Gilbert G. Gonzalez and Consuelo S. Gonzalez v. Temple Inland Mortgage Corporation, Curt Spicher and Bankers Trust Company--Appeal from 285th Judicial District Court of Bexar County

MEMORANDUM OPINION
No. 04-03-00236-CV
Gilbert G. GONZALEZ and Consuelo G. Gonzalez,
Appellants
v.
TEMPLE-INLAND MORTGAGE CORP. and Bankers Trust Company,
Appellees
From the 285th Judicial District Court, Bexar County, Texas
Trial Court No. 97-CI-05176
Honorable Michael P. Peden, Judge Presiding

Opinion by: Catherine Stone, Justice

Sitting: Catherine Stone, Justice

Sarah B. Duncan, Justice

Karen Angelini, Justice

Delivered and Filed: May 5, 2004

AFFIRMED

Gilbert G. Gonzalez and Consuelo S. Gonzalez (the "Gonzalezes") appeal a take nothing judgment entered against them based on a jury's verdict. The judgment ordered the Gonzalezes to pay Temple-Inland Mortgage Corp. ("Temple-Inland") and Bankers Trust Company ("Bankers Trust") attorneys' fees. The Gonzalezes present sixteen issues on appeal challenging: (1) the legal and factual sufficiency of the evidence to support the jury's failure to find liability; (2) the legal and factual sufficiency of the evidence to support the jury's failure to award any damages; and (3) the award of attorneys' fees. Temple-Inland and Bankers Trust assert a cross-point contending that the trial court's temporary injunction was void ab initio. We affirm the trial court's judgment.

Background

In December of 1995, the Gonzalezes were notified that their mortgage was "severely past due." The notice stated that the Gonzalezes' October, November, and December payments were past due. The notice further stated that the Gonzalezes owed $3,594.08 as of January 1, 1996, and $3,670.53 if received after January 11, 1996.

On January 18, 1996, the Gonzalezes received a notice of acceleration. The notice stated that the amount necessary to cure the default was $5,868.06 as of January 16, 1996. The notice further stated that if the default was not cured within twenty days, Bankers Trust would accelerate the maturity date of the note and have the Gonzalezes' home sold at a public foreclosure sale.

On February 3, 1996, the Gonzalezes responded to the notice of acceleration. The Gonzalezes asserted that the $5,868.06 amount was incorrect. The Gonzalezes stated that they only owed $3,670.53 and that they intended to pay that amount within the next week. The Gonzalezes requested a correct summary of the payments owed.

On February 9, 1996, the Gonzalezes received notice of acceleration and foreclosure. The notice stated that the property was scheduled for foreclosure on March 5, 1996. By letter dated February 23, 1996, the Gonzalezes paid the $5,868.06 under protest. The Gonzalezes disputed the amount of the delinquency, but they wanted to prevent the foreclosure.

By letter dated February 27, 1996, Bankers Trust acknowledged the Gonzalezes' payment and stated that the payment had been forwarded to Temple-Inland. The letter stated that Temple-Inland had been requested to research the Gonzalezes' dispute regarding the amount of the delinquency. The letter further stated that the foreclosure process had been stopped.

Over the next ten months, the Gonzalezes and Temple-Inland exchanged correspondence and engaged in conversations regarding the loan and the application of the payment in an effort to resolve the dispute. During this period, Temple-Inland did not make any demands for payment, and the Gonzalezes made no payment on their note.

In January of 1997, Temple-Inland sent the Gonzalezes a payment history, detailing the manner in which it had applied the $5,868.06 payment. Having received no payment since February of 1996, Temple-Inland sent the Gonzalezes a notice of default and intent to accelerate on March 10, 1997. In response, the Gonzalezes filed the underlying suit asserting various causes of action, including violations of the Debt Collection Act, unreasonable and negligent debt collection practices, duress, and violations of the DTPA.

Two liability questions were submitted to the jury. In response, the jury found that neither Temple-Inland nor Bankers Trust engaged in any false, misleading, or deceptive act or practice that the Gonzalezes relied on to their detriment and that was a producing cause of damages to them. The jury also found that neither Temple-Inland nor Bankers Trust applied economic duress against the Gonzalezes that was a producing cause of damages to them. In answering the damage questions, the jury awarded zero damages. Finally, the jury found that a reasonable fee for the necessary services of the attorneys for Temple-Inland and Bankers Trust was $77,500.00 for preparation and trial, $15,000.00 for an appeal to the court of appeals, and $7,500.00 for an appeal to the Supreme Court of Texas. Based on the jury's verdict, the trial court entered a take nothing judgment against the Gonzalezes and ordered them to pay attorneys' fees in the amounts determined by the jury.

Sufficiency of the Evidence

As the plaintiffs, the Gonzalezes had the burden to prove liability. When parties attack the legal sufficiency of an adverse finding on an issue on which they have the burden of proof, they must demonstrate on appeal that the evidence establishes, as a matter of law, all vital facts in support of the issue. Dow Chemical Co. v. Francis, 46 S.W.3d 237, 241 (Tex. 2001). In reviewing a "matter of law" challenge, the reviewing court must first examine the record for evidence that supports the finding, while ignoring all evidence to the contrary. Id. If there is no evidence to support the finding, the reviewing court will then examine the entire record to determine if the contrary proposition is established as a matter of law. Id. The point of error should be sustained only if the contrary proposition is conclusively established. Id. at 241-42.

When parties attack the factual sufficiency of an adverse finding on an issue on which they have the burden of proof, they must demonstrate on appeal that the adverse finding is against the great weight and preponderance of the evidence. Id. at 242. The court of appeals must consider and weigh all of the evidence, and can set aside a verdict only if the evidence is so weak or if the finding is so against the great weight and preponderance of the evidence that it is clearly wrong and unjust. Id.

The Gonzalezes assert that the jury should have found Temple-Inland and Bankers Trust liable under both the DTPA and economic duress theories because Temple-Inland and Bankers Trust: (1) misrepresented the extent and amount of the debt; (2) violated the trial court's temporary injunction; and (3) wrongfully filed motions for contempt. Assuming, without deciding, that the jury could have found liability under the DTPA or for economic duress if the evidence established any of the three specific acts mentioned in the Gonzalezes' brief, we reject the Gonzalezes contention that the evidence was legally and factually sufficient to support a liability finding. (1)

With regard to the amount of the debt, the Gonzalezes rely on evidence detailing the manner in which the $5,868.06 payment was applied by Temple-Inland to contend that when that amount was demanded in January of 1996, it was not the amount owed. The Gonzalezes rely on evidence that the payment history showed that Temple-Inland applied a portion of the payment to the February and March, 1996 payments and placed $430.30 in a suspense account. The Gonzalezes, however, ignore the testimony of Max Wernick, the attorney who represented Bankers Trust in regard to the Gonzalezes' note. Wernick testified that the amount of the debt was determined from the reinstatement worksheet provided by Lomas Mortgage USA, the company that serviced the note before Temple-Inland. Servicing of the note was transferred to Temple-Inland effective February 1, 1996. Both Wernick's testimony and the worksheet that was admitted into evidence support a finding that $5,868.06 was owed when the demand was made based on the following calculations:

October 1995 installments: $ 794.62

November and December 1995 installments: 1,528.96

Accrued late charges: 232.44

Escrow deficit total: 1,897.53

January 1996 installment: 1,038.06

Late charge on January 1996 installment: 76.45

Attorneys' fees: 300.00

$5,868.06

The jury could find from this evidence that the amount owed was not misrepresented but that Temple-Inland later elected to apply the payment in a more generous manner in an effort to resolve the parties' dispute.

With regard to the contention that Temple-Inland and Bankers Trust violated the temporary injunction, we sustain the cross-point. The temporary injunction was void because it did not include an order setting the cause for trial on the merits. See In re Garza, 126 S.W.3d 268, 271-73 (Tex. App.--San Antonio 1993, orig. proceeding [leave filed]). However, even if the temporary injunction were not void, it would not support a liability finding because there was no evidence that Temple-Inland or Bankers Trust violated the temporary injunction. The temporary injunction enjoined Temple-Inland and Bankers Trust from foreclosing on the property only until after the underlying cause was heard on the merits. Although evidence was introduced to show that Temple-Inland and Bankers Trust noticed the property for foreclosure, no evidence was introduced to show that they actually foreclosed on the property in violation of the temporary injunction. Furthermore, the evidence showed that the foreclosure notices were sent only after a trial judge granted a summary judgment, dismissing all of the Gonzalezes' claims. (2)

Finally, the Gonzalezes contend that the jury should have found liability based on the filing of motions for contempt by Temple-Inland and Bankers Trust. The Gonzalezes contend that the filing of the motions was "prohibited by law." Although the Gonzalezes assert in their brief that "[i]t is clear from the record that the Defendants/Appellees filed, at least, three (3) Motions for Contempt and Sanctions," the only evidence regarding the motions that was presented to the jury was a reference in a Rule 11 agreement, stating that it modified the trial court's order granting, in part, the second motion for contempt and sanctions. Therefore, the jury was not presented with any evidence regarding the filing of the motions or how the filing of those motions was prohibited by law. (3)

The evidence is legally and factually sufficient to support the jury's findings with regard to the liability questions, and the Gonzalezes' first six issues are overruled. In light of our disposition of the issues relating to liability, we need not address the Gonzalezes' seventh through tenth issues challenging the zero damage findings. See Tex. R. App. P. 47.1; Taco Cabana, Inc. v. Exxon Corp., 5 S.W.3d 773, 780 (Tex. App.--San Antonio 1999, pet. denied).

Attorneys' Fees

In their eleventh through sixteenth issues, the Gonzalezes challenge the trial court's award of attorneys' fees, asserting (1) the attorneys' fees question submitted to the jury did not request any of the findings required by section 17.50(c) of the DTPA; (2) the evidence is legally and factually insufficient to support the award; (3) and the trial court erred in awarding the attorneys' fees without stating the basis for its award.

Temple-Inland and Bankers Trust asserted a counterclaim for attorneys' fees under section 17.50(c) and, alternatively, under the provisions of the note and deed of trust. Because the trial court did not enter a finding that the Gonzalezes' action was groundless in fact or law or brought in bad faith, or brought for the purpose of harassment, the attorneys' fee recovery is necessarily based on the provisions of the note and deed of trust, and the trial court was not required to state the basis for its award. See Tex. Bus. & Com. Code Ann. 17.50(c) (Vernon 2002) (permitting trial court to award attorneys' fees only if court makes finding); Jones v. Smith, 649 S.W.2d 29, 29-30 (Tex. 1983) (reversing award of attorneys' fees under section 17.50(c) where no finding was made by the trial court); Gonzales v. American Title Co. of Houston, 104 S.W.3d 588, 599 (Tex. App.--Houston [1st Dist.] 2003, pet. denied) (affirming absence of attorneys' fee award in summary judgment where no finding made by trial court).

Attorneys' fees may be recovered from an opposing party if such recovery is provided for by statute or by contract. Travelers Indem. Co. of Conn. v. Mayfield, 923 S.W.2d 590, 593 (Tex. 1996). In this case, the note signed by the Gonzalezes authorized the recovery of attorneys' fees incurred in the enforcement of the note, and the deed of trust also authorized the recovery of attorneys' fees incurred in pursuing the remedies permitted under the deed of trust. The attorney for Temple-Inland and Bankers Trust testified regarding the number of hours the clients were billed and the hourly rate being charged. The attorney testified that through the end of 2002, the fees amounted to $73,500.00, and the attorney estimated that an additional $16,000.00 would likely be incurred through the end of trial and "cleanup matters through the end of trial." The attorney testified that the attorneys' fees that would be incurred in the event of an appeal to this court would be $15,000.00, and an additional $7,500.00 in attorneys' fees would be incurred in the event of an appeal to the Texas Supreme Court. This testimony is legally and factually sufficient to support the award of attorneys' fees. The Gonzalezes' eleventh through sixteenth issues are overruled.

Conclusion

The judgment of the trial court is affirmed.

Catherine Stone, Justice

1. We also note that the Gonzalezes failed to preserve their legal sufficiency complaint at least with regard to the jury's answer to the DTPA question. See Cecil v. Smith, 804 S.W.2d 509, 510-11 (Tex. 1991) (listing means by which legal sufficiency complaint may be preserved for appeal after a jury trial).

2. The summary judgment was subsequently reversed by this court in an earlier appeal.

3. We further note that the clerk's record contains orders granting, at least in part, each of the motions to compel and for contempt filed by Temple-Inland and Bankers Trust, indicating that the filing of the motions was not an act that was prohibited by law.