author: Justice WHITTINGTON.

text:
    SAS & ASSOCIATES, INC., Appellant, v. HOME MARKETING SERVICING, INC., Appellee.
    No. 05-04-01297-CV.
    Court of Appeals of Texas, Dallas.
    July 6, 2005.
    Rehearing Overruled Aug. 10, 2005.

      Perry J. Cockerell, Randall K. Price, Cantey & Hanger, Dallas, for Appellant.
    James W. Winblood, R. Scott Anderson, Law Office of Anderson & Jones, PLLC, and Harold Dean Jones, Dodge, Anderson, Jones, Bezney & Gillman, P.C., Dallas, for Appellee.
    Before Justices WHITTINGTON, MOSELEY, and LANG-MIERS.
   OPINION

Opinion by

Justice WHITTINGTON.

SAS & Associates, Inc. was the landlord and Home Marketing Servicing, Inc. the tenant under a commercial office lease. The parties’ dispute relating to the lease was tried to a jury, and the trial judge entered judgement for HMS. Both parties appeal. SAS raises eight issues; HMS complains only of the trial judge’s suggestion of remittitur of the exemplary damages award. We affirm the trial court’s judgment.

STANDARDS OF REVIEW

SAS challenges the legal and factual sufficiency of the evidence and complains the trial judge erred in failing to grant its motion for judgment notwithstanding the verdict. The Texas Supreme Court recently analyzed in detail the standards of no-evidence review (including legal sufficiency and motions for judgment notwithstanding the verdict) in City of Keller v. Wilson, 168 S.W.3d 802, No. 02-1012, 2005 WL 1366509 (Tex., June 10, 2005). In conducting a no-evidence review, “appellate courts must view the evidence in the light favorable to the verdict, crediting favorable evidence if reasonable jurors could, and disregarding contrary evidence unless reasonable jurors could not.” City of Keller, at 807, 2005 WL 1366509, at *1. In conducting a factual sufficiency review, we consider all the evidence, Plas-Tex, Inc. v. U.S. Steel Corp., 772 S.W.2d 442, 445 (Tex.1989), and set aside the verdict only if it is so contrary to the overwhelming weight of the evidence as to be clearly wrong and unjust. Cain v. Bain, 709 S.W.2d 175, 176 (Tex.1986)(per curiam).

ExpeRT Witness

In its first issue, SAS argues its motion for judgment notwithstanding the verdict should have been granted because the testimony of Denis Burns, HMS’s expert witness, was not reliable and was not supported by any evidence. Citing Kerr-McGee Corp. v. Helton, 133 S.W.3d 245 (Tex.2004), SAS argues Burns’s testimony is “no evidence” because “there is too great an analytical gap between the data and the expert’s conclusions.” SAS does not challenge Burns’s qualifications. SAS first contends Burns’s testimony “was not supported by generally accepted accounting principles,” but does not point to any particular principle Burns ignored or violated. SAS cites to a portion of Burns’s testimony where Burns testifies SAS “in large part” followed generally accepted accounting principles “in creating the bills for the [common area maintenance] expenses that went to [HMS].” This is not evidence Burns violated or ignored any principles himself in reviewing SAS’s charges.

The remainder of SAS’s complaints about Burns’s testimony relate to specific calculations Burns made. Burns reviewed SAS’s records and the lease, and criticized specific charges made by SAS to HMS. SAS’s expert, Steve Townes, reviewed each of Burns’s criticisms and gave his own opinions whether Burns’s analysis was correct or incorrect. Both experts took a similar approach of reviewing specific expenditures and offering an opinion, based on their expertise, on the proper accounting treatment for the expenditures under the lease. That Burns in Townes’s view made errors in accounting treatment or in his calculations did not create an impermissible “analytical gap” between the data and Burns’s conclusions. See Kerr-McGee, 133 S.W.3d at 254 (in reviewing reliability of expert testimony, court not to determine whether expert’s conclusions are correct, but only whether analysis used to reach conclusions is reliable). These alleged errors were a proper subject for SAS’s cross-examination of Burns and for Townes’s own opinions. See Gammill v. Jack Williams Chevrolet, Inc., 972 S.W.2d 713, 728 (Tex.1998) (trial court’s gatekeep-ing function does not supplant cross-examination as traditional and appropriate means of attacking shaky but admissible evidence). The jury was then free to accept or reject either expert’s judgments and inferences. See McGalliard v. Kuhlmann, 722 S.W.2d 694, 697 (Tex.1986) (judgments and inferences of experts not conclusive on jury or trier of fact). We overrule SAS’s first issue.

In its eighth issue, SAS urges the trial judge erred in not entering judgment for it because it was the “prevailing party” under the lease if we accept its argument on its first issue. Because we overrule SAS’s first issue, we also overrule its eighth issue.

OVERCHARGE AND OFFSET

HMS’s breach of contract claims are based upon alleged overcharges for “common area maintenance” expenses under the lease. In its second and sixth issues, SAS complains there was no evidence of any overcharge for common area maintenance under the lease, and avers the trial judge erred in denying its motion for judgment notwithstanding the verdict on this issue. In support of its argument, SAS argues it gave HMS a credit in 2003 for the overcharges Townes found to have occurred for the years 2000 and 2001. SAS further argues amounts paid by HMS into the registry of the court to cover estimated common area maintenance charges for 2002 and 2003 should have been used to offset the damages found by the jury for 2001.

Before trial, the trial judge limited the years in dispute between the parties to 2000 and 2001. The trial judge informed the jury of this limitation during the direct examination of Burns upon request by SAS’s counsel. The charge inquired about damages for overcharges in common area maintenance for two specific years, 2001 and 2002 (the submission of 2002 overcharges was apparently an error). The jury found damages for breach of the lease for the year 2001 of $4,653.00, and zero for 2002.

As noted above, SAS’s expert Townes agreed with some of Burns’ conclusions about common area maintenance charges made that were not allowable under the lease. Townes recommended adjustments based on those conclusions. Thus, SAS argues because the parties undertook an audit under the lease, and in 2003 SAS credited the amounts Townes and Burns agreed were overcharges for 2000 and 2001, there was no evidence of breach of the lease. We disagree. Townes and Burns agreed to a certain level of overcharges, and Burns also testified to additional overcharges upon which Townes disagreed. The jury could have found HMS was overcharged for common area maintenance in 2000 and 2001, and could have found the overcharges constituted a breach of the lease. SAS cites no authority for the proposition that making the credit in 2003 renders the evidence of 2000 and 2001 overcharges irrelevant or not probative of HMS’s breach of contract claim.

SAS further argues it was actually the prevailing party in the lawsuit when the actual damages found by the jury for breach of contract are offset against the amounts HMS paid into the registry of the court. The amounts paid by HMS, however, were not amounts for which HMS was determined to be liable by the jury; they were for years not in issue in the lawsuit. Moreover, the right of offset is an affirmative defense. The burden of pleading offset and of proving facts necessary to support it are on the party making the assertion. See Matrix, Inc. v. Provident American Ins. Co., 658 S.W.2d 665, 667 (Tex.App.-Dallas 1983, no writ); see also Tex.R. Crv. P. 94. SAS filed an answer, supplemental answer, and counterclaim for its attorneys’ fees, and sought to make a trial amendment to recover the 2002 and 2003 common area maintenance charges. SAS did not, however, plead offset as an affirmative defense, and has not appealed the trial judge’s denial of its request for trial amendment to recover 2002 and 2003 common area maintenance charges.

We overrule SAS’s second and sixth issues.

FRAUD

The jury found SAS committed fraud and awarded damages of $7,574 on HMS’s fraud claim. SAS challenges the sufficiency of the evidence to support these findings, asserting in its third issue the trial judge erred in denying its motion for judgment notwithstanding the jury’s verdict on HMS’s fraud claim. SAS asserts that for HMS’s claim it was fraudulently induced to enter into the lease, HMS was required to prove SAS had no intention of performing its obligations under the lease at the time the contract was made, citing Formosa Plastics Corp. v. Presidio Engineers and Contractors, Inc., 960 S.W.2d 41, 47-8 (Tex.1998). Because there was no such evidence, SAS argues, HMS’s fraud claim should fail as a matter of law.

We disagree. The jury was also instructed regarding a failure to disclose material facts. HMS presented evidence SAS knew of roof leaks, lack of hot water, “bug infestations,” and “power problems,” but failed to disclose these problems and instead represented to HMS the leased premises were “a great space.” This is some evidence which, if believed by the jury, could support HMS’s allegation of fraud. See Citizens Nat’l Bank v. Allen Rae Invs., Inc., 142 S.W.3d 459, 476-77 (Tex.App.-Fort Worth 2004, no pet.) (misrepresentation may consist of concealment or nondisclosure of material fact when there is duty to disclose; when party voluntarily discloses information, must disclose whole truth; duty to disclose also arises when party makes partial disclosure and conveys false impression).

SAS also contends Robert Lovell, President of HMS, was not designated as an expert to testify to the damages suffered by HMS as a result of SAS’s fraud. At trial, SAS objected to Lovell’s testimony regarding the value of items of personal property damaged by the water leaks and other problems with the leased space on the ground that Lovell had not been designated as an expert witness. The trial judge overruled the objection. Citing Anthony Equip. Corp. v. Irwin Steel Erectors, Inc., 115 S.W.3d 191, 206 (Tex.App.Dallas 2003, pet. dism’d), SAS also argues Lovell’s testimony was improper because HMS did not establish Lovell had knowledge, skill, experience, training, or education in determining the value of personal property or the cost to repair it.

We noted in Anthony Equipment Corp. that a lay witness with personal knowledge on which to base his testimony may be qualified to testify regarding cost of repair. See Anthony Equip. Corp., 115 S.W.3d at 206-7 (comparing Coker v. Burghardt, 833 S.W.2d 306, 310-11 (Tex.App.-Dallas 1992, writ denied), in which car owner could give opinion on reasonable cost of repairs after familiarizing himself with cost of repairs by visiting area car repair shops). Here, Lovell testified he is the sole shareholder, director, and officer of HMS. Lovell testified he originally purchased the items that were damaged and recalled what he paid for them. He also testified he analyzed whether he should replace the damaged items or repair them, by investigating the costs, obtaining bids, and finally determining to donate the items to charity. At trial, SAS objected only on the ground that Lovell was not a properly-designated and qualified expert; SAS did not object to Lovell’s lack of personal knowledge to testify as a lay witness. See Bower v. Processor & Chem. Serv., Inc., 672 S.W.2d 30, 32 (Tex.App.-Houston [14th Dist.] 1984, no writ) (sole shareholder and president of closely-held corporation could testify as to value of van owned by corporation). We overrule SAS’s third issue.

In its fifth issue, SAS argues the trial judge erred in not setting aside the jury’s award of punitive damages because without a valid underlying claim for fraud, punitive damages are not available. Because we hold there was some evidence to support the jury’s findings on HMS’s fraud claim, we overrule SAS’s fifth issue. We discuss the amount of the jury’s punitive damages award below.

Election Between CONTRACT and FRaud Claims

In its fourth issue, SAS contends the trial court erred in denying its motion for judgment notwithstanding the verdict because HMS was required to make an election between its fraud claim and its breach of contract claim. SAS contends the damages awarded by the jury on the fraud claim, $7,574, were actually breach of contract damages for common area maintenance overcharges. SAS points to Burns’s testimony that the common area maintenance overcharges for 2000 were $2,921, and for 2001 were $4,653, for a total of $7,574. Thus, SAS argues, because the jury awarded $4,653 for breach of contract damages, the $7,574 in fraud damages awarded by the jury constitutes a double recovery of the $4,653.

The amount of fraud damages awarded by the jury, however, is within the range of the evidence offered at trial. Lovell testified to fraud damages of $11,700. The jury has discretion to award damages within the range of evidence presented at trial. See City of Houston v. Harris County Outdoor Advertising Ass’n, 879 S.W.2d 322, 334 (Tex.App.-Houston [14th Dist.] 1994, writ denied). We are not permitted to disregard the jury’s damages award on the basis that the jury’s reasoning is unclear. See Adams v. Petrade Int'l Inc., 754 S.W.2d 696, 710 (Tex.App.Houston [1st Dist.] 1988, writ denied). HMS could recover for both breach of contract and fraudulent inducement of the contract. See Yeldell v. Goren, 80 S.W.3d 634, 637 (Tex.App.-Dallas 2002, no pet.) (tort damages recoverable for fraudulent inducement claim irrespective of whether fraudulent representations are later subsumed in contract or whether plaintiff only suffers economic loss related to subject matter of contract).

In its reply brief, SAS argues we cannot conclude the $7,574 is within the range of Lovell’s testimony of $11,700 in fraud damages, because the $11,700 was for damage to personal property, and the jury explicitly found zero damages in its answer to question number 2(b) for “loss of value of property damaged” as a result of SAS’s failure to comply with the lease. We cannot assume the jury’s answers conflict if they can be reconciled. See Huber v. Ryan, 627 S.W.2d 145, 145-46 (Tex.1981) (never presumed jurors intend to return conflicting answers; presumption is always to contrary; courts properly refuse to strike down answers on ground of conflict if any reasonable basis upon which they may be reconciled); see also Huber, 627 S.W.2d at 145-46 (court under duty to reconcile conflicting jury findings if at all possible). We overrule SAS’s fourth issue.

ATTORNEYS’ FEES

In its seventh issue SAS claims the trial judge erred in not ordering a remittitur of HMS’s attorneys’ fees. SAS argues that because HMS prevailed on only two of thirteen jury questions for which attorneys’ fees could be awarded, HMS should be able to recover only a similar fraction of its attorneys’ fees. HMS responds that it is not necessary to segregate attorneys’ fees where breach of contract claims and other claims require “proof or denial of essentially the same facts, so as to render the attorneys’ fees inseparable,” quoting Willis v. Donnelly, 118 S.W.3d 10, 46 (Tex.App.-Houston [14th Dist.] 2003, pet. filed). In its reply, SAS denies it was making an argument for segregation of fees (“[b]ut ‘segregation’ of the fees is not the issue in this case”), maintaining instead that the attorneys’ fees award was excessive because HMS did not prevail on many of the claims it asserted, and further did not prevail on many claims for which attorneys’ fees are recoverable. SAS further argues the fees were excessive because they exceeded the actual damages recovered.

An attorneys’ fees award may be reviewed for excessiveness under a sufficiency of the evidence standard. Stewart Title Guar. Co. v. Sterling, 822 S.W.2d 1, 12 (Tex.1991). The determination of reasonable attorneys’ fees is a question for the trier of fact. Sterling, 822 S.W.2d at 12. As noted in Sterling, “[although courts should consider several factors when awarding attorney’s fees, a short hand version of these considerations is that the trial court may award those fees that are ‘reasonable and necessary’ for the prosecution of the suit.” Sterling, 822 S.W.2d at 10. We may draw upon our common knowledge as justices of the court and our experience as lawyers and judges. See C.M. Asfahl Agency v. Tensor, Inc., 135 S.W.3d 768, 802 (Tex.App.-Houston [1st Dist.] 2004, no pet.). We may consider factors such as the time and labor required, the complexity of the case, the preclusion of other employment by the lawyer, the fee customarily charged in the area for similar legal services, the results obtained, and the experience of the lawyer performing the services, among other factors. See C.M. Asfahl Agency, 135 S.W.3d at 801-802 (quoting Arthur Andersen & Co. v. Perry Equip. Corp., 945 S.W.2d 812, 818 (Tex.1997)). The amount of damages awarded is not the sole determining factor. C.M. Asfahl Agency, 135 S.W.3d at 803.

Here, the jury awarded HMS $60,000 in attorneys’ fees through trial, $12,000 for representation on appeal to the court of appeals, and $5,000 for representation on appeal to the Supreme Court of Texas. HMS’s attorney testified these fees were reasonable and necessary. He submitted an exhibit showing the time he spent taking and defending depositions and obtaining and reviewing records. The exhibit also showed the hours paralegals from his firm spent on the case and the fees charged for those efforts, and the filing fees and other costs incurred on his client’s behalf. He testified to his hourly rate, the hours he spent preparing for trial, and his opinion of a reasonable fee for appeals. He testified he had over twenty-five years’ experience trying lawsuits. He testified the time he and his paralegals spent on the case was necessary to prosecute HMS’s claims as well as defend against SAS’s counterclaims, and was appropriate “concerning the issues which are present in this case and the work that is required to be done in this case.”

SAS’s attorney also testified as to the fees incurred by his own firm for defending the case. He testified his firm’s fees were approximately $120,000 for trial, at hourly rates comparable to those charged by HMS’s counsel. Neither lawyer testified the case was unusually complex or that it precluded him from accepting other employment. Both lawyers charged similar hourly rates and had comparable experience. HMS prevailed at trial, and HMS’s lawyer spent fewer hours at a lower rate than SAS’s lawyer. In light of this evidence, we cannot say the evidence that supports the award of attorneys’ fees is so weak that the award is clearly wrong and manifestly unjust, or that the evidence offered by HMS fails to show that the jury’s award was reasonable and necessary. See C.M. Asfahl Agency, 135 S.W.3d at 803. We overrule SAS’s seventh issue.

REMITTITUR

In its sole issue on cross-appeal, HMS complains of the trial judge’s suggestion of remittitur of a portion of the jury’s exemplary damages award. We review a trial court’s suggestion of remittitur under the factual sufficiency standard. See Arkoma Basin Exploration Co. v. FMF Assocs. 1990-A, Ltd., 118 S.W.3d 445, 462 (Tex.App.-Dallas 2003, pet. filed) (verdict should be set aside only if so contrary to overwhelming weight of evidence as to be clearly wrong and unjust; we may not pass upon credibility of witnesses or substitute our judgment for that of trier of fact). A court of appeals should uphold a trial court’s remittitur only when the evidence is factually insufficient to support the jury’s verdict. Snoke v. Republic Underwriters Ins. Co., 770 S.W.2d 777, 778 (Tex.1989)(standard of review of remittitur is sufficiency of the evidence). A remitti-tur will not be upheld on appeal unless the appellate court agrees with the trial court’s implicit finding that the evidence was insufficient to support the jury’s verdict. See U.S.A. Precision Machining Co. v. Marshall, 95 S.W.3d 407, 412 (Tex.App.Houston [1st Dist.] 2002, pet. denied)(re-mittitur not proper where evidence of attorney’s time and hourly rate was sufficient to support jury’s award of attorneys’ fees, even though award exceeded contingency fee agreement).

The jury awarded $200,000 in exemplary damages. The trial judge suggested a re-mittitur to $22,722, an amount equal to three times the amount of damages the jury awarded for fraud. She noted in her order that the punitive damages award “is excessive based on the Supreme Court guidelines and is therefore against the great weight and preponderance of the evidence as to be manifestly unjust.” HMS argues the jury’s award should not be set aside if there is any probative evidence to support it, and further argues the $200,000 was not excessive.

The factors set forth in Alamo National Bank v. Kraus, 616 S.W.2d 908, 910 (Tex.1981), provide the framework for our review. See Transp. Ins. Co. v. Morid, 879 S.W.2d 10, 31 (Tex.1994) (when conducting factual sufficiency review of punitive damage award, court of appeals must detail relevant evidence and explain why evidence does or does not support award in light of Kraus factors). The Kraus factors include: “(1) the nature of the wrong, (2) the character of the conduct involved, (3) the degree of the culpability of the wrongdoer, (4) the situation and sensibilities of the parties concerned, and (5) the extent to which such conduct offends a public sense of justice and propriety.” Kraus, 616 S.W.2d at 910. In sustaining a factual insufficiency challenge, our opinion must detail the relevant evidence and clearly state why the finding is factually insufficient or is so against the great weight and preponderance as to be manifestly unjust, why it shocks the conscience, or why it clearly demonstrates bias. See Pool v. Ford Motor Co., 715 S.W.2d 629, 635 (Tex.1986). Further, our opinion must state in what regard the contrary evidence greatly outweighs the evidence in support of the finding. See Foley v. Parlier, 68 S.W.3d 870, 886 (Tex.App.Fort Worth 2002, no pet.).

As noted above, and as HMS argued in response to SAS’s third issue, HMS’s fraud claim was based upon SAS’s inducing HMS to enter into the lease while failing to disclose the maintenance problems and representing to HMS the space was “great.” HMS summarizes the evidence supporting the jury’s award of punitive damages as follows:

The landlord engaged in a pattern to misrepresent the condition of space to induce a tenant to accept assignment of a lease and preserve the landlord’s income stream; repeatedly charged its tenants for personal expenses and capital expenses, contrary to lease terms, as CAM charges; refused to cooperate in providing information it controlled for an audit, despite lease terms, until the tenant obtained a court order; and manipulated a key witness concerning the maintenance issues at the heart of the fraudulent inducement issues.

We address the evidence in light of the Kraus factors. The nature of the wrong was fraudulent inducement to enter into a commercial lease. The character of the conduct involved was the statement of Alan Aguilar, a representative of SAS, that the leased premises was “a great space” when in fact it had maintenance problems of which the landlord knew but did not disclose. Regarding SAS’s culpability, HMS argues Aguilar’s motivation was financial, to “preserve the landlord’s income stream.” We do not agree with HMS that SAS’s later breaches of contract such as the common area maintenance overcharges and the failure to cooperate with an audit are additional grounds for the award of punitive damages. See Tex. Civ. Peac. & Rem.Code Ann. § 41.003 (Vernon Supp. 2004-05) (exemplary damages may be awarded only if claimant proves by clear and convincing evidence the harm with respect to which claimant seeks recovery of exemplary damages results from fraud, malice or gross negligence). The parties’ situation and sensibilities were similar; two business entities with an existing landlord/tenant relationship entered into an arms’ length transaction. Both parties had experience negotiating contracts.

As to the public’s sense of justice and propriety, the loss experienced by HMS is financial, and the jury awarded actual damages through which HMS will recover its financial loss. As noted in Lesikar v. Rappeport, 33 S.W.3d 282, 315 (Tex.App.-Texarkana 2000, pet. denied), “[ujnlike personal injury cases where monetary damages cannot replace a lost life or restore a maimed body, the actual recovery in this case will make the injured parties completely whole.” The size of the jury’s punitive damages award against SAS appears to be the result of passion rather than the result of an objective assessment of the evidence. See Lesikar, 33 S.W.3d at 315. A significant portion of the jury’s time was consumed with evidence relating to witness Jose Mendoza. Mendoza was in charge of maintenance for the leased premises both before and during HMS’s occupancy and thus had knowledge of the condition of and the repairs made to the premises. Mendoza apparently suffers from a brain condition. The parties presented evidence, including expert medical testimony, as to whether or not his condition could affect his memory and veracity. HMS presented evidence that during and in preparation for Mendoza’s deposition, Aguilar angered Mendoza by questioning his ability to communicate in English, and treated him unfairly after he gave his deposition. While this evidence about the condition of the premises and the repairs made was unquestionably relevant, and the evidence about Mendoza’s medical condition could have had bearing on his credibility as a witness, it does not bear one way or the other on the issue of the proper amount of punitive damages. However, it is possible the jury’s large award of punitive damages was improperly premised on this evidence.

SAS also challenged the award of punitive damages on federal due process grounds. Even if an assessment of punitive damages is not deemed excessive under governing state law, it may violate a party’s substantive due process right to protection from “grossly excessive” punitive damages awards. See Owens-Corning Fiberglas Corp. v. Malone, 972 S.W.2d 35, 45 (Tex.1998) (citing BMW of N. Am., Inc. v. Gore, 517 U.S. 559, 568, 116 S.Ct. 1589, 134 L.Ed.2d 809 (1996)). BMW establishes three “guideposts” for determining whether a punitive damages award is unconstitutionally excessive: (1) the degree of reprehensibility of the defendant’s misconduct; (2) the disparity between actual and punitive damages; and (3) a comparison of the punitive damages awarded and other civil or criminal penalties that could be imposed for similar misconduct. Malone, 972 S.W.2d at 45 (citing BMW, 517 U.S. at 574-75, 116 S.Ct. 1589).

Under the first guidepost, which the Supreme Court has described as the most important, we should consider whether the harm caused was physical as opposed to economic; the tortious conduct evinced a reckless disregard of the health or safety of others; the target of the conduct had financial vulnerability; the conduct involved repeated actions or was an isolated incident; and the harm was the result of intentional malice, trickery, deceit, or mere accident. State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 419, 123 S.Ct. 1513, 155 L.Ed.2d 585 (2003). The jury found SAS acted with malice. On the remainder of the Campbell factors, however, the harm was economic and did not “evince a reckless disregard of the health or safety of others.” See Campbell, 538 U.S. at 419, 123 S.Ct. 1513. The evidence did not show HMS was financially vulnerable; HMS was seeking to move into a larger space because its business was growing. The fraudulent misrepresentation and failure to disclose surrounded the transaction of entering into the lease, not repeated conduct.

As to the second factor, the jury awarded damages of $4653 for breach of contract and $7574 for fraud, for a total of $12,227.00. The jury awarded punitive damages of $200,000.00, approximately sixteen times the total. The ratio of actual to punitive damages alone is not determinative of excessiveness. See, e.g., Bunion v. Bentley, 153 S.W.3d 50, 54 (Tex.2004) (all three Gore factors work together to ensure exemplary damages are reasonable and proportionate to the amount of harm to the plaintiff and to the general damages recovered; factors cannot be viewed in isolation; ratio must be examined in light of other factors and actual harm to plaintiff). However, as noted by the Supreme Court in Campbell, “few awards exceeding a single-digit ratio between punitive and compensatory damages, to a significant degree, will satisfy due process.” See Campbell, 538 U.S. at 425, 123 S.Ct. 1513 (noting “a long legislative history, dating back over 700 years and going forward to today, providing for sanctions of double, treble, or quadruple damages to deter and punish”). As to comparable criminal penalties, theft of amounts between $1,500 and $20,000 is a state jail felony, see Tex. Pen. Code Ann. § 31.03(e)(4)(A) (Vernon Supp. 2004-05), punishable by confinement in a state jail for not more than two years and not less than 180 days, and a fine not to exceed $10,000. See Tex. Pen.Code Ann. § 12.35(a) and (b) (Vernon 2003). After considering the BMW and Campbell factors and the evidence detailed in the discussion of Kraus, we conclude the punitive damages award to HMS is excessive under the due process clause.

Having reviewed all of the evidence, we hold the jury’s award of punitive damages was so against the great weight and preponderance of the evidence as to be manifestly unjust. A rational jury could not have found that the nature of the wrong, the character of the conduct, the degree of SAS’s culpability, the situation and sensibilities of the parties, and the public’s sense of justice and propriety required SAS to pay exemplary damages in the amount awarded. The evidence was factually insufficient to support the jury’s award of $200,000 in punitive damages. See Gray v. Allen, 41 S.W.3d 330, 334 (Tex.App.-Fort Worth 2001, no pet.), citing Kraus, 616 S.W.2d at 910. We further hold that punitive damages in the amount suggested by the trial judge are not against the great weight and preponderance of the evidence and do not violate due process. See Cass v. Stephens, 156 S.W.3d 38, 77 ((Tex.App.-El Paso 2004, pet. filed) (while punitive damages award of twenty-five times actual damages violated due process, award three or four times actual damages was constitutionally permissible)). We hold that the trial court did not err in ordering a remittitur of a portion of HMS’s punitive damages award. We overrule HMS’s sole issue.

We affirm the trial court’s judgment.

      . The jury sent a note during deliberations asking the judge about the year 2002, noting "accountant did not do ’02’.”


source: Caselaw Access Project

author: Justice MOSELEY.

license: Public Domain

text:
    REHAB 2112, L.L.C., d/b/a Rehab 2112, North Texas MRI, and White Rock MRI, Appellant, v. AUDIO IMAGES INTERNATIONAL, INC., Assignee of Imagine Media, Inc., Appellee.
    No. 05-03-01534-CV.
    Court of Appeals of Texas, Dallas.
    July 11, 2005.
    Rehearing Overruled Aug. 16, 2005.

      Laura L. Worsham, Lindy D. Jones, Jones, Allen & Fuquary, L.L.P., Dallas, for Appellant.
    Jeffrey L. Clark, Kelsoe, Anderson, Khoury & Clark, P.C., Dallas, for Appel-lee.
    Before Justices MOSELEY, BRIDGES, and LANG-MIERS.
   OPINION

Opinion by

Justice MOSELEY.

After submission of this appeal, Rehab 2112, L.L.C. and related entities filed for bankruptcy protection. Without knowledge of the bankruptcy filing, we issued an opinion and judgment on February 16, 2005. A suggestion of bankruptcy was later filed and we withdrew our opinion, vacated our judgment, and abated the appeal. See Tex.R.App. P. 8; Howell v. Thompson, 839 S.W.2d 92 (Tex.1992). The appeal was subsequently removed to the bankruptcy court. The bankruptcy court has remanded the appeal to this Court to complete the appeal process and modified the automatic stay to the limited extent of permitting this Court to complete the appeal process and issue any orders in connection therewith in accordance with Texas law. We have reinstated the appeal and issue the following opinion.

Rehab 2112, L.L.C., d/b/a Rehab 2112, North Texas MRI, and White Rock MRI (“Rehab”) appeals the summary judgment granted in this breach of contract suit in favor of Audio Images International, Inc., as assignee of Imagine Media, Inc. In three issues, Rehab argues that there are genuine issues of fact precluding summary judgment, that there was no summary judgment evidence that Imagine Media assigned the contracts to Audio Images, and that the trial court did not have jurisdiction over North Texas MRI and White Rock MRI because they were not served with citation.

We conclude the trial court had jurisdiction to enter the judgment against Rehab. However, we conclude there were genuine issues of material fact precluding summary judgment. Therefore, we reverse the trial court’s judgment and remand for further proceedings.

BACKGROUND

Audio Images International, Inc., as as-signee of Imagine Media, Inc., sued Rehab 2112, L.L.C., d/b/a Rehab 2112, North Texas MRI, and White Rock MRI for failure to pay for audio services under three written agreements; each agreement was between Imagine Media and one of Rehab’s assumed names. One citation was issued naming Rehab and each of the assumed names shown in the petition. The citation was served on Rehab through its registered agent. After Rehab answered, Audio Images moved for summary judgment on it breach of contract and quantum meruit claims. Rehab filed a verified amended answer and a counterclaim alleging fraudulent inducement of the contracts, prior breach of the contracts, deceptive trade practices, and failure of consideration. Audio Images filed a supplemental motion for summary judgment including the terms on the back pages of the contracts and asserting that there was no evidence of any fraudulent representations, material breach, or deceptive trade practices by it or its assignor, Imagine Media. Rehab filed a response to the motions for summary judgment asserting there were material issues of fact on Audio Images’s claims and on its counterclaims. After a hearing, the trial court granted Audio Images’s motion and supplemental motion for summary judgment.

Audio Images offered the affidavits of its president, Phil Axt, and copies of the contracts, account statements, and demand letters. Axt stated that Audio Images had purchased all of the assets of Imagine Media including the contracts at issue in this case. He stated that Audio Images had provided audio services to Rehab, that Rehab had failed to pay for the audio services, and that $2613 was due and owing as of January 27, 2003. Audio Images made demand for this amount and accelerated all sums due under the contracts when Rehab failed to pay.

Rehab offered summary judgment evidence that it had contracted with Imagine Media, a local business, for audio services at its clinics for six years. Its contact with Imagine Media was Tony Eggleston. In August 2002, Eggleston contacted a representative of Rehab, Brigitta Naughton, about renewal contracts for Rehab 2112, North Texas MRI, and White Rock MRI. He stated there were no changes to the contracts. Naughton and Eggleston signed three contracts, one for each of the named clinics. The contracts were for “Please Hold” services and required Imagine Media to provide four productions per year for several locations at a monthly price. The terms of the contracts were 36 months.

In September 2002, Naughton contacted Eggleston about providing audio services for a new clinic in Houston opening in October, and about changing the production scripts for the holidays. Eggleston agreed he would make sure the services were set up for the Houston clinic. (There is no indication that the Houston clinic was the subject of the three contracts at issue in this case.) Naughton contacted Eggle-ston again a few days before the opening of the Houston clinic to check on the status and to remind him about changing the scripts for the existing clinics for the holidays. On October 4, 2002, Naughton went to Houston and discovered that the audio services had not been installed. She called Eggleston repeatedly but was unable to reach him on his cell phone or his business phone. She contacted Rehab’s offices and learned that the billing address for Imagine Media had changed to a Florida post office box, but the local telephone numbers remained the same. She tried to find a listing for Imagine Media in Florida, but was unsuccessful.

Naughton then contacted another company to supply the audio services for the Houston clinic. After the Houston clinic opened and she had not heard from Imagine Media or Eggleston, Naughton had another company make new script productions for the holiday season. On October 18, 2002, Rehab notified Imagine Media at its old address that Rehab was terminating the agreements because Imagine Media had abandoned the contracts.

Naughton stated that throughout these contacts with Eggleston, he never disclosed that he was selling Imagine Media to Audio Images in Florida and never provided her with contact information for Audio Images to call regarding service problems.

Finality of Judgment

We first address whether the summary judgment is a final judgment because it affects our jurisdiction. The judgment is titled “Final Judgment” and grants Audio Images’s motion for summary judgment and supplemental motion for summary judgment. It awards Audio Images judgment against Rehab for the sum of $18,693 plus prejudgment interest, attorney’s fees through trial and conditional awards for appeals, and post-judgment interest. The judgment does not expressly mention Rehab’s counterclaims. However, it states: “This is the Final Judgment of the Court disposing of all parties and all claims. All other relief not expressly granted is herewith denied.”

We conclude this is a final judgment for purposes of appeal, although it does not expressly dispose of Rehab’s counterclaims. In Lehmann v. Har-Con Corp., the supreme court concluded that when there has not been a conventional trial on the merits, an order or judgment is not final for purposes of appeal “unless it actually disposes of every pending claim and party or unless it clearly and unequivocally states that it finally disposes of all claims and all parties.” 39 S.W.3d 191, 205 (Tex.2001). The judgment here clearly and unequivocally states that it disposes of all parties and all claims and is a final judgment for purposes of appeal.

JURISDICTION OVER DEFENDANT

In its third issue, Rehab contends that White Rock Open MRI, L.L.C. and North Texas Open MRI, L.L.C. are separate limited liability companies and the trial court did not have jurisdiction to render judgment against these entities because they were never served with process and never appeared or waived service of process. However, the trial court did not render judgment against these entities. The judgment was rendered against Rehab 2112, L.L.C., doing business as Rehab 2112, North Texas MRI and White Rock MRI. Moreover, Rehab appeared and filed an answer and a counterclaim under the assumed names alleged in the petition. Rehab did not file a verified denial of the capacity in which it was sued, of the execution of the contracts on its behalf, or that it was doing business under an assumed name as alleged. TexR. Crv. P. 93.2, 93.7, 93.14. Nor did Rehab submit any summary judgment proof indicating the agreements were with separate legal entities rather than assumed names of the same company. We conclude the trial court had jurisdiction over the named defendant Rehab 2112, L.L.C. d/b/a Rehab 2112, North Texas MRI and White Rock MRI. We resolve Rehab’s third issue against it.

Traditional SummaRY Judgment

Rehab’s first issue argues that there are genuine issues of material fact and that Audio Images is not entitled to judgment as a matter of law. To be entitled to a traditional summary judgment, Audio Images had to conclusively prove each element of its cause of action. See Tex.R. Civ. P. 166a(c); MMP, Ltd. v. Jones, 710 S.W.2d 59, 60 (Tex.1986) (per curiam). In deciding whether a disputed material fact issue exists, precluding summary judgment, evidence favorable to the nonmovant will be taken as true. Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548-49 (Tex.1985). Further, every reasonable inference must be indulged in favor of the nonmovant and any doubts resolved in its favor. Id.

The motion for summary judgment asserted Audio Images was entitled to judgment as a matter of law on its breach of contract claim and alternatively on its quantum meruit claim. An essential element of the contract claim is that the plaintiff performed or tendered performance of its obligations under the contract. See Barnett v. Coppell N. Tex. Court, Ltd., 123 S.W.3d 804, 815 (Tex.App.-Dallas 2003, pet. denied). An essential element of the quantum meruit claim is that the plaintiff furnished or provided valuable services to the defendant. See Vortt Exploration v. Chevron U.S.A., 787 S.W.2d 942, 944 (Tex.1990).

The only summary judgment evidence that Audio Images performed its obligations under the contracts and provided valuable services to Rehab is Axt’s statement that “[pjursuant to written contract, Audio Images provided audio services to [Rehab],” and that when Audio Images provided the audio services it expected to be paid. However, Rehab offered summary judgment evidence that the contracts required Audio Images to provide four productions per year for each of the locations, and that Audio Images failed to provide a new production for the up-coming 2002 holidays despite Naughton’s repeated requests to Eggleston.

Reviewing the evidence in the light most favorable to Rehab, the nonmovant, and indulging every reasonable inference in its favor, we conclude there is a genuine issue of material fact as to whether Audio Images as assignee of Imagine Media performed or tendered performance of its obligations under the contracts and provided valuable audio services to Rehab. Accordingly, the trial court erred in granting summary judgment for Audio Images.

Disposition of Counterclaims; No-evidence Motion

We next consider Rehab’s first issue in the context of Rehab’s counterclaims. The summary judgment did not expressly dispose of Rehab’s counterclaims. However, it expressly granted Audio Images’s motion for summary judgment and supplemental motion for summary judgment. The supplemental motion for summary judgment included a statement that “there is no evidence that [Audio Images] or its assignee [sic] made any fraudulent representations, made any false, misleading or deceptive acts, materially breached the contract or abandonment [sic] of the contract,” and requested judgment under rule 166a(i). Tex.R. Crv. P. 166a(i). Rehab does not challenge the sufficiency of the supplemental motion as a no-evidence motion under rule 166a(i), but argues that it raised a genuine issue of material fact on the challenged elements. Accordingly, we will treat the supplemental motion as including a no-evidenee motion for summary judgment on Rehab’s counterclaims.

In reviewing a no-evidence summary judgment motion, we examine the record in the light most favorable to the nonmov-ant and disregard all contrary evidence and inferences. King Ranch v. Chapman, 118 S.W.3d 742, 750-51 (Tex.2003); Wal-Mart Stores, Inc. v. Rodriguez, 92 S.W.3d 502, 506 (Tex.2002). A no-evidence summary judgment is improper if the respondent brings forth more than a scintilla of probative evidence to raise a genuine issue of material fact. Tex.R. Civ. P. 166a(i); Wal-Mart, 92 S.W.3d at 506. “Less than a scintilla of evidence exists when the evidence is ‘so weak as to do no more than create a mere surmise or suspicion’ of a fact.” King Ranch, 118 S.W.3d at 751 (quoting Kindred v. Con/Chem, Inc., 650 S.W.2d 61, 63 (Tex.1983)). More than a scintilla of evidence exists if it would allow reasonable and fair-minded people to differ in their conclusions. King Ranch, 118 S.W.3d. at 751 (citing Merrell Dow Pharms., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex.1997)).

Rehab presented summary judgment evidence that Audio Images was required to provide four productions per year for each of the locations under the contracts and that despite requests made to Eggleston, the only representative known to Rehab, Audio Images failed to provide a new production for the holiday season of 2002. There was also summary judgment evidence that when the renewal contracts were signed, Eggleston failed to disclose the sale of the business to Audio Images located in Florida.

We conclude there is at least some evidence that Audio Images or its assignor made fraudulent representations by failing to disclose the sale of the business and engaged in false, misleading, or deceptive acts by passing off its services as the services of another, causing confusion as to the source of the services, and making deceptive representations regarding the geographic origin of the services. Viewing this evidence under the appropriate standard of review, we conclude there is more than a scintilla of evidence on the challenged elements and therefor the no-evidence summary judgment was improper. We sustain Rehab’s first issue.

Conclusion

Because our disposition of Rehab’s first issue resolves the appeal, we need not reach Rehab’s second issue. Tex.R.App. P. 47.1. We reverse the judgment of the trial court and remand for further proceedings.


author: Justice RICHTER.

text:
    TOWN OF HIGHLAND PARK, Texas, Appellant, v. IRON CROW CONSTRUCTION, INC., Appellee.
    No. 05-04-01463-CV.
    Court of Appeals of Texas, Dallas.
    July 12, 2005.
    Rehearing Overruled Aug. 10, 2005.

      David B. Koch and Alan J. Harlan, Hance Scarborough Wright Ginsberg & Brusilow, Dallas, for Appellant.
    Brian W. Erikson and Eric Alan Zuko-ski, Quilling, Selander, Cummiskey & Lownds, P.C., Dallas, for Appellee.
    Before Justices WHITTINGTON, FITZGERALD, and RICHTER.
   OPINION

Opinion by

Justice RICHTER.

On the Court’s own motion, we withdraw our opinion of June 7, 2005 and vacate our judgment issued on that date. This is now the opinion of the Court.

In this interlocutory appeal, the Town of Highland Park contends that the trial judge erred in denying its plea to the jurisdiction. We agree. Accordingly, we reverse the trial court’s order denying the plea to the jurisdiction and render judgment, dismissing the case against Highland Park.

BACKGROUND

Iron Crow Construction, Inc. entered into a contract with the Town of Highland Park to rehabilitate portions of Highland Park’s water and sanitary sewer lines. When Iron Crow demanded payment for alleged extra work and costs, Highland Park rejected the demand. Iron Crow initiated a declaratory judgment action in an attempt to enforce a provision of the contract regarding arbitration. In response, Highland Park filed a plea to the jurisdiction on the ground that immunity from suit had not been waived. The trial court denied the plea, and this appeal ensued. Tex. Crv. Peac. & Rem.Code Ann. § 51.014(a)(8) (Vernon Supp.2002) (allowing interlocutory appeal from order denying plea to jurisdiction).

DISCUSSION

Highland Park argues that it is immune from suit under the doctrine of sovereign immunity and that the trial court had no jurisdiction to consider the declaratory relief sought by Iron Crow. In response, Iron Crow contends that the trial court properly denied Highland Park’s plea to the jurisdiction because (1) sovereign immunity does not apply in an action to compel arbitration; (2) the Federal Arbitration Act preempts sovereign immunity; and (3) sovereign immunity has been waived. We agree with Highland Park.

Standard and Scope of Review

A plea to the jurisdiction is a dilatory plea by which a party challenges a court’s authority to determine the subject matter of an action. Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 554 (Tex. 2000). Whether a trial court has subject matter jurisdiction is a question of law to be reviewed de novo. Tex. Natural Res. Conservation Comm’n v. IT-Davy, 74 S.W.3d 849, 855 (Tex.2002). In performing this review, we do not look to the merits of the plaintiffs case but consider only the pleadings and the evidence pertinent to the jurisdictional inquiry. County of Cameron v. Brown, 80 S.W.3d 549, 555 (Tex.2002) (citing Tex. Natural Res. Conservation Comm’n v. White, 46 S.W.3d 864, 868 (Tex.2001)).

Sovereign Immunity

Sovereign immunity protects the State, its agencies, and its officials from lawsuits for damages absent legislative consent. Fed. Sign v. Tex. S. Univ., 951 S.W.2d 401, 405 (Tex.1997). The sovereign immunity of the State inures to the benefit of a municipality to the extent the municipality engages in the exercise of governmental functions. City of Tyler v. Likes, 962 S.W.2d 489, 501 (Tex.1997). According to the supreme court, “Sovereign immunity embraces two principles: immunity from suit and immunity from liability. First, the State retains immunity from suit, without legislative consent, even if the State’s liability is not disputed. Second, the State retains immunity from liability though the Legislature has granted consent to the suit.” Id., at 405 (citations omitted) (emphasis omitted). When the State contracts with a private person, it waives immunity from liability, but not immunity from suit. Id., at 408. Immunity from suit bars a suit against the State unless the State expressly gives its consent to the suit. Id., at 405. The State may consent to suit by statute or by legislative resolution. Id. Express consent is required to show that immunity from a breach of contract suit has been waived. Travis Comity v. Pelzel & Assocs., Inc., 77 S.W.3d 246, 248 (Tex.2002). Legislative consent for suit or any other sovereign immunity waiver must be “by clear and unambiguous language.” Tex. Gov’t Code Ann. § 311.034 (Vernon Supp.2004); Pelzel, 77 S.W.3d at 248; Fed. Sign, 951 S.W.2d at 405. When determining whether there is a clear and unambiguous waiver of immunity from suit, we generally resolve any ambiguity in favor of retaining immunity. Wichita Falls State Hosp. v. Taylor, 106 S.W.3d 692, 697 (Tex.2003).

Action to compel arbitration

In response to Highland Park’s immunity claim, Iron Crow asserts that sovereign immunity is inapplicable to suits seeking declaratory or injunctive relief. Specifically, Iron Crow claims that its declaratory judgment action to compel arbitration is not barred by the doctrine of sovereign immunity.

Private parties may seek declaratory relief against state officials who allegedly act without legal or statutory authority. See, e.g., Texas Educ. Agency v. Leeper, 893 S.W.2d 432 (Tex.1994) (suit challenging state officials’ construction of compulsory school-attendance law); W.D. Haden Company v. Dodgen, 158 Tex. 74, 308 S.W.2d 838, 840 (1958) (suit against state official for wrongfully imposing a statutory tax burden). But such suits are not suits against the State because suits to compel state officers to act within their official capacity do not attempt to subject the State to liability. Texas Natural Res. Conserv. Comm. v. IT-Davy, 74 S.W.3d 849, 855 (Tex.2002). Therefore, certain declaratory-judgment actions against state officials do not implicate the sovereign immunity doctrine. Id.

In contrast, declaratory-judgment suits seeking to establish a contract’s validity, to enforce performance under a contract, or to impose contractual liabilities are suits against the State because such suits attempt to control state action by imposing liability on the State. Id., at 855-56. The Texas Supreme Court concluded that “there is but one route to the courthouse for breach-of-contract cases [against the State], and that route is through the Legislature.” Id., at 860.

In the case before us, Iron Crow filed a declaratory judgment action to compel arbitration. Because its contract with Highland Park provided for binding arbitration in the event of a dispute between the parties, Iron Crow was seeking to enforce Highland Park’s performance under that contract. Therefore, sovereign immunity was indeed implicated here.

Federal Arbitration Act

Iron Crow argues that the Federal Arbitration Act preempts sovereign immunity. The Federal Arbitration Act governs an arbitration agreement contained in a contract “evidencing a transaction involving commerce.” 9 U.S.C. § 2 (2003); Allied-Bruce Terminix Cos. v. Dobson, 513 U.S. 265, 268, 115 S.Ct. 834, 130 L.Ed.2d 753 (1995). This provision is coextensive with the reach of the Commerce Clause of the United States Constitution. Id., at 273-77, 115 S.Ct. 834. That is, a contract evidences a transaction involving commerce if it involves or affects interstate commerce. Id., at 277-81, 115 S.Ct. 834. We have reviewed the appellate record and have found nothing to indicate that interstate commerce was involved in the matter before us. Thus, we do not decide this issue because this matter is not -within the purview of the Federal Arbitration Act.

Waiver

Iron Crow contends that section 51.075 of the Texas Local Government Code and Highland Park’s charter waive the town’s immunity from suit. We disagree.

Section 51.075 provides that a home-rule municipality “may plead and be impleaded in any court.” Tex. Local Gov’t Code Ann. § 51.075 (Vernon 1999). In construing this language, we have previously concluded that section 51.075 is not a clear and unambiguous waiver of the City’s immunity from suit. City of Dallas v. Reata Constr. Corp., 83 S.W.3d 392 (Tex.App.Dallas 2002), rev’d on other grounds, 2004 WL 726906 (Tex. Apr.2, 2004) (motion for rehearing granted Oct. 15, 2004).

Iron Crow would have us reconsider this conclusion. We revisited this issue recently in City of Carrollton v. McMahon Contracting, L.P., 134 S.W.3d 925 (Tex.App.-Dallas 2004, pet. granted). In deciding McMahon, we used the four factors set forth by the supreme court in Taylor to determine whether the Legislature has clearly and unambiguously waived sovereign immunity: (i) the statute waives immunity beyond doubt; (ii) ambiguities are resolved in favor of retaining immunity; (iii) if the Legislature requires the State be joined in a lawsuit in which immunity would otherwise attach, the Legislature has intentionally waived the State’s sovereign immunity; and (iv) whether the statute also provides an objective limitation on the State’s potential liability. See Taylor, 106 S.W.3d at 697-98; see also City of Mexia v. Tooke, 115 S.W.3d 618, 623-24 (Tex.App.-Waco 2003, pet. granted). We concluded that section 51.075 is not meaningless without waiver of immunity because the section could speak to a city’s capacity to participate in litigation when immunity has been waived or to take action to preserve immunity. See McMahon, 134 S.W.3d at 927. We also noted that often a statute will provide “sovereign immunity to suit is waived” or use similar unambiguous language when the Legislature intends to waive immunity. See Id. We did not apply the third or the fourth Taylor factors because neither is implicated in section 51.075. Based on this review, we again concluded that section 51.075 does not effect a waiver of the City’s immunity “by clear and unambiguous language.” See McMahon, 134 S.W.3d at 928.

We again note that the Supreme Court has never held that the language “plead and implead” is a clear and unambiguous waiver of immunity from suit. See id. Therefore, we decline to reconsider our previous holdings, and we thus conclude that section 51.075 does not constitute a clear and unambiguous waiver of the City’s immunity from suit.

Section 1.04 of Highland Park’s charter, which is entitled “General Powers of the Town,” states that the Town may “sue and be sued” and may “plead and be impleaded in all courts.” We have previously held that identical language in a city charter provision that specifically enumerated the city’s powers did not waive the city’s sovereign immunity. See Reata, 83 S.W.3d at 398. We reiterate that holding here. This language in Highland Park’s charter simply speaks to Highland Park’s capacity to sue and its capacity to be sued when immunity has been waived. See id.

CONCLUSION

We sustain Highland Park’s sole issue and hold the trial judge erred in denying Highland Park’s plea to the jurisdiction. We reverse the trial court’s order denying the plea to the jurisdiction and render judgment, dismissing the case against Highland Park.


text:
    In the Interest of D.M.C., a Child.
    No. 06-04-00108-CV.
    Court of Appeals of Texas, Texarkana.
    Submitted May 3, 2005.
    Decided July 13, 2005.
    John Delk, Texarkana, for appellant.

      Bobby Lockhart, Bowie County Dist. Atty., Texarkana, for appellee.
    Before ROSS, CARTER and CORNELIUS, JJ.

       William J. Cornelius, Chief Justice, Retired, Sitting by Assignment.

   OPINION

WILLIAM J. CORNELIUS, Justice (Retired).

The County Court at Law of Bowie County rendered judgment terminating Angela Denise Coleman’s parental rights to her son, D.M.C., who was born on May 7, 2003. At the hearing on the petition to terminate, Coleman appeared in person and through counsel. The Texas Department of Family and Protective Services was represented by counsel, the child was represented by an Attorney Ad Litem and a Guardian Ad Litem, and the unknown father of D.M.C. was represented by an Attorney Ad Litem.

After hearing evidence and argument of counsel, the trial court found and concluded that:

1. Coleman knowingly placed or allowed D.M.C. to remain in conditions or surroundings which endangered D.M.C.’s physical or emotional well-being. Tex. Fam.Code Ann. § 161.001(1)(D) (Vernon 2002).
2. Coleman knowingly engaged in conduct which endangered D.M.C.’s physical or emotional well-being. Tex. Fam.Code Ann. § 161.001(1)(E) (Vernon 2002).
3. Coleman had her parent-child relationship terminated with respect to another child based on a finding that her conduct violated Section 161.001(1)(D) or (E) of the Texas Family Code. Tex. Fam.Code Ann. § 161.001(1)(M) (Vernon 2002).
4. The termination of Coleman’s parental rights to D.M.C. is in the best interest of D.M.C. Tex. Fam.Code Ann. § 161.001(2) (Vernon 2002).

The trial court’s findings and conclusions are based on testimony given in open court by Linda Holley, a worker for the Department of Family and Protective Services; Terri Moore, a volunteer with C.A.S.A., and Guardian Ad Litem for D.M.C.; and Coleman, D.M.C.’s mother.

Coleman appeals the trial court’s judgment, raising two issues: (1) there is insufficient evidence to support the termination of Coleman’s parental rights as being in DM.C.’s best interests, and (2) the trial court improperly placed the burden of proof in this proceeding on Coleman rather than on the State. We decide both of these issues against Coleman for the reasons stated hereafter.

A court may terminate a parent’s parental rights if the State proves by clear and convincing evidence that the parent has engaged in one or more of the acts described in the Texas Family Code, Section 161.001, and further proves that termination is in the best interests of the child.

The standard of review for factual sufficiency challenges in termination cases is clear and convincing evidence. Tex. Fam.Code Ann. § 161.001 (Vernon 2002); In re J.F.C., 96 S.W.3d 256, 263 (Tex.2003). The evidence is clear and convincing when the proof is such that it produces in the mind of the trier of fact a firm belief or conviction of the truth of the allegations sought to be established. In re C.H., 89 S.W.3d 17, 25-26 (Tex.2002). The Texas Supreme Court case of In re J.F.C., 96 S.W.3d 256, sets out the tests for factual sufficiency of the evidence in termination cases, and they are the tests we apply in this case.

Although Coleman raises an issue as to factual sufficiency, she does not contest the sufficiency of the evidence to support the trial court’s findings that her actions came within subsections (1)(D), (1)(E), and (1)(M) of Section 161.001 of the Texas Family Code. On the issue of evi-dentiary sufficiency, she contends only that there is insufficient evidence to support the trial court’s finding that termination is in the best interests of D.M.C. She bases her contention on the allegation that the Guardian Ad Litem did not adequately investigate and seek to contact known relatives where D.M.C.’s siblings had been “successfully” placed in the past. In her brief, Coleman elaborates on this argument to contend, in effect, that the Guardian Ad Litem did not reasonably investigate alternative sources of placement for D.M.C., including reunification with his mother.

A guardian ad litem appointed pursuant to Tex. Fam.Code Ann. § 107.001 (Vernon Supp.2004-2005) is not required to conduct an investigation to determine the best interests of the child. Tex. Fam.Code Ann. § 107.002(a) (Vernon Supp.2004-2005) provides that the guardian ad litem may conduct an investigation to the extent the guardian considers necessary to determine the best interests of the child. The primary focus of the guardian’s responsibility is the propriety of termination based on the conduct of the parent, not the merits of alternative placement of the child. Nevertheless, the record here contains substantial evidence that the Guardian Ad Litem and the Department of Family and Protective Services workers did investigate all reasonable and practical avenues of alternative placements with relatives as well as reunification with the mother.

Coleman, by her own admission, is a regular, heavy user of cocaine and has been repeatedly incarcerated and convicted of multiple drug offenses, as well as theft and burglary offenses. She has had four children, including D.M.C., and has been incarcerated most of the time since D.M.C.’s birth. D.M.C. and at least one other of Coleman’s children tested positive for cocaine at their births. Coleman admitted that she used cocaine during her pregnancy and immediately before D.M.C.’s birth. As far as the Department of Family and Protective Services can determine, Coleman has no permanent home, and the Department has not been able to locate her at the various addresses she has given them. The only times Coleman contacted the Department was when she was incarcerated. Coleman informed the Department that she wanted to relinquish her parental rights to D.M.C. and only wanted the right to visit him, but she never signed the necessary papers to accomplish a relinquishment. Coleman does not know who is D.M.C.’s father.

The Department and the Guardian Ad Litem tried to locate D.M.C.’s father. Coleman identified a person known as Daryl Pickett as possibly being D.M.C.’s father. He was contacted and said he was interested in D.M.C., but a paternity test proved he was not D.M.C.’s father. Coleman was not able to identify any other person who could be the father. A woman who worked in the hospital where D.M.C. was born was interested in possibly taking D.M.C., but the Department did a study and found she was not a relative and did not qualify to be a foster parent.

Coleman had three other children before she gave birth to D.M.C. The first child was placed with some relatives when Coleman was incarcerated, and, as far as the Department knows, is still with them. The second child tested positive for cocaine when she was born. The Department worked with Coleman, and she agreed to place the child with relatives, but she later took the child from the relatives and placed her with other relatives, then took her back again. At three months of age, that child weighed nine ounces less than her birth weight and was in the hospital for failure to thrive. The Department tried to locate other relatives it could work with, but was never able to get from Coleman identifications or locations of relatives so it could consider other placements. The Guardian Ad Litem testified that a maternal aunt of Coleman’s had taken one of Coleman’s children, but Coleman interfered with that and the child was put in danger. The Department had previously worked with Coleman extensively to try to reunify her with her other children. Coleman’s lack of cooperation with possible reunification with D.M.C. is the same as it was with her other children. We find clear and convincing evidence that termination is in D.M.C.’s best interest, and we overrule Coleman’s first issue.

Coleman also contends the trial court erred in placing the burden of proof on her rather than on the State. Coleman brings this contention because of a statement the trial court made in announcing its decision. Among other remarks, the trial court said, “However, there was some testimony that you did have some contacts; though they appear to be very minimal contacts, you did have some. But just not enough to meet ... meet that burden that you need to meet to achieve reunification with the child.”

We find no indication in the record that the trial court placed any evidentiary burden on Coleman. The statement quoted here was made after the presentation of all the evidence and argument of counsel, and merely reflected the trial court’s conclusion that Coleman’s actions, as proven by the State, failed to demonstrate that she had met her burden as a parent, to provide the required protection and nurture for the child.

For all the reasons stated, we affirm the trial court’s judgment.


text:
    DALLAS AREA RAPID TRANSIT, Appellant, v. J.W. THOMAS, Appellee.
    No. 05-05-00159-CV.
    Court of Appeals of Texas, Dallas.
    July 19, 2005.
    Rehearing Overruled Aug. 10, 2005.

      Hyattye 0. Simmons, Dallas, TX, for Appellant.
    J.W. Thomas, Harker Heights, TX, for Appellee.
    Before Justices WHITTINGTON, MOSELEY, and LANG-MIERS.
   OPINION

Opinion by

Justice WHITTINGTON.

Dallas Area Rapid Transit appeals the trial court’s order denying its plea to the jurisdiction. See Tex. Civ. PRác. & Rem. Code Ann. § 51.014(a)(8) (Vernon Supp. 2004-05). J.W. Thomas sued DART for injuries sustained when he slipped and fell on a wet tile sidewalk at a DART transit station. DART filed a plea to the jurisdiction, contending Thomas failed to establish DART’s had waived its governmental immunity. The trial judge denied DART’s plea to the jurisdiction without prejudice, noting that “outstanding discovery issues” should be addressed as soon as possible. In a single issue, DART contends the trial judge erred in denying its plea to the jurisdiction because Thomas did not plead and the evidence does not support a cause of action within the limited waiver of governmental immunity authorized by the Texas Tort Claims Act. See Tex. Crv. PRAC. & Rem.Code Ann. § 101.021(2) & 101.022(a) (Vernon 2005). We affirm the trial court’s order.

BACKGROUND

On October 29, 2000, Thomas was waiting for a bus at DART’s Mockingbird station in Dallas. Thomas had a monthly bus pass that he had purchased from DART. It had been raining that day and, as Thomas walked toward the bus, he slipped and fell on decorative tiles embedded in the walking surface, breaking his leg.

In October of 2002, Thomas sued DART for his injuries caused by the fall. Thomas alleged DART’s governmental immunity for personal injuries caused by a premises defect had been waived by the Texas Tort Claims Act. See Tex. Civ. Prac. & Rem.Code Ann. § 101.021(2) & 101.022(a) (Vernon 2005). In response, DART filed a plea to the jurisdiction asserting governmental immunity. After limited discovery, the trial judge denied DART’s plea to the jurisdiction, without prejudice.

Law

Appellate courts reviewing a challenge to a trial court’s subject matter jurisdiction review the trial judge’s ruling de novo. Tex. Dept. of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 228 (Tex.2004) (citing Tex. Natural Res. Conservation Comm’n v. IT-Davy, 74 S.W.3d 849, 855 (Tex.2002)). When a plea to the jurisdiction challenges the pleadings, we determine if the facts alleged affirmatively demonstrate the court’s jurisdiction to hear the case. Miranda, 133 S.W.3d at 226. Whether the pleadings affirmatively demonstrate the trial court’s subject matter jurisdiction is a question of law. Miranda, 133 S.W.3d at 226.

In providing public transportation, DART is performing a governmental function and is entitled to immunity from suit and liability absent an express statutory waiver. See Tex. Transp.Code Ann. § 452.052(c) (Vernon 1999); Dallas Area Rapid Transit v. Whitley, 104 S.W.3d 540, 542 (Tex.2003). Immunity from suit defeats a court’s subject matter jurisdiction and may be raised by a plea to the jurisdiction. Tex. Dep’t of Transp. v. Jones, 8 S.W.3d 636, 638 (Tex.1999). In deciding a plea to the jurisdiction based on governmental immunity, a judge should consider the facts alleged by the plaintiff and, to the extent it is relevant to the jurisdictional issue, the evidence submitted by the parties. Tex. Natural Res. Conservation Comm’n v. White, 46 S.W.3d 864, 868 (Tex. 2001). When a jurisdictional challenge implicates the merits of a plaintiffs cause of action and the plea to the jurisdiction includes evidence, the trial judge reviews the evidence to determine if a fact issue exists. Miranda, 133 S.W.3d at 227. If the evidence creates a fact issue regarding the jurisdictional issues, the trial judge should not grant the plea to the jurisdiction. Miranda, 133 S.W.3d at 227. When the consideration of a trial court’s subject matter jurisdiction requires the examination of evidence, the trial judge exercises her discretion in deciding whether the jurisdictional determination should be made at a preliminary hearing or await a fuller development of the case, mindful that this determination must be made as soon as practicable. Miranda, 133 S.W.3d. at 226 (citing Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 555 (Tex.2000)). A trial judge abuses her discretion by acting in an unreasonable or arbitrary manner or by failing to follow guiding rules and principles. Stewart v. Sanmina Texas L.P., 156 S.W.3d 198, 214 (Tex.App. — Dallas 2005, no pet.).

Plea to the Jurisdiction

Under the Texas Tort Claims Act, governmental immunity is waived for

personal injury and death so caused by a condition or use of tangible personal or real property if the governmental unit would, were it a private person, be liable to the claimant according to Texas law.

Tex. Civ. Peac. & Rem.Code Ann. § 101.021(2) (Vernon 2005). If the condition of real property giving rise to the waiver of immunity is a premise defect,

the governmental unit owes to the claimant only the duty that a private person owes to a licensee on private property, unless the claimant pays for the use of the premises.

Tex. Civ. PRAC. & Rem.Code Ann. § 101.022(a) (Vernon 2005). The duty owed by a governmental entity to a licensee is not to injure the licensee by willful, wanton, or grossly negligent conduct, and to use ordinary care either to warn the licensee of, or make reasonably safe, a dangerous condition of which the owner is aware and the licensee is not. State Dept. of Highways & Pub. Transp. v. Payne, 838 S.W.2d 235, 237 (Tex.1992). If the claimant pays for the use of the premises, the limitation of duty under section 101.022 does not apply and the governmental entity owes the claimant the duty owed to an invitee. See Tex. Civ. Prac. & Rem.Code Ann. § 101.022(a) (Vernon 2005). A governmental entity has the duty to warn an invitee of dangerous conditions of which the government has knowledge or which the government would have discovered in the exercise of ordinary care. City of San Antonio v. Hartman, 155 S.W.3d 460, 465 (Tex.App. — San Antonio 2004, pet. filed) (citing Payne, 838 S.W.2d at 237). That duty also requires the owner to use ordinary care to reduce or eliminate an unreasonable risk of harm created by the condition. Hartman, 155 S.W.3d at 465.

In his second amended petition, Thomas alleged he was injured when he fell on a wet tile surface at DART’s Mockingbird station. Thomas alleged he paid for the use of the premises by purchasing his monthly bus pass and that, therefore, DART owed him the duty owed an invitee. See Tex. Civ. Puac. & Rem.Code Ann. § 101.022 (Vernon 2005). In its plea to the jurisdiction, DART claimed Thomas did not pay for the use of the premises and was owed only the duty owed to a licensee. DART argued that, as a licensee, Thomas presented no evidence DART engaged in willful, wanton, or grossly negligent conduct and had therefore failed to raise a fact issue that would implicate the premises liability waiver of DART’s governmental immunity. A hearing on DART’s plea to the jurisdiction was set.

Prior to the hearing on the plea, Thomas had filed a motion to compel in response to DART’s numerous objections to Thomas’s requests for disclosure, interrogatories, requests for admissions, requests for production, and request for entry upon property. Although DART submitted a significant amount of evidence in support of its plea to the jurisdiction, it had vigorously opposed discovery by Thomas with respect to similar evidence. In his motion to compel, Thomas sought production of evidence relating to prior similar incidents at the bus stop, construction and maintenance of the walkway, warnings provided by DART, and any measurements DART may have taken to determine traction provided by the walkway’s surface. The requested evidence would arguably allow Thomas to meet his burden to raise a fact issue regarding DART’s waiver of governmental immunity with respect to a premises defect. See Tex. Civ. PRAC. & Rem.Code Ann. § 101.022 (Vernon 2005).

After the hearing on DART’s plea to the jurisdiction, the trial judge entered an order stating

It is therefore [ ] ORDERED, ADJUDGED AND DECREED that Defendant Dallas Area Rapid Transit’s Plea to the Jurisdiction is hereby denied without prejudice. Please set the Mot. to Compel as soon as possible to address the outstanding discovery issues.

As is evident from the language of the order, the trial judge, in her discretion, decided to await a fuller development of the facts surrounding Thomas’ premises defect claim before making a final decision on DART’s plea to the jurisdiction. After reviewing the record in this case, we cannot say that the trial judge acted in an arbitrary or unreasonable manner or failed to follow guiding rules and principles in reaching this decision. See Miranda, 133 S.W.3d at 226.

DART also argues Thomas failed to plead or present evidence that would support a waiver of governmental immunity because decisions made by DART during the construction process of the walkway were discretionary. The waiver of governmental immunity contained in section 101.021(2) of the Texas Tort Claims Act does not apply to:

(1) the failure of a governmental unit to perform an act that the unit is not required by law to perform; or
(2) a governmental unit’s decision not to perform an act or on its failure to make a decision on the performance or nonperformance of an act if the law leaves the performance or nonperformance of the act to the discretion of the governmental unit.

Tex. Civ. PRAC. & Rem.Code Ann. § 101.056 (Vernon 2005).

DART acknowledges the line of cases holding that maintenance and construction are not discretionary functions of a governmental entity but argues that these cases are factually distinguishable. See City of Ft. Worth v. Gay, 977 S.W.2d 814 (Tex.App. — Fort Worth 1998, no pet.); Mitchell v. City of Dallas, 855 S.W.2d 741 (Tex.App. — Dallas 1993), aff'd, 870 S.W.2d 21 (Tex.1994); Shives v. State, 743 S.W.2d 714 (Tex.App. — El Paso 1987, writ denied). Once again, we note that evidence regarding maintenance and construction of the Mockingbird bus station was the subject of Thomas’s motion to compel. DART produced records regarding cleaning and a lack of maintenance work orders in support of its plea to the jurisdiction while objecting to the production of similar evidence requested by Thomas in discovery. In light of this, we cannot say that the trial judge abused her discretion in denying DART’s plea to the jurisdiction pending a fuller development of the case. See Miranda, 133 S.W.3d at 226.

In reaching this conclusion, we reject DART’s argument that the Texas Transportation Code creates additional statutory discretion that shields DART from waiver of governmental immunity under the Tort Claims Act. See Tex. Transp. Code Ann. § 452.064 (Vernon 2005). Section 452.064(a) provides:

(a) An authority that constructs or operates or contracts with another entity to construct or operate a light rail mass transit system is not subject to any state law regulating or governing the design, construction, or operation of a railroad, railway, street railway, street car, or interurban railway.

Tex. Transp. Code Ann. § 452.064(a) (Vernon 2005). DART argues that, because it operates a light rail mass transit system, the language of section 452.064(a) exempts it from the application of any state law that regulates or governs, in any way, the design, construction, or operation of a railroad or any of the other listed entities and that this gives DART greater governmental immunity than other governmental entities. Not only would such a broad interpretation shield DART from the effects of the Texas Tort Claims Act, it would foreclose enforcement of numerous other state laws with respect to DART. In making this argument, DART cites no authority for its proposition that section 452.064(a) grants to it such far-reaching discretion and authority, nor has our research yielded any. As this proposal has no support in the existing body of law in Texas, we decline to create a separate class of governmental immunity for DART.

Having concluded the trial judge did not abuse her discretion in denying DART’s plea to the jurisdiction without prejudice, we affirm the trial court’s order.

      . We need not determine whether Thomas was an invitee or licensee because the determination of either status is fact intensive, and Thomas was denied discovery with respect to both.