Opinion
No. 01-06-00962-CV
Opinion Issued April 3, 2008.
On Appeal from County Civil Court at Law No. 1 Harris County, Texas Trial Court Cause No. 837358.
Panel consists of Justices TAFT, KEYES, and ALCALA.
MEMORANDUM OPINION
Appellant, RDI Mechanical, Inc. ("RDI"), appeals from a final judgment in which the trial court granted RDI a foreclosure on a removable chiller located on the property of appellee, WPVA, L.P. ("WPVA"). In one issue, RDI contends that WPVA failed to affirmatively plead the defense of a prior foreclosure in its answer, thereby waiving that defense, and that the evidence was legally insufficient to support the trial court's judgment. With its brief, WPVA filed a motion for damages with this court under Texas Rule of Appellate Procedure 45 on the ground that RDI's appeal is frivolous. We conclude that the issue of a prior foreclosure was tried by consent and that the evidence was legally sufficient to support the trial court's judgment. We affirm the judgment of the trial court and deny WPVA's motion for damages.
Background
RDI sold and installed a chiller to provide air conditioning at an apartment complex owned by RDG Investment Group at a total cost of $90,006.44. RDI was not paid in full and, in December 2004, filed an affidavit claiming a mechanic's lien on the property. WPVA purchased the apartment complex at a foreclosure sale in January 2005.
When Keeley Megarity, a general partner of WPVA, inspected the property after the purchase, he discovered that RDI had disconnected the wires to the chiller and that the chiller was not functioning completely. WPVA then contacted RDI about repairing the chiller. RDI attempted on several occasions to fix the chiller but was never able to make it fully functional. WPVA continued to use the chiller although only part of it worked because WPVA planned to convert the apartment complex to individually metered units. WPVA also offered to return the chiller to RDI once the transition to individual units was complete.
RDI filed suit against WPVA asking for a foreclosure of its lien on "the real property and/or removables on the property." In its petition, RDI further asserted that WPVA "induced" RDI into leaving the chiller on the property and that, as a result, RDI "suffered damages for loss of rental value [and] devaluation of the equipment." In its First Amended Answer, WPVA asserted a general denial along with the defenses of payment, accord and satisfaction, failure of consideration, offset, and credit, and it pleaded that it was not liable in the capacity sued. At the bench trial, the trial court entered judgment granting RDI a foreclosure on the chiller but not on the real property. RDI filed a motion for new trial and a request for findings of fact and conclusions of law. The trial court never entered findings of fact and conclusions of law, nor did it grant a new trial. This appeal followed.
Failure to Plead Affirmative Defense
In its sole issue, RDI asserts that WPVA failed to plead the affirmative defense of a prior foreclosure and therefore should have been prohibited from raising such a defense at trial.
Under Rule 94 of the Texas Rules of Civil Procedure, a party must affirmatively plead any affirmative defenses including release, waiver "and any other matter constituting an avoidance or affirmative defense." TEX. R. CIV. P. 94. An affirmative defense does not tend to rebut factual propositions asserted by a plaintiff, but rather it seeks to establish an independent reason why the plaintiff should not recover. Gorman v. Life Ins. Co. of N. Am., 811 S.W.2d 542, 546 (Tex. 1991); Hamm v. Millennium Income Fund, L.L.C., 178 S.W.3d 256, 268 (Tex.App.-Houston [1st Dist.] 2005, pet. denied). Absent trial by consent, failure to plead a matter of affirmative defense will preclude a defendant from asserting it. An issue is tried by consent when a party introduces evidence to support an issue that is not included in the written pleadings and no objection is made to the lack of pleadings. See TEX. R. CIV. P. 67; see also Bell v. Meeks, 725 S.W.2d 179, 179-80 (Tex. 1987). "To determine whether an issue was tried by consent, the Court must examine the record not for evidence of the issue, but rather for evidence of trial of the issue." Pickelner v. Adler, 229 S.W.3d 516, 523 (Tex.App.-Houston [1st Dist.] 2007, no pet. h.) (internal quotation marks omitted). "A party's unpleaded issue may be deemed tried by consent when evidence on the issue is developed under circumstances indicating both parties understood the issue was in the case, and the other party failed to make an appropriate complaint." Haas v. Ashford Hollow Cmty Improvement Ass'n, 209 S.W.3d 875, 884 (Tex.App.-Houston [14th Dist.] 2006, no pet.).
In the present case, RDI asserts that WPVA failed to raise the defense of prior foreclosure in its answer. However, during trial, Keeley McGarity, a general partner of WPVA, testified that WPVA bought the real property at a foreclosure sale. RDI objected to the introduction of McGarity's testimony on the foreclosure because it "assume[d] facts not in evidence." RDI was then allowed to take the witness on voir dire, during which time RDI asked Megarity details of the purchase of the property at the foreclosure sale. WPVA resumed questioning Megarity and referred to the foreclosure sale on several occasions without any objection by RDI. RDI never objected to any evidence of foreclosure based on a lack of pleading. Accordingly, we hold that the issue of the prior foreclosure was tried by consent.
Legal Sufficiency Challenge
RDI also asserts that the evidence was legally insufficient evidence to support the trial court's judgment granting RDI a foreclosure only on the chiller. Specifically, RDI contends that, because there was no evidence of prior foreclosure, RDI's mechanic's lien extended to the apartment complex in which the chiller was installed, and the trial court should have granted RDI a foreclosure of the real property, rather than only the removable chiller. WPVA responds that Megarity's testimony is sufficient evidence of a prior foreclosure on which the trial court could have based its judgment granting RDI a foreclosure on the chiller.
When a party attacks the legal sufficiency of an adverse finding on an issue for which it did not have the burden of proof, that party must demonstrate that there is no evidence to support the adverse finding. See Croucher v. Croucher, 660 S.W.2d 55, 58 (Tex. 1983). Such a no-evidence challenge will be sustained when "`(a) there is a complete absence of evidence of a vital fact, (b) the court is barred by rules of law or of evidence from giving weight to the only evidence offered to prove a vital fact, (c) the evidence offered to prove a vital fact is no more than a mere scintilla, or (d) the evidence conclusively establishes the opposite of the vital fact.'" King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 751 (Tex. 2003) (quoting Merrell Dow Pharms., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997)). However, "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." City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex. 2005). "[L]egal-sufficiency review in the proper light must credit favorable evidence if a reasonable [fact finder] could, and disregard contrary evidence unless a reasonable [fact finder] could not." Id. The evidence is legally sufficient if it "would enable reasonable and fair-minded people to differ in their conclusions." See id. at 822. As long as the evidence falls within the zone of reasonable disagreement, "[a] reviewing court cannot substitute its judgment for that of the trier-of-fact." Id. Although the reviewing court "must consider evidence in the light most favorable to the verdict, and indulge every reasonable inference that would support it[,] . . . if the evidence allows for only one inference, neither [the fact finder] nor the reviewing court may disregard it." Id.
In the present case, WPVA presented the testimony of Megarity, one of its general partners. Megarity clearly stated that WPVA purchased the property at a foreclosure sale. RDI did not present any evidence rebutting the statement by Megarity that the property was purchased at a foreclosure sale roughly a month after RDI perfected its lien. Given that we must view the evidence presented in a light most favorable to the trial court's judgment, Megarity's testimony supports the implied finding of the trial court that there was a foreclosure of a prior deed of trust on the real property. A mechanic's lien attaches and has priority over a prior recorded deed of trust only with respect to removables that can be removed from the real property without damage to the land, preexisting improvements, or the material itself. Exchange Sav. Loan Ass'n v. Monocrete Pty. Ltd., 629 S.W.2d 34, 36 (Tex. 1982). The parties agree that the chiller was a removable. [R.R. 31-32] Therefore, even assuming RDI's mechanic's lien extended to the real property when perfected, after the foreclosure, RDI's lien extended only to the removable chiller. We conclude that the evidence was legally sufficient to support the trial court's judgment. We overrule RDI's sole issue.
Motion for Damages for a Frivolous Appeal
In addition to its responsive brief, WPVA filed a motion for damages under Rule 45 of the Texas Rules of Appellate Procedure, stating that RDI's appeal was frivolous. See TEX. R. APP. P. 45. Rule 45 of the Rules of Appellate Procedure permits an appellate court to award a prevailing party "just damages" for "frivolous" appeals. Id.; Smith v. Brown, 51 S.W.3d 376, 380 (Tex.App.-Houston [1st Dist.] 2001, pet. denied). In determining whether an appeal is frivolous, we apply an objective test. Smith, 51 S.W.3d at 381. We review the record from the viewpoint of the advocate and ask whether the advocate had reasonable grounds to believe the judgment could be reversed. Id. We exercise prudence and caution and deliberate most carefully before awarding appellate sanctions. Id. After objectively reviewing the record from the viewpoint of RDI, we conclude that RDI had reasonable grounds to believe the judgment could be reversed. Therefore, we decline to conclude that its appeal is frivolous.
Conclusion
We affirm the judgment of the trial court and deny WPVA's motion for damages.