Frank Thomas Shumate Jr. D/B/A F.T.S. Trucking v. Berry Contracting, L.P. D/B/A Bay, Ltd.
13-19-00382-CV
| Tex. App. | Jul 15, 2021Background
- Bay Contracting sued Frank Shumate d/b/a F.T.S. Trucking alleging a long-running scheme (with Bay employee Michael Mendietta) to divert Bay’s trucks, materials, and services to third parties and to Shumate’s personal projects without paying Bay; Bay discovered discrepancies in late 2011.
- Internal investigation (Kevin Stone, Juan Sotelo, Susie Sullivan, dispatchers, and third-party witnesses) identified missing work orders/scale tickets, destruction of records, and third-party payments made to Shumate (e.g., Quality Readymix checks totaling $87,507.10).
- Stone calculated unpaid value for thirteen work orders totaling $896,090.47; jury found for Bay on theft, conversion, fraud, etc., and assessed $896,090.47 actual damages, $4,480,452.35 punitive damages, and attorney’s fees.
- Bay elected to recover under the Texas Theft Liability Act; trial court entered final judgment awarding $871,090.47 actual damages (reflecting a $25,000 credit), punitive damages, interest, and fees.
- Shumate appealed raising five issues: statute of limitations, entitlement to settlement/one-satisfaction credit, punitive-damages infirmities, legal/factual sufficiency, and attorney’s fees.
Issues
| Issue | Plaintiff's Argument (Bay) | Defendant's Argument (Shumate) | Held |
|---|---|---|---|
| 1) Statute of limitations | Bay argued claims were timely; discovery in 2011 and suit filed 2012 | Limitations bars Bay’s claims | Waived by Shumate for failure to request jury finding or preserve; issue overruled |
| 2) One-satisfaction / settlement credit | Bay argued no satisfaction of prior Mendietta judgment that would bar recovery here | Shumate argued he was entitled to a $1.9M credit based on Mendietta judgment/forbearance | No settlement or satisfaction shown for the same indivisible injury; one-satisfaction inapplicable; credit denied |
| 3) Punitive damages (charge & excessiveness) | Bay maintained punitive damages allowed (uncapped because theft supports felony-level conduct) and charge was proper | Shumate argued jury charge failed to identify underlying tort for punitive award, misdirected jury to consider fees, and award was grossly excessive | Charge objections were waived (agreed charge); punitive award survived constitutional excessiveness review (reprehensibility, ratio, criminal-penalty guideposts) |
| 4) Legal/factual sufficiency of evidence | Bay argued evidence (documents, scale tickets, witness testimony) supported theft, causation, and damages | Shumate argued economic-loss rule, lack of proximate cause, unqualified damages witnesses, and insufficient evidence of theft or damages | Court found legal sufficiency for the theft claim and damages (Stone’s calculations supported damages); economic-loss and other complaints waived or unpersuasive |
| 5) Attorney’s fees | Bay argued fees properly proven by lodestar evidence and billing records; conditional appellate fees supported by opinion testimony | Shumate argued fees were not segregated, lodestar not properly shown, and contingent appellate fees unsupported | Segregation complaint waived; lodestar and billing records were sufficient; conditional appellate fees met lower evidentiary standard; fees affirmed |
Key Cases Cited
- Woods v. William M. Mercer, Inc., 769 S.W.2d 515 (Tex. 1988) (burden to plead, prove, and obtain findings on affirmative defenses like limitations)
- Sky View at Las Palmas, LLC v. Mendez, 555 S.W.3d 101 (Tex. 2018) (one-satisfaction rule and burden for settlement credits)
- Crown Life Ins. Co. v. Casteel, 22 S.W.3d 378 (Tex. 2000) (one-satisfaction/context on single indivisible injury)
- State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408 (U.S. 2003) (due-process guideposts for punitive-damages excessiveness)
- City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) (legal sufficiency standard and view of evidence)
- Rohrmoos Venture v. UTSW DVA Healthcare, LLP, 578 S.W.3d 469 (Tex. 2019) (lodestar requirements for shifting attorney’s fees)
- Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299 (Tex. 2006) (discussion of punitive-damages ratios and reprehensibility)
- Bennett v. Grant, 525 S.W.3d 642 (Tex. 2017) (procedures and guideposts for constitutional review of exemplary damages)