Cedar Spring Enterprises LLC D/B/A Elite Cars Group v. Auction Credit Enterprises, LLC ("ACE") as Assignee of Wesley Travis Free
14-19-01003-CV
| Tex. App. | Nov 4, 2021Background
- ACE (floor planner) advanced funds to Elite (car dealer) under a floor‑plan agreement that gave ACE a security interest in inventory; upon retail sale Elite was to remit payment to ACE and ACE to release the title.
- On June 14, 2016 Wesley Travis Free paid Elite $15,200 for a 2009 Cadillac, took possession, and Elite issued temporary tags; Elite claims it paid ACE amounts toward the car, ACE contends the account remained unpaid.
- Elite requested ACE release title in Sept. 2016; ACE refused and later claimed ~$12,000 remained due. Free retained possession throughout and later obtained title/registration.
- In March 2018 ACE and Free executed an Agreement and Assignment of Claim: ACE agreed to release title to Free and Free assigned his claims against Elite to ACE (and released ACE from related liability).
- ACE sued Elite for breach of contract; after a bench trial the court awarded ACE $15,200 in damages plus $2,000 attorney’s fees. Elite appealed, arguing the damages award lacked evidentiary support and that the assignment was void.
- The Fourteenth Court of Appeals reversed and rendered a take‑nothing judgment in favor of Elite, concluding the evidence was legally insufficient to support damages and vacating attorney’s fees.
Issues
| Issue | Plaintiff's Argument (ACE) | Defendant's Argument (Elite) | Held |
|---|---|---|---|
| Whether evidence supported $15,200 damages | Breach deprived Free of title; measure may be benefit‑of‑the‑bargain (purchase price) or loss‑of‑use | Free suffered no compensable loss: he had possession, temporary tags, and ultimately received title; Elite paid taxes | Court: Evidence legally insufficient for loss‑of‑use and for benefit‑of‑the‑bargain; reversed and rendered for Elite |
| Whether Free's assignment to ACE was void (e.g., ACE a joint‑tortfeasor) | Assignment valid; ACE proceeded as assignee | Assignment void because ACE was a joint‑tortfeasor (argument) | Court did not decide this issue after resolving damages; remanded/decided no need to reach it and rendered take‑nothing |
| Entitlement to attorney's fees | Sought fees as prevailing party | Opposed because no recoverable damages | Court: No attorney’s fees because ACE recovered nothing (American Rule/MBM) |
Key Cases Cited
- City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) (standard for legal‑sufficiency review)
- J & D Towing, LLC v. Am. Alternative Ins. Corp., 478 S.W.3d 649 (Tex. 2016) (loss‑of‑use damages described)
- Yazdani‑Beioky v. Sharifan, 550 S.W.3d 808 (Tex. App.—Houston [14th Dist.] 2018) (benefit‑of‑the‑bargain damages standard)
- Clear Lake City Water Auth. v. Friendswood Dev. Co., Ltd., 344 S.W.3d 514 (Tex. App.—Houston [14th Dist.] 2011) (purpose of benefit‑of‑the‑bargain measure)
- MBM Fin. Corp. v. Woodlands Operating Co., L.P., 292 S.W.3d 660 (Tex. 2009) (attorney’s‑fee recovery requires a substantive recovery)
- Sacks v. Hall, 481 S.W.3d 238 (Tex. App.—Houston [1st Dist.] 2015) (discussing benefit‑of‑the‑bargain measure)
