Randall J. Fischl v. Henry Fischl, Bernice Fischl and Texas Alamo Salvage Pool, Inc.--Appeal from 73rd Judicial District Court of Bexar County

MEMORANDUM OPINION
No. 04-03-00345-CV
Randall J. FISCHL,
Appellant
v.
Henry FISCHL, Bernice Fischl, and Texas Alamo Salvage Pool, Inc.,
Appellees
From the 73rd Judicial District Court, Bexar County, Texas
Trial Court No. 2000-CI-18131
Honorable Andy Mireles, Judge Presiding

Opinion by: Alma L. L pez, Chief Justice

Sitting: Alma L. L pez, Chief Justice

Karen Angelini, Justice

Sandee Bryan Marion, Justice

Delivered and Filed: June 2, 2004

AFFIRMED IN PART; REVERSED AND REMANDED IN PART

Randall J. Fischl ("Randall") sued his parents, Henry and Bernice Fischl (the "Fischls"), and Texas Alamo Salvage Pool, Inc. (the "Company") for breach of a settlement agreement. Concurrent with his filing of the lawsuit, Randall filed an application for writ of garnishment against the Fischls and the Company, alleging that neither had the means to pay a judgment. The Fischls filed a counterclaim seeking damages for wrongful garnishment. A jury found that the Fischls breached their agreement with Randall, but the jury only awarded Randall nominal damages of $1.00. The jury also found that Randall wrongfully garnished the Fischls' personal accounts and awarded each of the Fischls $175,000.00 in damages. Randall appeals the trial court's judgment, asserting that the evidence is insufficient to support various findings. We affirm the portion of the trial court's judgment awarding Randall nominal damages for his breach of contract claim; however, because we believe the evidence is factually insufficient to support the jury's damage award to the Fischls for their wrongful garnishment claim, we reverse the portion of the trial court's judgment relating to the wrongful garnishment claim and remand the cause to the trial court for further proceedings on that claim. See Tex. R. App. P. 44.1(b) (court may not order separate trial solely on unliquidated damages if liability is contested).

Background

In the early 1980's, Henry Fischl founded the Company with his life savings. Ownership of the Company was divided as follows: (1) Henry - 51 shares; (2) Bernice - 48 shares; and (3) Randall - 1 share. The Fischls decided to sell the Company in early 2000, but Randall disputed the respective ownership interests. Randall also claimed that he was owed compensation for back pay and unpaid bonuses. The parties entered into an agreement to resolve their differences on May 15, 2000. Under the terms of that agreement, Randall was to receive: (1) $578,500.00 for past services performed; (2) $200,000 as a gift from the Fischls out of the proceeds they were to receive from the sale of the land used in the business; (3) one-third of the cash on hand in all of the Company's bank accounts as of April 28, 2000, subject to reduction for regular and normal business expenditures and subject to any additional deposits resulting from the normal operation of the business; and (4) one-third of the assets owned by the Company as of April 29, 2000, including accounts receivable, to be collected and sold separately with Randall receiving one-third of the proceeds. The one-third cash and one-third assets were out of the cash and assets remaining after the Company was sold to the third party.

In furtherance of this agreement, Randall was given $200,000.00 by the Fischls. In addition, the Company paid him the gross amount of $594,387.44, for services performed. The Company also paid him an additional $65,000.00 from the proceeds of the sale to the third party. Because Randall disputed the Company's accounting with regard to the remaining cash on hand and assets, the final amount owed to Randall under the terms of the May 15th agreement was not paid.

In an effort to resolve the remaining dispute, attorneys for both parties negotiated a deal in early September of 2000. Pursuant to this agreement, the Fischls agreed to pay Randall $175,000.00. Before the agreement was executed, however, Randall's attorney communicated additional terms that Randall sought to impose on the Fischls that had never been discussed. One of the additional terms required $100,000.00 to be allocated to personal injury damages for tax purposes. The Fischls requested that Randall provide them with a letter from a tax lawyer or a CPA because the Fischls were concerned about the implications of this allocation in the event of a future audit. Another additional term would require the Fischls to set aside a portion of the cash remaining in the Company's accounts after Randall was paid for the education of the Fischls' grandchildren. The Fischls' attorney took the position that after Randall was paid, he should have no control over the manner in which the Fischls spent their money. The additional terms precluded the execution of a written agreement memorializing the Fischls' agreement to pay Randall $175,000.00.

The Fischls and the Company made one last effort to resolve matters, tendering almost $77,000 to Randall, representing one-third of the remaining cash left in the business accounts after the Company's assets were sold. Randall refused the money and filed suit. Concurrent with the filing of the suit, Randall filed an Application for Pre-Judgment Writ of Garnishment against the Fischls and the Company, alleging that none of the defendants had the means to pay a judgment. The writ was withdrawn, and the garnishment was non-suited a little over a month after it was issued.

Nominal Damages

In his first issue, Randall argues that the evidence is insufficient to support the $1.00 nominal amount that the jury awarded him. Randall claims that the evidence presented at trial and the questions submitted to the jury conclusively established that he is entitled to $175,000.00.

When a party attacks the legal sufficiency of an adverse finding on an issue on which he has the burden of proof, he must demonstrate on appeal that the evidence establishes, as a matter of law, all vital facts in support of the issue. Sterner v. Marathon Oil Co., 767 S.W.2d 686, 690 (Tex. 1989). The reviewing court employs a two-prong test in assessing a "matter of law" challenge. Id. The court must first examine the record only for evidence that supports the finding, while ignoring all evidence to the contrary. Id. If the court finds no evidence to support the finding, it then reviews the record in its entirety to determine if the contrary position is established as a matter of law. Id. The point of error should be sustained only if the contrary position is conclusively established by the evidence. Dow Chem. Co. v. Francis, 46 S.W.3d 237, 241 (Tex. 2001).

When a party attacks the factual sufficiency of the evidence on an adverse finding on an issue on which he has the burden of proof, he must demonstrate on appeal that the adverse finding is against the great weight and preponderance of the evidence. Croucher v. Croucher, 660 S.W.2d 55, 58 (Tex. 1983). The appellate court must consider and balance all the evidence, and can set aside a ruling 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. See Pool v. Ford Motor Co., 715 S.W.2d 629, 635 (Tex. 1986).

In this case, the jury was asked three questions relating to Randall's breach of contract claim. Question No. 1 asked:

Do you find from a preponderance of the evidence that after May 15, 2000, Randall Fischl and Henry and Bernice Fischl and Texas Alamo Salvage Pool, Inc. agreed that Randall Fischl would receive $175,000.00 for his one-third (1/3) of the remaining assets of Texas Alamo Salvage Pool, Inc.?

The jury answered "Yes." Question No. 2 asked:

Do you find from a preponderance of the evidence that Henry or Bernice Fischl or Texas Alamo Salvage Pool, Inc. failed to comply with the agreement to pay Randall Fischl for his one-third of the remaining assets of Texas Alamo Salvage Pool, Inc.?

The jury answered "Yes." Finally, Question No. 3 asked:

What sum of money, if any, if paid now in cash, would fairly and reasonably compensate Randall Fischl, Individually, for his damages, if any, that resulted from Henry Fischl, Bernice Fischl, and Texas Alamo Salvage Pool, Inc.'s failure to comply with the terms of the agreement to pay for his one-third of the remaining assets of Texas Alamo Salvage Pool, Inc.?

The jury answered "$1.00."

Randall argues that the answer to Question No. 3 is immaterial and must be disregarded because the jury necessarily found that Randall was entitled to receive $175,000.00 in answering Question No. 1.

In reviewing the jury findings for conflict, the threshold question is whether the findings are about the same material fact. Bender v. Southern Pac Transp. Co., 600 S.W.2d 257, 260 (Tex. 1980);Long Island Owner's Ass'n, Inc. v. Davidson, 965 S.W.2d 674, 688 (Tex. App.--Corpus Christi 1998, pet. denied). A court may not strike down jury answers on the ground of conflict if there is any reasonable basis upon which they can be reconciled. Bender, 600 S.W.2d at 260; Davidson, 965 S.W.2d at 688. The court must reconcile apparent conflicts in the jury's findings if reasonably possible in light of the pleadings and evidence, the manner of submission, and the other findings considered as a whole. Bender, 600 S.W.2d at 260; Davidson, 965 S.W.2d at 688. Our duty is to harmonize jury findings when possible. Bender, 600 S.W.2d at 260; Rice Food Markets, Inc. v. Ramirez, 59 S.W.3d 726, 733 (Tex. App.--Amarillo 2001, no pet.). Appellate courts are further mandated to try to interpret jury findings so as to uphold the trial court judgment. Ramirez, 59 S.W.3d at 733. Conflicting findings require reversal only if one finding is such that it would warrant judgment for one of the parties, and the other finding would warrant judgment for the other party. Davidson, 965 S.W.2d at 688.

In this case, the jury's answers to questions one and three are not about the same material fact. See Bender, 600 S.W.2d at 260. The jury's answer to Question No. 3 demonstrates that they did not interpret Question No. 1 as addressing the issue of damages, nor did the jury believe its answer to Question No. 1 was conclusive on that issue. Ultimately, the jury was not convinced by a preponderance of the evidence that Randall was damaged in the amount of $175,000.00. While the jury may have believed that an agreement was reached in principal, the jury was not required to find that Randall sustained $175,000.00 in damages. The jury had sufficient evidence before it to conclude that Randall suffered minimal damage and was entitled to no compensation.

Nominal damages are damages in name only and not in fact. Donnel v. Lara, 703 S.W.2d 257, 261 (Tex. App.--San Antonio 1985, writ ref'd n.r.e.). They are allowed in recognition of the existence of a technical injury, not as an equivalent for a wrong inflicted. Id. Typically, nominal damages are recoverable where a legal right is to be absolved but there is no actual loss suffered or the amount is not readily ascertainable. Trevino v. Southwestern Bell Tel. Co., 582 S.W.2d 582, 584 (Tex. Civ. App.--Corpus Christi 1979, no writ).

After the Fischls agreed to pay Randall $175,000.00 to resolve their remaining dispute, Randall disrupted the resolution process. Instead of signing the agreement that was reached during the parties' negotiations, Randall made ongoing attempts to receive additional concessions that had never been discussed, destroying any chance of settling. Finally, Randall rejected the Fischls' tender of $77,000.00, which represented one-third of the remaining cash accounts and one-third of the remaining Company assets after it was sold.

Based on these facts, the jury reasonably could have concluded that Randall, himself, was the true cause of his "damages." The jury could have found that Randall's insistence on including additional concessions that were not a part of the agreement as negotiated resulted in his not receiving the payment the parties had negotiated. Therefore, the jury could have found that any damages Randall incurred were caused by his own conduct not by the Fischls' failure to comply with the terms of the negotiated agreement. After reviewing the record in its entirety, we find the evidence legally and factually sufficient to support the jury's award of nominal damages.

We also question whether Randall can properly challenge the damage issue on the basis that the issue was immaterial. In his brief, Randall states, "Jury Question No. 3 as to damages was rendered immaterial by the form and answers to Question Nos. 1 and 2." By requesting the damage issue notwithstanding the manner in which Question No. 1 was worded, Randall invited error and waived any complaint by failing to object to the charge. See General Chemical Corp. v. De La Lastra, 852 S.W.2d 916, 920 (Tex. 1993); Butan Valley, N.V. v. Smith, No. 14-98-01167-CV, 2001 WL 812309, at *2 (Tex. App.--Houston [14th Dist.] 2001, pet. denied) (not designated for publication).

Wrongful Garnishment

Randall also contends that there is legally and factually insufficient evidence to support the jury's finding of wrongful garnishment and the damages award to the Fischls. When a court of appeals considers a legal sufficiency point, only the evidence supporting the jury's finding is taken into consideration. Davis v. City of San Antonio, 752 S.W.2d 518, 522 (Tex. 1988). A no evidence challenge fails if there is more than a "scintilla of evidence" supporting the finding. Thrift v. Hubbard, 974 S.W.2d 70, 77 (Tex. App.--San Antonio 1998, pet. denied).

In reviewing the factual sufficiency of the evidence, an appellate court should set aside the verdict only if the evidence that supports the jury finding is so weak as to be clearly wrong and manifestly unjust. Pool v. Ford Motor Co., 715 S.W.2d at 635. Under this analysis, the reviewing court is not a fact finder and may not substitute its judgment for that of the trier of fact, even if there is conflicting evidence upon which a different conclusion could be maintained. Thrift v. Hubbard, 974 S.W.2d. at 70.

The jury was instructed that the bank garnishments filed by Randall on the Fischls's accounts were wrongful if, at the time the garnishments were filed, (1) "the $175,000 debt sued for was not just, due and unpaid;" or (2) Randall knew the Fischls "possessed property in Texas subject to execution sufficient to satisfy the $175,000.00 debt;" or (3) Randall "sought to injure" the Fischls with the garnishment.

Randall initially claims that he did not seek to garnish the Fischls' individual accounts. In his application, however, Randall named the Fischls and the Company as "The Defendant" and alleged that, "Defendant does not possess property in Texas subject to execution to satisfy the debt." In his affidavit, Randall states, "upon information and belief, the Fischls do not have ascertainable assets subject to execution to insure their performance under the September Settlement Agreement." The writ of garnishment lists the Fischls as defendants and states that "certain properties alleged to be owned by you have been garnished." Accordingly, we disagree that Randall did not seek to garnish the Fischls' personal accounts. Furthermore, Bernice testified that the bank tellers told her that a writ of garnishment had been served on her bank account and that of the Company's when she went to the bank to make a deposit. Bernice further testified that she was charged a fee for the garnishment against the Fischls' certificate of deposit and that the interest on the certificate was frozen during the period it was garnished. Accordingly, the evidence is sufficient to support the jury's finding that Randall garnished the Fischls' personal accounts.

Randall also challenges the jury's finding that the garnishment was wrongful. In his petition, Randall alleged damages in the amount of $175,000.00 for breach of contract. However, in his affidavit, Randall asserted his belief that the Company had $235,000.00 in two bank accounts being held by the garnishee, Wells Fargo Bank. In addition, Randall testified at trial that he knew there was $235,000.00 in the bank. Accordingly, Randall's application and his affidavit are inconsistent. In addition, Randall agreed that the Fischls and Randall were each to receive one-third of the proceeds from the sale of the Company. Randall affirmed that he received $800,000.00 from the sale of the Company. Randall then stated that he assumed that the Fischls also each received $800,000.00. Despite Randall's affirmation of the amount the Company had in its bank accounts and the reasonable inference that the Fischls each received $800,000.00 from the sale of the Company, Randall continued to maintain in his application and affidavit for pre-judgment garnishment that "Defendant does not possess property in Texas."

These facts constitute both legally and factually sufficient evidence to support the jury's finding that Randall not only knew that the Fischls and the Company possessed property sufficient to satisfy a judgment, but also that the application for garnishment was intended to injure the Fischls personally. Such a finding is not so weak as to be clearly wrong and manifestly unjust. We find that the evidence is legally and factually sufficient to support the jury's finding that the garnishment was wrongful.

Finally, Randall challenges the sufficiency of the evidence to support the damage award. The Fischls each testified that they suffered humiliation in public business situations, including at their bank and with one of their most important customers. Henry testified that the "head man from the State of Texas" of one of his most important customers said that he had heard that Henry "got sideways with your son" and "wanted to know where his money was." Henry testified that the garnishment caused him "unbelievable humiliation and embarrassment," which kept him from sleeping. Henry testified that he did not go to any counselor but just "sat and moped the way through." Henry stated that he discussed the matter only with his immediate family, who told him that he had to "be careful in [his] life or things [were] going to happen to [him]." Bernice testified that she was "shocked and humiliated" when she first learned of the garnishment from the people at the bank, and was ashamed to return and "face people that I had known for a long time." She also testified that she had checks bounce as a result of the garnishment, which had never happened before. The checks bouncing humiliated her. In addition, the bank charged a fee for the garnishment and froze the interest on the Fischls' certificate of deposit.

Although there is some evidence that the Fischls sustained economic damage with regard to the freezing of the interest on their certificate of deposit, we find that the evidence is factually insufficient to support the amount of damages that were awarded. Based on the amount of the award, it appears that the jury necessarily awarded damages for mental anguish. However, the term mental anguish implies a relatively high degree of mental pain and distress. Parkway Co. v. Woodruff, 901 S.W.2d 434, 444 (Tex. 1995). Mental anguish is more than mere disappointment, anger, resentment or embarrassment, although it may include all of these. Id. To recover mental anguish damages, the plaintiffs must introduce direct evidence of the nature, duration, and severity of their mental anguish, thereby establishing a substantial disruption in the plaintiffs' daily routine. Id. Having reviewed the Fischls' testimony, we hold that the evidence did not permit the jury to award the Fischls damages for mental anguish. Because the evidence was insufficient to support an award of damages for mental anguish, the evidence is factually insufficient to support the amount of damages that the Fischls were awarded. Accordingly, the trial court's judgment with regard to the wrongful garnishment claim is reversed, and the cause is remanded to the trial court for further proceedings on that claim.

Conclusion

The portion of the trial court's judgment awarding Randall nominal damages with regard to his breach of contract claim is affirmed. The portion of the trial court's judgment awarding the Fischls damages with regard to their wrongful garnishment claim is reversed, and the cause is remanded to the trial court for further proceedings on the wrongful garnishment claim.

Alma L. L pez, Chief Justice