Jonathan Levine and Samantha Levine v. Steve Scharn Custom Homes, Inc., Steve Scharn, and NewFirst National Bank
448 S.W.3d 637
| Tex. App. | 2014Background
- Levines sued SSCHI, Scharn, and NewFirst for construction-related claims; SSCHI countered for breach of contract and defamation; NewFirst counter-claimed for sanctions.
- Trial court granted partial summary judgment and a jury later found the Levines breached first, with SSCHI’s breach excused, and defamed SSCHI; Levines defeated on all claims against SSCHI and NewFirst.
- During construction, NewFirst held $814,990.35 in a deposit account; withdrawals required a signature and were limited to construction purposes.
- A neighbor complaint about the unfinished house led to an email from Jonathan Levine labeling builders as ‘crooks,’ which SSCHI claimed was defamatory.
- SSCHI’s defamation claim proceeded to trial; the jury found the email defamatory and false; the court later sanctions against the Levines for a forged-draw claim.
- On appeal, the Levines challenged jury instructions, sufficiency of defamation damages, materiality of breaches, recovery of damages, and sanctions, all of which the court largely overruled, affirming the trial court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Defamation jury instruction | Levine denial of privilege claim; requested instruction denied | Privilege applies; communications on common interest are protected | No abuse; no privilege instruction required |
| Defamation liability and damages sufficiency | Defamation per quod; damages proven | Statements were opinions or privileged; damages lacking | Defamation per quod not shown; damages not sustained; group libel not dispositive |
| Breach of construction contract first | SSCHI breached first by receipts and plans deviations | No material breach by SSCHI; Levines breached first | Jury finding of Levines breaching first supported; SSCHI breaches immaterial |
| Damages and attorney's fees | Levines liable for damages and fees; SSCHI entitled to fees | Damages improperly awarded; no prevailing party | Damages upheld for SSCHI; Levines not prevailing; fees denied |
| Sanctions against Levines | Forgery claim frivolous; sanctions proper | Sanctions improper; privilege and evidence issues | Sanctions affirmed; evidence supported misconduct |
Key Cases Cited
- City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) (standard for legal sufficiency and weight of the evidence)
- Hancock v. Variyam, 400 S.W.3d 59 (Tex. 2013) (defamation per se vs. per quod framework)
- Diaz v. BarZingus, 306 F.3d 17 (10th Cir. 2010) (arising from standards for jury charge abuse)
- Bentley v. Bunton, 94 S.W.3d 561 (Tex. 2002) (presumption of damages for defamation per se)
- Memon v. Shaikh, 401 S.W.3d 407 (Tex.App.-Houston [14th Dist.] 2013) (definition of defamation categories and damages)