Opinion
No. 06-05-00015-CV
Submitted: April 20, 2006.
Decided: May 4, 2006.
On Appeal from the 125th Judicial District Court, Harris County, Texas, Trial Court No. 2003-34963.
Before MORRISS, C.J., ROSS and CARTER, JJ.
MEMORANDUM OPINION
The promoter hoped that an African-American flavored Gospel and God-fearing musical would be a wonderful way to reach the African-American community — and make a lot of money for investors. The musical was written, was performed briefly in at least two other cities, and then a promoter with little or no experience in musical production brought it to Houston. The promoter was Wendell Jones (a defendant below), sole owner of and d/b/a Senoj Productions. Working with or for him in the enterprise was Quintin Hollis (named vice-president of the one-man company) and Cheryl A. Brown (a local attorney whose involvement was the subject of some disagreement before the trial court).
This case was transferred to the Sixth Court of Appeals by the Texas Supreme Court in accordance with its docket equalization plan.
Hollis was not a defendant.
The undisputed evidence shows that Brown made a PowerPoint presentation to Christopher Thomas and Bobby Johnson, that she created the presentation and that she was one of several people on hand when the potential investors viewed it and while they listened to radio commercials prepared to advertise the production. Following the presentation, the production obtained investments from Johnson of $60,000.00 and from Thomas of $42,500.00. The investors were told they could expect to double their money in short order. Perhaps appropriately, from the investors' standpoint, the play was titled: God Is Good All the Time. The investors' money was spent, but evidently not on the actors. The musical ended when some of the actors left in mid-show because they had not been paid.
Thus, instead of making the expected return from their investment, the investors lost everything they invested.
The Underlying Proceedings
The investors, Johnson and Thomas, sued Jones, Senoj Productions, and Brown. A trial was held to the court, which rendered judgment for the plaintiffs. The judgment awarded:
(1) Thomas: $42,000.00 from Senoj and Jones, jointly and severally,
(2) Johnson: $60,000.00 from Senoj, Jones, and Brown, jointly and severally, and
(3) Thomas and Johnson: $15,360.00 from Senoj and Jones, for attorney's fees, and post-judgment interest and appellate attorney's fees.
The court further held that Jones, Brown, and Senoj take nothing on their counterclaims.
The First Question: Who is here on appeal?
The defendants at trial were Jones, Brown, and Senoj Productions. Rule 25.1(c) explicitly requires that any "party who seeks to alter the trial court's judgment . . . must file a notice of appeal." Tex.R.App.P. 25.1(c). The rule also provides that multiple parties may file a joint notice. Id.
In this case, we have a notice of appeal and an amended notice of appeal. Both documents were filed by counsel Michelle I. Taylor, giving notice of appeal from the judgment on behalf of "Defendant Cheryl A. Brown."
There is no notice of appeal on behalf of Jones or Senoj Productions.
At trial, Jones was represented by different counsel than Brown.
As a result, neither Jones nor Senoj Productions is before this Court on appeal. We cannot address the first or fourth contentions of error, which involve allegations of trial court error involving Jones and Senoj Productions. We will, however, review any argument under those points that may apply to Brown's appeal.
The issues read as follows: "Whether the trial Court erred in finding that Wendel Jones d/b/a Senoj Productions breached the agreements/contracts with Appellees," and "Whether the trial Court erred when it found that Wendel Jones d/b/a/ Senoj Productions had a duty to Appellees and whether he was negligent in the discharge of his duty to Appellees."
The Second Question: What is appealed?
In the findings of fact, the trial court found that Brown made eight false representations to Johnson and failed to disclose three matters. In its conclusions of law, the trial court found that Johnson was entitled to recover from Brown for negligent misrepresentation and breach of duties. It appears that the judgment against Brown was based on a negligent misrepresentation theory.
The court found that Brown made the following false representations to Johnson: that, with his investment, the play would be produced; that there would be five performances of the play; that, with his investment, all financial arrangements to produce the play had been taken care of; that projected revenues from the production of the play were sufficient to protect his investment; that he would not lose his investment; that Brown was legal counsel for Senoj Productions; that Senoj Productions "collaborates with the play to produce superior main-stage productions throughout the United States and abroad"; and that they had produced or promoted prior performances of the play in other cities. The court found that Brown failed to disclose to Johnson material risks of investing in the play, including that the play had been unsuccessful in generating enough revenue to reimburse the investments of other investors in previous productions, that Brown had invested in a previous production of the play and that the play had not generated enough revenue to reimburse her for her investment of funds in that production, and that they had not produced or promoted the play in the past.
Conclusion of law 5 found that Brown negligently misrepresented material facts concerning the play to Johnson to induce Johnson to enter into the agreement. Conclusion of law 19 found Brown was also liable to both Johnson and Thomas for negligent misrepresentation and breach of duties. With no further explanation, conclusion of law 20 found that Thomas was not entitled to any recovery against Brown. Only Johnson was granted a judgment against Brown.
Brown contends the judgment against her was improperly rendered because she personally made no false representations in "the PowerPoint presentation" to Johnson and Thomas. The contentions of error are directed at no particular single or group of the findings of fact entered by the trial court, but argue globally (and without any reference to evidentiary sufficiency standards) that the elements of common-law fraud were not proven and that Brown made no false representations.
Johnson and Thomas argue cogently that we should decline to address most of these issues because Brown's briefing is so inadequate. We acknowledge that Brown's brief provides little to no reference to the record and consistently fails to specify the nature of the review sought, beyond a generic complaint that the evidence is insufficient. Johnson and Thomas complain, with considerable justification, that they do not know what to respond to. They correctly point out that counsel has specified no finding of fact or conclusion of law under attack and that this is inadequate on its face. There are a number of cases stating generally that findings and conclusions must be challenged specifically, and also that unchallenged findings and conclusions are absolutely binding on appellate courts. Atascosa County Appraisal Dist. v. Tymrak, 815 S.W.2d 364, 367 (Tex.App.-San Antonio 1991), aff'd, 858 S.W.2d 335 (Tex. 1993).
For example, in Bransom v. Standard Hardware, Inc., 874 S.W.2d 919, 927 (Tex.App.-Fort Worth 1994, writ denied), the point of error challenged no specific finding (in a nonjury case), but merely said that the evidence was insufficient to support the damages awarded; the appellate court said that no error was presented. Unchallenged findings of fact are binding on the appellate court "unless the contrary is established as a matter of law, or if there is no evidence to support the finding." McGalliard v. Kuhlmann, 722 S.W.2d 694, 696 (Tex. 1986); Thomas v. Casale, 924 S.W.2d 433, 437 (Tex.App.-Fort Worth 1996, writ denied).
It is clear that Brown's complaints involve the evidence. However, the lack of any attempt to explain the type of analysis sought makes it difficult both for Johnson and Thomas and for the Court to address whatever we might speculate the complaint to be. In this instance, we will address the arguments raised — so far as we can fairly do so in light of the notice provided to Johnson and Thomas about the content of those arguments.
Negligent Misrepresentation of Material Facts
It appears that Brown is complaining about conclusion of law 5, in which the trial court found that she negligently misrepresented material facts about the play to Johnson to induce him to enter into the agreement. In a properly analyzed argument, findings of fact are the equivalent of a jury answer and should be attacked on the basis of legal or factual sufficiency of the evidence. Associated Tel. Directory Publishers, Inc. v. Five D's Publ'g Co., 849 S.W.2d 894, 897 (Tex.App.-Austin 1993, no writ) (citing Anderson v. City of Seven Points, 806 S.W.2d 791, 794 (Tex. 1991)). Conclusions of law should be attacked on the ground that the law was incorrectly applied. Heritage Res., Inc. v. Hill, 104 S.W.3d 612, 619 (Tex.App.-El Paso 2003, no pet.).
Brown was found liable only for damages to Johnson, so we can properly limit our review to anything involving the award to him. Brown has failed to support the overwhelming majority of the factual statements contained in her brief with specific references to the record. See Tex.R.App.P. 38.1(f), (h). This Court is not required to search the entire record for evidence supporting her claims, and we will not do so. Henriquez v. Cemex Mgmt., Inc., 177 S.W.3d 241, 245 n. 4 (Tex.App.-Houston [1st Dist.] 2005, pet. denied); see Tex.R.App.P. 38.1(f), (h).
An appellant may not challenge a trial court's conclusions of law for factual insufficiency; however, the reviewing court may review the trial court's legal conclusions drawn from the facts to determine their correctness. BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 794 (Tex. 2002); Templeton v. Dreiss, 961 S.W.2d 645, 656 n. 8 (Tex.App.-San Antonio 1998, pet. denied).
Brown argues the trial court could not have properly found that she negligently misrepresented material facts. Brown first argues she made no representations because she only ran the PowerPoint projector — or perhaps because she only used other people's information when she prepared the slide presentation. With no citation to the record, we cannot truly determine what evidence on which Brown relies in making this assertion.
However, there is evidence that Brown prepared the materials presented to Johnson, including the presentation describing the nature of the musical, the cast members, the way in which it was designed to reach the community, the financial projections, and the "synopsis" with past ticket sales information. There was testimony indicating that Brown was represented to be legal counsel for the company, as well as assisting in the production. There was evidence that she did not tell Johnson she had invested in a previous production of the play — and had not been repaid, or that the estimated cost of production was nearly twice the amount sought from these investors, or that the talent agent was already complaining of their failure to pay deposits for the actors. In short, there is considerable evidence which, if believed by the fact-finder, indicates that Brown did far more than mere clerical work.
Brown also argues that the representations she made could not have been material because Johnson did not immediately decide to invest — he delayed a few days before deciding. This argument is not persuasive. Johnson's delay does not alleviate any damage that might occur as a result of representations made two days earlier. Brown has directed us to no authority providing that the harm must follow immediately after the representations are made, and we are aware of none. The representations were necessarily material: the entire purpose of them was to persuade Johnson to invest money so that the show would materialize. Almost by definition, such a solicitation will be material to the decision-making process of the learned investor.
Brown next argues that none of the representations or statements were false. However, as we previously stated, the trial court made a number of findings of fact that various statements were false. Brown attacks no particular finding, and as set out above, there was evidence showing that some of the representations were false.
Brown further alleges the evidence shows that the information she communicated was true to the best of her knowledge or belief, again, without any specific reference to any finding of fact. Analyzing her contention as broadly as she has presented it, there was evidence before the fact-finder that Brown had an expectation that a part of her own lost investment from previous productions of the play would be recovered from the Houston production. The trial court found that Brown represented that she was legal counsel for Senoj Productions, which was false. There is no evidence she attempted to check or verify any of the information presented. The broad-brushed argument that no falsity existed because the play had, at least, been presented before in other cities (even if conclusively proven) does not negate the findings, supported by evidence, that Brown falsely represented material facts to Johnson.
Brown does not believe that the evidence shows that Johnson relied on her representations. She points out there is evidence that Johnson did not immediately agree to invest after the presentation and that he also talked to Hollis later, and then decided to invest. The fact-finder could have disbelieved this argument, based on the presentation, Brown's involvement, and Johnson's investment based on the combined conversations with the various parties. There is evidence from which reliance could be gleaned.
Brown claims Johnson did not prove that her presentation caused his injury. The ultimate injury was the entire loss of his investment. Again, Brown references no finding of fact, and as pointed out several times above, there is evidence that she was involved in the presentation, that she was involved in the promotion of the production, and that it was within the scope of the evidence as believed by the fact-finder to conclude that her actions were a cause of injury to Johnson.
Brown asserts that, under common-law negligence, she complied with her duty to use ordinary care in making representations about the play. There are two conclusions of law that are relevant. In conclusion of law 19, the court concluded Johnson was entitled to recover from Brown "for negligent misrepresentation and breach of duties." In conclusion of law 2, the trial court found that the defendants had a duty to avoid misrepresentations, disclose material risks, and to exercise reasonable care in obtaining and communicating material information about the risks. The trial court did not base its judgment on common-law negligence, but it was for negligent misrepresentation. That theory has specific elements, none of which were specifically addressed by Brown in her brief. Brown's "ordinary care" argument does not address the specific elements of the negligent misrepresentation theory.
The elements of negligent misrepresentation are: (1) the defendant made a representation in the course of business or a transaction in which the defendant had a pecuniary interest; (2) the defendant supplied false information for the guidance of others in their business; (3) the defendant did not exercise reasonable care or competence in obtaining or communicating the information; and (4) the plaintiff suffered pecuniary loss by justifiably relying on the representation. Fed. Land Bank Ass'n of Tyler v. Sloane, 825 S.W.2d 439, 442 (Tex. 1991); Wright's v. Red River Fed. Credit Union, 71 S.W.3d 916, 920 (Tex.App.-Texarkana 2002, no pet.).
We affirm the judgment.