Tranum v. Broadway

283 S.W.3d 403, 2008 Tex. App. LEXIS 5043, 2008 WL 2640126
CourtCourt of Appeals of Texas
DecidedJuly 2, 2008
Docket10-06-00308-CV
StatusPublished
Cited by21 cases

This text of 283 S.W.3d 403 (Tranum v. Broadway) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Tranum v. Broadway, 283 S.W.3d 403, 2008 Tex. App. LEXIS 5043, 2008 WL 2640126 (Tex. Ct. App. 2008).

Opinions

OPINION

FELIPE REYNA, Justice.

A jury found Jim Tranum liable for malicious prosecution and slander against David Broadway and awarded mental anguish, reputation, and exemplary damages to Broadway. Tranum appeals, arguing that: (1) the evidence is legally and factually insufficient to support malicious prosecution, slander, mental anguish damages, reputation damages, and exemplary damages; (2) the jury’s award of exemplary damages is unconstitutional; (3) exemplary damages were not tied to a cause of action; (4) Broadway received a double-recovery of mental anguish damages; (5) in the alternative, the exemplary damages award should be remitted if not stricken; (6) in the alternative, the award of mental anguish damages should be remitted if not stricken; and (7) the trial court abused its discretion by striking expert testimony. We modify the judgment and affirm the judgment as modified.

FACTUAL BACKGROUND

Tranum employed Broadway as the new car sales manager at Tranum Buick Pontiac GMC in Temple. Broadway later became the general manager for Tranum Ford-Mercury in his hometown of Gates-ville. He received monthly compensation, a year-end bonus of twenty percent net profit, ten percent of all credit life insurance, and twenty percent of the proceeds from a car wash owned by Tranum. He used his annual bonuses to purchase stock in the dealership. Broadway and B.J. Shaw, the dealership’s bookkeeper, pre[410]*410pared the dealership’s monthly financial statements. Tranum reviewed these statements and at the end of each year, he and the board of directors reviewed the dealership’s financial records and awarded bonuses. Tranum and his three daughters also received bonuses.

At some point, the dealership began experiencing cash flow problems. Tranum wanted to buy another dealership, but Ford Motor Company had expressed concern about Tranum Ford’s “cash position.” Broadway and Tranum had discussed the dealership’s financial position. According to Broadway, Foi*d expected the dealership to be “in the black,” and Tranum instructed Broadway to “fix it.” Broadway knew how Tranum Buick had handled the problem and decided to use this same practice. He would take the “next two or three days’ or four days’ deposits, post them in the previous month so that it shows that you’re in the positive in the bank, send your financial statement off electronically, [and] move the cash back where it belongs.” Tranum did not expressly instruct Broadway to use this practice and Broadway did not tell Tranum how he “fix[ed]” the' problem. Eventually, a check to Ford Motor Credit bounced due to insufficient funds. Tranum contacted Broadway who informed Tranum that the dealership needed money and had for a “long time.” Tranum instructed Broadway to “grow up.” Unable to “take the stress anymore,” Broadway left the dealership that day, but later returned to clean out his office and deliver his resignation letter to Tranum’s daughter. Tranum subsequently invested about $350,000 to “keep the doors open.”

A few days later, Shaw issued a written statement wherein she claimed that Broadway instructed her to reverse transactions reflecting a loss, not show overdraft charges on the financial statements, and alter the statements to show a profit by increasing costs, offsetting expenses, and performing transactions to “bring his bottom line up.” Broadway had assured Shaw that Tranum was aware of these practices and that Tranum Buick also used these practices. Shaw wrote that she once attempted to quit when she discovered that someone had gone through her office, misplacing and disposing of records, but Broadway threatened to “blame everything” on Shaw. Broadway told Shaw to follow his instructions or she would lose her job and that Tranum would “stand behind him.” Shaw stated that Broadway did not care if she was unable to balance the books.

According to sevei’al witnesses, Tranum began accusing Broadway of theft, embezzlement, and misappropriation. Broadway sued Tranum for slander and slander per se. Tranum’s accountant, Steve Niemeier, subsequently issued a report after examining the dealership’s financial records at Tranum’s request. Niemeier found that: (1) certain accounts were not reconciled to the general ledger during the applicable dates; (2) operating expenses were “inappropriately deferred as increases to inventory”; (3) “financial statement items” were “increased to a value that exceeded what was considered a reasonable balance”; (4) “the Dealership had delayed reporting sales activity in order to delay required loan payments”; (5) “parts inventory” was “significantly overstated”; (6) “collection procedures significantly reduced the claims receivable account”; (7) $13,789.09 in “[i]ndividual customer accounts” were “doubtful for future collection”; (8) $9,050 in operating expenses had been “added to inventory”; (9) “retained earnings” were “reduced to a deficit balance;” (10) Broadway charged $10,232.57 in personal expenses to the dealership; and (11) Broadway received $82,091 in bonuses as a result of the above transactions.

[411]*411Tranum delivered Shaw’s statement and Niemeier’s report to Coryell County District Attorney Riley Simpson. Bruce Beals, a legal assistant with the district attorney’s office, reviewed these documents and prepared a memorandum concluding that Broadway: (1) “committed a theft by deception”; (2) “intentionally misrepresented the amount of annual net profit of Tranum Ford-Mercury in order to obtain a yearly bonus, thereby unlawfully] appropriating funds”; and (3) received bonuses in excess of $20,000, but less than $100,000. Beals recommended that an indictment be prepared charging Broadway with “Theft over $20,000, but less than $100,000.” Simpson presented the indictment to the grand jury, which returned a “no bill.” Broadway then amended his lawsuit to allege malicious prosecution.1

At trial, Tranum admitted that Broadway advised him of the dealership’s financial problems, but testified that he did not perceive a problem in light of financial statements reflecting a positive cash flow. He denied knowing that Broadway was altering financial statements until after Broadway resigned and Shaw informed him of the situation. However, at her deposition, Shaw testified that Tranum instructed her to write the statement under threats that she would go to jail and have her children taken away. Shaw was afraid and wrote what she thought Tranum wanted to hear. Tranum denied threatening Shaw and accused Shaw of lying.

Tranum testified that he would not have approved even if he had known of Broadway’s actions. He denied altering the books at his other dealerships or instructing Broadway to do so, but admitted lying to General Motors to conceal a negative cash balance and submitting documents that misrepresented the “true state of the bank accounts.” He testified that documents were sometimes altered, probably at his direction, to show that the dealership had more money in the bank, but did not misstate assets, liabilities, expenses, income, or losses. He would have no complaints had Broadway used these practices. He claimed that the “bottom line,” “net worth of the financial statement, the assets, [and] the liabilities” never changed.

Dorothy Haddox, former bookkeeper for Tranum Buick, testified that Tranum never instructed her to change or alter an accurate financial statement. Haddox testified that General Motors did not like to see statements showing a negative cash balance.

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Tranum v. Broadway
283 S.W.3d 403 (Court of Appeals of Texas, 2008)

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Bluebook (online)
283 S.W.3d 403, 2008 Tex. App. LEXIS 5043, 2008 WL 2640126, Counsel Stack Legal Research, https://law.counselstack.com/opinion/tranum-v-broadway-texapp-2008.