Harvey E. DONWERTH et ux., Petitioners, v. PRESTON II CHRYSLER-DODGE, INC., Respondent.
No. C-6821.
Supreme Court of Texas.
July 5, 1989.
Rehearing Denied Sept. 20, 1989.
775 S.W.2d 634
Kevin Cook, Dallas, for respondent.
OPINION
SPEARS, Justice.
This appeal presents the following issues: whether the record demonstrates some evidence of misrepresentation, whether the court or the finder of fact determines if an action is groundless and brought in bad faith under the Deceptive Trade Practices—Consumer Protection Act,
The court of appeals reversed the trial court‘s judgment in favor of the consumers and rendered judgment that the consumers take nothing, holding that there was no evidence to support the jury‘s verdict. The court also awarded attorneys’ fees against the consumers and, in doing so, held that the issue of bad faith is for the finder of fact while groundlessness is for the court. Finally, the court dismissed the consumers’ cross-points because no separate appeal was brought. 744 S.W.2d 142 (1987).
We hold that there is some evidence to support the jury verdict, that the determination of whether to assess attorneys’ fees against a DTPA claimant is entirely for the court, and that the consumers’ cross-points were properly preserved. Therefore, we reverse the judgment of the court of appeals and remand the cause to that court for consideration of factual sufficiency points and other points upon which it did not initially rule.
Facts
In March 1983 Harvey and Dorothy Donwerth purchased a used 1981 Chrysler automobile from Preston II Chrysler-Dodge, Inc. Before the sale, Mr. Donwerth “mashed” on the brake pedal, finding it to be “spongy” rather than “a full pedal.” Donwerth mentioned his concerns to Bob White of Preston II. After White told the Donwerths that he had driven the automobile as his personal car, that it was a good car, and that there was nothing wrong with the brakes, the Donwerths made the purchase.
The Donwerths began having serious problems with the car, especially the brakes, just months after purchasing it. Suspecting that the odometer reading did not accurately reflect the car‘s milage, Mr. Donwerth had the car‘s ownership history checked. As a result of this title run Donwerth discovered that the automobile had been repossessed from its last individual owner by Chrysler Credit Corporation, which then sold it to a wholesale dealer. That dealer in turn sold it to another wholesale dealer, Villa & Son Auto Sales, which sold it to Preston II. A prior owner‘s records showed the car with over 57,000 miles on it. At the time of sale, however, Preston II had given the Donwerths a written odometer mileage statement that the odometer reading of approximately 37,000 miles was correct to the best of its knowledge and belief. After the sale, when Mr. Donwerth first questioned the mileage statement, White told him: “That is the actual mileage. We bought that car from Larry Lange Cadillac.” When the Donwerths confronted Preston II with the facts, however, White produced an odometer certificate from Fred Villa of Villa & Son stating under oath the unaltered odometer mileage to be 37,199.1
After unsuccessful settlement negotiations, the Donwerths drove for three con-
The case proceeded to trial before a jury. The jury failed to find that the Donwerths had defamed Preston II, and the trial court rendered judgment for the Donwerths on that portion of the verdict. As to the counterclaim, the jury found that Preston II represented the automobile to be of a particular standard, quality or grade when it was of another. The jury failed to find, however, that Preston II acted knowingly in making the misrepresentation or that it violated the DTPA in any other respect. Finally, the jury found that the Donwerths’ DTPA claims were groundless and brought in bad faith, and that Preston II‘s reasonable and necessary attorneys’ fees were $7,000. The trial court, disregarding the groundless and bad faith findings, rendered judgment on the remainder of the verdict for the Donwerths for $15,300, representing statutory damages, attorneys’ fees and prejudgment interest.
Preston II appealed, and the Donwerths by cross-points sought appellate attorneys’ fees. The court of appeals reversed the judgment of the trial court, holding that there was no evidence to support the jury‘s finding that Preston II had violated the DTPA. Based on this holding, the court went on to hold the suit groundless as a matter of law. The court of appeals held the jury‘s finding that the suit was groundless and brought in bad faith constituted an unattacked finding of bad faith and rendered judgment against the Donwerths for Preston II‘s attorneys’ fees of $7,000.00. The court of appeals also dismissed the Donwerths’ cross-points, holding that the Donwerths were required to perfect a separate appeal in order to seek affirmative relief.
DTPA Claim: Circumstantial Evidence Representation Untrue
The Donwerths first complain that the court of appeals erred in holding that there was no evidence to support the jury finding that Preston II represented the automobile was of a particular standard, quality or grade when it was of another. We agree.
White, the Preston II salesman, represented that there was nothing wrong with the brakes. The Donwerths, however, produced evidence that despite proper braking procedure the brakes began “groaning” within a few months after the purchase. After five months, when the Donwerths had driven the car approximately 3,250 miles, Preston II‘s own service report showed that the front brake linings were gone, were “metal to metal,” and that the back linings were “super thin,” making the car “dangerous due to brakes.” Finally, as previously noted, the odometer had been rolled back approximately 20,000 miles at the time of purchase. Together, this constituted some evidence that the brakes were excessively worn and defective at the time of the sale, thus supporting the jury finding that Preston II represented the car was of a particular standard, quality or grade when it was of another. See Morgan v. Compugraphic Corp., 675 S.W.2d 729, 733 (Tex.1984).
Defendant‘s Attorneys’ Fees
The Donwerths next complain that the court of appeals erred in concluding that Preston II was entitled to recover attorneys’ fees against them under
On a finding by the court that an action under this section was groundless and brought in bad faith, or brought for the purpose of harassment, the court shall award to the defendant reasonable and necessary attorney‘s fees and court costs.
We hold that the court of appeals erred in holding that the Donwerths’ action was groundless and brought in bad faith.
The jury found, in response to a single issue, that the Donwerths’ claim was both groundless and brought in bad faith. The court of appeals correctly held that a determination of groundlessness is for the court. However it erred in concluding that the action brought by the Donwerths was groundless. The court stated: “Because the Donwerths could come forward with no evidence to support a DTPA complaint against Preston II, their suit was without arguable basis in fact and, therefore, groundless as a matter of law.” 744 S.W.2d at 145. Even if the court‘s approach were correct, our holding that there was some evidence to support the jury‘s answer to the DTPA inquiry would require a reversal on the determination of groundlessness. However we find the whole approach of the court of appeals flawed. To equate groundlessness with no evidence would preclude the award of attorneys’ fees in obviously fraudulent or malicious actions when some evidence was presented, yet discourage legitimately wronged consumers from seeking the protections afforded by the Act for fear of failure in court. “Groundless” under the DTPA has the same meaning as “groundless” under
The court of appeals next held that the existence of bad faith is an issue for the finder of fact, and that there was some evidence of bad faith to support the jury‘s finding. This was also erroneous. Under the Act, defendants may recover their attorneys’ fees when the court finds the DTPA action was groundless and brought in bad faith, or was brought for the purpose of harassment.
Because the trial court expressly refused to find the action was groundless, and because as a matter of law the action was not groundless, it appears Preston II could not have prevailed on a claim the suit was brought for the purposes of harassment in any event.
Cross-Points
We turn now to the court of appeals’ dismissal of the Donwerths’ cross-points. The Donwerths asserted by cross-points in their appellees’ brief before the court of appeals that the trial court erred in not awarding them appellate attorneys’ fees as a matter of law. They did not, however, perfect a separate appeal by filing their own cost bond under
Notice of Limitation of Appeal. No attempt to limit the scope of an appeal shall be effective as to a party adverse to the appellant unless the severable portion of the judgment from which the appeal is taken is designated in a notice served on the adverse party within fifteen days after judgment is signed, or if a motion for new trial is filed by any party, within seventy-five days after the judgment is signed.4
By its plain language, this rule provides the sole means by which an appellee‘s complaints on appeal can be restricted. We confronted this same issue in Hernandez v. City of Fort Worth, 617 S.W.2d 923 (Tex.1981). In Hernandez, as in this case, the court of appeals refused to consider appellees’ cross-points which sought more relief than appellees had received from the trial court, because appellees had not perfected an independent appeal. In reversing the court of appeals, we held:
An appellee may use cross-points to bring forward complaints of some ruling or action of the trial court that the appel-
lee alleges constituted error as to him. [Citations omitted.] It is not necessary to perfect two separate and distinct appeals, unless the judgment of the trial court is definitely severable, and appellant strictly limits the scope of his appeal to a severable portion. [Citations omitted.]
We reaffirm that holding today. Unless an appellant limits his appeal pursuant to
We reverse the judgment of the court of appeals and remand the cause to that court for further proceedings consistent with this opinion.
PHILLIPS, C.J., files a concurring opinion in which GONZALEZ and COOK, JJ., join.
RAY, J., files a concurring opinion in which MAUZY and HECHT, JJ., join.
PHILLIPS, Chief Justice, concurring.
I do not agree that a DTPA defendant who secures a finding that an action was brought for the purpose of harassment cannot recover attorney‘s fees unless he also obtains a finding that the action was groundless. I, therefore, do not join in the court‘s holding on that question.
This holding was not necessary to the disposition of this case, as Preston II did not complain of the trial court‘s failure to find that the action was brought for the purpose of harassment. The court undertakes to decide this issue without the benefit of briefing or argument, rather than waiting until the question was properly before us.
Moreover, having undertaken to decide this issue, the court decides it wrongly. In my opinion, the plain language of the statute compels the opposite result. Prior to 1979,
On a finding by the court that an action under this section was groundless and brought in bad faith or for the purpose of harassment the court may award to the defendant reasonable attorney‘s fees in relation to the amount of work expended and court costs.
As amended, the section now reads:
On a finding by the court that an action under this section was groundless and brought in bad faith, or brought for the purpose of harassment, the court shall award to the defendant reasonable and necessary attorney‘s fees and court costs. [Emphasis added.]
The underscored changes demonstrate the legislature‘s intention that a finding of harassment alone will justify an award of attorney‘s fees. As the court explained in Schott v. Leissner, 659 S.W.2d 752, 754 (Tex.App.—Corpus Christi 1983), writ ref‘d n.r.e. per curiam, 668 S.W.2d 686 (Tex.1984).
When the legislature amends a law, it is presumed that it intends to change the law. [Citations omitted.] We give effect to the legislature‘s addition of the comma after the word “faith” and the insertion of the word “brought” a second time after the word “or” in the present version of section 17.50(c)....
Schott ... secured a finding that the suit against him was “brought for the purpose of harassment.” Therefore, under the present statute, as amended, he is entitled to his attorney‘s fees. [Emphasis original.] After this court refused to grant writ of error in Schott, the
I admit that the distinction between “bad faith” and “harassment” is subtle, and the policy reasons for requiring one instance also to be groundless and not another are obscure. But this policy decision is one for the legislature, not the court, to make. Because I cannot justify our incursion into the legislative prerogative, I concur in the court‘s decision.
GONZALEZ and COOK, JJ., join in this concurring opinion.
RAY, Justice, concurring.
The concurring opinion of July 5, 1989, is withdrawn and the following is substituted.
The court has correctly held that an appellee may complain by cross-point of any error by the trial court without perfecting an independent appeal, unless the appellant limits his appeal pursuant to
Cross-Points in the Courts of Appeals
This court has consistently held that an appellee can seek affirmative relief by cross-points against unfavorable rulings of the trial court unless the appellant has clearly and distinctly indicated his intention to limit his appeal.1,2 Barnsdall Oil Co. v. Hubbard, 130 Tex. 476, 483, 109 S.W.2d 960, 963 (1937). In amending former rule 420 of the Texas Rules of Civil Procedure in 1941, the court affirmed the right of an appellee to bring forward cross-points against the appellant without perfecting an independent appeal.
The requirement that an appellant must clearly and distinctly indicate his intention to limit his appeal produced gamesmanship by appellants who sought to delay and hide their intentions from appellees by varying when and how they indicated a limitation of appeals. To remedy this problem, the court amended rule 353 of the Texas Rules of Civil Procedure to provide strict procedures for prosecuting a limited appeal. Now appearing as
Notice of Limitation of Appeal. No attempt to limit the scope of an appeal shall be effective as to a party adverse to the appellant unless the severable portion of the judgment from which the appeal is taken is designated in a notice served on the adverse party within fifteen days after judgment is signed, or if a motion for new trial is filed by any party, within seventy-five days after the judgment is signed.
Compliance with
The court today reaffirms its approach in Hernandez and by implication disapproves the language of cases purporting to find limitations on an appellee‘s right to assert cross-points other than those expressly sanctioned by this court. E.g., Dallas Indep. School Dist. v. Porter, 759 S.W.2d 454 (Tex.App.—Dallas 1988, writ denied); Speed v. Eluma Int‘l, Inc., 757 S.W.2d 794 (Tex.App.—Dallas 1988, no writ); Essex Crane Rental Corp. v. Striland Constr. Co., 753 S.W.2d 751 (Tex.App.—Dallas 1988, writ denied); Reynolds v. Charbeneau, 744 S.W.2d 365 (Tex.App.—Beaumont 1988, writ denied); Ragsdale v. Progressive Voters League, 743 S.W.2d 338 (Tex.App.—Dallas 1987, no writ); Miller v. Presswood, 743 S.W.2d 275 (Tex.App.—Beaumont 1987, writ denied); Miller v. Spencer, 732 S.W.2d 758 (Tex.App.—Dallas 1987, no writ); Chapman Air Conditioning, Inc. v. Franks, 732 S.W.2d 737 (Tex.App.—Dallas 1987, no writ); City of Dallas v. Moreau, 718 S.W.2d 776 (Tex.App.—Corpus Christi 1986, writ ref‘d n.r.e.); Yates Ford, Inc. v. Benavides, 684 S.W.2d 736 (Tex.App.—Corpus Christi 1984, writ ref‘d n.r.e.); Marshbank v. Austin Bridge Co., 669 S.W.2d 129 (Tex.App.—Corpus Christi 1984, writ ref‘d n.r.e.); Young v. Kilroy Oil Co., 673 S.W.2d 236 (Tex.App.—Houston [1st Dist.] 1984, writ ref‘d n.r.e.); Stendebach v. Campbell, 665 S.W.2d 557 (Tex.App.—El Paso 1984, writ ref‘d n.r.e.).3 Because of the growing number of decisions by the courts of appeals contrary to Hernandez, I will address this issue in detail.
Most court of appeals opinions limiting the appellee‘s right to assert cross-points beyond what has been expressly sanctioned by this court suggest that the matter raised by the cross-points must “affect the interest of the appellant” or “bear upon matters presented by the appeal.” The quoted phrases or their equivalents have indeed appeared in opinions of this court as limitations on the appellee‘s right to assert cross-points. See, e.g., Connell Constr. Co. v. Phil Dor Plaza Corp., 158 Tex. 262, 267, 310 S.W.2d 311, 313-14 (1958). Although
The phrases “affect the interest of appellant” or “bear upon matters presented by the appeal” mean only that the matters presented by the appellee‘s cross-points must have actually been in controversy in the suit as contested matters between the appellant and the appellee. In particular, the phrase “bear upon matters presented by the appeal” does not mean that the court of appeals should look to the points presented by the appellant in his brief to determine what is presented in the appeal. In the ordinary case, when there is only one plaintiff and only one defendant, everything that was in controversy in the trial court between the two parties may be raised by the appellee‘s cross-points on appeal, unless the appellant has properly limited his appeal by strict compliance with
The situation is not the same when there are multiple plaintiffs or multiple defendants. It is in this situation that the phrases “affect the interest of appellant” or “bear upon matters presented by the appeal” retain some significant meaning. For example, when one plaintiff recovers judgment against a first defendant, but
A similar situation arises if the plaintiff has sued two defendants, and the first defendant cross-claims in the trial court against the second defendant. When the plaintiff appeals a judgment that he take nothing against the first defendant, or both defendants, the first defendant may not normally assert by cross-points that the trial court failed to render judgment in his favor against his codefendant. The matters in controversy between the two defendants do not “affect the interest of appellant“—the plaintiff—and do not “bear upon matters presented by the appeal” because the matters in controversy between the appellant and the particular appellee do not necessarily include what is in controversy between the two defendants.
An exception exists, of course, in those instances in which the rights of a nonappealing party are so intertwined with the rights of a party entitled to relief on appeal that the whole judgment must be reversed. See Turner, Collie & Braden, Inc. v. Brookhollow, Inc., 642 S.W.2d 160, 166 (Tex.1982) (certain indemnity rights of nonappealing parties were so dependent or interwoven with the erroneous damages issue that the entire judgment had to be reversed); Thompson v. Kelley, 100 Tex. 536, 539, 101 S.W. 1074, 1075-76 (1907) (judgment fixing the boundaries to real estate must protect the rights of nonappealing parties). Such situations must be recognized on a case-by-case basis, and should be regarded as exceptions to the general rule.
The term “severability” has also caused much confusion when used in connection with cross-points.
An attempt to limit an appeal under
Some court of appeals opinions discuss severability as if it were a component of what “bears upon matters presented by the appeal” or “affects the interest of appellant.” See, e.g., Scull v. Davis, 434 S.W.2d 391, 394 (Tex.Civ.App.—El Paso 1968, writ ref‘d n.r.e.) (holding that when an appellant appeals a severable portion of a judgment the appellee cannot use cross-points to complain of any matters falling wholly within the portion of the judgment not brought up for review by the appellant). Such discussion is error.
Severability may be a factor in whether the rights of nonappealing parties are so intertwined with those of an appealing party that the whole judgment must be reversed. In this sense severability is always related to the interest of the appellant. But that is really a separate question. It is not an element of what “affects the interest of appellant” or “bears upon matters presented by the appeal” for purposes of what may be presented by cross-points. If the matter was in controversy between one
Cross-Points in the Supreme Court
One source of confusion in the lower courts may be our treatment of cross-points before this court. There has always been a crucial difference between cross-points in the courts of appeals and cross-points in this court. When a party seeks a different and more favorable judgment than the judgment rendered by the court of appeals, such point must be brought to this court by application for writ of error. Archuleta v. International Ins. Co., 667 S.W.2d 120, 123 (Tex.1984). A cross-point is insufficient to preserve the point of error. In general, to obtain a different and more favorable judgment and to invoke the jurisdiction of this court, each party in the court of appeals must file both a timely motion for rehearing and an application for writ of error.5,6 Id.; Wich v. Fleming, 652 S.W.2d 353, 356 (Tex.1983); Pruitt v. Republic Bankers Life Ins. Co., 491 S.W.2d 109, 112 (Tex.1973); Oil Field Haulers Ass‘n v. Railroad Comm‘n, 381 S.W.2d 183, 187 (Tex.1964); Schleicher v. Runge, 90 Tex. 456, 457-58, 39 S.W. 279, 280 (1897);
Conclusion
This court has labored long and hard to remove as many procedural traps from our rules as possible. Litigants are entitled to have their disputes resolved on the merits, not on unnecessary and arcane points that can sneak up on even the most diligent of attorneys. The court‘s decision in this cause is another step in achieving this goal. However, the simplicity of our holding still belies the intricacies and troubling inconsistencies in our rules for perfecting appeals in other contexts.
I believe it is time to adopt a single, consistent procedure for perfection of appeals in Texas courts. I suggest two alter-
We cannot, of course, attempt to formulate such rules in the context of the simple facts of this cause. We can, however, consider this problem in our continuing study and revision of the Texas Rules of Appellate Procedure.
Accordingly, I concur.
MAUZY and HECHT, JJ., join in this concurring opinion.