Lead Opinion
OPINION
Opinion by
These two appeals were consolidated for the purposes of briefing and argument, and will now be addressed in a single opinion. Cause number 13-04-358-CV began as a declaratory judgment action filed on May 15, 2002, by appellants, G. Xavier Montemayor and Franklin T. Graham, Jr. (collectively “Montemayor”), against appel-lees Jose Antonio Ortiz Fernandez (“Fernandez”), his son Jose Antonio Ortiz Cela-da (“Celada”) and Celada’s wife, Becky Ortiz (“Ortiz”). Montemayor desired to collect on a monetary judgment against Fernandez and Celada that issued in 1990, and sought a declaratory judgment that properties of Schor’s, a d/b/a of Ortiz, were community property of Celada and Ortiz and therefore subject to levy and execution for payment of the judgment debt.
In conjunction with the petition for declaratory judgment, and without notice to Ortiz, Montemayor sought and obtained a temporary restraining order and an ex parte receivership. Ortiz filed counterclaims on January 10, 2003, alleging that the ex parte receivership was obtained wrongfully, based on misrepresentations to the court, and had damaged her and her business. Causes of action included abuse of process, malicious prosecution, defamation, and intentional infliction of emotional distress.
Two partial summary judgments were entered in favor of Ortiz in 2003 in the declaratory judgment action reflecting: (1) the 1990 judgment was for collection of a debt, not a tort; and (2) Schor’s was the “special community property” of Ortiz, at all times subject to her sole management and control, and not subject to levy or execution by Montemayor. Subsequent to entry of the two summary judgment orders, the counterclaims of Ortiz were severed (now cause number 13-04-224-CV on appeal). The severed action dealing with the damage claims proceeded to trial in August 2003; final judgment consistent with the jury verdict in favor of Ortiz issued in February 2004. At that point, Ortiz returned to court in the declaratory judgment action and obtained an award for attorneys’ fees. Final judgment in that case issued in favor of Ortiz on April 19, 2004.
Appeal is brought from the orders granting the summary judgments, and from the findings and judgment in the severed action, concluding that Montema-yor engaged in tortious conduct and awarding damages. We affirm the trial court’s rulings reflected in appeal number 13-04-358-CV. We reverse the trial court’s judgment in appeal number 13-04-224-CV, based upon no evidence to support the findings, and render.
I. Background
In the mid 1980’s, Fernandez and Cela-da had done business with the Brownsville Money Exchange. In 1986, they sought the immediate exchange of $140,000 in pesos for American dollars to satisfy some other debts. They received a check from the exchange; they then contacted it to advise that the check would not clear soon enough. They requested that $140,000 be forwarded by wire and they would return the check. The money was wired; the check was also deposited. After some dispute, but without litigation, Fernandez and Celada agreed to execute four promissory notes for the additional $140,000 in favor of the Brownsville Money Exchange. They
When still a newly-wed, Ortiz began Schor’s in 1977 in partnership with her sister-in-law. The initial capital investment was $15,000; Ortiz contributed $7,500 given to her as a gift from her father. The sister-in-law was not interested in operating the business, which grew largely due to the efforts of Ortiz. Schor’s expanded into two stores, operating as a jewelry store and interior decorating business. Ortiz bought out her sister-in-law in the early 1990s with monies earned from the business. During this time, Celada allegedly had nothing to do with the Schor’s business; he focused on farming operations with his father in Mexico. Ortiz was aware that in the late 1980s, Cela-da and Fernandez started an unsuccessful steel business. She testified she was aware of financial difficulties, but not immediately aware of the promissory notes executed on behalf of the Brownsville Money Exchange. In 1990, Fernandez filed for Chapter 7 protection in bankruptcy. The principal amount of the 1990 judgment debt against him for $140,000 was not discharged, based on a finding by the bankruptcy court that the debt had been incurred through fraud.
Ortiz continued to reinvest profits from Schor’s into the business, which grew to have an inventory value in excess of one million dollars by 2002. She contended at all times that Schor’s was subject to her sole management and control, as either her separate or special community property, and that she and Celada separately managed their own business affairs. By 2002, Celada was not contributing to maintenance of the family, was absent much of the time, living in Mexico, and the couple initiated divorce proceedings.
In May 2002, Montemayor and Graham approached counsel about possibly collecting on the 1990 judgment against the Schor’s property. Various unsuccessful attempts had been made to collect in the intervening years; frequently Celada could not be located for service.
Montemayor filed a petition on May 15, 2002, requesting a temporary restraining order to “preserve the status quo,” to prevent Fernandez, Celada or Ortiz from concealing or hiding assets of Schor’s. They also sought and secured an ex parte appointment of a receiver, based upon affidavits which alleged imminent threat that the
Ransome appeared at the store’s facility on May 15, 2002, with order in hand. Store employees contacted Ortiz, who was shocked, but granted admittance and told employees to cooperate. Some other family member contacted Celada, who then appeared at the store, got into an altercation with Ransome, and told him to leave. Ransome left. Ortiz contacted an attorney, Dennis Sanchez, who immediately contacted counsel for Montemayor. An agreed order was negotiated and formally entered on May 28, 2002. It reflects that, based on representations that Fernandez and Celada would not be permitted access to Schor’s and that no assets of Schor’s will be transferred to them, Ortiz would be permitted to continue operating her business, buying and selling merchandise and conducting normal operations.
At a hearing held June 7, 2002, the temporary restraining order was dissolved and replaced by a temporary injunction. The parties agreed the receivership would remain in place: “It is our agreement that Mr. Ransome will be able to continue to view the books and records, and look at the inventory, and examine the inventory on a weekly basis.... But if he believes something irregular is occurring such as looting of assets, or something like that, then he would have the right to come back and advise the Court and counsel.” Ortiz was permitted to continue normal operations of her business. A formal order to this effect was entered June 24, 2002; however, this order was not “agreed” as some additional language was included.
In October 2002, Ortiz moved to dissolve the receivership; it was formally vacated on January 8, 2003. Ortiz also moved for two partial summary judgments. Partial summary judgment that the 1990 judgment was an action for debt, and not based in tort, was entered on February 21, 2003. Partial summary judgment that Schor’s was at all times Ortiz’s “special community property,” subject to her sole management and control and not available for attachment to satisfy the 1990 judgment debt, was entered on May 27, 2003.
On August 11, 2003, the declaratory judgment action was severed from Ortiz’s counterclaims for damages. Trial on the damage claims commenced on August 12, 2003. The jury verdict was entered August 22, 2003, awarding actual damages to Ortiz. The trial was bifurcated; punitive damages were awarded in an August 26, 2003, verdict. Final judgment was entered on the damage claims on February 5, 2004. Ortiz then returned to court in the
II. The Declaratory Judgment Case— The Summary Judgments
Montemayor raises four issues on appeal relating to entry of the summary judgment orders. These orders arise in appeal number 13-04-358-CV. Issues one, two, and three involve the order concluding Schor’s assets were the “special community property” of Ortiz, and not subject to any liability for the 1990 judgment. Montema-yor contends the trial court erred because (1) they were jointly managed assets of Ortiz and Celada (issue one), (2) issues of material fact remained as to the nature of the property (issue two), and (3) issues of fact precluded summary judgment that the 1990 judgment was not the “joint debt” of Ortiz and Celada (issue three). In issue four, Montemayor contends that the trial court erred in finding that the 1990 judgment was based on contract and not in tort because material fact issues remained that required resolution by a jury.
A. Summary Judgment— Standard of Review
The function of a summary judgment is to eliminate patently unmeritorious claims and defenses, not to deprive litigants of the right to a jury trial. Alaniz v. Hoyt,
We affirm a trial court’s ruling on a summary judgment motion if any of the theories advanced in the motion is meritorious. State Farm Fire & Cas. Co. v. S.S.,
B. Summary Judgment that 1990 Debt is Based in Contract
Montemayor’s fourth issue challenges the trial court’s finding that the underlying 1990 judgment was for a debt in contract, rather than a judgment in tort. Preliminary resolution of this issue is crucial because, pursuant to section 3.202 of the Texas Family Code, unless both spouses are personally liable,
Ortiz moved for summary judgment, requesting the trial court to declare the 1990 judgment to have been based on a promissory note and not a judgment in tort. She asserted that any attempt to argue otherwise was barred by res judicata, collateral estoppel, and statute of limitations. The judgment itself reads:
The court here finds that the defendants, JOSE ANTONIO ORTIZ FERNANDEZ and JOSE ANTONIO ORTIZ CELADA, executed Four (4) Promissory Notes, ... payable to the order of Plaintiff [Brownsville Money Exchange] ... The Court further finds that each of the Four (4) Notes provided for interest.... The Court further finds that the Plaintiff found it necessary to engage the services of an attorney to effect collection and that under the terms of said Notes the Defendants ... are liable for fifteen percent (15%) of the principal and interest due as an attorneys’ fee, which the Court here finds to be reasonable, and which the Court here finds to total ... $26,479.95.
The judgment awarded $203,013.00 in principal (including accrued interest), interest forward until the date paid at the rate of eighteen percent (18%), and attorneys’ fees.
Graham testified that the suit on the judgment did not involve Ortiz. He also testified that they did not urge tortious conduct in the underlying suit because it was not necessary. Montemayor nevertheless contends that the underlying judgment was based upon tortious, fraudulent conduct committed by Fernandez and Ce-lada in 1986, and that this was confirmed by the bankruptcy court when it refused to discharge the debt against Fernandez. Montemayor urged the trial court to defer to the bankruptcy court’s finding, and argued that fact issues remained as to whether Ortiz was a party to the fraud because she allegedly received $10,000 of the monies from the missing $140,000.
The 1990 judgment clearly sets forth that it was based on the failure to pay promissory notes. There is no mention of tortious or fraudulent conduct, despite the fact that tortious conduct was alleged to have taken place in 1986. Testimony of Graham confirms that no issues as to fraud were raised in securing the judgment on the notes. There is no dispute as to the contentions raised before the court in securing the 1990 judgment. The judgment clearly applies only to Fernandez and Celada. The judgment also awards attorneys’ fees, consistent with the terms of the notes and with an action to collect on either a sworn account or an oral or written contract. See Tex. Civ. PRAC. & Rem.Code Ann. § 38.001 (Vernon 1997). Attorneys’ fees are not recoverable in an action in tort. Knebel v. Capital Nat’l Bank,
“Under res judicata, a final judgment on the merits of an action precludes the parties or their privies from relitigat-ing issues that were or could have been raised in that action.” John G. & Marie Stella Kenedy Mem. Found, v. Dewhurst,
We conclude that the trial court properly determined in its order for partial summary judgment, which issued February 21, 2003, that the underlying 1990 judgment “was one for debt and Plaintiffs are barred from claiming it is for tort by res judicata, collateral estoppel and statute of limitations.” We overrule Montemayor’s fourth issue on appeal.
C. Summary Judgment — Special Community Property
1. The Judgment
Ortiz filed a separate motion for partial summary judgment in February 2003, requesting a declaration that Schor’s was not community property and was not subject to attachment for the 1990 judgment debt. As exhibits, Ortiz included (a) affidavits explaining how Schor’s had begun with the gift of $7,500 from her father, with the intent that it be her property; (b) deposition testimony of her accountant, Ygnacio Garza, who had handled tax filings for the partnership between Ortiz and her sister-in-law until it was dissolved, and who testified that Celada never signed checks, secured loans, or otherwise participated in the business of Schor’s; (c) deposition testimony of Celada reflecting that he considered Schor’s as Ortiz’s separate property, always under her management and control, and that he had no participation in the business whatsoever; (d) copies of the assumed name certificates for Schor’s, reflecting Ortiz as its owner; and (e) excerpts from Montemayor’s deposition reflecting he had no personal knowledge of Celada’s involvement in any of Schor’s business affairs, other than hearsay that he occasionally assisted in hanging window blinds.
Montemayor countered with Ortiz’s admission that profits from Schor’s were reinvested into the business. He urges that, pursuant to Cockerham v. Cockerham,
The trial court concluded in its order of May 27, 2003, that all assets of Schor’s during the marriage of Celada and Ortiz were the special community property of Ortiz, subject to her sole management, control and disposition, and were never subject to the liability of Celada reflected in the 1990 judgment. “The Schor’s properties were not, and are not subject to levy and execution by [Montemayor] based upon the above judgment debt which this Court has already found to be, as a matter of law, a nontortious judgment debt based on promissory notes.” We further note that, in concluding Schor’s was the separate community property of Ortiz, and that those assets were not subject to levy and execution for Montemayor’s judgment, the trial court necessarily concluded that Ortiz was not personally liable for the debt along with Celada. See Tex. Fam.Code Ann. § 3.202 (Vernon 1998).
2. Analysis
We review the trial court’s granting of the motion for summaiy judgment de novo, Natividad,
In his first and second issues, Montema-yor challenges the trial court’s conclusion that Schor’s was the special community property of Ortiz; in his third issue, he challenges the conclusion that the 1990 judgment was not a joint debt of Ortiz and Celada.
Texas recognizes both sole and joint-managed community property. Tex. Fam.Code Ann. § 3.102 (Vernon 1998); Douglas v. Delp,
There is no dispute that the business of Schor’s began subsequent to the marriage of Ortiz and Celada and grew during the term of their marriage. It began with a gift of monies from Ortiz’s father to her, and operated as a separate partnership until the early 1990s. Evidence before the trial court demonstrated that Ortiz did control the business of Schor’s, and that Celada had no input in its management or operations, and no direct access to checks or other financial aspects of the business. No evidence other than speculation was tendered to suggest otherwise.
However, our analysis does not end here. There is no dispute that profits from Schor’s were reinvested into the business to assist in its growth. Additionally, it is undisputed that income from Schor’s was used to fund family expenses. Monte-mayor contends that, pursuant to Cockerham,
Ortiz counters that Cockerham is distinguishable.
Cockerham involved a circumstance where the wife had filed for divorce and then filed for chapter 7 bankruptcy because of her failed dress shop business. Cockerham,
In Cockerham, the husband owned an undivided one-half interest in a 320-acre tract, along with his brother, prior to his marriage. Id. at 167-68. As such, his interest was his separate property. Cock-erham and his wife later purchased his brother’s one-half interest in the property through a convoluted transaction that ended up with a conveyance to both husband and wife. Id. at 168. The supreme court agreed that at all times, an undivided one-half interest in the property remained the separate property of Mr. Cockerham. Id. Testimony reflected no intent to gift the wife with an interest in the land. The one-half interest in the property was clearly traced and was adequate to rebut the presumption that all interest in the property became community at the time the other one-half interest was purchased. Id. The trustee therefore claimed a community interest in the remaining one-half interest, and in the dairy business.
The dairy business was located on the 320-acre tract. Mr. Cockerham urged that the dairy business had at all times been subject to his sole management and control, and relied upon the predecessor to section 3.102 of the family code,
With respect to the dairy business, it was acquired during the marriage, and its proceeds were reinvested into the business. Id. at 170. Again, the distinction in how the land was acquired meant that proceeds of the dairy business were acquired not just by the labor of the husband by also by virtue of capital improvements that were community property. Id. Therefore, the dairy business was also under the joint management and control of each, and subject to attachment for debts of the dress shop, whether those obligations were of only the wife or joint obligations of each. Id. at 171.
We find Cockerham to be distinguishable from the matter before us. Here, unequivocal evidence reflected not only that Ortiz maintained full control over management and operations of Schor’s, but also that no community capital assets were used to increase the business of Schor’s. Schor’s was initially purchased with Ortiz’s separate property. Profits from Schor’s were directly reinvested into Schor’s, without prior commingling into community bank accounts. No debts were incurred or monies borrowed by both Ortiz and Celada to finance further growth of Schor’s. Schor’s did not grow by virtue of the infusion of other community funds. Schor’s did not rely upon any community-owned real property. All investments into Schor’s derived from “the increase and mutations of, and the revenue from, all property subject to the spouse’s [Ortiz’s] sole management, control, and disposition.” Tex. Fam.Code Ann. § 8.102(a)(4) (Vernon 1998).
In construing a statute, our objective is to determine and give effect to the Legislature’s intent first by looking to the statute’s plain and common meaning. Tex. Workers’ Comp. Comm’n v. Patient Advocates of Tex.,
III. The Damage Claims
Ortiz brought counterclaims against Montemayor for allegedly wrongfully pursuing the business assets of Schor’s and for harassing her. After the trial court issued its two rulings on Ortiz’s motions for partial summary judgment, those counterclaims in which Ortiz sought damages were severed from the declaratory judgment portion of the suit.
The claims for damages based on wrongful conduct proceeded to a bifurcated trial in August 2003. On August 22, 2003, the jury issued a verdict awarding actual damages to Ortiz in the amount of $335,000.
A. Issues on Appeal
In the consolidated appeal, Montemayor challenges the damages awards. In issues 5-11, he asserts the trial court erred as follows:
(a) issue 5 — no evidence or legally insufficient evidence of abuse of process;
(b) issue 6 — no evidence or insufficient evidence of defamation;
(c) issue 7 — no evidence or insufficient evidence of intentional infliction of emotional distress;
(d) issue 8 — no evidence or insufficient evidence of malicious prosecution;
(e) issue 9 — no evidence or insufficient evidence of malice to support an award of punitive damages;
(D issue 10 — no evidence or insufficient evidence of mental anguish damages in tort;
(g) issue 11 — no evidence or insufficient evidence of any causal connection between alleged lost profits and any act or omission of Montemayor;
(h) issue 12 — no evidence or insufficient evidence to support award for damage to reputation.
The claims for damages all derive from a central contention that Montema-yor acted wrongfully in securing the ex parte receivership. We note that a trial court is statutorily authorized to appoint a receiver in certain cases, including an action by a creditor to subject any property or fund to its claim, on the application of the plaintiff or any party whose right to or interest in the property or fund or in the proceeds therefor is probable, and where it is shown that the property or fund is in danger of being lost, removed or materially injured. See Tex. Civ. PRAC. & Rem.Code Ann. § 64.001 (Vernon 2005); B & W Cattle Co. v. First Nat’l Bank of Hereford,
The parties do not dispute that issuance of an ex parte receivership is a harsh remedy to be exercised only in extraordinary circumstances. See Indep. Amer. Sav. Ass’n v. Preston,
Ortiz has never contended that the trial court erred or abused its discretion in ordering the receivership, based upon the information before it. No interlocutory
B. Standard of Review
Montemayor claims there is no evidence to support any of the jury’s findings. He challenges the legal sufficiency of the evidence with respect to the claim for abuse of process. With respect to all counterclaims except abuse of process, Montema-yor contends in the alternative that evidence is “insufficient” to sustain the jury’s findings, without specifying whether he challenges the legal or the factual sufficiency of the evidence.
Inasmuch as Montemayor’s prayer requests first that we reverse and render and, in the alternative, that we reverse and remand, we construe the issues to challenge the legal and factual sufficiency of the evidence for findings related to defamation, intentional infliction of emotional distress, malicious prosecution, punitive damages, and mental anguish. When both legal and factual sufficiency challenges are raised on appeal, the court must first examine the legal sufficiency of the evidence. See Glover v. Tex. Gen. Indem. Co.,
1 No Evidence — Legal Sufficiency
We address legal-sufficiency challenges as either “no-evidence” or “matter-of-law” issues. Gooch v. Am. Sling Co.,
In challenging the legal sufficiency of the evidence to support a finding on which an adverse party, here Ortiz, bore the burden of proof, the appellant must show the record presents no evidence to support the adverse finding. Croucher v. Croucher;
“The final test for legal sufficiency must always be whether the evidence at trial would enable reasonable and fair-minded people to reach the verdict under review. Whether a reviewing court begins by considering all the evidence or only the evidence supporting the verdict, legal-sufficiency review in the proper light must credit favorable evidence if reasonable jurors could, and disregard contrary evidence unless reasonable jurors could not.”
City of Keller v. Wilson,
We overrule a legal-sufficiency issue if the record reflects any evidence of probative force to support the finding. ACS Investors, Inc. v. McLaughlin,
The evidence is no more than a scintilla and, in legal effect, is no evidence “[w]hen the evidence offered to prove a vital fact is so weak as to do no more than create a mere surmise or suspicion of its existence.” Kindred v. Con/Chem, Inc.,
2. Factual Sufficiency
When reviewing a jury verdict to determine the factual sufficiency of the evidence, the party attacking a finding on which an adverse party bore the burden of proof must show that the record presents “insufficient evidence” to support the finding. Gooch,
C. Analysis — The Counterclaims
1. Abuse of Process
Montemayor sought and obtained a temporary restraining order from the trial court to enjoin Ortiz, Celada, and Fernandez from hiding or secreting assets of Schor’s, pending further ruling by the trial court on the nature of that property. Montemayor also sought and obtained an order from the trial court ordering the
Ortiz contends that it was the process used in seeming the ex parte appointment of the receiver that was wrongful. Monte-mayor proceeded ex parte and is alleged to have submitted false oaths and fatally defective pleadings reflecting that dissipation of the assets of Schor’s was threatened if quick action were not taken, despite the fact that Montemayor knew of nothing to suggest risk of immediate dissipation or flight by Ortiz.
Elements of a claim for the tort of abuse of process include (1) an illegal, improper, or perverted use of the process, neither warranted nor authorized by the process, (2) an ulterior motive or purpose in exercising such use, and (8) damage as a result of the illegal act. Graham v. Mary Kay, Inc.,
Montemayor, in issue 5, charges that none of these elements were established by Ortiz at trial.
Abuse of process is the malicious misuse or misapplication of process in order to accomplish an ulterior purpose. Baubles & Beads v. Louis Vuitton, S.A.,
Where process is used for the purpose for which it is intended, even though accomplished by an ulterior motive, no abuse of process has occurred. Baubles & Beads,
We conclude there is no evidence of abuse of process and sustain Montema-yor’s fifth issue on appeal.
2. Malicious Prosecution
In his eighth issue, Montema-yor alleges that no evidence or insufficient evidence existed to sustain a jury finding of malicious prosecution. Malicious prosecution is “generally available against one who maliciously caused process to issue and without probable or reasonable cause.” Martin,
Far from relieving litigants and the judicial system of repetitive lawsuits with the possibility of inconsistent results, we believe that extension of the Scurlock15 rule to malicious prosecution cases would actually promote repetitive and unnecessary litigation because it would allow the plaintiff to prosecute a claim only to have it rendered meaningless if later all or part of the appeal of the underlying action is decided adversely.
Id. at 207-08. Accordingly, “an underlying civil suit has not terminated in favor of a malicious prosecution plaintiff until the appeals process for that underlying suit has been exhausted.” Id.
Here, the first order for partial summary judgment (that the claim was for one of debt) issued on February 21, 2003; the second order for partial summary judgment (dealing with the nature of the Schor’s property) issued on May 27, 2003. On August 11, 2003, an order was entered severing that portion of the case from Ortiz’s claims for damages. The damage claims proceeded to trial in cause number 2002-08-4040-B. Subsequent to the jury verdict in that matter, the parties returned to court and Ortiz sought and obtained attorneys’ fees in the declaratory judgment action under the original cause number, 2002-05-2004-B. Final judgment in the matter involving the damage claims issued February 5, 2004. No final judgment in the declaratory judgment action issued until April 19, 2004, following the trial on the issue of attorneys’ fees. Clearly, the declaratory judgment portion of the suit had not terminated in Ortiz’s favor prior to the jury verdict and judgment awarding her damages for malicious prosecution. Moreover, both matters are before this court on appeal simultaneously.
We conclude that the claim for malicious prosecution is premature, inasmuch as there is no evidence that the prosecution complained of, and on which the findings were based, had fully terminated in favor of Ortiz at the time the matter was presented to the jury.
3. Defamation
To recover for defamation, a private plaintiff must prove that the defendant (1) published a statement, (2) that was defamatory to the plaintiff, (3) while acting negligently as to the truth of the statement. WFAA-TV, Inc. v. McLemore,
Ortiz bore the burden to show that Montemayor published the defamatory remarks that damaged her. WFAA-TV,
Ortiz also alleges a second source of defamation, “general rumors.” Montema-yor urges that the alleged rumors were (1) “too vague” to meet the element of “falsity,” and (2) could not be attributed to him. Ortiz testified:
A: We immediately got calls from people. I mean, customers calling in, if we*653 were having a sale — if Schor’s was closing. “What will you do if Schor’s is closing? Where will we buy?” You know — I mean, we had people that thought that the Montemayors were going to be owning the store. “Oh Becky the store will never be the same without you owning the store.” It was constant. It was people coming, last week. To this day, people are still, “How’s everything going?” ...
Q: Let’s talk about other things that you saw in the store in the time once Mr. Ransome had come in. Tell us about customers that you — that you’ve never seen before that came in after that. Tell us about that.
A: Well, I noticed — I guess that it was that week, ... and I just noticed people that I had never seen before, come into the store, coming in just to kind of see. “We heard the rumors. Something big was happening at Schor’s. Schor’s is in trouble.” And they would come in just out of curiosity.... We knew by the way they came in, and the way they were looking to see — okay—“What’s this big thing that is happening at Schor’s.” I mean, it was just very obvious.
Ortiz also testified as follows:
Q: And isn’t it true, Mrs. Ortiz, that you have testified before that neither Xavier Montemayor nor Tommy Graham ever said anything bad about your business?
A: I don’t know if they have or not. I don’t think that they would say anything. I can’t imagine anything. I don’t know.
Q: That you have knowledge of.
A: I have no knowledge that they said anything to me directly, no.
Q: And what you told this jury, you are not saying that they went out to the public and said something bad about your business, or disparage[d] it, or put it down in any form?
A: No. Just indirectly with the receivership.
Q: And that is just because of the receivership, but they never said anything to anybody?
A: No. It’s — it’s the act of the receivership.
Q: Now, isn’t it true, that you testified that what you did hear Mr. Montemayor say, was, that he didn’t want to harm your business, he didn’t want to take your store, and he didn’t want anything to do with that. You did hear that?
A: Yes, I did.
Q: That’s what he said?
A: Uh-huh.
Q: Is that accurate?
A: That’s accurate, that’s what I heard he said.
Q: Do you recall testifying that Mr. Ransome — that you did not know whether Mr. Ransome had ever said anything false that damaged your business — that damaged you, or your business?
A: No. I mean, I know that he told people about what was going on at the store.
Q: But do you recall testifying, that as far as you knew, you did not know of anything false that he said that damaged you, or your business?
A: No.
Q: Is that accurate?
A: That’s accurate.
Q: And isn’t it likewise for Mr. Graham that you did not know of anything that he said false, that damaged your business?
A: I don’t.
Q: Is that correct?
A: No. Except for the receivership. That’s it.
While we agree that a conditional or qualified privilege can be defeated with a finding of actual malice at the time of publication, see Randall’s Food Mkts.,
Any communication, oral or written, uttered or published in the due course of a judicial proceeding is absolutely privileged and cannot constitute the basis of a civil action in damages for slander or libel. The falsity of the statement or the malice of the utterer is immaterial, and the rule of nonliability prevails even though the statement was not relevant, pertinent and material to the issues involved in the case.
Reagan v. Guardian Life Ins. Co.,
Here, all alleged defamatory conduct arises solely in the context of judicial proceedings, or in conjunction with the appointment or presence of the receiver. There are no allegations that the receiver made statements to the public, outside of announcing his court-appointed role, which would obviate the privilege. Further, in any event, there must still be a defamatory statement that was published and that is directly attributable to the defendants. There is no evidence attributing such a statement to any of the appellants, or to the receiver. Allegations of rumors generated by the presence of the receiver, that cannot be attributed to a wrongful or defamatory statement by appellants, will not suffice.
We conclude the evidence for the claim of defamation is legally insufficient, and sustain Montemayor’s sixth issue on appeal.
4. Intentional Infliction of Emotional Distress
In his seventh issue, Montemayor challenges the award of damages for intentional infliction of emotional distress, contending that Ortiz tendered either no evidence or insufficient evidence of either “extreme and outrageous” conduct or “severe emotional distress.”
Extreme and outrageous conduct is conduct “so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community.” Zeltwanger,
Montemayor alleges that no extreme or outrageous conduct occurred; instead, he sought only the appointment of a receiver to inventory Schor’s assets and accounts based upon the legal presumption that all properties held by married persons are “jointly managed community properties.” Montemayor relied upon the advice of counsel and acted with approval of a state district judge in obtaining the relief. He urges that the filing of suit and the use of legal process issued by the court do not support a claim for intentional infliction of emotional distress.
Ortiz confirmed she had testified that neither Graham nor Montemayor exhibited any ill will or malice toward her, but that she later “corrected” that testimony. She believed they engaged in illegal or unlawful activity specifically to harm her and to force her family to pay Celada’s debt. She agreed Montemayor told her he didn’t want to harm her, but felt she was being used as a “punching bag” for her husband and father-in-law. She testified this wasn’t her debt, and she never borrowed
It has not been enough that the defendant has acted with an intent which is tortious or even criminal, or that he has intended to inflict emotional distress, or even that his conduct has been characterized by ‘malice,’ or a degree of aggravation which would entitle the plaintiff to punitive damages for another tort.
Brewerton v. Dalrymple,
The Restatement (Second) of ToRts § 46 cmt. d (1965) provides some illustrations of the type of conduct that might be considered sufficiently extreme and outrageous. These include (a) a practical joke suggesting another’s spouse has been severely injured in an accident; (b) accusations made in front of others that an employee has violated territorial restrictions, followed by a public demand to tender all proceeds therefrom or risk being beaten up, having his truck destroyed, and being put out of business; and (c) giving a woman a bathing suit known to dissolve in water, causing her extreme embarrassment when she goes swimming in the presence of new male and female acquaintances.
Here, we are faced with a situation in which a person was sent into a business to inventory goods, with the authority to monitor sales and purchases, but who was never rude, insolent or interfering (other than by his mere presence and authority). Moreover, the presence of this individual was court-sanctioned, and he never exceeded the parameters of his appointment. We are unable to conclude that the pursuit of a remedy through legal process, however invasive, or even injurious, constitutes outrageous conduct beyond the bounds of decency, such as that
The Supreme Court found no evidence of extreme and outrageous conduct where university administrators and employees made negative comments in a professor’s tenure file, denied the professor tenure, restricted his speech about his tenure file, and assigned him an allegedly excessive course load. Brewerton,
[Although a defendant’s motive or intent is relevant to an intentional infliction of emotional distress claim, it is not enough to support liability. Rather, “the conduct itself must be extreme and outrageous.” Accordingly, any punitive intent or personal vendetta underlying Farm Bureau’s post-termination acts will not, standing alone, support an extreme and outrageous finding. Instead, we must examine Farm Bureau’s conduct.
Id. (citations omitted). In Sears, evidence reflected that there was a reasonable belief that Sears was involved in some suspicious dealings; to find the resulting investigation was extreme or outrageous “would be tantamount to imposing liability for negligent infliction of emotional distress, a cause of action that Texas does not recognize.” Id. The court concluded there was no evidence of extreme or outrageous conduct. See also Creditwatch,
We reach the same conclusion here. There was ample evidence before the court that Montemayor, whether or not incorrectly, held a bona fide belief that the property of Shor’s was community property, and therefore accessible to him as a creditor. There is evidence that Celada had, in the past, taken steps to evade satisfaction of the outstanding debt. The complained-of conduct, alleged to have been extreme and outrageous, consisted of a remedy sought through the court system. The conduct was sanctioned by court order. There was no allegation of conduct outside the parameters of that prescribed by the court; instead argument was solely that the receivership was wrongfully secured.
We note the supreme court did find extreme and outrageous conduct in GTE Southwest, Inc.,
5. Malice and Punitive Damages
The jury determined that harm to Ortiz resulted from malice by both Graham and Montemayor. The charge included a definition of clear and convincing evidence, and a definition for malice.
We cannot ignore that the finding of malice and the awards for punitive damages were predicated upon findings of tor-tious conduct by Montemayor. The purpose of punitive damages is to “punish the defendant” and “for the added purpose of protecting the public by [deterring] the defendant and others from doing such wrong in the future.” Moriel,
The jury instruction properly provided that the jury should consider the nature of the wrong, the character of the conduct,
6. Mental Anguish
Mental anguish damages may not be awarded without either “direct evidence of the nature, duration, or severity of [plaintiffs’] anguish, thus establishing a substantial disruption in the plaintiffs’ daily routine,” or other evidence of “ ‘a high degree of mental pain and distress’ that is ‘more than mere worry, anxiety, vexation, embarrassment, or anger.’ ” Id. at 614. These types of damage awards are designed to compensate non-economic losses. Moore v. Lillebo,
7. Sufficiency of Evidence— Lost Profits, Damage to Reputation
Because of our conclusions with respect to Montemayor’s fifth, sixth, seventh, and eighth issues, we do not reach his eleventh issue, involving sufficiency of the evidence for any causal connection between alleged lost profits and an act or omission of Montemayor, or his twelfth issue, involving sufficiency of the evidence to support an award for damage to reputation. Tex. R.App. P. 47.1.
IV. Conclusion
We affirm the trial court’s rulings relating to the motions for summary judgment as reflected in appeal number 13-04-358-CV. We reverse the trial court’s judgment in appeal number 13-04-224-CV, based upon either no evidence to support the findings, and render that Ortiz take nothing.
Concurring Opinion by Justice Linda Reyna Yáñez.
Notes
. The trial court was required to determine that the judgment was still valid and had not lapsed; it found that sufficient writs of execution were issued during the interim time to maintain its viability.
. Graham testified that he formed a belief in 1994-1995 that Schor’s was community property. He testified that in 1995, the amount of principal and interest owed on the judgment was approximately $464,000, but he had no information and made no inquiry as to the value of Schor’s inventory at that time. He did not pursue Schor’s at that time because he "didn't think there was enough value there to get into a fight about.” Ortiz was not contacted because they did not want to give any warning that they were going to try to collect against the community property.
. Determination of whether or not Ortiz was personally liable is addressed below in conjunction with Montemayor's issue three.
. We note that objections to Fernandez's discharge in bankruptcy based upon alleged fraudulent conduct were necessarily filed pri- or to that court’s findings that issued in November 1990. We further note that any findings of the bankruptcy court were limited to Fernandez, the debtor before it.
. Cockerham v. Cockerham,
. Tex. Fam.Code Ann. § 3.102 (Vernon 1998). See Act of June 2, 1969, 61st Leg., R.S., ch. 888, § 1, sec. 5.22, 1969 Tex. Gen. Laws 2727.
. The jury awarded damages as follows: (a) $225,000 for past physical pain and mental anguish, (b) zero dollars for future physical pain and mental anguish, (c) $50,000 for past lost profits, (d) $10,000 for future lost profits, (e) $50,000 for past damage to reputation, and (f) zero for future damage to reputation.
. “The appointment of a receiver without notice to the adverse party is one of the most drastic remedies known,” and should be exercised only in extreme cases where the rights are clearly shown in a verified bill or affidavit and based upon facts and circumstances rather than opinions and conclusions. Allegations must be verified positively and not upon information and belief. Wilkenfeld v. State,
. Ortiz also contends the affidavits were defective inasmuch as they were based upon speculation and "information and belief,” rather than fact.
. Montemayor argued at all times that the threat of dissipation by the other two named defendants, Fernandez and Celada, was very real. Montemayor did not urge that Ortiz was the type of person to conceal or hide assets, but instead that Celada could access Schor's since it was community property, thereby placing its assets at risk. Throughout all court proceedings, Montemayor maintained he had a justifiable belief that Schor’s was indeed community property.
. See also J.C. Penney Co. v. Gilford,
. Case law addressing the wrongful issuance of an injunction (which was also claimed in this matter) is also illustrative. A person can bring two separate types of causes of action for wrongful injunction, one upon the bond ordinarily filed to obtain the injunction, and the other for malicious prosecution. The two actions differ in the kind of wrong which must be shown to establish liability and in the amount of recovery. DeSantis v. Wackenhut Corp.,
A cause of action upon an injunction bond is predicated upon a breach of the condition of the bond. That condition, as prescribed by Rule 684, Texas Rules of Civil Procedure, is "that the applicant will abide the decision which may be made in the cause, and that he will pay all sums of money and costs that may be adjudged against him if the restraining order or temporary injunction shall be dissolved in whole or in part.” To prevail upon this cause of action, the claimant must prove that the temporary restraining order or temporary injunction was issued or perpetuated when it should not have been, and that it was later dissolved. The claimant need not prove that the temporary restraining order or temporary injunction was obtained maliciously or without probable cause. The purpose of the bond is to protect the defendant from the harm he may sustain as a result of temporary relief granted upon the reduced showing required of the injunction plaintiff, pending full consideration of all issues.... The only other cause of action for wrongful injunction is for malicious prosecution. " 'It is established by the weight of authority that in the absence of elements of an action for malicious prosecution no action will lie by the defendant in an injunction suit, independently of a bond or undertaking, for damages for the wrongful suing out of the injunction.’ ” To prevail upon this cause of action the claimant must prove that the injunction suit was prosecuted maliciously and without probable cause, and was terminated in his favor.
Id. at 685-86 (citations omitted).
.On appeal, Ortiz argues that the receivership was set aside because it was obtained on false or improper allegations. The record does not reflect any such finding.
. Scurlock Oil Co. v. Smithwick, 724 S.W.2d 1, 6 (Tex.1986).
. Further, the appeal on the matter does not conclude until the issuance of this opinion.
.An action for injurious falsehood or business disparagement is similar in many respects to an action for defamation. Both, involve the imposition of liability for injury sustained through publications to third par
. Testimony reflected that Mr. Ransome was appointed receiver for the sole purpose of conducting an inventory of the assets of the business. That process took approximately seven to ten days, ended in June 2002, and he never returned to the store after that. He did remain in the position of receiver, with authority to overview transactions and halt anything that seemed outside of normal day-today operations until the receivership was dissolved in December 2002 (the formal order was signed January 8, 2003).
. Truth is a complete defense to defamation. Randall’s Food Mkts. v. Johnson,
. The jury charge inquired whether Monte-mayor intentionally inflicted severe emotional distress, and included definitions of "extreme and outrageous conduct,” and intentional or reckless conduct. It also included an instruction that the tort only occurs when the emotional distress suffered was severe, but it did not define "severe” distress.
. Other examples of conduct that qualifies as extreme and outrageous, as to be atrocious and utterly intolerable in a civilized society, address circumstances where an actor has knowledge of another's peculiar susceptibility by reason of some physical or mental condition and takes advantage of that knowledge to cause the distress. Restatement (Second) of Torts § 46 cmt. f (1965).
. We pause to address the question of the severity of Ortiz’s distress. The receivership happened at about the same time she was seeking a divorce from Celada. She testified that when she learned of the receivership, she was stunned, shocked, and could not talk. She was humiliated; many persons approached her at various events to express concern and support. She worried about her store closing and that her reputation, which had been impeccable, was harmed. She felt invaded, abused, and scared. She testified she could not sleep, cried at a moment’s notice, got stomach and chest pains, and felt depressed. She did see her doctor (gynecologist), complaining of stress and marital discord, and he prescribed sleeping pills and some anti-depressants. On cross-examination, she conceded she never visited a psychiatrist, and was told by another doctor (to whom she also complained about stress due to getting a divorce) to exercise instead of taking anti-depressants.
As noted above, to prevail on this claim, a plaintiff must establish that emotional distress is severe. GTE Southwest, Inc., v. Bruce,998 S.W.2d 605 , 618 (Tex.1999). Feelings of anger, depression, and humiliation are insufficient evidence of severe distress. Regan v. Lee,879 S.W.2d 133 , 136-37 (Tex.App.-Houston [14th Dist.] 1994, no writ) (per curiam). Ortiz testified that her embarrassment hindered her business and her relations with customers during the presence of the receiver in her office; she testified she experienced sleeplessness, and some depression. However, she did not testify that her distress was unendurable. She testified she carried on because she had to be strong for her children. The record also reflects that during the time in which she is alleged to have sustained mental anguish damages, she worked to maintain her business by focusing more on in-home decorating services rather than on jewelry sales. There is no testimony that she was unable to perform well in these one-on-one relations with her clients and, indeed, her skill in personal relations appears to be one of the strengths of her business. During this period, business revenues remained relatively constant, despite alleged disruptions in the store, because she was able to perform these other services. We conclude that there is legally insufficient evidence that the distress she sustained constituted "severe distress” as it is currently defined.
. The charge defined malice to mean "a specific intent” or “an act or omission” by either Montemayor or Graham which, "when viewed objectively from the standpoint of at [sic] the time of its occurrence, involved an extreme degree of risk, considering the probability and magnitude of the potential harm to others; and of which Montemayor or Graham had actual subjective awareness of the risk involved, but nevertheless proceeded with conscious indifference to the rights, safely or welfare of others.”
. The charge also permitted consideration, of the net worth of Montemayor and Graham. See Tex. Civ. Prac. & Rem.Code Ann. § 41.011 (Vernon 1997).
. We do not reach whether evidence was sufficient to sustain the awards for punitive damages, in the event the underlying foundational tort were found to exist.
Concurrence Opinion
concurring.
I write separately to note that the names of the Appellees may create some confusion. In light of the fact that this opinion is a legal document, I believe it is important to refer to the parties by their proper names. Appellee, Jose Antonio Ortiz Fernandez is referred to as “Fernandez”; his paternal last name is actually Ortiz. In Mexico, persons routinely use
Lead Opinion
OPINION ON REHEARING
Opinion by
Both appellants and appellee have filed motions for rehearing. We deny appel-lee’s motion for rehearing. We similarly deny appellant’s motion for rehearing. We provide this supplemental opinion on rehearing to fully address the question of attorney fees in the declaratory judgment action, appellate cause No. CV-04-358CV. These issues do not alter the Court’s opinion in this appeal which issued July 20, 2006.
I. The Issues
Appellants’ issues thirteen, fourteen and fifteen on appeal are framed as follows:
13. The trial court erred in granting judgment for attorney fees because Ortiz failed to timely designate Shelby Jordan as a fact and expert witness, and Ortiz also failed to timely produce documents admitted into evidence pursuant to appellants’ request for production. All such evidence should have been excluded.
14. The trial court erred in granting judgment for attorney fees because Ortiz failed to properly segregate attorney fees incurred to obtain her declaratory judgment versus attorney fees incurred to prosecute tort damage claims and other matters.
15. The trial court erred in granting judgment for attorney fees because there was no right to recover attorney fees under the declaratory judgment act. Ortiz’s declaratory judgment action raised no new factual or legal issues that were not already raised in appellants’ pleadings.
II. Background
As we noted in our opinion, partial summary judgment in the declaratory judgment action that the 1990 judgment was an action for debt, and not based in tort, was entered on February 21, 2003. Partial summary judgment that Schor’s was at all times Ortiz’s “special community property,” subject to her sole management and control and not available for attachment to satisfy the 1990 judgment debt, was entered on May 27, 2003. On August 11, 2003, the declaratory judgment action was severed from Ortiz’s counterclaims for damages. Following a jury trial on the damage claims, Ortiz returned to the trial court in the declaratory judgment action to pursue her claim for attorney fees.
On September 8, 2003, Ortiz filed a motion for determination of attorney fees and
The charge submitted to the jury included a request for a dollar amount of attorney fees reasonably and necessarily incurred by Ortiz in “this” lawsuit. The jury’s response was $142,908.72 for representing Ortiz in court, $20,000 for representing her on appeal, and $15,000 for any appeal to the Supreme Court of Texas. Final judgment incorporating this award was entered April 19,2004.
A. Discovery Documents
Requests for Disclosure were propounded to Ortiz on May 29, 2002. Supplemental responses, provided in February and March 2003, include identification of various persons with knowledge of relevant facts, and various experts. Mr. Frank Perez is identified as the expert who would testify as to the reasonableness and necessity of attorney fees. Montemayor’s Third Request for Production was propounded to Ortiz on October 14, 2003. The requests call for production of any and all attorney fee agreements, attorney fee billing statements, and payments for retained or other services made to attorneys. On November 14, 2003, Ortiz responded by objecting to each request.
Following the hearing on February 27, 2004, a jury trial was scheduled for March 22, 2004. On March 3, 2004, Montemayor file a motion to compel discovery and for sanctions, complaining of Ortiz’s failure to respond to the third set of requests for production. On March 11, 2004, Ortiz produced documents responsive to the requests, including Ortiz’s fee agreement and detailed time records of Shelby Jordan and Norman Thomas, counsel for Ortiz. Ortiz also notified Montemayor of her intent to use Jordan as an expert on attorney fees, and tendered him for deposition. Jordan’s deposition was taken on approximately March 18, and Montemayor reviewed with him the related documentation and his prospective testimony.
B. Trial
At the hearing on pre-trial motions held March 22, Montemayor objected to the admission of Jordan’s testimony, contending he was either never designated, or was late designated as an expert. Ortiz contended that Jordan had been designated as soon as it was learned the motion for new trial had been granted, and further that, having taken Jordan’s deposition, Monte-mayor would sustain no unfair surprise. The trial court overruled Montemayor’s objections and permitted Jordan to testify. The trial court also overruled Montema-yor’s objections to the admission of attorney fee and billing records.
Jordan testified as to his experience and expertise, and his hourly rates. He testified that he did not bill Ortiz at his usual rate of $375, but instead at the reduced
Jordan and his firm maintained time records of services rendered in the case. The contingency fee agreement called for Ortiz to pay costs of the litigation as they were incurred. Fees in Ortiz’s exhibit 6 totaled $183,000, but some portions were redacted and not requested because they were unrelated to the declaratory judgment action. Fees requested totaled $131,268.50, plus $11,000 in costs for a total of $142,268.50.
Jordan testified that fees and services associated with the other affirmative claims brought by Ortiz, which had been severed and were pursued separately to a jury trial, were not included in this fee request. He estimated what reasonable and necessary fees would be for any appeal. Jordan was fully cross-examined.
William Kimball, counsel for Montema-yor, testified to counter the assertions of Jordan. He testified he was familiar with pleadings filed in the case and that he had reviewed Jordan’s billing records. He complained of the vagueness of certain billing entries, and expressed his opinion that many of the services reflected in those records did not relate to issues in the declaratory judgment action. He contested specific entries. Kimball and counsel for Montemayor contended that Ortiz should only be able to recover fees, if at all, for work done on the sole issue of whether or not Schor’s was her special community property. Kimball opined that in Jordan’s firm billing records, only 5.2 hours properly dealt with that issue, and those were spent by an attorney billing at $180 per hour. He also opined that only 33 hours of Thomas’s time could be attributed to this issue, at a rate of $200 per hour, bringing the total reasonable fees to only $7,500-$8,000. Kimball distinguished the different suits involved, the issues in each, and opined that the other suits had no bearing on the matters in the declaratory judgment action. Ortiz’s cross-examination of Kimball explored Ortiz’s contrary view. The fact of the severance was discussed.
The jury returned a unanimous verdict awarding to Ortiz $142,908.72 in fees, plus $20,000 for any appeal to the court of appeals, and $15,000 for any appeal to the Texas Supreme Court. Judgment on this verdict was entered on April 19, 2004. This appeal ensued.
III. Standard of Review
The Declaratory Judgments Act provides that in proceedings brought under it, “reasonable and necessary attorney’s fees” may be awarded as are “equitable and just.” Tex. Crv. PRAC. & Rem.Code
A judge’s decision to award or not award attorney’s fees is reviewed on appeal for an abuse of discretion. Id. at 163. To find an abuse of discretion, the trial court must have acted without reference to any guiding rules or principles, such that the act was arbitrary or unreasonable. Downer v. Aquamarine Operators, Inc.,
Similarly, the admission and exclusion of evidence is committed to the trial court’s sound discretion. Oyster Creek Fin. Corp. v. Richwood Invs. II, Inc.,
With respect to the conclusions of the jury, the trier-of-fact remains the sole judge of the credibility of the witnesses and the weight to give their testimony. City of Keller v. Wilson,
IV. Analysis
A. Admissibility of Testimony and Documents to Support the Fee Award
Montemayor urges that the trial court erred in permitting Jordan to testify as a fact or expert witness because he was not timely designated. Montemayor further urges that because Ortiz failed to timely respond to production requests, all documentary evidence admitted in support of the attorney fees should have been excluded.
Texas Rule of Civil Procedure 193.6 provides that a party who fails to amend or supplement discovery in a timely manner may not introduce in evidence the material or information that was not timely disclosed, or offer the testimony of a witness who was not timely identified, unless the
Ortiz contended there was no unfair surprise. The trial court repeatedly overruled Montemayor’s objections to entry of the evidence and the testimony, at both the pre-trial hearing and at trial. Implicit in the trial court’s decisions, both to permit Ortiz’s witness to testify on attorney fees and to admit the related documentary evidence, is a determination that there was good cause or no unfair surprise in any late disclosure of the witness or the documentation. Bellino v. Comm’n for Lawyer Discipline,
Additionally, the record is unequivocal that the sole issue to be addressed in the forthcoming trial was attorney fees. Subsequent to the disclosure of the information in issue, the deposition of Jordan was scheduled and taken by Montemayor. Testimony provided at trial by Kimball, counsel for Montemayor, reflected he had reviewed in detail the fee records as well as Jordan’s deposition testimony. Cross-examination of Jordan was full and competent.
We conclude the record supports an implicit finding of lack of unfair surprise, and that the trial court did not abuse its discretion in permitting the witness to testify and the documentary evidence to be admitted. Bellino,
B. Segregation of Fees
Montemayor next urges it was error to submit evidence of all the various fees to the jury because Ortiz failed to properly segregate attorney fees related solely to pursuit of the declaratory judgment issues. Montemayor argues that, because of this failure, the jury award was excessive, unreasonable, and conflicted with the trial court’s earlier finding.
The trial court issued its first judgment awarding fees without any hearing or evidence of the parties. Montema-yor in fact objected to entry of that order on fees, and Ortiz had requested a jury trial on the issue. Both parties filed a motion for new trial on the issue of attorney fees; that new trial was granted, and the earlier judgment was withdrawn. The question was then presented to the jury as the fact finder.
The trial court has broad discretion in granting a new trial. Champion Int’l Corp. v. Twelfth Court of Appeals,
With respect to segregation of fees, Montemayor argues that Ortiz recovered for time spent not just on the declaratory judgment action dealing with whether or not Schor’s was her separate property, but also other claims, including other declaratory judgment claims and counterclaims based in tort. A plaintiff is required to show that the fees were incurred in conjunction with the prosecution or defense (in the context of a declaratory judgment) of a claim which allows recovery of such fees. Recovery of attorney fees is statutorily permissible under the Texas Declaratory Judgments Act; fees may be awarded “as are equitable and just,” without the requirement that a party prevail on its claims. Tex. Crv. Pra.c & Rem.Code Ann. § 37.009 (Vernon 1997).
Here, Montemayor originally brought suit seeking a declaratory judgment of the
right of the Plaintiffs [Montemayor] to execute and foreclose upon the personal properties ... and/or equipment of the Defendants and/or Schor’s jewelry stores ...” and that “said personal properties ... inventory and/or equipment of the Schor’s jewelry stores is the community property of defendants Cela-da and Becky Ortiz; that said cash and properties are subject to levy and execution by the plaintiffs based upon said judgment debt....
Subsequently, Ortiz filed counter-claims seeking a declaratory judgment that Ortiz was not personally liable on the judgment, and that neither Ortiz nor her business assets of Schor’s were subject to the judgment debt underlying Montemayor’s action to levy on that property. Ortiz also sought a declaration that the judgment on the debt was dormant. Ortiz’s counterclaims included several based in tort; those were later severed from the declaratory judgment actions.
Evidence at trial included testimony that work on the declaratory judgment issues was consuming and closely intertwined with all other issues, up until the date of the severance. Jordan further testified that time incurred prior to the severance that was attributable to the tort claims had been redacted from the fees requested; time attributed to trial preparation and trial on the tort claims similarly had not been included in the fee request. Full cross-examination of Jordan occurred; an attorney also testified on behalf of Monte-mayor. The jury had the opportunity to not only evaluate the testimony but also to review the fee statements.
As noted above, the jury, as trier-of-fact, is the sole judge of the credibility of the witnesses and the weight to give their testimony. City of Keller,
Montemayor contends the fee award is unjust as a matter of law. Whether the fees are reasonable and necessary is a question of fact for the jury. Bocquet,
We conclude that the jury could properly find that the fees it awarded were neither unreasonable nor unnecessary. We further conclude that the trial court did not abuse its discretion or err as a matter of law in finding that the fee award reflected in the jury award, and subsequently incorporated in the final judgment was neither inequitable nor unjust. We overrule Montemayor’s issue fourteen on appeal.
C. Availability of Attorney Fee Award
In the fifteenth issue, Montema-yor urges that Ortiz had no right to recover attorney fees under the Declaratory Judgments Act because she presented no new factual or legal issues not already raised in appellants’ pleadings. It is undisputed that Montemayor initiated proceedings with a suit for declaratory judgment and that Ortiz counterclaimed with her own requests for declaratory judgment. Two summary judgment orders issued declaring rights in favor of Ortiz.
Attorney fees may be recovered in actions arising under the Declaratory Judgments Act. See Tex. Civ. PRAC & Rem.Code Ann. § 37.009 (Vernon 1997). Montema-yor contends that Ortiz’s counterclaims presented no new controversies, and therefore an award of fees based thereon was improper.
When a party brings a declaratory judgment action by way of a counterclaim, and that counterclaim involves only issues already raised by the original claim, the party is not entitled to an award of attorney’s fees. Flagship Hotel, Ltd. v. City of Galveston,
In the present case, the plaintiff (appellant), not the defendants (appellees), invoked the Declaratory Judgments Act in its pleadings. Only after appellant instigated the declaratory judgments action as the basis for its suit did appellees then request attorney’s fees under the same Declaratory Judgments Act. The request was logical and clearly authorized in defense of the main suit.
Falls County,
We conclude the trial court did not abuse its discretion in finding that Ortiz was entitled to seek and recover an award of attorney fees under the Declaratory Judgments Act. See Bocquet,
CONCLUSION
We deny the motions for rehearing filed by appellants and by appellee.
. Montemayor’s motion for new trial also complained of the trial court’s substantive findings in the declaratory judgment. Only the attorney fee issue proceeded to trial.
. Jordan’s firm first formally appeared as counsel of record in the case in February 2003. The time records reflect consultations and services rendered beginning in late August 2002. Jordan testified that he and Ortiz first reached an oral agreement regarding his representation; the later written fee agreement is dated November 1, 2002.
. The exhibit also includes time records and fees incurred on behalf of Ortiz by counsel J. Norman Thomas who assisted in the matter.
. Montemayor relies upon Howell v. Mauzy,
. We further note that an award of fees under the Declaratory Judgments Act is not dependent upon whether or not the party ultimately prevails. Bocquet v. Herring,
.We note Montemayor’s contention that we failed to address the third issue on appeal, that the trial court erred in determining that the 1990 judgment was not a "joint debt.” The 1990 judgment, based on promissory notes, did not name Ortiz as a party or as an obligor. The record is further devoid of any evidence that Ortiz participated in any of the underlying events or even had knowledge of the 1990 judgment. In our earlier opinion, we discussed at length that the judgment was for a claim in contract and not in tort; only a tort debt can reach community property under the separate management and control of the other spouse. Tex Fam.Code Ann. § 3.202 (Vernon 1998). Nothing supports any contention that this earlier judgment debt was a "joint obligation” simply because Ortiz was married to a named debtor. We have already distinguished Cockerham, v. Cockerham,