Opinion
No. 05-08-00445-CV
Opinion issued August 12, 2009.
On Appeal from the 192nd Judicial District Court Dallas County, Texas, Trial Court Cause No. 06-01158-K.
Before Justices WRIGHT, MOSELEY, and FRANCIS.
MEMORANDUM OPINION
Jaipal Reddy Elete appeals the trial court's judgment awarding SEJ Properties, LP, $4719 in actual damages and $97,500 in punitive damages. In nine issues, Elete claims the trial court erred in submitting jury questions on damages and punitive damages, awarding punitive damages, allowing SEJ to make a trial amendment, and admitting certain evidence. We suggest a remittitur of $90,956 with respect to exemplary damages, but in all other respects, we affirm the trial court's judgment.
Plymouth Park is a 750,000-square-foot strip center in Irving, Texas, which includes a 15,000 square-foot movie theater. SEJ acquired the entire property, including "the existing leases and tenants," in August 2004. At the time SEJ acquired Plymouth Park, Elete was subleasing the theater from tenant Jerry Meagher. Elete's sublease ended June 30, 2005. In the months before Elete's sublease expired, SEJ representatives spoke with Elete about leasing the space to him under a new lease but Elete was not "interested in reletting it" at the price that was offered. SEJ then leased the facility to a company called Fun Asia. According to Jonathan Shokrian, one of the principals of SEJ, Elete left the leased facility damaged with areas "literally broken and destroyed." Fun Asia sued SEJ for the damages to the building, and SEJ paid $97,500 to Fun Asia for the repairs.
SEJ then sued Elete for breach of contract and intentionally damaging the leased premises. Before trial began, Elete stipulated he was liable for the physical property damage to the bathrooms, including the toilets, urinals, sinks, tiles, and walls. At the close of evidence, SEJ sought and was granted a trial amendment to include a cause of action for negligence. The jury found in favor of SEJ on the negligence issue and awarded actual damages of $70,410 and punitive damages of $97,500. Elete filed a motion for judgment notwithstanding the judgment. Although the trial court denied Elete's motion, SEJ remitted $65,691 in actual damages at the trial court's suggestion, and the final judgment awarded SEJ only $4719 in actual damages but the entire $97,500 in punitive damages. This appeal ensued.
In his seventh issue, Elete alleges the trial court erred in allowing SEJ's trial amendment to add a negligence cause of action. Under civil procedure rules 63 and 66, a trial court has no discretion to refuse an amendment unless the opposing party presents evidence of surprise or prejudice, or the amendment asserts a new cause of action or defense, is thus prejudicial on its face, and the party opposing the amendment objects. Greenhalgh v. Service Lloyds Ins. Co., 787 S.W.2d 938, 939 (Tex. 1990). The burden of showing prejudice or surprise rests on the party resisting the amendment. Id. (citing Patino v. Tex. Employers Insur. Ass'n, 491 S.W.2d 754, 756 (Tex. Civ. App.-Austin 1973, writ ref'd n.r.e.)).
Prior to trial, Elete stipulated to "the liability for the reasonable and necessary cost of repairs to the restrooms." The record shows that, at the conclusion of trial, Elete tendered a proposed charge that dealt with the "negligence issue." When SEJ then sought a trial amendment for negligence, Elete objected on the ground he was surprised. Elete did not claim prejudice or that the amendment sought a new cause of action. The trial court overruled the objection, noting Elete submitted the negligence issue and was therefore not surprised. Furthermore, Elete stipulated to his liability for the damage done to the restrooms, and the final judgment awarded damages relating only to the repairs done to the restrooms. Because the amendment raised no new substantive matters and because there was no showing of surprise or prejudice by Elete, the trial court did not abuse its discretion in granting leave to file the amendment. See Greenhalgh, 787 S.W.2d at 939-40. To the extent Elete now argues a verbal trial amendment is insufficient to modify the pleadings, we conclude Elete waived this complaint. See City of Fort Worth v. Zimlich, 29 S.W.3d 62, 73 (Tex. 2000) (City waived complaint when City failed to specifically object to lack of written trial amendment before submission of charge to jury). We overrule issue seven.
In his eighth issue, Elete contends the trial court erred in allowing evidence that SEJ owned the property, and in his ninth issue, he claims the trial court's error was harmful. At trial, Shokrian testified he and his sisters were partners in SEJ and that SEJ owned the property. Elete claimed this evidence was inadmissible because Shokrian was testifying about the purchase documents of the property and Texas Rule of Evidence 1002 requires an original writing be admitted to prove the content of a writing.
We review a trial court's ruling on the admission or exclusion of evidence for an abuse of discretion. Interstate Northborough P'ship v. State, 66 S.W.3d 213, 220 (Tex. 2001). To reverse a judgment on the ground of improperly admitted evidence, a party must show the error probably resulted in an improper judgment. Id.; Tex. R. App. P. 61.1(a). A party waives any complaint regarding a ruling on the admissibility of evidence when prior or subsequent testimony to the same effect has been admitted without objection. Banks v. Columbia Hosp. at Med. City Dallas Subsidiary, L.P., 233 S.W.3d 64, 71 (Tex. App.-Dallas 2007, pet. denied).
Although Elete claims the admission of Shokrian's testimony regarding ownership of the property was inadmissible, he did not object each time Shokrian testified about SEJ's ownership of the property, including when Shokrian testified SEJ acquired the property in August 2004. By failing to object each time Shokrian testified SEJ owned the property, Elete waived this complaint. See Banks, 233 S.W.3d at 71. In light of this, we need not address Elete's ninth issue. We overrule issues eight and nine.
In his first three issues, Elete claims there was no evidence or factually insufficient evidence of the reasonableness, necessity, or cost of repairs to the property. Elete also claims there was no evidence or factually insufficient evidence to show SEJ had an interest in the property.
Although Elete states "the trial court erred in submitting a jury question on damages (number 2) and this Court should disregard the jury's verdict because there is no evidence, or in the alternative legally insufficient evidence or in the further alternative factually insufficient evidence" to support the reasonableness, necessity, or cost or that SEJ owned the property, the crux of his complaint challenges the sufficiency of the evidence to support the jury's verdict. Thus, we confine our discussion to the sufficiency of the evidence.
When, as here, a party challenges the legal sufficiency of the evidence supporting an adverse finding on an issue for which he does not have the burden of proof, that party must demonstrate on appeal that there is no evidence to support the adverse finding. Croucher v. Croucher, 660 S.W.2d 55, 58 (Tex. 1983); IKON Office Solutions, Inc. v. Eifert, 125 S.W.3d 113, 123 (Tex. App.-Houston [14th Dist.] 2003, pet. denied). In a legal sufficiency or "no evidence" review, we determine whether the evidence would enable reasonable and fair-minded people to reach the verdict under review. City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex. 2005). In conducting this review, we credit favorable evidence if reasonable jurors could and disregard contrary evidence unless reasonable jurors could not. Id. We consider the evidence in the light most favorable to the finding under review and indulge every reasonable inference that would support it. Id. at 822. We must sustain a no evidence complaint only if (1) the record reveals a complete absence of evidence of a vital fact, (2) the court is barred by rules of law or of evidence from giving weight to the only evidence offered to prove a vital fact, (3) the evidence offered to prove a vital fact is no more than a mere scintilla, or (4) the evidence establishes conclusively the opposite of the vital fact. Id. at 810; Merrell Dow Pharm., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997).
In reviewing a challenge to the factual sufficiency of the evidence, we must consider and weigh all of the evidence and should set aside the judgment only if it is so contrary to the overwhelming weight of the evidence as to be clearly wrong and unjust. Arias v. Brookstone, L.P., 265 S.W.3d 459, 468 (Tex. App.-Houston [1st Dist.] 2007, pet. denied) (citing Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986)). The fact finder is the sole judge of witnesses' credibility; it may choose to believe one witness over another, and a reviewing court cannot impose its own opinion to the contrary. Wilson, 168 S.W.3d at 819; Arias, 265 S.W.3d at 468. Because it is the fact finder's province to resolve conflicting evidence, we must assume that the fact finder resolved all evidentiary conflicts in accordance with its decision if a reasonable human being could have done so. Wilson, 168 S.W.3d at 819; Arias, 265 S.W.3d at 468. An appellate court may not impose its own opinion to the contrary of the fact finder's implicit credibility determinations. Wilson, 168 S.W.3d at 819; Arias, 265 S.W.3d at 468.
A plaintiff who seeks to recover the cost of repairs must prove the reasonableness and necessity of those repairs. Executive Taxi/Golden Cab v. Abdelillah, No. 05-03-01451-CV, 2004 WL 1663980, at *1 (Tex. App.-Dallas July 19, 2004, pet. denied.) (mem. op.); Legacy Motors, LLC v. Bonham, No. 02-07-00065-CV, 2007 WL 2693863, at *4 (Tex. App.-Fort Worth Sept. 13, 2007, no pet.) (mem. op.). The plaintiff need not use the words "reasonable" and "necessary" to establish the right to recover costs of repairs; the injured party need only present sufficient evidence to justify a jury's finding that the costs were reasonable and the repairs necessary. Executive Taxi/Golden Cab, 2004 WL 1663980, at *1; Ron Craft Chevrolet, Inc. v. Davis, 836 S.W.2d 672, 677 (Tex. App.-El Paso 1992, writ denied); Carrow v. Bayliner Marine Corp., 781 S.W.2d 691, 694 (Tex. App.-Austin 1989, no writ); Liptak v. Pensabene, 736 S.W.2d 953, 958 (Tex. App.-Tyler 1987, no writ). Testimony of the person making the estimates or performing the repairs or third-party approval of the repairs has been held sufficient to support an award of damages based on the cost of repairs, see Executive Taxi/Golden Cab, 2004 WL 1663980, at *1; Ron Craft Chevrolet, Inc., 836 S.W.2d at 677; Carrow, 781 S.W.2d at 694; Liptak, 736 S.W.2d at 958, as well as testimony from property owners, contractors, and others knowledgeable about the condition of the property in question before and after the alleged damage. Moren v. Pruske, 570 S.W.2d 442, 444-45 (Tex. Civ. App.-San Antonio 1978, writ ref'd n.r.e.).
In this case, Dwight Sellars, a general contractor, testified he had performed work at the Plymouth Park strip center for five to six years and, having occasionally met with tenants or the landlord, was familiar with the property. Fun Asia hired him to look at the theater after Elete vacated the property. According to Sellars, everything in the theater was "either ripped up or moved or damaged in some way." There were holes and chunks missing in the bathroom tiles. Although the toilets and sinks "weren't necessarily ripped out of the wall, . . . holes had been put in every single fixture in such a manner that . . . you have to trash them. There's no way to fix it." The partitions between the toilets had been cracked or had holes punched in them. Many of the drain pipes were filled with porcelain and plaster debris. Sellars testified the facility required "substantial rehabilitation" before it could be occupied.
Plumber Chuck Mihlan testified he was hired by Fun Asia to perform repair work at the theater. The "damage was pretty intense." Some of the urinals were ripped out from the walls and the others had cracks in them where they had been vandalized. The toilets were broken and, although the company wanted to try to repair the toilets and urinals, they were not salvageable and had to be removed. Some of the drains were broken and water lines destroyed. One drain contained a "hard substance" that clogged the drain; Mihlan said it was not "even worth messing" with repairing it so he simply removed the plumbing from that fixture. He charged Fun Asia for his labor but the company purchased most of the materials.
Shokrian testified SEJ purchased the strip center in August 2004, and Elete was leasing the theater at that time. When Shokrian met with the tenant, Elete expressed an interest in leasing a larger space. Although SEJ gave Elete the opportunity to relet the theater, Elete was not "interested" in leasing it at the price SEJ offered. SEJ then began negotiating with Fun Asia and, approximately two months before Elete's lease expired, SEJ leased the space to Fun Asia. Elete moved out around the time his lease expired on June 30, 2005.
After Elete moved out, Dr. Hamid, the owner of Fun Asia, discovered the property was damaged. He took numerous photographs and sent them to Shokrian who, after reviewing the photographs, inspected the property personally. According to Shokrian, the place "just looked basically like it was completely destroyed." Damages included clogged drains and pipes, toilets, sinks, and mirrors with holes in them, doors knocked out, and tiles missing from the walls. The walls between the bathroom stalls "looked like someone took the back of a hammer and literally just put dents in the separations between the urinals." The urinals looked "like someone took that same hammer and just left holes on the bottom of the bowls of the toilet seats." They were not able to salvage any of the toilets, urinals, or sinks. Shokrian identified the five invoices totaling $4719 from Mihlan, and stated they were for plumbing work on the bathrooms. Although Fun Asia hired and paid Mihlan, SEJ reimbursed Fun Asia for the repairs and restoration.
After reviewing the entire record, including the above detailed evidence, we conclude the evidence is legally and factually sufficient to support the award of $4719 in damages as the reasonable and necessary cost of the bathroom repairs. See United Servs. Auto. Ass'n v. Croft, 175 S.W.3d 457, 469 (Tex. App.-Dallas 2005, no pet.); Hernandez v. Lautensack, 201 S.W.3d 771, 777 (Tex. App.-Fort Worth 2006, pet. denied). We further conclude the evidence is legally and factually sufficient to show SEJ owned the property as of August 2004 and, therefore, had an ownership interest at the time. We overrule Elete's first, second, and third issues.
In his fifth issue, Elete claims the trial court erred in allowing punitive damages because SEJ failed to establish actual damages. In light of our disposition of issues one, two, and three, we conclude we need not address this issue. See Tex. R. App. P. 47.1.
In his fourth and sixth issues, Elete contends the trial court erred in submitting a jury question on punitive damages because there is no evidence or factually insufficient evidence to support an award of punitive damages and that the punitive damages awarded by the jury were grossly excessive.
To be entitled to an award of punitive damages, SEJ had to prove by clear and convincing evidence that the harm with respect to which it sought recovery of exemplary damages resulted from malice by Elete. See Tex. Civ. Prac. Rem. Code Ann. § 41.003(a) (Vernon 2008). Clear and convincing evidence is that "measure or degree of proof that will produce in the mind of the trier of fact a firm belief or conviction as to the truth of the allegations sought to be established." Id. § 41.001(2); Transp. Ins. Co. v. Moriel, 879 S.W.2d 10, 31 (Tex. 1994). In conducting a legal sufficiency review, we review all the evidence in the light most favorable to the jury's finding, taking into account contrary undisputed facts, to determine whether reasonable jurors could have formed a firm belief or conviction regarding malice. Qwest Int'l Commc'ns, Inc. v. AT T Corp., 167 S.W.3d 324, 326 (Tex. 2005) (citing Sw. Bell Tel. Co. v. Garza, 164 S.W.3d 607, 619 (Tex. 2004)). To give appropriate deference to the factfinder's conclusions and the role of a court conducting a legal sufficiency review, we look at the evidence in the light most favorable to the judgment which means that, as a reviewing court, we must assume the factfinder resolved disputed facts in favor of its finding if a reasonable factfinder could do so. In re J.F.C., 96 S.W.3d 256, 266 (Tex. 2002). In a factual sufficiency review, a court of appeals must give due consideration to evidence that the factfinder could reasonably have found to be clear and convincing. Id. The inquiry must be "whether the evidence is such that a factfinder could reasonably form a firm belief or conviction about the truth of the State's allegations." Id. (citing In re C.H., 89 S.W.3d 17, 25 (Tex. 2002)). We should consider whether disputed evidence is such that a reasonable factfinder could not have resolved that disputed evidence in favor of its finding. Id. If, in light of the entire record, the disputed evidence that a reasonable factfinder could not have credited in favor of the finding is so significant that a factfinder could not reasonably have formed a firm belief or conviction, then the evidence is factually insufficient. Id. Malice is defined as "a specific intent by the defendant to cause substantial injury or harm to the claimant." Tex. Civ. Prac. Rem. Code Ann. § 41.001(7) (Vernon 2008); Bennett v. Reynolds, 242 S.W.3d 866, 884 (Tex. App.-Austin 2007, pet. filed). Specific intent means the "actor desires to cause the consequences of his act, or that he believes the consequences are substantially certain to result from it." Bennett, 242 S.W.3d at 885 (citing Reed Tool Co. v. Copelin, 689 S.W.2d 404, 406 (Tex. 1985)). Malice may be proved by circumstantial evidence. Transp. Ins. Co., 879 S.W.2d at 23.
Sellars testified he had been in the construction business for twenty-five years and had done a number of rehabilitation and remodels of facilities like the theater. When he walked through the theater after July 1, 2005, everything in the theater was "either ripped up or moved or damaged in some way." The bathroom tiles had holes and chunks missing. Many pipes had plaster and debris in them and were clogged. Some toilets, urinal, and sinks were ripped out of the wall while others had holes in them, rendering them useless. The partitions between the toilets had been cracked or had holes punched in them. The building was "trashed" and would require "substantial rehabilitation" before anyone could occupy it. Based on his experience, the damage in the theater was not consistent with someone "just moving out of a building."
Mihlan stated there was vandalism in the building, and the damage was "pretty intense." The toilets and urinals were broken and often ripped out of the wall. The situation was "unsanitary." Drains were broken, and water lines destroyed. Several drains had rags stuffed in them and another had a bottle stuffed in it. The damage that was done was not the type Mihlan would have expected from normal wear and tear. For example, the bottle that was placed in the drain "had to [have] been deliberately dropped" in the drain with the drain cover placed over it.
According to Shokrian, the theater "looked . . . completely destroyed." He similarly testified drains and pipes were clogged, each toilet, urinal, sink, and mirror had a hole gouged in it, doors were knocked out, and bathroom tiles were missing from the walls. Each partition between the bathroom stalls looked as though someone had taken a hammer and dented each separating partition between the urinals. The urinals looked like that same person had taken the hammer and punched holes on the bottom of the bowls of the toilet seats. Sections of tile were removed. None of the sinks, toilets, or urinals were salvageable. SEJ had to reimburse Fun Asia for the repairs to the interior of the building, including the damage to the restrooms.
Elete testified his brother, Mahipal Elete, hired three people to help move Elete's furniture and fixtures from the theater. He did not know the names of the men but thought they came from "Ready Labor" next to a gas station nearby. The men were paid in cash for their services. During the time the men were removing items from the theater, Elete had a three-hour meeting and had to leave but his brother and the theater manager, Mohammad Abbas, were both there. According to Elete, he told the men to "carefully" remove the sinks and toilet seats because they were in new condition and belonged to him. He had no idea why his brother and Abbas did not tell the men "not to wreck the bathrooms and tear all the mirrors and fixtures out of them." He denied authorizing it or approving of it, but conceded he was responsible for what went on in the theater. Elete stated nothing was torn down or destroyed, rather it was "very nicely, professionally" taken down. He conceded that when he returned from his meeting, he saw the damage his workers had done to the bathroom but did not call anyone to report it.
This evidence shows Elete hired three day laborers to "remove furniture and fixtures." Elete did not know the men nor could he provide their names. Although Elete was not present, his brother and manager were present and did nothing to stop the men from destroying the bathrooms. Elete admitted he saw the damage but did nothing and told no one. The men were paid cash for their services. Under the facts and circumstances, we conclude the evidence is legally and factually sufficient to support the jury's implicit finding of malice and thus, to support an award of exemplary damages. We overrule Elete's fourth issue.
Next, Elete complains the exemplary award is grossly excessive. When reviewing the amount of an exemplary damage award for constitutionality, we have been directed to consider three "guideposts:" (1) the nature of the defendant's conduct, (2) the ratio between exemplary and compensatory damages, and (3) the size of civil penalties in comparable cases Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299, 308 (Tex. 2006) (citing State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 417 (2003)). Although declining to adopt a bright-line ratio between actual and exemplary damages, the United States Supreme Court has stated that "few awards exceeding a single-digit ratio . . . will satisfy due process." Campbell, 538 U.S. at 425. The Court has pointed to early statutes authorizing awards of double, treble, or quadruple damages as support for the conclusion that "four times the amount of compensatory damages might be close to the line of constitutional impropriety." Id.
In this case, the jury initially awarded actual damages of $70,410 with exemplary damages of $97,500, a ratio of 1.3847. After the trial court suggested, and SEJ agreed to, a remittitur of $65,691, the actual damages were reduced to $4719. The exemplary damage award, however, was not reduced. Considering the $4719 actual damages awarded in the final judgment, the exemplary damages awarded are nearly twenty-one times the actual award of damages and do not pass constitutional muster under the Supreme Court's guidelines set out in Campbell. Accordingly, we sustain Elete's sixth issue.
Pursuant to appellate rule 46.3 and the due process clause of the U.S. Constitution, we suggest a remittitur of $90,965 reducing the exemplary damage award to $6535 or 1.3847 times the actual damages awarded in the final judgment. In accordance with rule 46.3 of the Texas Rules of Appellate Procedure, if SEJ files with this Court, within fifteen days of the date of this opinion, a remittitur of $90,965 with respect to exemplary damages, the trial court's judgment will be reformed to reflect exemplary damages of $6535 and the judgment will be affirmed as reformed. If the suggested remittitur is not timely filed, the trial court's judgment will be reversed and this case will be remanded to the trial court for a new trial on all issues.