Opinion
No. 04-16-00395-CV
04-12-2017
Matthew PERDUE and Team 1 Consulting, LLC, Appellants v. Jay D. PFEIFER and CCNBI, Inc., Appellees
MEMORANDUM OPINION
From the 150th Judicial District Court, Bexar County, Texas
Trial Court No. 2010-CI-07859
Honorable Renée Yanta, Judge Presiding Opinion by: Sandee Bryan Marion, Chief Justice Sitting: Sandee Bryan Marion, Chief Justice Marialyn Barnard, Justice Patricia O. Alvarez, Justice AFFIRMED IN PART; REVERSED IN PART
Matthew Perdue and Team 1 Consulting, LLC each appeal a judgment entered after a bench trial. Perdue contends the trial court erred in awarding CCNBI, Inc. damages and attorney's fees for its breach of contract claim and in failing to award him damages for his DTPA claim. Team 1 contends the trial court erred in only awarding it $3,000 in damages for its conversion claim and in calculating prejudgment interest from August 19, 2013. Team 1 also contends the trial court erred in only allowing it to recover from CCNBI and not from the individual defendants. We reverse the portion of the trial court's judgment calculating prejudgment interest on Team 1's conversion claim from August 19, 2013, and render judgment that the prejudgment interest began to accrue on June 29, 2010. We affirm the remainder of the trial court's judgment.
BACKGROUND
In February of 2007, Perdue entered into an agreement with CCNBI for the hosting of computer equipment in space provided by CCNBI. The equipment was owned by Perdue and his clients, which included Team 1. Perdue also periodically obtained computer consulting services from CCNBI.
In 2010, Perdue was late in paying CCNBI's invoices for its hosting and consulting services. On March 26, 2010, CCNBI sent Perdue a letter stating he owed a delinquent balance of $6,978.27, which included $4,759.52 for hosting services and $2,218.75 for consulting services. The letter stated Perdue's physical access to CCNBI's facilities was disabled immediately and would not be restored until the balance due for the hosting services was paid in full. The letter further stated if the balance due for the hosting services was not paid in full by April 2, 2010, all remaining services would be disconnected. The letter allowed Perdue to pay the balance due for the consulting services in three payments, with the first payment to be made on or before April 15, 2010.
This did not affect Perdue's remote access to the equipment.
On April 2, 2010, CCNBI sent Perdue a letter acknowledging his payment in full of the past due balance for the hosting services in the amount of $4,759.52. The letter stated all of Perdue's access would be immediately reinstated.
On April 30, 2010, CCNBI sent Perdue a letter providing thirty days' notice of its intent to terminate services effective June 1, 2010. The letter stated services would be disconnected on June 1, 2010, and Perdue needed to have all of his items removed from CCNBI's facility by that date.
On May 5, 2010, CCNBI sent Perdue a letter stating he owed a delinquent balance of $3,603.43 and demanding payment in full by May 10, 2010. The letter stated Perdue's physical access to CCNBI's facilities was disabled immediately and would not be restored until the balance due was paid in full. The letter further stated if the balance due was not paid in full by May 10, 2010, all remaining services would be disconnected. The invoices attached to the letter showed Perdue owed $2,218.75 for consulting services and $1,384.68 for hosting services.
On May 7, 2010, Perdue filed the underlying lawsuit asserting a deceptive trade practices claim against CCNBI and two of its officers, Jay D. Pfeifer and Mark Seamans, and also seeking a temporary restraining order and injunctive relief. On June 1, 2010, CCNBI's attorney sent Perdue a demand letter asserting Perdue owed CCNBI $10,684.68 for services and $10,375.00 in attorney's fees. The letter stated if Perdue failed to pay the amount in full, CCNBI would enforce its lien on all of the equipment Perdue had stored at CCNBI's facilities.
On June 29, 2010, Team 1 intervened in the lawsuit alleging its attorney sent CCNBI's attorney a letter demanding the return of its equipment which the letter identified in great detail. The letter also stated any refusal to return the equipment would be considered a conversion. Team 1's petition in intervention further alleged CCNBI's attorney sent Team 1's attorney a written response refusing to return the equipment.
On May 24, 2013, Perdue and Team 1 each filed a no evidence motion for summary judgment asserting CCNBI did not have a lien on their equipment under Chapter 59 of the Texas Property Code which applies to self-storage facilities. CCNBI filed a response to the motions, alleging CCNBI had a lien on the equipment as previously determined by the justice court. CCNBI argued that when Perdue filed a complaint for re-entry in the justice court, the justice court found CCNBI had a lien on the equipment. Although CCNBI attached a copy of Perdue's complaint for re-entry to its response, CCNBI did not attach any order from the justice court. On August 19, 2013, the trial court signed an order granting Perdue's and Team 1's motions, thereby concluding no lien existed.
On January 14, 2016, a bench trial was held as to all the remaining claims. At the conclusion of the trial, the trial court announced its ruling that Perdue take nothing on his DTPA claim or on any claims against Pfeifer and Seamans. The trial court awarded CCNBI $3,603.43 in damages on its breach of contract claim against Perdue plus $10,000 in attorney's fees. Finally, the trial court found CCNBI had converted Team 1's equipment. The trial court allowed Team 1 to elect to recover either (1) $3,000 in damages with prejudgment interest accruing from August 19, 2013; or (2) the return of its equipment. The trial court subsequently signed a written judgment memorializing its verbal ruling.
STANDARD OF REVIEW
Although both Perdue's and Team 1's briefs raise challenges to the sufficiency of the evidence to support various factual findings made by the trial court, the issues are not expressly phrased as sufficiency challenges. Based on the arguments made and the relief requested, however, we construe the issues as challenging the legal sufficiency of the evidence. See Sterner v. Marathon Oil. Co., 767 S.W.2d 686, 690 (Tex. 1989); Elias v. Mr. Yamaha, Inc., 33 S.W.3d 54, 59 & n.6 (Tex. App.—El Paso 2000, no pet.).
In an appeal from a bench trial, we apply the same sufficiency standards in reviewing the trial court's factual findings as we apply in determining whether sufficient evidence exists to support a jury's finding. Anderson v. City of Seven Points, 806 S.W.2d 791, 794 (Tex. 1991); In re Guardianship of Tischler, 505 S.W.3d 73, 76 (Tex. App.—San Antonio 2016, no pet.). As the factfinder, the trial court is the sole judge of the credibility of the witnesses and the weight to be given their testimony. See City of Keller v. Wilson, 168 S.W.3d 802, 819 (Tex. 2005); In re Guardianship of Tischler, 505 S.W.3d at 76. "The trial court may believe or disbelieve the testimony of a witness, in whole or in part, and it may resolve any inconsistencies in a witness's testimony." In re Guardianship of Tischler, 505 S.W.3d at 76. We "may not pass upon the witnesses' credibility or substitute [our] judgment for that of the [trial court,] even if the evidence would clearly support a different result." Maritime Overseas Corp. v. Ellis, 971 S.W.2d 402, 407 (Tex. 1998).
With regard to issues on which the opposing party had the burden of proof, the test for legal sufficiency is "whether the evidence at trial would enable reasonable and fair-minded people to reach the verdict under review." City of Keller, 168 S.W.3d at 827. In making this determination, we credit evidence favoring the finding if a reasonable factfinder could, and disregard contrary evidence unless a reasonable factfinder could not. Id. If there is more than a scintilla of evidence to support the finding, the legal sufficiency challenge fails. BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 795 (Tex. 2002).
"A party attempting to overcome an adverse fact finding as a matter of law [on an issue upon which that party had the burden of proof] must surmount two hurdles." Sterner, 767 S.W.2d 690. First, we examine the record for evidence that supports the finding, while ignoring all evidence to the contrary. Id. Second, if no evidence supports the finding, we examine the entire record to determine if the contrary proposition is established as a matter of law. Id.
TEAM 1'S ISSUES ON APPEAL
CONVERSION
The trial court determined CCNBI converted Team 1's equipment and awarded Team 1 damages. In its first two issues, Team 1 contends the trial court erred "in failing to award the correct amount of damages" and "in granting prejudgment interest beginning on August 1, 2013." For the reasons previously stated, we construe these issues as challenging the legal sufficiency of the evidence to support the trial court's findings regarding the amount of damages awarded and the date on which prejudgment interest began to accrue. In its third issue, Team 1 contends the trial court erred in refusing to find Pfeifer and Seamans individually liable.
CCNBI argues the trial court erred in finding CCNBI converted Team 1's equipment and in concluding in the partial summary judgment that CCNBI did not have a lien on the equipment. In making these arguments, CCNBI seeks to alter the trial court's judgment. "A party who seeks to alter the trial court's judgment ... must file a notice of appeal." TEX. R. APP. P. 25.1(c). Because CCNBI did not file a notice of appeal, we must conclude it waived these arguments. See TEX. R. APP. P. 25.1(c); Lubbock Cty. v. Trammel's Lubbock Bail Bonds, 80 S.W.3d 580, 584 (Tex. 2002); Soefje v. Jones, 270 S.W.3d 617, 631 (Tex. App.—San Antonio 2008, no pet.). Therefore, we next consider Team 1's complaints regarding the amount of damages awarded for CCNBI's conversion
By order dated December 29, 2016, this court noted CCNBI's brief stated it filed a timely notice of appeal; however, the clerk's record did not contain a notice of appeal filed by CCNBI. CCNBI was ordered to ensure a supplemental clerk's record was filed containing any notice of appeal it filed or "the court will presume that [CCNBI] did not timely file [a] notice[] of appeal." No supplemental clerk's record was filed.
A. Damages for Conversion
Conversion is the "unauthorized and wrongful assumption and exercise of dominion and control over the personal property of another, to the exclusion of or inconsistent with the owner's rights." Waisath v. Lack's Stores, Inc., 474 S.W.2d 444, 447 (Tex.1971); Bank of Am., N.A. v. Prize Energy Res., L.P., No. 04-13-00201-CV, 2014 WL 4257865, at *15 (Tex. App.—San Antonio Aug. 29, 2014, pet. denied). "To establish conversion of personal property, a plaintiff must prove (1) the plaintiff owned, had legal possession of, or was entitled to possession of the property; '(2) the defendant unlawfully and without authorization assumed and exercised control over the property to the exclusion of, or inconsistent with, the plaintiff's rights'; (3) the plaintiff made a demand for the property; and '(4) the defendant refused to return the property.'" Bank of Am. N.A., 2014 WL 4257865, at *15 (quoting Tex. Integrated Conveyor Sys., Inc. v. Innovative Conveyor Concepts, Inc., 300 S.W.3d 348, 365-66 (Tex. App.—Dallas 2009, pet. denied) (op. on reh'g)). "Generally, the measure of damages for conversion is the fair market value of the property at the time and place of the conversion." United Mobile Networks, L.P. v. Deaton, 939 S.W.2d 146, 147-48 (Tex. 1997).
Team 1 contends the trial court found the conversion occurred in June of 2010. CCNBI responds the conversion did not occur until the trial court determined it did not have a lien against the equipment in granting the partial summary judgment on August 19, 2013. CCNBI contends that its control over the property was lawful and authorized until that date because the justice court previously determined it had a lien.
In the reporter's records from the bench trial and the hearing on the post-judgment motions, Perdue, Team 1's attorney, and the trial court repeatedly make reference to the absence of any evidence of an order from the justice court. Having reviewed the entire record, we agree the record contains no evidence that the justice court determined CCNBI had a lien on the equipment. Therefore, the trial court's determination that CCNBI did not have any such lien made CCNBI's control over the equipment unlawful in June of 2010 when Team 1 demanded the return of the property and CCNBI refused to return it.
At trial, Tracy Creguer, Team 1's owner, testified as follows regarding the value of the equipment CCNBI converted:
Q. All right. Okay. So you — so as an expert on the computer, would you say — what is the value would you say of the equipment listed in the Plea in Intervention today, the fair market value?
A. Today, fair market value, right around $2,000, $3,000.
Q. What was it in May or June of 2010?
A. Approximately $120,000.
Team 1 argues the trial court was required to believe Creguer's undisputed testimony that the fair market value of the equipment at the time of the conversion in June of 2010 was $120,000. However, "[e]vidence that no one disputes does not necessarily establish a fact as a matter of law" because undisputed evidence is not the same as conclusive evidence. Natural Gas Pipeline Co. of Am. v. Justiss, 397 S.W.3d 150, 154 (Tex. 2012). As previously noted, the trial court, as the factfinder, was the sole judge of Creguer's credibility and the weight to be given his testimony. See City of Keller, 168 S.W.3d at 819. As a result, the trial court could disbelieve his testimony in whole or in part. In re Guardianship of Tischler, 505 S.W.3d at 76; see also Blanken v. Krasoff, No. 03-00-00541-CV, 2001 WL 838436, at *3 (Tex. App.—Austin July 26, 2001, no pet.) (mem. op.) (affirming damage award for conversion claim that was less than value of witness's unchallenged testimony at trial). And, in this case, the trial court expressly noted its ability to disbelieve Creguer's testimony at the hearing on the post-judgment motions. Because the trial court's damage award is within the range of the evidence presented at trial, we overrule Team 1's first issue. See Sw. Energy Prod. Co. v. Berry-Helfand, 491 S.W.3d 699, 713 (Tex. 2016) (noting trier of fact "generally has discretion to award damages within the range of evidence presented at trial"); Maritime Overseas Corp., 971 S.W.2d at 407 (noting appellate court "may not pass upon the witnesses' credibility or substitute its judgment for that of the [trial court]").
At the hearing on the post-judgment motions, the following exchange occurred:
THE COURT: What if I didn't believe him? What if I didn't believe your client that it was worth 120 in June of 2010.
[Team 1's Attorney]: Well —
THE COURT: Because he said it was approximately and he didn't have any — anything to support it at all but his statement?
[Team 1's Attorney]: Well again — you are — you are the — you know, you are the fact finder. You can assess credibility. So, yes, you have the right to do it, but my only point was that did come into evidence not objected to.
B. Prejudgment Interest
In its second issue, Team 1 contends the trial court erred in granting prejudgment interest beginning on August 19, 2013, instead of on the date of the conversion. While we agree the trial court erred in accruing prejudgment interest from August 19, 2013, we disagree that prejudgment interest began to accrue on the date of the conversion.
"Prejudgment interest is compensation allowed by law as additional damages for lost use of the money due as damages during the lapse of time between the accrual of the claim and the date of judgment." Ventling v. Johnson, 466 S.W.3d 143, 153 (Tex. 2015) (internal quotations omitted). In Qualia v. Qualia, No. 04-97-933-CV, 1998 WL 448608, at *10-12 (Tex. App.—San Antonio July 31, 1998, pet. denied), this court considered a similar challenge to an award of prejudgment interest on a conversion claim. In that case, the trial court began the accrual of the prejudgment interest at the time the conversion occurred. Id. at *12. This court held the trial court's calculation was erroneous because "prejudgment interest begins to accrue at the earlier of 180 days after the defendant receives notice of a claim or the date suit was filed." Id. at *11.
In this case, Team 1 filed its petition in intervention on June 29, 2010, which was shortly after it sent CCNBI a demand to return its equipment. Accordingly, prejudgment interest began to accrue on June 29, 2010. Therefore, we sustain Team 1's second issue, reverse the portion of the trial court's judgment calculating prejudgment interest on Team 1's conversion claim from August 13, 2013, and render judgment that Team 1 recover prejudgment interest from June 29, 2010.
C. Individual Defendants
In its third issue, Team 1 contends the trial court erred in refusing to hold Pfeifer and Seamans personally liable for the conversion. In support of this issue, Team 1 cites cases holding a corporate employee or officer is personally liable for tortious acts which he directs or in which he knowingly participates. See Leyendecker & Assocs., Inc. v. Wechter, 683 S.W.2d 369, 375 (Tex. 1984); Walker v. Anderson, 232 S.W.3d 899, 918 (Tex. App.—Dallas 2007, no pet.).
With regard to Seamans, the trial court signed an order on May 24, 2010, after a hearing on an Emergency Request for a Continuance by way of a Special Appearance filed by Seamans. In his special appearance, Seamans asserted he was not properly served with citation. In its order, the trial court stated any further hearings "must be scheduled AFTER citations have been issued and proper service has been perfected." Nothing in the appellate record reflects that Seamans was served after the date of the trial court's order. Accordingly, because the record does not establish that Seamans was a party to the suit, the trial court did not err in refusing to enter a judgment against him.
With regard to Pfeifer, Team 1's brief contains no citations to evidence showing Pfeifer directed or knowingly participated in CCNBI's conversion of the equipment. The only record citations provided are to evidence that Seamans admitted he made the decision not to return Team 1's equipment. Because Team 1 does not cite any evidence to show Pfeifer directed or knowingly participated in CCNBI's conversion, the trial court did not err in refusing to find Pfeifer liable for the conversion. Team 1's third issue is overruled.
PERDUE'S ISSUES ON APPEAL
Perdue contends the trial court erred in awarding CCNBI, Inc. damages and attorney's fees for its breach of contract claim and in failing to award him damages for his DTPA claim.
A. Attorney's Fees
In his first issue, Perdue asserts the trial court erred in awarding CCNBI $10,000 in attorney's fees because CCNBI did not segregate the fees it incurred in prosecuting its claim against Perdue from the fees it incurred in defending against Team 1's conversion claim. In response, CCNBI contends the trial court erred in not awarding $39,625.00 in attorney's fees to its attorney; however, because CCNBI did not file a notice of appeal, we are precluded from addressing this contention. See TEX. R. APP. P. 25.1(c); Lubbock Cty., 80 S.W.3d at 584; Soefje, 270 S.W.3d at 631.
Although attorney's fees generally must be segregated, segregation is not required when the claims arise out of the same transaction and are so interrelated that their prosecution or defense entails proof or denial of essentially the same facts. Buchanan v. O'Donnell, 340 S.W.3d 805, 815-16 (Tex. App.—San Antonio 2011, no pet); see also Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299, 313-14 (Tex.2006) (noting attorney's fees need not be segregated when discrete legal services are intertwined by advancing both a recoverable and unrecoverable claim). In this case, Team 1's conversion claim and CCNBI's breach of contract claim arose out of the same transaction, and CCNBI's defense of the conversion claim was based on its rights with regard to the equipment after Perdue failed to pay the amount due for CCNBI's services. As a result, the prosecution of CCNBI's breach of contract claim and CCNBI's defense of Team 1's conversion claim entailed proof of the same facts, and the same legal services were required to advance both. Therefore, the trial court did not err in determining the legal services were so intertwined that segregation was not required. Perdue's first issue is overruled.
Even if segregation was required, we note the trial court awarded CCNBI approximately one-fourth of the total amount of attorney's fees CCNBI's attorney testified CCNBI incurred.
B. Breach of Contract
We construe Perdue's second issue as a challenge to the legal sufficiency of the evidence to support the trial court's finding that he breached his agreement with CCNBI.
Perdue first contends the trial court erred in finding he had an agreement with CCNBI. In questioning Seamans during trial, the following exchange occurred:
Q. (Mr. Perdue) So just to clarify, your understanding of why you could bill for the services that are in these invoices was because of the agreement. I agreed to pay for certain services according to the agreement from February of 2007?Seamans testified the 2007 agreement was for a three year term and month to month thereafter. Seamans stated he believed he had a written and signed agreement with Perdue in 2007, but he could not find the written agreement. CNBI's invoices also contain the following reference "3 year Term - Begin 01Feb2007." During Perdue's testimony, CCNBI's attorney asked Perdue whether he voluntarily moved his equipment from one CCNBI suite to a different suite in 2009, and Perdue responded he voluntarily moved the equipment "based upon the understanding that my agreement with them in existence from February 2007 would remain in effect." When asked if he had a copy of the 2007 agreement, Perdue responded, "I signed it, sent it to Mr. Seamans. He subsequently says that he lost it." The foregoing is more than a scintilla of evidence to support the trial court's finding that an agreement existed. Therefore, Perdue's first issue is overruled.
A. Yes. And that we were providing you services.
Perdue represented himself at trial pro se.
Perdue also contends the evidence did not establish CCNBI performed the consulting services for which it was awarded damages. The trial court awarded $3,603.43 in damages for breach of contract. This amount is identical to the amount CCNBI stated was past due in its May 5, 2010 letter to which two invoices are attached. Invoice #m133 showed $2,218.75 past due for consulting services performed in January of 2008, and invoice #m966 showed $1,384.68 past due for hosting services. With regard to the consulting services, Perdue testified he repeatedly complained the work was not complete; however, he admitted he did not have any written evidence of any such complaints. An email dated June 20, 2008 from Perdue to Pfeifer was admitted into evidence. In that email, Perdue states, "Of course I intend to pay the labor invoice (m-133 - server set up)." In addition, a chat log between Perdue and various employees of CCNBI was introduced into evidence. The chat log was from January 2010 through May 2010, and contains no complaints from Perdue regarding the consulting services or the payment amounts being demanded for those services. As the factfinder, it was within the trial court's province to weigh the conflicting evidence. Because the record contains more than a scintilla of evidence to support the trial court's damage award, we overrule Perdue's second issue.
In its brief, CCNBI contends the trial court erred in failing to award it a greater amount of damages. Because CCNBI did not file a notice of appeal, however, we do not address this contention. See TEX. R. APP. P. 25.1(c); Lubbock Cty., 80 S.W.3d at 584; Soefje, 270 S.W.3d at 631.
C. DTPA Claim
In his final issue, Perdue contends the trial court erred in failing to award him damages for his DTPA claim. Because Perdue had the burden to prove his claim, we first examine the record for evidence that supports the finding, while ignoring all evidence to the contrary. Sterner, 767 S.W.2d 690.
During trial, the trial court limited Perdue's DTPA claim to the allegation that CCNBI misrepresented the quality and completeness of its work. As previously noted, the record contains conflicting evidence regarding CCNBI's consulting services. Although Perdue testified the services were not complete, he admitted he never sent any emails documenting any complaints regarding the work performed. In addition, Perdue sent an email agreeing to pay the invoice for the services. With regard to CCNBI's hosting services, Perdue contends CCNBI misrepresented Perdue would have 24/7 access to CCNBI's facilities. The evidence at trial, however, established Perdue had 24/7 access until he failed to timely pay for CCNBI's services. Therefore, the evidence supports the trial court's finding that CCNBI did not misrepresent the quality or completeness of its services, and Perdue's third issue is overruled.
CONCLUSION
The portion of the trial court's judgment calculating prejudgment interest from August 19, 2013 is reversed and judgment is rendered that prejudgment interest began to accrue on June 29, 2010. The remainder of the trial court's judgment is affirmed.
Sandee Bryan Marion, Chief Justice