, 2007—which asserted claims against Ramon in his
individual capacity for the first time and was filed more than two years after Lile’s
property was damaged on April 17, 2003—did not relate back to Lile’s timely filed
suit against MBR & Associates, Inc. Ramon’s argument fails in light of the trial
court’s finding of alter ego, which was not challenged with regard to this issue.10
Because we have upheld the trial court’s finding that Ramon is the alter ego of
MBR & Associates, Inc., the statute of limitations was tolled as to Ramon when
10 Appellants’ supplemental brief does not challenge any finding of fact relating to this issue.
30 Lile sued MBR & Associates, Inc. See Matthews Constr. Co. v. Rosen, 796
S.W.2d 692, 693 (Tex. 1990) (citing Gentry v. Credit Plan Corp., 528 S.W.2d
571, 575 (Tex. 1975), for the proposition that suit against a corporation tolls
limitations as to the alter ego of the corporation and quoting from Gentry, “The
purpose of the court in cases of this nature is to prevent use of the corporate
entity as a cloak for fraud or illegality or to work an injustice . . . .”). We hold that
the trial court therefore did not err by denying Ramon’s limitations defense, and
we overrule Appellants’ second issue.
X. CALCULATION OF PREJUDGMENT INTEREST
In the eighth issue, Ramon argues that the trial court incorrectly calculated
the prejudgment interest as to him. Specifically, Ramon argues that because Lile
first filed his claims against Ramon on January 30, 2007, it is improper to award
prejudgment interest dating back to the original filing against MBR & Associates,
Inc. on June 2, 2004.11
Both parties agree that Texas Finance Code section 304.104 governs the
accrual of prejudgment interest. Texas Finance Code section 304.104 states
that “prejudgment interest accrues on the amount of a judgment during the period
beginning on the earlier of the 180th day after the date the defendant receives
11 In their postsubmission brief, Appellants challenge conclusion of law 31 in connection with this issue. Conclusion of law 31 states only that “Lile is entitled to prejudgment interest on his damages at the rate of five percent (5%) per annum, against MBR & Associates, Inc. and Ramon, jointly and severally . . . .” It does not, however, set forth the date on which the prejudgment interest accrues.
31 written notice of a claim or the date the suit is filed and ending on the day
preceding the date judgment is rendered.” Tex. Fin. Code Ann. § 304.104 (West
2006) (emphasis added). The only dispute is over which date should be used for
the prejudgment interest on the judgment against Ramon.
The statute, however, does not provide for the delayed accrual date that
Ramon seeks. The statute specifically states that prejudgment interest accrues
on the earlier of (1) 180 days after the defendant receives notice, which Ramon
claims would be a 180 days after he was added to the suit on January 30, 2007,
or (2) “the day suit was filed,” which was June 2, 2004. The statute does not
state “the day suit was filed against the particular defendant.” Thus, under the
statute, the June 2, 2004 date, which is clearly the earlier of the two, is the
accrual date for the prejudgment interest on the judgment against Ramon. See
id.; see also Harris Cnty. Hosp. Dist. v. Tomball Reg’l Hosp., 283 S.W.3d 838,
846–47 (Tex. 2009) (declining to read language into the statutes and citing Seay
v. Hall, 677 S.W.2d 19, 25 (Tex. 1984) (“While this court may properly write in
areas traditionally reserved to the judicial branch of government, it would be a
usurpation of our powers to add language to a law where the legislature has
refrained.”)).
Not only is this result proper under the previous statutory construction, the
same result is reached under the alter ego theory. Because we held above that
MBR & Associates, Inc. is Ramon’s alter ego, Lile’s suit against MBR &
Associates, Inc. was effectively the same as filing suit against Ramon. See
32 Matthews Constr. Co., 796 S.W.2d at 692–94; Schlueter, 112 S.W.3d at 169.
Thus, under the alter ego theory, the prejudgment interest accrues on the
judgment against Ramon beginning on June 2, 2004, when suit was filed against
MBR & Associates, Inc., Ramon’s alter ego. See, e.g., Hughes v. Thrash, 832
S.W.2d 779, 787–88 (Tex. App.—Houston [1st Dist.] 1992, no writ) (holding that
date prejudgment interest accrued against individual was same as the date suit
was filed against entity, even though individual was added to suit by an amended
petition seven months after the entity was sued, because entity was an assumed
name of individual).
Because under both statutory construction and the alter ego theory the
prejudgment interest on the judgment against Ramon begins accruing on June 2,
2004, we hold that the trial court did not err in its calculation of prejudgment
interest on the judgment against Ramon. We overrule Appellants’ eighth issue.
XI. NO ERROR IN FAILING TO ASSIGN LIABILITY TO OTHERS
In their seventh issue, Appellants argue that the trial court’s ruling that the
“designated responsible third-parties” bore no responsibility is against the great
weight and preponderance of the evidence. Specifically, Appellants argue that
the trial court committed reversible error when it refused to find that Appellants
were not entitled to an offset in the amount of the settlement between Lile and
Baker Brothers Plumbing.
The record demonstrates that Lile began having problems with his home in
2002. Prior to the foundation issue at hand, Lile discovered black mold in his
33 home, and the problem was traced to leaks in the water supply lines. Baker
Brothers Rotovisions, Inc. repaired leaks in the toilets and underneath the kitchen
sink, completing the work in 2002. After the repairs were completed, there were
no other leaks in the water supply lines.
In May or June 2002, Baker Brothers discovered that the sewer lines to
Lile’s home were leaking. Baker Brothers caused the toilet to overflow with raw
sewage. Baker Brothers caused damage to both toilet areas, underneath the
counters, the tubs, the hall, the foyer, the laundry room, part of the master
bedroom, a couple of closet areas, part of the middle bedroom, the dining room,
and the roof. The sewage also damaged the Sheetrock. Baker Brothers did
nothing to help Lile clean up the mess that they had caused. Lile later sued
Baker Brothers for the damage caused by the sewage and ultimately settled with
them for $8,000.
In June or July 2002, it was discovered that the foundation had moved as a
result of the leaking sewer lines and that the sewer lines needed to be replaced.
So in August 2002, Steven Thomas Lux, a master plumber who was referred by
Power Jack Foundation Company, started the sewer line replacement; he did
not, however, jackhammer any holes in Lile’s foundation. When Lux completed
the replacement of the sewer line, Lile observed Lux conduct a hydrostatic test
on the line, which showed that there were no leaks or cracks in the line.
In March 2003, ASAP Containment, a mold remediation company,
removed carpeting, Sheetrock, some kitchen cabinets, and some of the ceiling in
34 several rooms in order to rid the home of mold. ASAP also repaired the roof. At
that point, all of the water leaks had been repaired, the sewer system had been
replaced, and the mold remediation had been completed.
Lile testified that after ASAP Containment had completed structural
remediation and prior to MBR’s starting work on Lile’s home, there were no holes
punched through the slab of the interior of the foundation. There were also no
tunnels under the house; Lux and his crew had filled them when they replaced
the sewer lines. Lile further testified that he had never had any mudjacking work
done on his home prior to the day that MBR started its work. After MBR put
mudjacking cement in Lile’s sewer system, no one else came and did any
mudjacking work on Lile’s home.
The trial court found that Baker Brothers and the other providers listed
above did not commit any act, omission, or other conduct in performing services
for Lile that caused or contributed to causing any damages or harm that Lile
sustained as a result of Appellants’ conduct.
Based on the record, there is no evidence that any other person or entity
was responsible for the mudjacking damage caused by Appellants. As set forth
above, no other person or entity performed mudjacking work on Lile’s home, and
thus no other person or entity contributed to cause the damages Lile sustained
as a result of the mudjacking performed by Appellants. Moreover, Appellants’
attempt to receive an offset in the amount of the settlement between Lile and
Baker Brothers fails not only because there is no evidence to support it but also
35 because Baker Brothers was no longer a party to the suit at the time of the trial;
the trial court had entered an order striking Appellants’ cross-claims against
Baker Brothers, and Appellants failed to challenge the order. And because
Appellants never obtained an order on their motion to add Lux and Mendoza as
responsible third parties and never challenged the order striking their
counterclaims against Lux and Mendoza, the only parties in the case at the time
of the trial were MBR & Associates, Inc.; Ramon; and Lile. See generally Tex.
Civ. Prac. & Rem. Code Ann. § 33.003(a) (West 2008) (stating that “trier of fact .
. . shall determine the percentage of responsibility . . . for . . . each responsible
third party who has been designated under Section 33.004”). We therefore hold
that the evidence is legally and factually sufficient to support the trial court’s
findings of fact 210, 211, 212, 213, and 214, which find that other service
providers are not responsible as third parties for the damages resulting from the
mudjacking performed by Appellants. We overrule Appellants’ seventh issue.
XII. NO NEED TO REMAND TO RECONSIDER EXEMPLARY DAMAGES
Because we have held that there is sufficient evidence to support the trial
court’s findings of fact that were challenged above by Appellants and because
we have not modified the judgment to delete any of the damages awarded by the
trial court, we need not reach Appellants’ ninth issue in which they argue that
remand is necessary to reconsider exemplary damages in the event we modify
the judgment. See Tex. R. App. P. 47.1 (stating that appellate court need only
address every issue necessary for final disposition of the appeal).
36 XIII. CONCLUSION
Having overruled each of Appellants’ issues necessary for final disposition
of the appeal, we affirm the trial court’s judgment.
SUE WALKER JUSTICE
PANEL: DAUPHINOT, WALKER, and MCCOY, JJ.
DELIVERED: October 4, 2012
Related
Cite This Page — Counsel Stack
MBR & Associates, Inc. and Marion Brian Ramon v. William S. Lile, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mbr-associates-inc-and-marion-brian-ramon-v-willia-texapp-2012.