Kwik Industires, Inc. v. TSFG, Inc.
05-13-00054-CV
| Tex. App. | Mar 30, 2015Background
- Five to six plaintiffs asserted fraud claims against Kwik and Ellis related to dry cleaning and auto service center purchases; Willis group and Lofton group were the remaining plaintiffs after prior dismissals.
- The Willis claims involved alleged misrepresentations by a nonemployee agent (Gary Henson) in the sale of a dry cleaning center; the Lofton claims involved alleged misrepresentations by Ellis regarding price fairness and appraisal for a Centex lube center.
- The trial court granted Kwik and Ellis’s directed verdict as to all Willis claims and most Lofton claims; the Willis claims were dismissed with prejudice, and the Lofton claims proceeded to a jury.
- A jury found for the Lofton plaintiffs on the remaining common law and statutory fraud claims and awarded damages; the court denied postverdict motions and entered final judgment.
- On appeal, the court affirmed the Willis judgment, sustained Kwik and Ellis’s positions on the Lofton issues, and reversed the Lofton damages by rendering take-nothing against Kwik and Ellis.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Agency existence between Henson and Kwik | Willis: Henson was Kwik’s agent during representations | Kwik/Ellis: no agency; Henson not Kwik’s employee/agent | No agency; directed verdict proper |
| Price fairness and validity of appraisal representation | Lofton: Ellis said price was fair/valid appraisal | Kwik/Ellis: statements were opinions, not facts | Statements were opinions; no actionable misrepresentation; verdict reversed for Loftons on this issue (taken as error in denial of JNOV) |
| Revenue projections as misrepresentation/fraud by concealment | Lofton: pro forma projections misrepresented industry standards | Insufficient evidence of false representations or reliance | Insufficient evidence to support fraud; JNOV warranted for Kwik and Ellis on these claims |
| Loftons’ cross-appeal on directed verdict on remaining claims | Loftons: directed verdict prevented fraud claims from reaching jury | No appealable cross-issue due to lack of notice of appeal | Cross-appeal overruled; Loftons take nothing on those issues |
Key Cases Cited
- Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of Am., 341 S.W.3d 323 (Tex. 2011) (fraud elements; value opinions can be actionable if knowledge unequal)
- Transp. Ins. Co. v. Faircloth, 898 S.W.2d 269 (Tex. 1995) (whether a statement of value is fact or opinion; special knowledge may render it factual)
- Gaines v. Kelly, 235 S.W.3d 179 (Tex. 2007) (apparent authority and agency distinctions in fraud cases)
- City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) (standard for reviewing legal sufficiency of evidence in verdicts)