author: AKIN, Justice. GUILLOT, Justice,

text:
    Jack K. JEANES, Appellant, v. Paul M. HAMBY, Charles Shaver, and R.L. McSpedden, Appellees.
    No. 05-83-00452-CV.
    Court of Appeals of Texas, Dallas.
    Oct. 30, 1984.
    Rehearing Denied Jan. 21, 1985.

      C. Wesley Jeanes, Richardson, for appellant.

      David M. Kendall, Debora Beck Williams, Austin, Gary R. Stephens, Dallas, for ap-pellees.
    Before AKIN, SPARLING and GUIL-LOT, JJ.
   AKIN, Justice.

Jack K. Jeanes appeals a summary judgment declaring that Jeanes released Paul M. Hamby and Charles C. Shaver from liability on a prior judgment obtained by Jeanes on a note of indebtedness against them and others. Additionally, Jeanes appeals a finding that Jeanes’ counterclaim for fraud against Hamby, Shaver, and R.L. McSpedden was precluded as a matter of law by the affirmative defenses of res judi-cata and the statute of limitations. By cross-point, Hamby and Shaver contend that the trial judge erred in failing to grant them summary judgment against Jeanes on their breach of contract claim based upon releases of the prior judgment executed by Jeanes. We hold that the trial judge properly rendered summary judgment against appellees on their breach of contract claim because the releases were not supported by consideration. We also hold that the trial judge erred in declaring valid and binding the releases, signed by Jeanes, which purported to relieve Hamby and Shaver of their judgment debt to Jeanes. Additionally, we hold that the court erred in summarily ordering that Jeanes take nothing for damages allegedly resulting from appel-lees’ fraud because neither res judicata nor the statute of limitations precludes Jeanes’ suit. Consequently, we affirm the judgment with respect to the denial of appel-lee’s breach of contract claim against Je-anes but reverse and render the judgment with respect to the void releases. As to Jeanes’ suit for fraud, the judgment is reversed and remanded for trial.

Appellees were guarantors on a note which evidenced a $150,000 loan made by Jeanes to Gar-Dal, Inc., a company in which the appellees were shareholders. Gar-Dal defaulted on the note. Jeanes sued Gar-Dal and its five shareholders, including the appellees, who had personally guaranteed payment of the note. In that lawsuit, Je-anes recovered judgment against all opposing parties. In that same cause of action, the appellees in this case won a judgment of indemnity against the two other shareholders for their liabilities to Jeanes. Thereafter, Jeanes attempted to collect on his judgment by numerous means, including garnishment of appellees’ judgment of indemnity against O.K. Jones, one of the other Gar-Dal shareholders.

The present appeal arose when appellees intervened in a garnishment suit brought by Jeanes against Jones seeking satisfaction of his judgment against appellees. Appellees alleged in their plea in intervention, later severed from the garnishment proceeding, that Jeanes’ judgment against appellees on the note had been extinguished when Jeanes garnished appellees’ judgment of indemnity against Jones. However, before this cause of action was severed, Jeanes executed two documents, referred to as releases, wherein he promised to forego all legal recourse against appellees Hamby and Shaver, including his efforts to collect from them pursuant to his judgment on the note, in return for payment of $100,000, which was less than Je-anes’ judgment. Nevertheless, Jeanes later counterclaimed in this suit to have these releases declared unenforceable.

In this respect, Jeanes contends that the trial judge erred in granting summary judgment for Hamby and Shaver on the issue of the validity of the releases because, among other reasons, the releases were not supported by consideration. We agree. It is well settled that the payment of less than the full amount of a judgment debt alone cannot be consideration for an accord and satisfaction. Blaylock v. Akin, 619 S.W.2d 207 (Tex.Civ.App.—Texarkana 1981, writ ref’d n.r.e.); Reeves v. Hall, 437 S.W.2d 424 (Tex.Civ.App.—Austin 1969, no writ). In this case, it is undisputed that an amount of over $100,000 remained unpaid on the judgment held by Jeanes against Hamby and Shaver. Consequently, payment by Hamby and Shaver to Jeanes of only $100,000 is not consideration that will support the releases, thereby rendering these releases invalid. Although Hamby and Shaver correctly note that the rule in Blaylock applies only to liquidated debts, we disagree with their characterization of this judgment debt as an unliquidated obligation. Their sole support for this contention is that at the time Jeanes signed the releases, litigation was pending concerning the question of whether the judgment debt owed by appellees to Jeanes was extinguished by his garnishment of their judgment against Jones. But the mere pleading of such an allegation does not convert a liquidated debt arising from a valid final judgment into an unliquidated debt or put the obligation in dispute. In this respect, we note that Hamby and Shaver did not allege that Jeanes’ judgment had been satisfied from the garnishment of their judgment of indemnity against Jones. Furthermore, appellees cite no authority, nor have we found any, to support their theory that the mere garnishment of an obligation owing to a judgment debtor extinguishes the debt owed to the holder of the judgment. Consequently, we hold that the releases executed by Jeanes were invalid for lack of consideration.

Nevertheless, Hamby and Shaver persist in contending that Blaylock is not controlling because Jeanes received consideration other than the $100,000 payment for Je-anes’ signature on the releases. According to Hamby and Shaver, Jeanes’ received consideration which will support the releases in the form of a promise by Hamby and Shaver to forego their attempts to have Jeanes’ judgment declared extinguished. We disagree because the only basis for these attempts were founded on Hamby and Shaver’s allegations that the judgment debt was extinguished when Jeanes garnished the judgment held by Hamby and Shaver against Jones. As noted previously, we are not of the opinion that a cause of action against Jeanes was pleaded on this issue. Consequently, no consideration existed because Hamby and Shaver could not be said to have abandoned any legal rights by foregoing their attempt to have the judgment extinguished.

Moreover, even if their pleadings had alleged a cause of action, the releases signed by Jeanes do not state that they were signed in consideration of appellees terminating any cause of action. Instead, the releases merely state that Jeanes released Hamby and Shaver from any claims held by him by virtue of Jeanes’ prior judgment and nowhere do the releases mention additional consideration in the form of a release of Jeanes from any controversy, claims, or actions held against him by Ham-by or Shaver. Moreover, because the releases are unambiguous, any attempt by Hamby and Shaver to prove that the releases were signed by Jeanes in return for additional consideration not mentioned in the releases would violate the parol evidence rule. Crozier v. Horne Children Maintenance and Educational Trust, 597 S.W.2d 418 (Tex.App.—San Antonio 1980, writ ref’d n.r.e.). Because the $100,000 payment was the only consideration for the release of a judgment debt of a greater amount, we hold that, as a matter of law, these releases were not supported by consideration and are, therefore, invalid and unenforceable to discharge Jeanes’ judgment. Because the contracts of release are invalid, appellees’ cross-point by which they contend that the court erred in not allowing them to proceed against Jeanes for breach of that agreement is also without merit.

Since we have held that the releases of the judgment are invalid for lack of consideration, it is unnecessary to address Je-anes’ other points of error attacking the validity of the releases. We now turn to the question of whether the trial judge erred in granting summary judgment against Jeanes on his pleading that he had been defrauded by all three appellees. In this respect, the record shows that Jeanes specifically alleged that appellees wrongfully conspired to obtain loans from him on behalf of Gar-Dal, Inc. with the intent to withhold payment when due and to hinder collection of any judgment that he might obtain on the note so as to pressure him into signing the releases involved in this appeal. According to Jeanes, appellees concealed and secreted their assets for the purpose of delaying his collection efforts, and this concealment is evidenced by the fact that Hamby and Shaver were able to deliver the $100,000 in cash at the time when he had agreed to the release even though his previous extensive attempts to discover assets to satisfy the judgment had been unsuccessful.

In considering Jeanes’ point with respect to his cause of action for conspiracy to defraud him, we first note that the burden was on appellees, as movants, to establish that Jeanes’ cause of action was precluded, as a matter of law, as to at least one essential element of Jeanes’ cause of action. Williamson v. Tucker, 615 S.W.2d 881 (Tex.Civ.App.—Dallas 1981, writ ref’d n.r.e.). Appellees do not contend that they have met this burden because they argue that Jeanes’ cause of action was barred by the doctrine of res judicata and by the statute of limitations, both of which are affirmative defenses.

With respect to res judicata, ap-pellees argue that Jeanes had already had his day in court when he obtained his original judgment on the note against appellees and that Jeanes should have pursued his allegation of a conspiracy to defraud him in that suit. We cannot agree because Je-anes’ allegations assert a continuing fraudulent conspiracy by appellees to assure that he would never recoup his money in the form of continuing actions by appellees to prevent collection of his judgment. Res judicata precludes litigation of causes of action which, with the use of diligence, could have been adjudicated in a prior suit between the same parties. That doctrine is only applicable if the questions at issue in the first suit constituted a defense to, or a part of, a cause of action finally adjudicated. Griffin v. Holiday Inns of America, 496 S.W.2d 535, 538 (Tex.1973) (a final judgment on the merits in an action for breach of contract did not preclude a later action, based on related events, in the form of a suit on quantum meruit). In Gilbert v. Fireside Enterprises, Inc., 611 S.W.2d 869, 879-80 (Tex.Civ.App.—Dallas 1980, no writ), we noted that res judicata is a harsh doctrine, which should be applied narrowly and with caution. In light of Griffin and Gilbert, we hold that even though Jeanes’ cause of action for fraudulent conspiracy arose from some of the same events which gave rise to his original suit against appel-lees for payment on the note, the two causes of action depend upon the determination of altogether different factual and legal questions and are sufficiently distinct so as to prevent the doctrine of res judicata from precluding Jeanes’ suit.

As to the statute of limitations, we are unpersuaded by appellees’ argument that Jeanes’ cause of action for fraudulent conspiracy was barred by the applicable statute. In this respect, appellees argue that Jeanes filed his fraud claim on April 7, 1981, and the two year statute of limitations commenced in 1975 when the loan note was reduced to judgment. But the record shows that Jeanes’ theory of appellees’ fraudulent conduct consisted of his allegation that the goal of their conspiracy was to obtain his signature on contracts which would relieve appellees of the full amount of any obligations owed to Jeanes. As Jeanes points out, he signed documents releasing Hamby and Shaver on July 19, 1979. Jeanes argues that the obtaining of his signature on these documents was an overt act in furtherance of the conspiracy, and since it occurred within two years of the filing of the fraud suit, his cause of action was not barred by the statute of limitations. See Harang v. Aetna Life Insurance Company, 400 S.W.2d 810 (Tex.Civ.App.—Houston 1966, writ ref’d n.r.e.). Nevertheless, appellees contend that Jeanes failed to tender summary-judgment evidence to overcome the rule that in a fraud case the statute of limitations begins to run when the victim knew or should have known that he had been defrauded. We agree with Jeanes because when overt acts in furtherance of a conspiracy to defraud occur within two years of the filing of suit, that suit is not barred by limitations. Moreover, the burden was on appel-lees to establish by summary-judgment evidence that Jeanes’ counterclaim was precluded as a matter of law. Williamson, supra. Accordingly, we hold that the trial judge erred in granting summary judgment on Jeanes’ suit for fraud.

Finally, we consider Jeanes’ argument that the trial judge erred in refusing to declare, pursuant to his counterclaim, that post-judgment interest on his original judgment on the note against ap-pellees should accrue at the rate of 10%, compounded annually. The judgment in question provides that interest on the principal amounts awarded should accrue at the rate of 10% per annum from the date of judgment until paid. Jeanes argues that the court should have declared that the interest should compound annually because the award of interest at 10% per annum was contrary to the “spirit” of the judgment. We cannot agree. In the first place, the judgment does not provide for interest compounded annually. To hold as Jeanes would have us do would be to change the clear language of a final judgment, which the trial judge lacked jurisdiction to do. In the second place, the law does- hot favor compound interest, which will be only allowed when equity requires it. E.g. Grand Fraternity v. NicoSia, 41 S.W.2d 684, 686 (Tex.Civ.App.—Waco 1931, writ ref’d n.r.e.) (per Justice Alexander, later Chief Justice of the Texas Supreme Court). Obviously, if the law or equity required that the interest should be compounded annually, the trial judge who rendered the earlier judgment would have so provided in that judgment. Accordingly, the trial judge in this case correctly refused to disturb the prior judgment.

In summary, we reverse the summary judgment granted by the trial judge and render judgment in favor of Jeanes declaring that the releases executed by Jeanes are void. TEX.R.CIV.P. 434. We also reverse and remand for trial the judgment denying Jeanes’ counterclaim against ap-pellees for fraud. In all other respects, the judgment is affirmed. Costs are assessed against the appellees.

GUILLOT, J., dissenting.

GUILLOT, Justice,

dissenting.

I respectfully dissent. While I would hold that the trial court improperly granted summary judgment to Hamby, Shaver, and McSpedden, I would hold that there is a material fact issue as to whether the releases which Jeanes gave Hamby and Shaver were valid. I would further hold that res judicata barred Jeanes’ cause of action for conspiracy to defraud. However, I agree with the majority’s disposition of Je-anes’ contention regarding post-judgment j interest.

i I believe an additional rendition of the facts is in order. I shall attempt to succinctly set them out in the chronological order of the pleadings that led to this appeal.

1. January 1975. Jeanes loans $150,000 to Gar-Dal Inc. and the loan is guaranteed by Hamby, Shaver, McSpedden, Hunt, and Jones. Additionally Jones indemnifies Hamby, Shaver, and McSpedden for any loss or judgment.

2. February 1977. Gar-Dal Inc. defaults and Jeanes re- Cause #75-5721-D covers judgment against Hamby, Shaver, McSpedden, Hunt, and Jones. Hamby, Shaver, and McSpedden recover a judgment of indemnity against Jones.

3. September 1977. Jeanes files suit garnishing the judg- Cause #77-9732-C ment debt of Jones to Hamby, Shaver, and McSpedden.

4. Spring 1978. Jeanes files suit to establish lien on Jones’ interest in a joint venture. Cause #78-2019-E

5. December 1978. Hamby, Shaver, and McSpedden intervene, alleging that, when Jeanes garnished their judgment against Jones, the debt of Hamby, Shaver, and Mc-Spedden was merged into the garnishment judgment and was thereby canceled. Cause #78-2019-E

6. July 1979. Hamby and Shaver pay Jeanes $100,000 for a release.

7. August 1979. Jones pays Jeanes $75,000 for a release from the judgment in Cause #75-5721-D.

8. November 1979. The intervention of Hamby, Shaver, and McSpedden is severed and re-docketed #80-523-E.

9. July 1980. Jeanes files counterclaim alleging that the releases given him by Hamby and Shaver are not valid. Cause #80-523-E

10. December 1982. Hamby, Shaver, and McSpedden file amended petition seeking damages for fraud and breach of contract against Jeanes. They also seek a summary judgment that Jeanes’ declaratory judgment action be denied. Cause #80-523-E

11. February 1983. Jeanes files fourth amended petition seeking declaratory judgment that releases given by Hamby and Shaver are invalid and seeking damages for fraud and conspiracy. Cause #80-523-E

12. February 1983. Judgment is entered declaring that the releases signed by Hamby and Shaver are valid and denying all other relief. Cause #80-523-E

In his first point of error, Jeanes contends that the court erred in declaring the releases from Jeanes to be valid because either they were not supported by consideration as a matter of law, or the summary-judgment evidence was insufficient to establish consideration as a matter of law. The majority holds that there was no consideration for these releases as a matter of law. It says that the debts of Hamby and Shaver were liquidated and undisputed, and thus, consideration did not exist for payment by them of a lesser amount. Industrial Life Insurance Co. v. Finley, 382 S.W.2d 100, 104 (Tex.1964); Blaylock v. Akin, 619 S.W.2d 207 (Tex.Civ.App.—Texarkana 1981, writ ref'd n.r.e.). The majority says that, although Hamby and Shaver have argued that the debt was unliqui-dated, it was, in fact, liquidated. Hamby and Shaver do not argue that it was unliq-uidated, but rather than it was disputed. Hamby and Shaver argue that consideration for the releases existed due to their claims (1) that the judgment debt was merged as a result of the garnishment actions by Jeanes; (2) that no sum or credit had been given to the garnishment judgment; (3) that there was pending litigation initiated by both parties at the time of the settlement; and (4) that part of the litigation pending was a claim that Jeanes had conspired to defraud appellees by attempting to settle a judgment that they had against a third party without their knowledge. Thus, there was a good faith dispute between the parties as to what amount, if any, Hamby and Shaver owed Jeanes.

Contrary to the majority’s assertion, the releases do mention consideration in addition to the non-monetary consideration mentioned above. The release states in pertinent part:

NOW, THEREFORE, IN CONSIDERATION of the payment of One Hundred Thousand Dollars ($100,000.00), by Ham-by and Shaver to Jeanes, receipt of which is hereby acknowledged by Jeanes, Je-anes does here and now forever release any claims of any nature whatsoever, known or unknown held by Jeanes or any of his assigns, against Hamby and Shaver.

Contrary to the majority’s assertion, the parol evidence rule does not bar admission of a contemporaneous agreement, collateral to an integrated agreement, which is not inconsistent with nor varies or contradicts the express or implied terms or obligations thereof. Hubacek v. Ennis State Bank, 159 Tex. 166, 317 S.W.2d 30, 32 (1958). Here, the evidence of the non-monetary consideration is not inconsistent with and does not contradict the terms of the releases. This evidence only explained the circumstances surrounding execution of the releases, and the “claims” to which the releases refer. Texas Utilities Fuel Co. v. First National Bank in Dallas, 615 S.W.2d 309, 312 (Tex.Civ.App.—Dallas 1981, no writ). I would hold there is a fact question as to whether the amount owed to Jeanes by Hamby and Shaver was disputed.

Moreover, a bona fide dispute may be predicated upon a question of law; here, the question of law was whether the judgment debt of Hamby and Shaver to Jeanes was merged into Jeanes’ garnishment suit against Jones resulting in Hamby and Shaver losing their indemnity judgment against Jones. Although Hamby and Shaver may have been wrong in their beliefs, it is not important that later they may be shown to be in error. General American Life Insurance Co. v. Valley Feed Mills, 458 S.W.2d 860 (Tex.Civ.App.—El Paso 1970, writ ref’d n.r.e.). The issue is whether they were honest in them. Loggins v. Stewart, 218 S.W.2d 1011, 1015 (Tex.Civ. App. — El Paso 1949, writ ref’d). That issue raises a fact question precluding summary judgment.

In his second and third points of error, Jeanes contends that the court erred in granting summary judgment to appellees because the releases were invalid. Jeanes argues that evidence exists that they were obtained from him under economic duress; that they were adhesion contracts; and that they were obtained by illegal means and in furtherance of an unlawful conspiracy. Jeanes further argues that the conspiracy to defraud claim was not barred by appellees’ affirmative defenses. These arguments are without merit.

Releases obtained by duress are voidable. Mitchell v. C.C. Sanitation Co., 430 S.W.2d 933, 936 (Tex.Civ.App.—Houston [14th Dist.] 1968, writ ref’d n.r.e.). Economic duress may be claimed only when the party against whom it was claimed was responsible for the claimant’s financial distress. First Texas Savings Association of Dallas v. Dicker Center, Inc., 631 S.W.2d 179, 185-86 (Tex.App.—Tyler 1982, no writ). In my opinion, there is no evidence that appellees were responsible for the stress of Jeanes’ financial condition which made it unprofitable for him to pursue further legal procedures, as Jeanes argues. It is interesting to note that, after the release was signed, Jeanes did find the • money to litigate the validity of that document. Thus, any claim as to economic duress is without basis in fact in this record.

As to adhesion, Jeanes did not raise any fact issue as to Hamby and Shaver being in an unfairly superior bargaining position nor did Jeanes raise a fact issue as to the releases being unconscionable. Fluor Western, Inc. v. G & H Offshore Towing Co., 447 F.2d 35, 39 (5th Cir.1971), cert. denied, 405 U.S. 922, 92 S.Ct. 959, 30 L.Ed.2d 793 (1972). Accordingly, any claim as to an adhesion contract is without basis in fact in this record.

Finally, I would hold that Jeanes’ claim as to conspiracy to defraud is barred by res judicata. I would hold that res judicata barred any claims arising from actions occurring before February 22, 1977, (the time that Jeanes obtained judgment from appel-lees). Thus, I need not reach any of Je-anes’ arguments regarding appellees’ other affirmative defenses (statute of limitations and estoppel by judgment). In analyzing this affirmative defense, it would be judicious to ask the question: Is the prosecution of the present cause of action offensive to the policy considerations underlying the doctrine of res judicata? In Gilbert v. Fireside Enterprises, Inc., 611 S.W.2d 869, 877 (Tex.Civ.App.—Dallas 1980, no writ), we stated those considerations: promotion of judicial economy; prevention of vexatious litigation; prevention of double recovery; and promotion of the stability of decisions. The majority admits that “Jeanes’ cause of action for fraudulent conspiracy arose from the same events which gave rise to his original suit against appellees for payment on the note.” Judgment in the first suit precludes a second action by the parties “not only on matters actually litigated, but also on causes of action or defenses which arise out of the same subject matter and which might have been litigated in the first suit.” Texas Water Rights Commission v. Crow Iron Works, 582 S.W.2d 768, 771-72 (Tex.1979) (emphasis added). Thus, the fraudulent conspiracy claim should have been considered and litigated in the prior suit. Jeanes had his day in court. He now seeks another judgment for essentially the same damages. To allow this suit would threaten stability of decisions. Thus, I would hold that any claim as to fraudulent conspiracy is barred by res judicata.

I agree that post-judgment interest on the original judgment should not be granted. My discussion of these points disposes of the case. In their cross-point, appellees have requested that we only reverse the judgment as to their cause of action for breach of the releases if we reverse the summary judgment granted in their favor. Because I would reverse the summary judgment as to the validity of the releases, I do not consider the breach question discussed by appellees. It also raises fact issues to be determined by the trier of fact.

I would reverse and remand the judgment of the trial court on the issue as to the validity of the releases and render judgment in favor of Hamby, Shaver, and McSpedden on their affirmative defense of res judicata.

      . We do not pass on the question of whether Jeanes has a cause of action for damages when he has already recovered judgment on his note.


source: Caselaw Access Project

author: KENNEDY, Justice.

license: Public Domain

text:
    FIRST TEXAS SAVINGS ASSOCIATION, Appellant, v. STIFF PROPERTIES, A Partnership, Appellee.
    No. 13-83-548-CV.
    Court of Appeals of Texas, Corpus Christi.
    Nov. 1, 1984.
    Second Rehearing Denied Nov. 20, 1984.

      Marshall Boykin, III, Wood, Boykin, Wol-ter, Smith & Hatridge, Corpus Christi, for appellant.
    W.R. Hitchens, Kingsville, for appellee.
   OPINION ON MOTION FOR REHEARING

KENNEDY, Justice.

Appellee’s motion for rehearing is granted. Opinion and judgment of September 6, 1984, are withdrawn and a new opinion is delivered this date.

Appellee, Stiff Properties, sued appellant, First Texas Savings Association, for violations of the Texas Deceptive Trade Practices Act and other causes. After a jury trial, and based upon answers to special issues, judgment was entered in favor of appellee for violations of the DTPA in the amount of $80,000 and attorney’s fees.

Appellee, a partnership, was formed by a group of friends for the purpose of purchasing a beachfront property, specifically Unit No. 106 of the Portofino Condominium Complex. An earnest money contract was entered into naming $87,000 as the purchase price and July 1, 1982 as the closing date. The contract provided for an extension of up to fifteen days, if necessary, to complete loan requirements.

Because appellant held the existing mortgage on the property, appellee first contacted appellant for financing. An application charge of $160 was required by appellant, and, as a result, only two couples actually applied for the loan. Applications were promptly completed by the two couples in the Kingsville office. The applications were forwarded in late May or early June to the Corpus Christi office of appellant for processing. The applications showed the closing date as July 1, 1982.

In mid-June, the appellee was informed that the seller of the condominium unit would not extend the earnest money contract if the closing date, July 16th (including extensions), was not met. Appellee immediately informed appellant of this development and inquired what, if anything, appellee could do to expedite the processing of the application. Appellee repeatedly contacted appellant in an effort to secure loan approval. The loan was eventually approved on Friday, July 9th. On Monday, July 12th, appellee called appellant to discuss setting up the closing, but was informed that the computer in Dallas was “down.” The closing instructions and other documents could only be obtained from the Dallas computer. Appellee was assured that the computer would be “up” in a few days and that it “felt good that we would make it by Friday.” By Wednesday, July 14th, “the computer was up” and “things looked good.” On Thursday, appel-lee was informed that the closing was in jeopardy because the closing instructions and other documents had not yet been prepared and would not be in Corpus Christi in time for a Friday closing. The missing documents included closing instructions to the title company, a promissory note, deed of trust and truth in lending statement.

The closing did not take place on July 16, 1982, and appellees lost the opportunity to purchase the condominium unit. The documents were received in Corpus Christi on Monday, July 19, 1982. Notice of a claim as required by the DTPA was given, and the instant suit was filed. The jury returned a verdict on special issues, wherein they found that appellant represented to appellee that the necessary closing instructions would be in Corpus Christi in time for a July 16, 1982 closing; that the representation was made knowingly; that the failure to timely forward the closing instructions was unconscionable; that the failure was a knowingly committed unconscionable act; that this failure caused appellee to lose the opportunity to purchase the condominium unit; that the difference between the contract price and market value was $28,000; that appellee should be awarded additional (exemplary) damages of $50,000; and that attorney’s fees of specific amounts were reasonable and necessary. Judgment was entered on the verdict, granting $28,000 in actual damages, $2,000 in damages pursuant to TEX.BUS. & COM. CODE ANN. § 17.51(b)(1), $80,000 in additional (exemplary) damages and attorney’s fees. From this judgment, First Texas Savings appeals.

By its fourth point of error, appellant complains by “no evidence” and “insufficient evidence” points that the appel-lee was not a consumer. By its fifth point of error, appellant complains that the representation, if any, of appellee that it would timely forward the closing instructions could not constitute a violation of the DTPA. The gravamen of appellant’s complaint is that appellees are not consumers and that appellant did not provide a service.

That appellee is a consumer was settled by La Sara Grain Co. v. First National Bank of Mercedes, 673 S.W.2d 558 (Tex.1984), which was decided after briefs were filed in this case. In La Sara Grain, the Supreme Court said: “[A] lender may be subject to a DTPA claim if the borrower’s ‘objective’ is the purchase or lease of a good or service thereby qualifying the borrower as a consumer.” 673 S.W.2d at 567. Likewise, it is immaterial whether or not the appellant provided a service. “If in the context of a transaction in goods or services, any person engages in an unconscionable course of action which adversely affects a consumer, that person is subject to liability under the DTPA.” Flenniken v. Longview Bank and Trust Co., 661 S.W.2d 705 (Tex.1983); TEX.BUS. & COM. CODE ANN. § 17.50(a)(3) (Vernon Supp. 1984). We read this to mean that, if the purpose of the transaction (the purchase of the condominium) falls within the DTP A, any person (including the financing institution) who performs an unconscionable act will be subject to liability. Appellant’s fourth and fifth grounds of error are overruled.

Appellant, by its first, second and third points of error, complains by “no evidence” and “insufficient evidence” points that there was no support for the jury’s finding that 1) there had been a representation made that the instructions would be forwarded in time for the closing; 2) the failure to forward the instructions was an unconscionable act; and 3) the representations were made knowingly. In considering a “no evidence” or “insufficient evidence” point of error, we will follow the well established test set forth in Glover v. Texas General Indemnity Company, 619 S.W.2d 400 (Tex.1981); Garza v. Alviar, 395 S.W.2d 821 (Tex.1965); Allied Finance Company v. Garza, 626 S.W.2d 120 (Tex.App.—Corpus Christi 1981, writ, ref’d n.r.e.); CALVERT, No Evidence and Insufficient Evidence Points of Error, 38 Tex.L. Rev. 361 (1960).

We have carefully considered the record and find no evidence that a representation was made that the instructions would be forwarded in time for the closing. One of the appellees, Mrs. Wolfe, testified that Mr. Batey, an employee of appellant, said “he would not anticipate that being a problem, or something to that effect ...” at the time of application for the loan. In addition, Mrs. Wolfe testified that another employee, Harrie Katz, told her on Monday, the 12th of July, that the loan was approved, that the computer was “down,” “but not to be too concerned because she thought it would be ‘up’ in a day or two and she felt good that we would make it by Friday.” Further, on Wednesday of that week, Mrs. Wolfe testified that “she told me that the computer was up and she felt things looked good.” Mrs. Wolfe testified that, on Thursday, Miss Katz “just said it doesn’t look good, we’re not going to have the instructions by tomorrow.”

Considering the above-quoted testimony in a light most favorable to the verdict, we find that there is no evidence that the jury could have relied upon to find a representation that the instructions would be forwarded in time for the closing. Appellant’s first point of error is sustained.

We find sufficient evidence to support the remainder of the jury’s findings. Appellant’s second and third points of error are overruled.

Appellees, by their Motion for Rehearing, have called to this Court’s attention that the judgment of the trial court is supported by sufficient jury findings. Therefore, we find no reversible error and affirm the judgment of the trial court. Tex.R.Civ.P. 301, 434.

A consumer may maintain an action when any unconscionable action or course of action is the producing cause of actual damages. TEX.BUS. & COM.CODE ANN. § 17.50(a)(3) (Vernon’s Supp.1984). A finding that appellant engaged in an unconscionable act or course of action is sufficient to support a judgment in a DTPA action even in the absence of specific misrepresentations. Bennett v. Bailey, 597 S.W.2d 532 (Tex.Civ.App.—Eastland 1980, writ ref’d n.r.e.)

By the third and fourth Special Issues, the jury found that appellant, in failing to forward the closing instructions in a timely manner, knowingly committed an “unconscionable action or course of action.” The jury charge gave the statutory definition of “unconscionable action or course of action”; that is “an act or practice which, to a person’s detriment”:

(A) takes advantage of the lack of knowledge, ability, experience, or capacity of a person to a grossly unfair degree; or
(B) results in a gross disparity between the value received and consideration paid, in a transaction involving transfer of consideration.

See TEX.BUS. & COM.CODE ANN. § 17.-45(5) (Vernon Supp.1984)

Because at least some of appellees were experienced in real estate dealings, we would hesitate to find a lack of knowledge, ability and experience in appellees. However, we need not reach that question because we find there is “a gross disparity between the value received and consideration paid”. Appellees paid a consideration in the total amount of $320.00 in application and processing fees. The jury’s finding of unconscionability is supported by the evidence of the reasonable expectation of appellees that appellant would promptly process appellee’s application and provide the necessary papers for closing in a timely manner.

Because the judgment of the trial court is supported by the jury’s answers to Special Issues three and four, the judgment of the trial court is affirmed.

YOUNG, J., not participating on Motion for Rehearing.


author: GUILLOT, Justice.

text:
    Abacn TOVAR, Appellant, v. The STATE of Texas, Appellee.
    No. 05-83-00881-CR.
    Court of Appeals of Texas, Dallas.
    Nov. 16, 1984.
    Lawrence Mitchell, Dallas, for appellant.
    Leslie McFarlane, Dallas, for appellee.
    Before CARVER, WHITHAM and GUIL-LOT, JJ.
   GUILLOT, Justice.

Abacn Tovar appeals from a conviction for the offense of attempted murder. Punishment, twice enhanced, was assessed at life imprisonment. In two related grounds of error, appellant contends the trial court erred by admitting into evidence a penitentiary packet as proof of a 1978 theft conviction. Specifically, appellant complains that the theft statute, TEX.PENAL CODE ANN. § 31.03 (Vernon 1974), has become unconstitutionally vague and ambiguous rendering the conviction void. We disagree and affirm.

In Thomas v. State, 621 S.W.2d 158, 161 (Tex.Crim.App.1981), the Court of Criminal Appeals stated in a footnote that “Section 31.01(4) negating effective consent is not to be interpreted as an exhaustive list.” Because the court in Thomas failed to specifically define the additional ways of negating effective consent, appellant maintains TEX. PENAL CODE ANN. § 31.03 (Vernon Supp.1984) is unconstitutionally vague and ambiguous. Thus appellant asserts that the 1978 theft conviction has been voided by the 1981 Thomas opinion, and that the trial court erred by admitting the penitentiary packet.

In order for this article to be unconstitutionally vague and ambiguous, appellant must demonstrate that persons of common intelligence would necessarily guess at the meaning of the negation of effective consent and differ as to its application. Papachristou v. City of Jacksonville, 405 U.S. 156, 162, 92 S.Ct. 839, 843, 31 L.Ed.2d 110 (1972); Ahearn v. State, 588 S.W.2d 327, 338 (Tex.Crim.App.1979). A statute is vested with a presumption of validity; the presumption obtains until the contrary is shown beyond a reasonable doubt. Ex parte Granviel, 561 S.W.2d 503, 515 (Tex.Crim.App.1978). It is well settled that a statute is not rendered unconstitutionally vague merely because the words or terms are not specifically defined. Ahearn, 588 S.W.2d at 338.

The negation of effective consent is illustrated four alternative ways in TEX. PENAL CODE ANN. § 31.01(4). Considering that the allegedly vague and ambiguous language has four expressed statutory definitions, we hold that the presumption of validity has not been overcome beyond a reasonable doubt even though the statutory definitions are not exhaustive. Consequently, TEX.PENAL CODE ANN. § 31.03 is neither unconstitutionally vague nor ambiguous; the penitentiary packet demonstrating the 1978 theft conviction . was properly admitted.

The judgment of conviction is affirmed.

      . TEX.PENAL CODE ANN. § 31.01(4) (Vernon 1974) provides: "Effective consent” includes consent by a person legally authorized to act for the owner. Consent is not effective if:

        (A) induced by deception or coercion;
      (B) given by a person the actor knows is not legally authorized to act for the owner;
      (C) given by a person who by reason of youth, mental disease or defect, or intoxication is known by the actor to be unable to make reasonable property dispositions; or
      (D)given solely to detect the commission of an offense.


author: CARVER, Justice.

text:
    Robert MERRITT, Relator, v. Fred S. HARLESS, Judge, et al., Respondents.
    No. 05-84-00982-CV.
    Court of Appeals of Texas, Dallas.
    Nov. 30, 1984.

      Howard V. Tygrett, Jr., Troy C. Vinson, Dallas, for relator.
    Henry J. Voegtle, III, Scott Henderson, Dallas, for respondents.
    Before CARVER, ROWE and SHUM-PERT, JJ.
   CARVER, Justice.

Robert L. Merritt applies for mandamus relief to vacate an order of the trial court which denied the filing of and execution on a foreign judgment, and to require the clerk of the trial court to act affirmatively on the foreign judgment. We grant relief as to the trial court but withhold relief as to the clerk because his failure to act rests wholly in obedience to the trial court’s order which we now vacate.

In support of his application, Merritt shows by appropriate documents the following sequence of events in his suit in the Florida courts against Argos Resources, Inc.; Argos Resources, Inc. 1981 Partnership; and William D. Brosseau: (1) his complaint in the Circuit Court for the 11th Judicial Circuit in Dade County Florida seeking return of the $100,000, plus interest and costs, which he paid for an unregistered security sold to him by the named defendants; (2) the opinion of the District Court of Appeals of Florida, Third District, denying the named defendant’s appeal from the trial court’s order overruling defendant’s “motions to quash service of process, to dismiss for insufficiency of service of process and to dismiss for lack of personal service;” (3) an order by the Supreme Court of Florida denying the defendant’s Petition for Review of the opinion of the District Court of Appeal; (4) a “Summary Final Judgment” of the trial court entered April 19, 1984, granting judgment and execution against all named defendants, jointly and severally, for $100,000, plus interest of $34,044 to April 19, 1984, and interest at $32.88 per day thereafter till paid, and costs of $1,368.25; and (5) the named judgment debtors’ notice of appeal of the “Summary Final Judgment” and a denial by the trial court of the judgment debtors’ application for a stay and for a reduced bond pending appeal.

Merritt further shows that when he tendered his judgment for local filing and local execution in the Texas courts, one court gave him relief and then transferred the application to the court of respondent Harless. Before respondent Harless, the judgment debtors secured an order which we set out in full:

On the 28th day of August, 1984 came on to be heard Defendants’ Motion to Vacate and Stay of Execution of the foreign judgment originally filed in the 68th Judicial District Court of Dallas County, Texas, Cause No. 84-6317, which case was transferred to this Court.
The Court finds that Defendants’ Motion should be granted and it is therefore ORDERED that the approval for filing of foreign judgment is vacated and the execution on the foreign judgment is stayed pending further order of this Court.

Signed this 28th day of August, 1984. The motion of the judgment debtors which was sustained by respondent Harless urged: (1) that they were entitled to a “Motion for New Trial" directed to the Florida judgment but presented to respondent Harless; (2) that they are entitled to try counterclaims against Merritt before execution is allowed on his Florida judgment; (3) that judicial efficiency warrants (2) above; and (4) that the Florida judgment is not actually final despite its recitations.

Before this Court, the judgment debtors have filed a “real party in interest” response to Merritt’s application in which it is urged (1) that this Court has no jurisdiction to grant Merritt any relief; (2) that respondent Harless had “discretion” to enter the order and no abuse has been shown; and (3) that respondent Harless’ order is authorized by article 2328b-5 (Uniform Enforcement of Foreign Judgments Act) TEX. REV.CIV.STAT. (Vernon 1984). We hold that the order entered by respondent Harless was without authority, whether by “discretion” or by statute. Consequently, we vacate the order.

The mandamus jurisdiction of this Court is currently found in article 1824, TEX.REV.CIV.STAT.ANN. (Vernon Supp. 1984). Our jurisdiction is concurrent with that of our supreme court and includes “all writs of mandamus agreeable to the principles of law regulating such writs, against any Judge of a District or County Court.” See W. W. Rodgers and Sons Produce Co. v. Johnson, 673 S.W.2d 291 (Tex.App.—Dallas 1984, no writ). Rodgers holds that mandamus should issue “where the respondent had no authority” to enter the order complained of in the mandamus proceeding. If the Respondent here entered his order without authority, then we have jurisdiction, as well as the duty, to vacate the unauthorized order. Our inquiry then becomes whether respondent Harless had authority under article 2328b-5 to deny filing of and execution upon the Florida judgment.

Article 2328b-5 provides a comprehensive scheme for the filing and enforcement of the judgments of sister states. Section 2 of that Act provides for the filing of an authenticated foreign judgment with the local court clerk who shall thereafter “treat” such judgment as if the local court had entered it. The last sentence of section 2 provides that: “A filed foreign judgment has the same effect and is subject to the same procedures, defenses, and proceedings for reopening, vacating, staying, enforcing, or satisfying as a judgment of the court in which it is filed.” Relying upon this language, the judgment debtors urged the trial court, and now this court, that, from the moment the Florida judgment was filed, all the panoply of relief accorded a judgment debtor, from and after entry of a local judgment, applies and is available. The Relator urges that section 2 cannot be read so as to allow any of the panoply of relief twice and that any relief sought and denied in the foreign state may not be again sought here. We agree with the Relator and disagree with the judgment debtors.

We conclude that the question of personal jurisdiction, having been raised in and decided by the Florida courts, cannot be raised again in the Texas courts. Our record reflects that the judgment debtors appeared in the Florida trial and appellate courts urging, and losing, their jurisdictional pleas. Had such proceedings preceded a judgment in a Texas court, the “effect” thereof could not be said to allow the judgment debtors to again raise lack of personal jurisdiction as a ground to vacate the judgment or deny the execution thereon, as ordered by respondent Harless. Kellogg v. Kellogg, 559 S.W.2d 126, 128 (Tex.Civ.App.—Texarkana 1977, no writ); Layton v. Layton, 538 S.W.2d 642, 647-48 (Tex.Civ.App.—San Antonio 1976, writ ref’d n.r.e.); see Joiner v. Vasquez, 632 S.W.2d 755, 760 (Tex.App.—Dallas 1981) (en banc) (Guittard, C.J., on motion for rehearing), cert. denied, — U.S. -, 104 S.Ct. 422, 78 L.Ed.2d 357 (1983).

The other grounds urged for staying the Florida judgment cannot be raised in the Texas court because they are the subject of a pending appeal in Florida. Our record reflects that the judgment debtors sought a “stay” in the Florida courts pending appeal of the trial court’s judgment, or a reduced bond to delay execution, but were denied both. Had such stay or reduced bond been sought and denied, post-judgment in a Texas court, the “effect” thereof could not be said to allow the judgment debtors to twice urge the same.

Our record reflects that the judgment debtors urged, and lost, in the trial court in Florida, objections to the severance of their counterclaims and a plea that trial thereof with Merritt’s claims would aid judicial efficiency as well as allow judicial offset between the claims. The record further reflects that all the trial court’s rulings, as well as the judgment, are now on merit appeal in the Florida courts. Had such rulings and final trial court judgment been made and entered in a Texas court, and had an appeal been perfected, the “effect” thereof could not be said to be that the Texas trial court still possessed any jurisdiction to vacate its orders or judgment, the very power respondent Harless purported to exercise in this case.

The record reflects that the judgment debtors employed, as their vehicle in Respondent’s court, a “Motion for New Trial” and raised therein all the issues now argued. However, the judgment debtors had theretofore fully perfected their appeal in Florida. The effect of an appeal is to deprive the trial court of all authority to change or vacate its judgment. It cannot be said that article 2328b-5’s intended “effect” was to ignore the perfected appeal and restore all issues to the trial court (now a Texas Court) to be relitigated.

We recognize that no precedent is cited in our holdings; however, to the best of our knowledge, and that of counsel, no precedent exists to resolve the arguments presented. We are directed by section 7 of article 2328b-5 to interpret and construe this act to achieve its general purpose, i.e., the uniform enforcement of foreign judgments. To accomplish this purpose, we are instructed to give the same effect to foreign judgments that we would give to an identical judgment rendered in the Texas court where filed. We hold that article 2328b-5 requires that respondent Harless treat the Florida judgment as his own would be treated when all issues, interlocutory and final, have been concluded by judgment with execution, and an appeal therefrom has been perfected, but no su-persedeas bond has been filed. Because respondent Harless would be without authority to enter his order of August 28, 1984, relating to a judgment in his own court which had been rendered April 19, 1984, from which appeal had been perfected without supersedeas bond, it follows that he was without authority to do so in this case.

Our writ shall issue requiring the vacation of respondent Harless’ order of August 28, 1984, unless a certified copy of such order is furnished to and filed with our clerk promptly after the receipt of this opinion by respondent Harless.

Writ conditionally granted.


text:
    Terry Len ANDERSON, Milton Wingate, and Dye Trucking Co., Appellants, v. Johnny TRENT, Individually and As Next Friend of Johnny Wayne Trent, Jr., A Minor, Appellee.
    No. 05-83-01489-CV.
    Court of Appeals of Texas, Dallas.
    Dec. 12, 1984.
    Rehearing Denied Jan. 14, 1985.
    Lancaster Smith, Dallas, for appellants.
    Frederick H. Shiver, Dallas, for appellee.
    Before CARVER, GUILLOT and SHUM-PERT, JJ.
   GUILLOT, Justice.

This is an appeal from a judgment granting actual and exemplary damages as a result of a jury verdict in a collision' case. In their first three points of error, appellants, who will be collectively referred to as Anderson, contend that there is no or insufficient evidence to support the findings of gross negligence on the part of Dye or the findings of recklessness or incompetence on the part of Anderson. In his final point, Anderson contends that, should exemplary damages be awarded, they should be reduced by the 35 percent comparative negligence of Johnny Trent’s wife who was killed in the accident. Other points of error are disposed of in an unpublished opinion of this date. For the reasons below, we affirm the damages portion of the judgment.

We shall point out the facts as briefly as possible. The accident giving rise to this case occurred about 5:15 p.m., July 20, 1981, at the intersection of U.S. Highway 380 and the service road of U.S. Highway 75 in the City of McKinney, Texas. U.S. 380 is three lanes westbound and three lanes eastbound at that point. These lanes are divided by a concrete median. There are stop signs stopping north and south traffic on the service road of U.S. 75.

Defendant Terry Len Anderson was driving a loaded tractor-trailer weighing approximately 78,000 pounds in the eastbound center lane of U.S. 380 when he collided with the automobile being driven by Tambra Arlene Trent. Mrs. Trent had driven up to the intersection in the inside westbound lane on U.S. 380 and was turning to the left to make a “U” turn and to go eastbound on U.S. 380. There was a flashing yellow light for the eastbound traffic at the intersection. That light was flashing red for north and south traffic on U.S. 75. Mrs. Trent died as a result of the injuries she sustained in this collision.

The evidence on whether Anderson was a reckless or incompetent driver and whether Dye knew or should have known this is, needless to say, conflicting. With respect to the no evidence contentions of Anderson, we focus only on the evidence favorable to the jury verdict, ignoring all contrary evidence. Garza v. Alviar, 395 S.W.2d 821 (Tex. 1965). In so doing we find that there is evidence to support the jury’s findings.

With respect to the insufficiency of evidence contention, we consider all the evidence to see if the verdict is so against the great weight and preponderance of the evidence as to be manifestly unjust. In re King’s Estate, 244 S.W.2d 660 (Tex.1951). The following evidence is favorable to Anderson: he had no chargeable accidents on his record for the previous three years; he had a chauffeur’s and a commercial license; he had not had any suspension of his licenses in the past three years. On the other hand, the record also reveals that Anderson had three speeding violations—ranging from fifteen to twenty miles an hour above the limit—within a nine-month period that began only 25 months before the accident in question. He had previously had one accident, and he received a speeding ticket on the morning of the accident in question. The evidence further shows that, at the time of the accident, Anderson was driving a gravel truck weighing approximately 78,-000 pounds; that he was going approximately 35 miles per hour as he approached a known busy intersection controlled by a flashing yellow light; that his vision of the intersection was at least partially obstructed; and that it was financially advantageous for Anderson to haul as many loads of gravel that day as he could. While a different jury might have reached a different conclusion, this court is not authorized to substitute its judgment for this jury’s. Continental Bus System, Inc. v. Biggers, 322 S.W.2d 1, (Tex.Civ.App.—Houston 1959, writ ref’d n.r.e.). We find that the evidence is sufficient to show that Anderson was a reckless or incompetent driver.

In determining the issue of Dye Trucking’s gross negligence in permitting Anderson to drive for it, the jury heard evidence that Dye:

(1) hired Anderson at his first interview, a visit lasting fifteen to twenty minutes;
(2) did not talk to anyone for whom Anderson previously worked;
(3) did not administer a written or other driving test to Anderson;
(4) did not wait for a report from Austin on Anderson’s driving record;
(5) did not give a defensive driving test or a copy of the safety manual to Anderson; and
(6) would not have hired Anderson if it had known the number of his traffic violations in the period of time.

There is also evidence of Dye’s due care; nevertheless, weighing both the favorable and the unfavorable evidence, the jury could find evidence of Dye’s gross negligence. In reviewing that finding, we must weigh all of the evidence. See Burnett v. Motyka, 610 S.W.2d 735, 736 (Tex.1980). In doing so, we hold that the evidence is sufficient. We overrule Anderson’s first three points of error.

In his final point of error, Anderson contends that if we sustain the jury’s award of exemplary damages against Dye, we must reduce the award by the amount of comparative negligence (35%) of Mrs. Trent. He cites for this proposition Pedernales Electric Cooperative, Inc. v. Schultz, 583 S.W.2d 882 (Tex.Civ.App.—Waco 1979, writ ref’d n.r.e.). In that case, the Court of Civil Appeals rightly stated that “the overriding policy consideration in the award of exemplary damages is as a punishment for gross negligence as distinguished from compensation.” Pedernales, 583 S.W.2d at 884-85. But we disagree, for two reasons, with the Waco court’s conclusion that the comparative negligence statute, TEX.REV.CIV.STAT.ANN. art. 2212a (Vernon 1984), also bars recovery of exemplary damages in “the proportionate part attributable to plaintiffs’ contributory negligence.” Pedernales, 583 S.W.2d at 885.

First, if exemplary damages were only for compensating the plaintiff, then an argument could be made that they should be reduced by the percentage of the plaintiff’s comparative negligence. However, the paramount purpose for awarding exemplary damages is not to compensate the plaintiff, but to punish and set an example for others. Missouri Pacific Railway Company v. Shuford, 72 Tex. 165, 10 S.W. 408 (1888); see also Pedernales, 583 S.W.2d at 884-85. Consequently, it is incorrect to view the award of exemplary damages from the eyes of the recovering plaintiff; rather, the award should be viewed from the eyes of public policy. Second, if gross negligence, wanton conduct, or reckless disregard for the rights of others were a plain vanilla form of negligence, then comparative negligence would necessitate reduction in any damages. In Texas, however, while gross negligence has been defined in a myriad of ways, the distilled essence of those definitions is that ordinary negligence is not of the same ilk as gross negligence. Therefore, the two are not so analogous as to allow comparison for the purpose of reducing compensation.

Probably the best Texas case discussing the fact that ordinary and gross negligence are not comparable is Burk Royalty Company v. Walls, 616 S.W.2d 911 (Tex.1981). There the Supreme Court outlined the difference:

The essence of gross negligence is not the neglect which must, of course, exist. What lifts ordinary negligence into gross negligence is the mental attitude of the defendant; that is what justifies the penal nature of the imposition of exemplary damages. The plaintiff must show that the defendant was consciously, i.e., knowingly, indifferent to his rights, welfare and safety. In other words, the plaintiff must show that the defendant knew about the peril, but his acts or omissions demonstrated that he didn’t care.

Burk Royalty Company, 616 S.W.2d at 922 (emphasis in original). Consequently, we hold that the nature of gross negligence resulting in exemplary damages does not call for the imposition of the comparative negligence reduction in damages. We overrule Anderson’s final point and affirm.

Costs taxed 98% against appellants jointly and severally; 2% against appellee.


author: DUGGAN, Justice.

text:
    Pete O. ZAMORA, d/b/a Pete O. Zamora Insurance Agency, Appellant, v. Woodie KITCHING and Sandra Kitching, Appellees.
    No. 01-84-00348-CV.
    Court of Appeals of Texas, Houston (1st Dist.).
    Dec. 31, 1984.
    Rehearing Denied Jan. 24, 1985.

      Charles A. Daughtry, Richard B. Dreyfus, Dibrell & Greer, Galveston, for appellant.
    Douglas H. Chilton, Mabry, Herbeck & Chilton, Texas City, for appellees.
    Before BASS, DUGGAN and BULLOCK, JJ.
   OPINION

DUGGAN, Justice.

This is an appeal from a judgment entered on a verdict in favor of homeowners in their suit against their insurance agent for damages occasioned by the agent’s alleged negligent failure to inform them that their flood insurance had lapsed.

In answers to special issues, the jury found that the defendant/appellant, Pete 0. Zamora, was 75% negligent (a) in failing to notify plaintiffs/appellees, Woodie and Sandra Kitching, that he had received their copy of the National Flood Insurance Renewal Form; (b) in disregarding a “Speed Letter” from the Kitchings’ mortgage company inquiring as to the non-renewal of their flood insurance policy; and, (c) in failing to notify the Kitchings that he had received their “Payor Copy” of the National Flood Insurance Premium Notice. The jury likewise found that the Kitchings were 25% negligent in failing to pay their flood insurance premium before the expiration date, and that the cost of repairs reasonably necessary to restore the appellees’ residence to its former condition was $20,-704.75. The court’s judgment awarded the plaintiffs 75% of that amount, or $15,-528.56.

The appellant raises eight points of error on appeal.

When the Kitchings purchased their home in Dickinson in March of 1974, Zamora’s real estate agency handled the transaction. Additionally, through his insurance agency, Zamora helped the Kitchings procure a' policy of home owner’s insurance and a one-year flood insurance policy with the National Flood Insurance Program. This flood insurance policy was renewed annually in 1975, 1976, 1977 and 1978 after the Kitchings received renewal notices directly from the National Flood Program. The flood policy lapsed on June 16, 1979, for nonpayment of premium, and on July 26, 1979, the appellees’ home was damaged by extensive flooding in the Dickinson area.

Sandra Kitching testified that the pay- or’s endorsement of the original flood insurance policy called for the Kitchings’ mortgage company to pay the yearly premium due. Yearly policy renewal notices were mailed to the Kitchings as insureds, to the mortgage company as payor, and to Zamora as agent. In 1975, 1976, 1977, and 1978, duplicate premium payments were made when Mrs. Kitching received the insured’s copy of the renewal notice and paid the “bill,” and the mortgage company, as payor, also made payments.

Mrs. Kitching testified that she “usually” paid the renewal premiums through Zamora’s office by making out checks to P.O.Z. Realty or to the National Flood Insurance Program, and that she either personally delivered the checks or mailed them to Zamora’s office. The evidence of this method of payment consisted of copies of two checks found in Zamora’s file: (1) the Kitchings’ check dated June 11, 1975, payable to “P.O.Z. Realty;” and, (2) the Kitch-ings’ check dated May 16, 1978, payable to “National Flood Insurance.” All of the Kitchings’ other cancelled checks and records were lost in the flood. No other checks or records were produced to show how payments were made.

Mrs. Kitching testified that she never relied on Zamora to notify her that the renewal premium was due and that Zamora never called her to make sure that the premiums were paid. She testified that she received a renewal notice from National Flood each year from 1975 through 1978, but denied that she received a renewal notice for 1979. Mr. and Mrs. Kitching both testified that when they went to Zamora’s office on July 30, 1979, after the loss, they saw in Zamora’s file not only the 1979 renewal notices they should have received but also a policy expiration notice dated as having been mailed from National Flood on July 31, 1979.

Zamora denied that the “payor’s” copies of the insurance renewal notices were ever in his file or that he had received them. He testified that if he had received the payor’s copies of the renewal notices, there would have been some form of transmittal letter or explanation from National Flood, and there was no such letter or explanation in his file. He did testify that he had received the agent’s copies of the renewal notices dated May 2,1979 and June 4,1979, and a “Speed Letter” from the Kitchings’ mortgage company dated June 14, 1979. This “Speed Letter” stated:

The flood policy on the captioned loan will expire on 6/16/79 and our records indicate that Mr. Kitching is to pay the premium, however, we have not receive [sic] evidence of renewal coverage. Please review your records and advise us if this premium has been paid and the coverage extended.

Zamora testified that he received this letter, dated June 14th, only after the June 16th policy expiration date, and that while he made no attempt to contact the Kitch-ings, he did contact the mortgage company.

Zamora testified that after his receipt of the “Speed Letter” from the mortgage company, he received a draft payable to the Kitchings in care of Pete 0. Zamora Insurance Agency, dated June 22, 1979, from National Flood in the amount of $83.00. At the bottom of the draft, which was introduced in evidence by the Kitchings, was the following notation:

Frequently, both the insured and the mortgagee will pay a renewal notice at the same time, resulting in a double payment. Perhaps this is what happened in your case. This draft is a refund of a duplicate payment since your policy has already been renewed. (Emphasis added).

Zamora testified that after he received this draft he assumed that the renewal premium had been paid in duplicate for the Kitchings’ 1979 flood policy. He deposited the draft in his agency account, allowed time for it to clear, wrote out a check to the Kitchings for $83.00, and mailed it on July 24, 1979, to the address provided by the Kitchings, 12226 Oak Lane, Dickinson, Texas 77539. The letter was returned to Zamora on or about July 25, 1979, with a notation on the envelope, “Return to Sender, Undeliverable as Addressed, Dickinson, Texas.”

The flood which damaged the Kitching’s home occurred on July 26, 1979, a Wednesday. On the following Monday, July 30, 1979, Mrs. Kitching came to Zamora’s office to turn in a claim for flood damage. Zamora testified that it was then that he noticed he had not received a notice from National Flood that the Kitching’s policy had been renewed. Zamora also testified that Mrs. Kitching told him at that time that she had sent in the renewal premium. In Mrs. Kitching’s presence, Zamora called the National Flood Program office and was told that the company had no record of having received payment for the renewal premium, that company records showed the renewal notices had been mailed to the insured at 12226 Oak Lane, and that the company had no record of the return of these notices as not received by the insured.

Woodie Kitching testified that prior to his wife’s and his visit to Zamora’s office on July 30th, both had called Zamora and told him they had sustained flood damage, and Zamora had arranged for a National Flood Program adjuster to come out to their home. The adjuster was prepared to give the Kitchings an initial payment of $10,000 toward their flood loss when she checked with her office and discovered that the flood policy renewal premium had not been paid. Mr. Kitching testified that he told Zamora when he first spoke to him that he paid the premium, had a loss, and wanted to claim this loss.

By his first point of error, Zamora contends that the trial court erred in rendering judgment for the Kitchings because there was no evidence that he had a duty to prevent the expiration of the Kitchings’ flood insurance policy.

The right to recover for injuries resulting from negligence is founded upon the violation of a duty. Where no duty exists, there can be no violation of duty and no negligence. Trinity Universal Insurance Co. v. Burnette, 560 S.W.2d 440, 442 (Tex.Civ.App.—Beaumont 1977, no writ). The plaintiff has the burden of proving the existence and the violation of a legal duty. Taylor v. Colonial Savings Assn., 533 S.W.2d 61, 64 (Tex.Civ.App.—Houston [1st Dist.] 1975, rev’d on other grounds 544 S.W.2d 116 (1976)).

Appellant’s omission to act lay in his failure to notify appellees of his receipt of the payor’s copy of the renewal form and renewal notice, as well as the “Speed Letter” from appellees’ mortgage company. However, unless some relationship between the parties imposed a duty to act, there was no liability for an omission to act. Gibson v. R.O. “Bill” Williams Ins. Co., 398 S.W.2d 408, 410 (Tex.Civ.App.—Beaumont 1965, writ ref’d n.r.e.).

A relationship between appellant and ap-pellees was first established when he aided them in applying for flood insurance when they purchased their home. Appellant was listed as the insurance agent on the yearly renewal notice forms sent to appellees by the National Flood Insurance Program, and received a yearly commission from the National Flood Program after appellees renewed their policy. The evidence is uncon-troverted that appellees made at least two premium payments for the flood insurance policy through appellant’s office. In 1978, at the request of the Kitchings’ mortgage company, Zamora corresponded with National Flood to change the payor endorsement on the policy from the mortgage company to the Kitchings. Mrs. Kitching testified that she spoke only to the mortgage company about this change in endorsement which she requested, and that she “never talked to Mr. Zamora until the day of the flood.”

Uncontroverted evidence further shows that from 1974 until 1978 it was the responsibility of the Kitchings’ mortgage company to pay the flood policy premiums, and that the Kitchings never relied on Zamora to notify them that a renewal premium was due.

Zamora’s expert witness, an independent insurance agent since 1974, testified that the National Flood Insurance Program differs from other types of insurance coverage in that it does not assume the liability of issuing a renewal notice to the insured; that the renewal notice sent out by the program is merely a courtesy to the insured; and that the person who pays the premium assumes the responsibility to see that the policy is renewed every year. He likewise testified that in his experience with the National Flood Program, he has on occasion received the insured’s copy of a renewal notice, but that a form letter has been attached each time explaining why the insured’s or payor’s copy was being sent to the agent. When asked on cross-examination if it was his duty to forward the insured’s copy of a renewal form if the copy was in his file, he answered, “[i]t would be a professional courtesy; it would not be a duty.”

Few Texas cases deal with whether an insurance agent has a duty to inform an insured as to an insurance policy renewal date. Zamora relies on the case of Gibson v. R.O. “Bill” Williams Ins. Co., supra, to support his contention that he had no duty to notify the Kitchings about the non-renewal of their policy.

In Gibson, an insurance agent advised his client by a letter, dated five days after the policy expired, that he would not be able to renew coverage on the client’s beach house. This letter was received one day before Hurricane Carla hit and five days after the U.S. Weather Bureau issued its first storm bulletin. The client was unable to secure coverage for his beach house before the storm hit. Prior to this notification of nonrenewal, the insurance agent had carried the insured’s automobile insurance for about ten years. At renewal time for the automobile policy, the agent would renew that policy, sometimes with prior client contact and sometimes without. The renewal automobile policy, when sent to the client, would always have a sticker attached stating that:

This policy is mailed to you in keeping with our practice of never letting our customers’ protection lapse....

Despite the evidence of these stickers, the Beaumont Court held that, under the circumstances presented, the agent did not have a duty to notify the insured that the policy covering the beach house would not be renewed. “There is no doubt that an insurance agent may contract with an insured to maintain certain coverage, and that an action would lie in the event of breach of such contract.” Gibson, 398 S.W.2d at 410. Because no such agreement existed, however, the court found no duty on the part of the agent to notify his client earlier of the policy’s non-renewal.

In arguing that Zamora had a duty to notify them of his receipt of their renewal notices or of the date of renewal of the policy, the Kitchings rely on the 1977 decision in Trinity Universal Ins. Co. v. Burnette, supra, also by the Beaumont Court, where the uncontroverted evidence showed that the insurance agent handled a number of policies for the insured and had always renewed the policies or notified the insured when policies were not renewed. Burnette held that “[although there was no statutory or contractual duty impressed upon ... [the agent] to notify its policyholders of non-renewal,” the agent was under a duty as the insured’s agent “to either renew their policy with Trinity, replace the policy with another company, or notify them of its non-renewal so that they could obtain insurance elsewhere.” Id. at 443.

The Texas Supreme Court held in McCall v. Marshall, 398 S.W.2d 106 (Tex.1965) that no legal duty arises on the part of an insurance agent to extend his customer’s insurance protection merely because the agent knows of the need for additional insurance, in the absence of evidence of prior dealings whereby agent has taken care of his customer’s needs without consulting him. Conversely, in Diamond v. Duncan, 107 Tex. 256, 172 S.W. 1100 (1915), the court held that an insurance broker who had for years procured insurance for his client and handled renewals and placement, had a duty to obtain substitute coverage when he knew that the insurance company covering his client’s property had become insolvent.

An insurer has no duty to notify an insured of the time when a premium falls due unless (1) such notice is required by statute or agreement of the parties; or, (2) the insurer has by custom or course of dealing with a particular insured led him to believe that a notice of premium due will be sent. Vance on Insurance, sec. 55 (3rd ed. 1951). Substantial authority from other jurisdictions states that neither the insurer nor its agent has a legal duty to give notice of the expiration of an insured’s policy since the insured is charged with the knowledge of the expiration date stated in the policy and the necessity of tendering a premium for renewal. Citta v. Camden Fire Ins. Ass’n., Inc., 152 N.J.Super. 76, 377 A.2d 779, 780 (N.J.Super.1977), citing Gibson v. R.O. “Bill” Williams Ins. Co., supra; Burns v. Ramsey, 520 P.2d 137, 138 (Colo.App.1974); Shepherd v. United States Fidelity & Guaranty Co., 504 P.2d 228, 229 (Kan.1972); Kapahua v. Hawaiian Insurance & Guaranty Co., 447 P.2d 669, 671 (Hawaii 1968).

No statute requires an agent to notify an insured that a National Flood Insurance Program renewal premium is due. Appellant’s expert witness likewise testified that the National Flood Program does not assume the liability of issuing renewal notices. The appellees’ own uncontrovert-ed testimony showed that there was no agreement between the parties by which Zamora was required to notify the appel-lees as to payment of flood renewal premiums. Additionally, there is no evidence that Zamora, by custom or course of dealing with the Kitchings, led them to believe that he would send out a notice that a renewal premium was due, or see that the renewal premium was paid. The Kitchings both testified that they never relied on Zamora to send a renewal notice or to pay their premiums gratuitously.

The evidence fails to prove that such a definite relationship existed between Zamora and the Kitchings as to impose an affirmative duty on Zamora to act to notify the Kitchings that their insurance had not been renewed. McCall, 398 S.W.2d at 109; Gibson, 398 S.W.2d at 410. There being no affirmative duty on Zamora to act, there can be no action for negligence for his failure to do so. The trial court erred in rendering judgment for the plaintiffs based on the negligence issues submitted to the jury. Appellant’s point of error one is sustained.

Our holding of no duty on the part of the appellant is dispositive of this appeal, and it is therefore unnecessary to consider appellant’s seven remaining points of error, all of which are predicated upon the existence of a duty by appellant to notify appellees in connection with policy renewal. The judgment of the trial court is reversed and judgment rendered that the plaintiffs/ap-pellees take nothing.

Reversed and rendered.


author: COUNTISS, Justice.

text:
    In the Matter of the MARRIAGE OF Havon Paul KNIGHTON and Donna Maria Knighton and In the Interest of P.I.K. and P.A.K.
    No. 07-82-0392-CV.
    Court of Appeals of Texas, Amarillo.
    Dec. 31, 1984.
    Rehearing Granted in Part and Overruled in Part Jan. 30, 1985.

      Robert E. Goodfriend, Ruth Abboud Cross, Akin, Gump, Strauss, Hauer & Feld, Dallas, for appellant.
    R.C. Hamilton, Kolander & Hamilton, P.C., Amarillo, for appellee.
    Before DODSON, COUNTISS and BOYD, JJ.
   COUNTISS, Justice.

This is a divorce case. Appellant Donna Maria Knighton attacks, by twelve points of error, that portion of the judgment by which, consistent with the jury verdict, her former husband, appellee Havon Paul Knighton, was appointed managing conservator of their two minor sons. Because we have concluded that Mr. Knighton’s attorney exceeded the bounds of permissible jury argument, we reverse and remand.

Mrs. Knighton is a member of the Worldwide Church of God, a denomination headquartered in Pasadena, California, and led by Mr. Herbert W. Armstrong. Mrs. Knighton’s religious beliefs, the teachings of her church, the personality of its leader and her private religious thoughts from a personal diary that came into Mr. Knigh-ton’s hands were the focal points of the trial. From the record before us, it appears that, as pertinent to this appeal, the Worldwide Church of God is a Christian church that advances a fairly strict set of tenets, advocates a three-tiered tithing policy and observes a Friday evening to Saturday evening Sabbath. The record does not disclose any policies or practices of the church that could be construed as physically harmful to Mrs. Knighton or her children.

The final jury argument by Mr. Knigh-ton’s counsel was, in its entirety, an attack upon Mrs. Knighton’s church and her religious beliefs. Over unsuccessful objections to his use of the term “cult” and his characterizations of the church as “designed to collect money,” counsel told the jury in part:

Up until now in this trial, I have called this a religious belief or a religion. That’s not the truth. The truth is, it’s a cult. It’s a cult designed to collect money.
* * * * * *
Let me tell you why it is a cult. This group even makes the ministers send the money to Pasadena, even their — the money they collect, they’ve got to send it to California, and Mr. Armstrong sends back what he wants them to have. If that’s not the first characteristic of a cult, I’ve never seen it.
* * * * * *
He tells the people that they are going to be persecuted for these beliefs, for taking these feasts. They recognize that the world thinks they’re foolish for doing this.
******
They admit that the world looks at them just like the Nazis looked at the Jews. What more definition would you want of a cult than that? And they call it a religion.
We’re not ashamed. That was in the evidence. She said it. We’re not ashamed. Society is structured where we don’t fit.
Think of that. She wrote it in her book. We don’t fit. And then are you going to fit these two childs — children in something like that?
The only way to break the structure that the world has against this cult is by bucking the system.
******
You are going to condemn these two children to this kind of life, and you’re going to condemn them.
Her mother was in it. Her uncles were in it. Remember, she first denied her uncle was a minister, but then how could you forget her uncle was a minister when she stayed with him in Tennessee last November? But she denied it at first.
One of her cousins is an official in the Ambassador College right today, and she says she has four cousins that were ministers. And she’s going to raise these children in this faith.
Now, the two most important people didn’t come here today. You haven’t seen them, and that’s these two little boys.
Now, all I want you to do is to give them a choice, to give them a choice at religious freedom.
If you give them to this wife, you certainly will deny them a choice, and they will be condemned. Maybe they might escape later on, but look what situation they’re going to be in at that time.
******
But on your oath as jurors and from your common, human experiences and knowledges, the worst thing you could do would be to condemn these two children to figuratively being burned at the stake.

The foregoing argument, says Mrs. Knighton by her points of error one, two and four, was so improper, prejudicial and inflammatory that it deprived her of a fair trial. We agree.

In Standard Fire Ins. Co. v. Reese, 584 S.W.2d 835, 839 (Tex.1979), the Supreme Court listed the elements a complainant must establish in order to demonstrate a reversibly erroneous jury argument. There must be (1) error (2) that was not invited or provoked, (3) that was preserved by proper trial predicate (such as objection, motion to instruct or motion for mistrial) and (4) was not curable by instruction, withdrawal of the statement or reprimand by the court. In analyzing the harmfulness of the argument, the appellate court will consider the length, repetitiveness and cumulative effect of the argument, its probable effect on a material finding and, from the entire record, the relative strength of the case. “From all of these factors, the complainant must show that the probability that the improper argument caused harm is greater than the probability that the verdict was grounded on the proper proceedings and evidence.” Standard Fire Ins. Co. v. Reese, supra, at 840.

In applying the stated principles, we note at the outset that elements (2) and (3) are satisfied. Mrs. Knighton did not invite or provoke Mr. Knighton’s trial tactics and she preserved her complaint by objection sufficient to preserve error. Houseman v. De Cuir, 155 Tex. 127, 283 S.W.2d 732, 735 (1955). In determining whether the argument was erroneous, the first requirement of Standard Fire Ins. Co. v. Reese, we are especially cognizant,' in this case, of those rules of law that forbid an appeal to religious prejudice, Safety Casualty Co. v. Wright, 138 Tex. 492, 160 S.W.2d 238, 243 (1942); Texas Employers’ Insurance Association v. Jones, 361 S.W.2d 725, 727 (Tex.Civ.App.—Waco 1962, writ ref’d n.r.e.); Carson v. Amberson, 148 S.W.2d 972, 974 (Tex.Civ.App.—San Antonio 1941, writ dism’d judgmt cor.), or a misrepresentation of the factors that a jury may consider in reaching its decision, Younger Brothers, Inc. v. Myers, 159 Tex. 585, 324 S.W.2d 546, 549 (1959); World Wide Tire Co. v. Brown, 644 S.W.2d 144, 146 (Tex.App.—Houston [14th Dist.] 1982, writ ref’d n.r.e.). We apply those rules in this case to enforce a fundamental principle: The State cannot prefer the religious views of one parent over the other in deciding the best interest of the child. Watts v. Watts, 563 S.W.2d 314, 317 (Tex.Civ.App.—Dallas 1978, writ ref’d n.r.e.); Bevan v. Bevan, 283 S.W.2d 305, 310 (Tex.Civ.App.—San Antonio 1955, writ ref’d n.r.e.).

After reviewing the entire record, we conclude that the argument was erroneous. There is nothing in this record to suggest that Mrs. Knighton’s religious beliefs were harmful to the children. Yet the argument was a blatant appeal to the jury to deprive Mrs. Knighton of the managing conservatorship of her children because of those religious beliefs. The jury was told several times that Mrs. Knighton belonged to a cult and was warned that it would be condemning the children, denying them religious freedom and figuratively burning them at the stake if it named Mrs. Knigh-ton as their managing conservator. Such an argument violates all of the principles discussed above.

The final inquiry, then, is whether the argument was so prejudicial that reversal is required. We note, again, that Mr. Knighton’s pursuit of Mrs. Knighton’s religious beliefs consumed most of the trial and all of his counsel’s closing argument. The jury’s attention was continually focused on the matter and it had little else before it from Mr. Knighton. It is probable, indeed almost certain, that counsel’s inflammatory argument, especially his frequent use of a word so laden with negative implications as “cult,” led to the verdict in question. Thus, we must conclude that the erroneous argument requires reversal.

Points of error one, two and four are sustained. Because we have found reversible error on common law grounds, we do not reach Mrs. Knighton’s contentions, in points three and five, that the argument produced constitutional violations. Horton v. Horton, 625 S.W.2d 78, 79 (Tex.App.—Fort Worth 1981, writ ref’d n.r.e.). Nor do we dispose of her remaining six points which, if sustained, would produce no greater relief than is being granted. We observe, however, that many of the matters complained of in points six through twelve were not correctly preserved in the trial court and it would be premature for us to rule on them before the trial judge is given an opportunity to do so by proper objection or request.

The judgment is reversed and the case is remanded for new trial.

ON MOTION FOR REHEARING

By his motion for rehearing Mr. Knigh-ton raises one issue that requires attention by the Court. He contends the reversal, if there must be one, should be limited to that portion of the trial court’s judgment decreeing conservatorship of the minor children, because that was the only contested issue brought to this Court. In her response, Mrs. Knighton agrees. We also agree and amend our opinion as specified below.

It is clear that a trial court cannot divide a divorce case into various segments and enter separate, appealable, judgments for each piece. Marriage of Johnson, 595 S.W.2d 900, 902-03 (Tex.Civ.App.—Amarillo 1980, writ ref’d n.r.e.). On appeal, however, the appellate court may affirm the divorce decree, and sever and order a retrial of property issues, McKnight v. McKnight, 543 S.W.2d 863, 864, 868 (Tex.1976); Roach v. Roach, 672 S.W.2d 524, 532 (Tex.App.—Amarillo 1984, no writ), or conservatorship issues. Lipshy v. Lipshy, 525 S.W.2d 222, 223-24 (Tex.Civ.App.—Dallas 1975, writ dism’d).

Accordingly, Mr. Knighton's motion for rehearing is granted to the extent that the portion of the trial court’s judgment granting the divorce and dividing the marital property of the parties is affirmed. The portion of the trial court’s judgment determining conservatorship of the minor children of the parties is reversed and the case is remanded for retrial of all issues pertinent to conservatorship, possession and support of the children. In all other respects, Mr. Knighton’s motion for rehearing is overruled.

      . Mrs. Knighton testified that the church suggests three tithes of ten percent each, one to go to the church, one to be saved by the individual and used to attend various church festivals and one to be donated to needy widows and children of the church. Mr. Knighton never permitted Mrs. Knighton to tithe anything, however.

      . As we understand element (3), an overruled objection will satisfy the element. If, however, the objection is sustained, the objector should then request an instruction to the jury and follow it with a motion for mistrial. Even with the predicates required by element (3), the appellate court will still analyze the argument under element (4) to determine whether it was so prejudicial that nothing could cure the error.