Dean Ranch Properties LTD v. J. Fred Bayliss--Appeal from 272nd District Court of Brazos County

IN THE

TENTH COURT OF APPEALS

No. 10-04-00028-CV

Dean Ranch Properties LTD,

Appellant

v.

J. Fred Bayliss,

Appellee

From the 272nd District Court

Brazos County, Texas

Trial Court No. 02-000247-CV-272

MEMORANDUM Opinion

Dean Ranch Properties, Ltd., and Bayliss both appeal the trial court s judgment in Dean Ranch s suit for fraud in a real estate transaction. See Tex. Bus. & Comm. Code Ann. 27.01 (Vernon 2002). We affirm the judgment as reformed.

Capacity. In Bayliss s first issue, he contends that Dean Ranch lacked standing. Bayliss argues that he conveyed the property at issue to an individual, not to Dean Ranch, a limited partnership. This is an issue of capacity, not standing. Bayliss waived the issue by failing to file a verified denial. See Tex. R. Civ. P. 93; Tex. R. App. P. 33.1(a); Austin Nursing Ctr., Inc. v. Lovato, 171 S.W.3d 845, 848-49 (Tex. 2005); Pledger v. Schoellkopf, 762 S.W.2d 145, 146 (Tex. 1988) (per curiam); WHM Props., Inc. v. Dallas County, 119 S.W.3d 325, 330-31 (Tex. App. Waco 2003, no pet.) (per curiam). We overrule Bayliss s first issue.

Prejudgment Interest. In Bayliss s second issue, he contends that the trial court erred in awarding prejudgment interest. Bayliss argues that the prejudgment-interest statute permits prejudgment interest only in wrongful death, personal injury, and property damage cases, but not on Dean Ranch s claim. See Tex. Fin. Code Ann. 304.102 (Vernon Supp. 2005). The case that Bayliss cites for that proposition does not so hold. See Johnson & Higgins, Inc. v. Kenneco Energy, 962 S.W.2d 507, 528 (Tex. 1998) (holding that prejudgment interest may be either statutory or equitable). The trial court did not err in awarding prejudgment interest. We overrule Bayliss s second issue.

Damages. In Dean Ranch s first issue, it contends that the trial court erred in not awarding it damages found by the jury. Dean Ranch sought damages for the value of the property and for interest on the note on the property. The jury awarded damages for interest but not for the value of the property, and the trial court did not order rescission. The interest that Dean Ranch seeks to recover is the interest that it paid on the debt incurred to purchase the property. Dean Ranch remains the owner of the property and the debtor on the note. Dean Ranch was awarded damages for the diminished value of the property. The prejudgment interest awarded by the trial court on the amount of the damages compensates Dean Ranch for the use or detention of money. Thus, the judgment represents the damages plus interest for the period of time prior to Dean Ranch s recovery. Accordingly, the trial court did not err in disregarding the jury s answer to the interest damages issue. See Tex. R. Civ. P. 300-301. We overrule Dean Ranch s first issue.

Attorney s Fees. In Dean Ranch s second issue, it contends that the trial court erred in not awarding it attorney s fees found by the jury. See Tex. Bus. & Comm. Code Ann. 27.01(e). The case went to the jury on three theories: negligence, common-law fraud, and statutory fraud in a real-estate transaction. See id. 27.01(a). The jury found in favor of Dean Ranch on all three theories. Thus, absent an election by Dean Ranch, it was the trial court s duty to render judgment under the theory that would support the judgment under the theory that would support the largest recovery. Cf. McCarty v. Morrison, 468 S.W.2d 350, 351 (Tex. 1971) (mandatory duty to render judgment on verdict); Tate v. Wiggins, 583 S.W.2d 640, 644 (Tex. Civ. App. Waco 1979, no writ) (same). The trial court awarded Dean Ranch damages in the amount of $123,000. The same amount of damages is proper under all three theories. The theory that yields the largest recovery is the Section 27.01 theory, because it is the only theory of the three under which attorney s fees are recoverable. See Tex. Bus. & Comm. Code Ann. 27.01(e).

Bayliss argues that the trial court ruled as a matter of law that Dean Ranch could not have reasonably relied upon the nondisclosure or silence of Bayliss regarding the prospect for an assessment by the City. Bayliss states that the Reporter s Record supports the trial court s ruling ; however, he points to nothing in the record, such as a motion to disregard the jury findings, an objection to the submission of the charge, a motion for directed verdict, or a motion for judgment non obstante veredicto, that would allow the trial court to make such a determination. See Tex. R. Civ. P. 300-301; McCarty at 351; Tate at 644. We are not obligated to search the multi-volume record in search of a procedural device supporting Bayliss s arguments. Prior to the entry of judgment, there was some discussion in correspondence between counsel and the trial court about disregarding the issue. But even if the parties could rely on that correspondence to raise the matter, the trial court s judgment rebuts the argument that the jury s finding on statutory fraud was ignored or disregarded. No issue is raised on appeal about the jury s finding of statutory fraud or to the trial court s reciting and incorporating that finding by reference into the final judgment. That jury finding thus stands unassailed on appeal.

Finally, if Bayliss were able to cobble together an argument that the issue could be reviewed, Bayliss nevertheless cannot prevail on the merits. Dean testified that Bayliss told him that the property would not be assessed by the City. After this representation and before the transfer of ownership, Bayliss learned that the City might assess the property but did not pass this information on to Dean. This is some evidence to support the statutory fraud claim. See Schlumberger Tech. Corp. v. Swanson, 959 S.W.2d 171, 181 (Tex. 1997); Columbia/HCA Healthcare Corp. v. Cottey, 72 S.W.3d 735, 744 (Tex. App. Waco 2002, no pet.); Restatement (2d) of Torts 551(2) (1977); cf. Bradford v. Vento, 48 S.W.3d 749, 755 (Tex. 2001). Thus, it would be error for the trial court to have ruled as a matter of law that the jury s finding of statutory fraud could be ignored.

Based upon the jury s finding of statutory fraud, Dean was entitled to attorney s fees under the statute. Accordingly, the trial court erred in not awarding the attorney s fees as determined by the jury in the amount of $35,000. We sustain Dean Ranch s second issue. We will reform the judgment accordingly.

Having overruled Bayliss s issues and Dean Ranch s first issue, and having sustained Dean Ranch s second issue, we affirm the judgment as reformed.

TOM GRAY

Chief Justice

Before Chief Justice Gray,

Justice Vance, and

Justice Reyna

(Justice Vance dissenting)

Affirmed as reformed

Memorandum opinion delivered and filed November 30, 2005

[CV06]