Matice Enterprises, Inc., d/b/a Urban Designer Kitchen and Roger Matice d/b/a Urban Designer Kitchen v. A. Wright Gibson, III--Appeal from Co Civil Ct at Law No 1 of Harris County

Opinion issued August 4, 2005

In The

Court of Appeals

For The

First District of Texas

NO. 01-04-00913-CV

MATICE ENTERPRISES, INC. , D/B/A URBAN DESIGNER KITCHENS AND ROGER MATICE D/B/A URBAN DESIGNER KITCHENS, Appellants

V.

A. WRIGHT GIBSON, III, AND LINDA S. GIBSON, Appellees

On Appeal from the County Civil Court at Law No. 1

Harris County, Texas

Trial Court Cause No. 762,914

MEMORANDUM OPINION

This appeal arises from a dispute between a contractor and a homeowner over a home-remodeling contract. Appellant, Roger Matice d/b/a Urban Designer Kitchens ( Roger Matice ) brought suit against appellees, A. Wright Gibson, III, and Linda S. Gibson ( the Gibsons ), for breach of contract, quantum meruit, sworn account, and fraud, seeking recovery of amounts due for materials and services. The Gibsons counterclaimed for breach of contract, fraud, and violations of the Deceptive Trade Practices Act ( DTPA ). The case was later restyled Plaintiff Matice Enterprises, Inc. d/b/a Urban Designer Kitchens v. Defendants/Third Party Plaintiffs A.Wright Gibson, III and Linda S. Gibson v. Third Party Defendant Roger Matice d/b/a Urban Designer Kitchens. A jury awarded Matice Enterprises, Inc. d/b/a Urban Designer Kitchens ( Matice Inc. ) $1,571.79 on its quantum meruit claim and $32,500 in attorney s fees. The Gibsons were awarded $2,000 on their DTPA claims against Roger Matice and $45,500 in attorney s fees. Roger Matice took nothing.

In three issues, Matice Inc. and Roger Matice jointly contend that (1) the evidence was legally insufficient to support any finding of liability against Roger Matice d/b/a Urban Designer Kitchens because such entity does not legally exist, (2) the trial court erred in disregarding the damages awarded to Matice Inc. and allocating an improper offset, and (3) the trial court erred in refusing to reform the judgment to correct clerical errors.

We reverse and remand to enter judgment on damages consistent with the jury s verdict and affirm the trial court s judgment in all other respects.

BACKGROUND

In January 2001, the Gibsons contracted with Urban Designer Kitchens to remodel their kitchen and three bathrooms. A series of estimates was compiled on Urban Designer Kitchens letterhead, signed by Roger Matice as the Authorized Company Representative. The final contract defined the seller as Urban Designer Kitchens and was signed by Roger Matice in his individual capacity.

The total contract price for the remodeling was $76,826.93, with 50% due upon signing the contract, 40% upon delivery of the cabinets, and the remaining 10% upon completion. Work began in late January 2001 and continued until March 2001, when the Gibsons noticed that work progress began to slow. In addition, the Gibsons discovered that the quality of the work being performed was below industry standards. The Gibsons wrote Roger Matice several letters complaining about the unfinished and defective work such as defective installation of lighting fixtures, flooring, and cabinetry. Roger Matice responded on Urban Designer Kitchens letterhead, signing as Roger Matice. As one of only two employees at Urban Designer Kitchens, Roger Matice was the Gibsons sole contact.

By April 2001, the Gibsons had paid $72,000 on the contract. They met with Roger Matice, discussed the list of unfinished work, and set a deadline of June 30, 2001 for completion. Roger Matice sent a letter to his subcontractors, on Urban Designer Kitchens letterhead, with a list of the incomplete work. By August 2001, however, the job remained unfinished.

Roger Matice maintains that he ceased working on the job because the Gibsons refused to pay $22,000 that became due for additional work he performed when the Gibsons requested changes outside of the contract. The Gibsons maintain that they refused to pay any money over and above that already paid under the contract because Roger Matice abandoned the job.

In November 2001, Roger Matice d/b/a Urban Designer Kitchens filed suit against the Gibsons to recover the unpaid amount, alleging breach of contract, quantum meruit, sworn account, and fraud. The Gibsons counterclaimed for breach of contract, fraud, and violations of the DTPA due to the unfinished work.

In September 2002, Roger Matice filed an amended petition in which he restyled his cause Matice Enterprises, Inc. d/b/a Urban Designer Kitchens versus the Gibsons. In addition, Matice Enterprises, Inc. d/b/a Urban Designer Kitchens answered the Gibsons counterclaims, but did not deny the capacity in which the counterclaims had been brought (as against Roger Matice d/b/a Urban Designer Kitchens ).

In March 2003, Roger Matice d/b/a Urban Designer Kitchens formally moved to restyle the case, asserting that the proper plaintiff and counter-defendant was Matice Enterprises, Inc., d/b/a Urban Designer Kitchens. Roger Matice put on proof that, in 1999, Matice Enterprises incorporated and filed an assumed name certificate, calling itself Urban Designer Kitchens. The trial court ordered Matice s suit restyled as Plaintiff Matice Enterprises, Inc. d/b/a Urban Designer Kitchens v. Defendants A. Wright Gibson, III and Linda S. Gibson. However, the trial court ordered the Gibson s suit styled as Third Party Plaintiffs A. Wright Gibson, III and Linda S. Gibson v. Third Party Defendant Roger Matice d/b/a Urban Designer Kitchens.

In August 2003, Matice Inc. amended its petition and Roger Matice filed an Amended Answer to the Counterclaim in which Roger Matice identified himself as Counter-Defendant/Third Party Defendant Roger Matice d/b/a Urban Designer Kitchens. By verified denial, Roger Matice denied the capacity in which he had been sued and denied that he was individually doing business under the name of Urban Designer Kitchens.

In January 2004, the Gibsons filed a supplemental counterclaim, this time solely against Roger Matice d/b/a Urban Designer Kitchens, and the case proceeded to jury trial. During trial, Roger Matice offered a copy of the articles of incorporation and assumed name certificate as evidence that Matice Enterprises was incorporated and that the corporation had been on file with the Secretary of State as doing business in the name of Urban Designer Kitchens since January 1999. The Gibsons objected that the articles of incorporation and assumed name certificate were not properly authenticated and could not be admitted for the purpose of showing official government records. The trial court overruled the objections and admitted the documents; however, the Gibson s assert that the documents were admitted for limited purposes. //

The Gibsons did not offer evidence that Roger Matice was officially registered as individually doing business as Urban Designer Kitchens; however, the Gibsons offered evidence that Roger Matice was, in fact, individually conducting his business under that name. The Gibsons demonstrated that throughout all of their dealings with Urban Designer Kitchens the estimates, the contract, invoices, letters there was never any disclosure of the existence of Matice Inc. or that Roger Matice was acting as its agent.

The jury charge properly reflected the order to restyle. The jury answered questions finding the following, which the court entered:

" Matice Enterprises d/b/a Urban Designer Kitchens did substantially perform under the agreement. (Question No. 1).

" The Gibsons did not fail to comply with a material obligation of the agreement with Matice Enterprises d/b/a Urban Designer Kitchens.(Question No. 2).

" Matice Enterprises d/b/a Urban Designer Kitchens performed compensable work outside of the agreement, valued at $1,571.79. (Question Nos. 4 and 5).

" The reasonable fees for the necessary services of the attorney for Matice Enterprises d/b/a Urban Designer Kitchens [total $32,500]. (Question No. 6).

" Roger Matice d/b/a Urban Designer Kitchens did engage in a false, misleading, or deceptive act or practice that was a producing cause of damages to the Gibsons, and $2,000 damages are awarded. (Question Nos. 7 and 8).

" Roger Matice d/b/a Urban Designer Kitchens did engage in an unconscionable action or course of action that was a producing cause of damages to the Gibsons, but zero damages are awarded. (Question Nos. 9 and 10).

" Roger Matice d/b/a Urban Designer Kitchens did not knowingly and voluntarily engage in a fraudulent and deceitful scheme, course of conduct and deceptive trade practice. (Question No. 11).

" Roger Matice d/b/a Urban Designer Kitchens did fail to comply with a material obligation of the agreement with the Gibsons, but zero damages are awarded. (Question Nos. 14 and 15).

" The reasonable fees for the necessary services of the attorney for the Gibsons [total $45,500]. (Question No. 16).

On May 18, 2004, the final judgment awarded the Gibsons $15,000 against Roger Matice d/b/a Urban Designer Kitchens. In addition, court costs were assessed against Roger Matice d/b/a Urban Designer Kitchens and Matice Enterprises Inc. d/b/a Urban Designer Kitchens.

The style of the final judgment does not reflect the order to restyle or the jury charge. The final judgment lists Matice Enterprises, Inc. d/b/a Urban Designer Kitchens as plaintiff, the Gibsons as defendants/counter-plaintiffs, and Roger Matice d/b/a Urban Designer Kitchens as counter-defendant. In addition, the body of the judgment states, in pertinent part, that

the court orders that plaintiff, Roger Matice d/b/a Urban Designer Kitchens, take nothing by his suit, and that defendants, A. Wright Gibson III and Linda S. Gibson, recover from plaintiff, Roger Matice d/b/a Urban Designer Kitchens the sum of $15,000 plus prejudgment interest . . . . All costs of court . . . are adjudged against Roger Matice d/b/a Urban Designer Kitchens, and Matice Enterprises d/b/a Urban Designer Kitchens, Plaintiff.

(Emphasis added.)

Roger Matice and Matice Inc. filed a motion to set aside the jury s findings on the ground that no evidence was offered that Roger Matice d/b/a Urban Designer Kitchens was a legally existing entity. In addition, they filed a motion to modify or reform the judgment. These motions were overruled by operation of law. Matice Inc. and Roger Matice jointly filed this appeal.

Legal Sufficiency

In their first issue, Roger Matice and Matice Inc. (hereinafter jointly referred to as appellants ) contend that the evidence was legally insufficient to support DTPA liability against Roger Matice. Appellants do not challenge the jury s findings that the DTPA was violated. Further, appellants do not raise the corporate status of Matice Inc. to contend that Roger Matice is not individually liable under agency principles. Rather, appellants solely contend that there is no evidence that Roger Matice is individually doing business as Urban Designer Kitchens or that Roger Matice d/b/a Urban Designer Kitchens is a legally existing entity. // Hence, assert appellants, the Gibsons are precluded from recovery.

A. Standard of Review

In a legal-sufficiency review, we consider the evidence in a light that tends to support the finding of the disputed facts, and we disregard all evidence to the contrary. Lee Lewis Constr., Inc. v. Harrison, 70 S.W.3d 778, 782 (Tex. 2001); Ned v. E.J. Turner & Co., Inc., 11 S.W.3d 407, 408 (Tex. App. Houston [1st Dist.] 2000, pet. denied). If there is more than a scintilla of evidence to support the finding, we must uphold it. Formosa Plastics Corp. USA v. Presidio Eng rs & Contractors, Inc., 960 S.W.2d 41, 48 (Tex. 1998). When 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, the evidence is no more than a scintilla and, in legal effect, is no evidence. Kindred v. Con/Chem, Inc., 650 S.W.2d 61, 63 (Tex. 1983). However, if the evidence supplies some reasonable basis for differing conclusions by reasonable minds, then there is some evidence. Id.

B. Analysis

The Texas Business and Commerce Code requires every business operating under an assumed name to file an assumed name certificate in the county where the entity is doing business or, in the case of an incorporated business, with the Secretary of State. Tex. Bus. & Com. Code Ann. 36.10 .11 (Vernon 2002). Failure to file does not impair the validity of any contract or act by such person or business, but prevents the person or business from maintaining an action or proceeding arising out of the contract or act in which the assumed name was used, until a certificate is filed. Id. 36.25. Any corporation or individual doing business under an assumed name may sue or be sued in its assumed name for the purpose of enforcing for or against it a substantive right, but on a motion by any party or on the court s own motion the true name may be substituted. Tex. R. Civ. P. 28.

Here, Roger Matice originally named himself Roger Matice d/b/a Urban Designer Kitchens in his own petition against the Gibsons. The Gibsons brought their counterclaim against him in that capacity. Over a year later, Roger Matice moved to restyle the case, asserting that the proper plaintiff was Matice Enterprises Inc. d/b/a Urban Designer Kitchens. The court considered the question of the proper capacity of the parties and ordered the Gibsons claim to be styled Third Party Plaintiffs A. Wright Gibson v. Third Party Defendant Roger Matice d/b/a Urban Designer Kitchens.

Subsequently, Roger Matice properly filed verified denials that he was sued in the wrong legal capacity and that he was not doing business under Urban Designer Kitchens. See Tex. R. Civ. P. 93. Roger Matice asserted that Urban Designer Kitchens was the assumed name of Matice Inc. and that all work and materials provided in the remodeling of the Gibson s home were provided by Matice Inc. This put the burden on the Gibsons to show otherwise.

Generally, in order to avoid individual liability, an agent has a duty to disclose the existence of a principal and his representative capacity. Hideca Petroleum Corp. v. Tampimex Oil Int l, Ltd., 740 S.W.2d 838, 842 (Tex. App. Houston [1st Dist.] 1987, no writ). The law does not presume agency. Lachmann v. Houston Chronicle Publ g. Co., 375 S.W.2d 783, 785 (Tex. Civ. App. Austin 1964, writ ref d n.r.e.). The Gibsons put on evidence that Roger Matice did not disclose the existence of Matice Inc. or that he was acting in a representative capacity. While the estimates, contract, invoices, and correspondence between the Gibsons and Roger Matice name Urban Designer Kitchens, courts have held that use of a trade name alone is not sufficient disclosure. Id. The Gibsons had no way of knowing that Matice Inc. was in existence. Even if the articles of incorporation and assumed name certificate were on file, the Gibsons had no duty to search for this information to discover the principal. See Latch v. Gratty, Inc., 107 S.W.3d 543, 546 (Tex. 2003) (holding individual liable when principal is undisclosed); Hideca Petroleum Corp., 740 S.W.2d at 842.

Appellants seem to contend that the Gibsons claims should fail because they did not prove that Roger Matice was individually on file as d/b/a Urban Designer Kitchens. However, adding d/b/a to a name does not constitute the creation of a separate legal capacity; rather, it is a term of identification. See C.T. Lambert v. Dealers Elec. Supply, Inc., 629 S.W.2d 61, 64 (Tex. App. Dallas 1981, writ ref d n.r.e.) (Guittard, C.J., dissenting). Further, filing is not use of the name. Tex. Bus. & Com. Code Ann. 36.17 (Vernon 2002). Hence, in order to shield himself individually from liability with the corporate status of Matice Inc., Roger Matice had to conduct the business of Urban Designer Kitchens as an agent of Matice Inc.

Considering the evidence in a light that tends to support finding Roger Matice individually liable and disregarding all evidence to the contrary, we conclude that reasonable minds could differ as to whether Roger Matice individually conducted business as Urban Designer Kitchens. See Lee Lewis Constr., 70 S.W.3d at 782; Ned, 11 S.W.3d at 408. Because there is more than a scintilla of evidence to support the finding, we must uphold it. Formosa Plastics, 960 S.W.2d at 48.

We overrule appellants first issue.

Damages and Clerical Errors

In their second issue, appellants contend that the trial court erred in entering a judgment that disregards the actual damages awarded to Matice Inc. and appears to have improperly offset Roger Matice s liability to the Gibsons with the attorney s fees awarded to Matice Inc.

The jury awarded Matice Inc. $1,571.79 for work performed outside of the contract and $32,500 in attorney s fees. The Gibsons were awarded $2,000 on their DTPA claims and $45,500 in attorney s fees. Roger Matice took nothing. However, the only award listed in the final judgment is $15,000 to the Gibsons, against Roger Matice d/b/a Urban Designer Kitchens. There is no award to Matice Inc. listed in the judgment.

Rule of civil procedure 302 requires an offset of damages [i]f the defendant establishes a demand against the plaintiff upon a counterclaim exceeding that established against him by the plaintiff. Tex. R. Civ. P. 302. However, here, we do not have mutuality of judgment. See Brook Mays Organ Co. v. Sondock, 551 S.W.2d 160, 166 (Tex. Civ. App. Beaumont 1977, writ ref d n.r.e.) (determining that both demands must mutually exist in the same parties and in the same capacity or right). The plaintiff, Matice Inc., prevailed on its breach of contract claim against the defendants, the Gibsons. The Gibsons did not prevail on any counterclaims against Matice Inc. Rather, the Gibsons prevailed solely on their DTPA claims against third-party defendant, Roger Matice. Hence, any such setoff, if it occurred, is improper. Nevertheless, there is no explanation in the record for the calculations or the allocations.

We reverse the portion of the judgment disregarding the $1,571.79 award to Matice Inc. and reverse the portion of the judgment awarding the Gibsons $15,000 in damages. We remand for the purpose of allocating damages as supported by the evidence.

We sustain appellants second issue.

Clerical Errors

In their third issue, appellants contend that the trial court erred in failing or refusing to correct clerical errors in the final judgment. The final judgment was signed May 18, 2004. Appellants timely filed a motion to modify or reform the judgment to correct alleged clerical errors, which was overruled by operation of law. Tex. R. Civ. P. 329b(a). Appellants ask this Court to reform the judgment to correct the clerical errors.

A judgment nunc pro tunc in the trial court is used to correct clerical errors and may be executed after the trial court loses plenary jurisdiction. Tex. R. Civ. P. 329b(f); Riner v. Briargrove Park Prop. Owners, Inc., 976 S.W.2d 680, 682 (Tex. App. Houston [1st Dist.] 1998, no pet.). A clerical error is an error in entering a final judgment. Escobar v. Escobar, 711 S.W.2d 230, 231 (Tex. 1986). A judicial error, which is an error in rendering final judgment, cannot be corrected in the trial court once the trial court s plenary power has expired. Id.

Whether an error is clerical or judicial is a question of law. Id. at 232. Whether the trial court pronounced the judgment orally and the terms of the pronouncement are questions of fact. Id. The judicial or clerical question becomes a question of law before us only after the trial court has factually determined whether it previously rendered judgment and the contents of the judgment. Id. Here, the record is not developed on this point.

We overrule appellants third issue.

CONCLUSION

We reverse the portion of the judgment disregarding the $1,571.79 award to Matice Inc. and reverse the portion of the judgment awarding the Gibsons $15,000 in damages. We remand for the purpose of entering judgment on damages consistent with the jury s verdict. The trial court s judgment is affirmed in all other respects.

Laura Carter Higley

Justice

Panel consists of Chief Justice Radack and Justices Higley and Bland.