GARY SHEPHERD and VICKI SHEPHERD, Appellant s v. JIM ANDERSON, Appellee

AFFIRMED and REVERSED in Parts, Opinion filed October 23, 1989
 
 
S
In The
Court of Appeals
Fifth District of Texas at Dallas
............................
No. 05-88-01182-CV
............................
GARY SHEPHERD and VICKI SHEPHERD, Appellant
s
 
V.
JIM ANDERSON, Appellee
 
.................................................................
On Appeal from County Court at Law No. 4
Dallas County, Texas
Trial Court Cause No. 87-12456-D
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O P I N I O N
Before Justices McClung, Thomas and Whittington
Opinion By Justice McClung
        This is an action for violations of the Texas Deceptive Trade Practices-Consumer Protection Act (DTPA) brought by Gary and Vicki Shepherd, the purchasers of a used car, against Jim Anderson, the seller. The Shepherds appeal from the trial court's judgment in favor of Anderson.         In eight points of error, the Shepherds complain of the following: The trial court erred in disregarding three of the four DTPA claims plead by the Shepherds; there was no evidence or, alternatively, insufficient evidence to support the trial court's finding that the Shepherds' lawsuit was groundless and brought in bad faith; the trial court erred as a matter of law in awarding costs and attorney's fees to Anderson; there is no evidence or insufficient evidence to support certain of the trial court's findings of fact and conclusions of law. For the reasons discussed below, the trial court's judgment is affirmed in part and reversed and rendered in part.
        In 1986, Vicki Shepherd saw a 1983 Audi with a "for sale" sign posted in its window. She telephoned the owner, Jim Anderson, to inquire about the vehicle. Anderson said that the car had been driven about 50,000 miles, that it needed some repair work and that the sale price was $8,500. Anderson said he had owned the car for less than a year. The Shepherds were allowed to inspect and drive the vehicle and their mechanic also test-drove it. Thereafter, they decided to purchase the car. The Shepherds executed an "as-is-no warranty" form except that Anderson agreed to warrant the air conditioner compressor. Approximately one month and 1400 miles after the purchase, the transmission failed. The Shepherds demanded from Anderson the $1,664.79 cost of the repairs.
        Subsequently, the Shepherds filed suit for violations of the DTPA. Their allegations included breaching express and implied warranties, taking advantage of their lack of knowledge, failing to disclose information about the vehicle of which Anderson knew at the time of the sale, and misrepresenting that the vehicle had certain characteristics that it did not. The Shepherds claimed that Anderson was a car dealer and that the car was being sold by a dealership. They also alleged that he failed to disclose that the transmission was in poor condition, that the car was not his personal car, and that he would attempt to impose a limited warranty on the transaction after the sale was consummated. They further alleged that he misrepresented the value of the car. Anderson counterclaimed pursuant to section 17.50(c) FN:1 , claiming that the suit was groundless and brought in bad faith. Trial was to the court which held that the Shepherds' allegations were not true and that their claim was groundless and brought in bad faith. The court then awarded attorney's fees and costs to Anderson.
        In the Shepherds' first point of error, they claim that the trial judge only considered their breach of warranty allegation and that he disregarded their three other DTPA causes of action. The three theories which the Shepherds assert were not addressed by the judge included: pursuing an unconscionable course of action in violation of section 17.50(a)(3); failing to disclose information which was intended to induce the plaintiffs into a transaction they would not have otherwise entered in violation of section 17.46(b)(23); and representing that the vehicle had characteristics, uses, benefits or qualities that it did not have in violation of section 17.46(b)(5). The Shepherds claim that trial judge "never got past" their first allegation regarding breach of express and implied warranties based on the following statement which the judge made at the close of the trial: "Well, your whole fly in the ointment, Mr. O'Brien, is defendant's Exhibit No. 2. It is as is, no warranty. . . ."
        To begin with, the Shepherds claim that the court did not consider the allegation that Anderson took unfair advantage of their lack of knowledge to a grossly unfair degree. To support this allegation the Shepherds attempt to characterize Anderson as a car dealer. The court made findings of fact and conclusions of law based upon these allegations such as, "defendant did not hold himself out to be an expert in Audis," "the wholesale value of the vehicle at the time of the sale was over $9,000" and "defendant was not a car dealer at the time of the purchase." Clearly, the court did consider the Shepherds' allegation.
        Next, the Shepherds claim that the court ignored their allegations that "[Anderson] failed to disclose information which he knew at the time of the transaction, and such failure to disclose was intended to induce the Shepherds into a transaction they would not have otherwise entered into. . . ." The Shepherds claim that one such undisclosed fact was that the vehicle was not the personal automobile of Anderson and his wife for the time period he represented, which was less than a year. The trial court found that the vehicle in question was used as a personal vehicle by Anderson and his wife, and that Anderson had owned the vehicle for less than a year. As to the transmission, the trial court found that Anderson did not fail to disclose information which he knew about the transmission and that Anderson was not obligated to reveal any condition or defect unknown to him so long as he did not make a contrary representation. The court then went on to find that Anderson did not make any misrepresentations that caused damage to the Shepherds.
        Further, the Shepherds assert that the trial court ignored their allegations that Anderson represented that the vehicle had characteristics, uses, benefits, or qualities that it did not have. This complaint references several statements which the Shepherds allege Anderson made to them. One such statement was that Anderson said the car would be in "tip top" shape before he sold it. This statement was made prior to the time Anderson reduced the price of the car. He later only agreed to reduce the price if he were relieved of the obligation to repair. Even after the price reduction, Anderson's guarantee about the air compressor remained in effect. After reviewing this testimony, the trial court found that Anderson did not make any misrepresentations that caused damage to the Shepherds. The final misrepresentation which the Shepherds claim the trial court failed to address concerned the value of the car. Anderson told the Shepherds that the car was worth at least $9,000. The trial court's conclusions of law state that the wholesale value of the vehicle at the time of purchase was over $9,000. As shown by the findings of fact and conclusions of law, the court addressed each allegation plead. Therefore, we conclude that the trial court did consider all of the Shepherds' causes of action alleged under the DTPA. We overrule the Shepherd's first point of error.
        In point of error eight, the Shepherds allege that the trial court erred as a matter of law in concluding that Anderson did not commit a deceptive trade practice. The Shepherds assert that the trial judge's conclusion rested on the assumption that the only deceptive trade practice alleged was a breach of warranty. Since we previously concluded that the trial judge did consider the breach of warranty allegation along with the other causes of action, we overrule point of error eight.
        The Shepherds' second and third points of error challenge Anderson's recovery of attorney's fees. At the conclusion of the trial, the judge found that the Shepherds' case was "groundless and brought in bad faith" and awarded Anderson the costs of court and $5,800 in attorney's fees. In determining whether an action is groundless, the trial court makes its decision based on undisputed fact issues, law issues, or jury findings. Mader v. Aetna Casualty and Sur. Co., 683 S.W.2d 731, 734 (Tex. App.--Corpus Christi 1984, no writ). The term "groundless" means that there is no arguable basis for the cause of action. "A suit does not become legally groundless merely because [the] plaintiffs fail[ed] to convince the jury of the truth of their allegations." LaChance v. McKown, 649 S.W.2d 658, 661 (Tex. App.--Texarkana 1983, writ ref'd n.r.e.). The definition of "bad faith" or "for the purpose of harassment" is set forth in Brunstetter v. Southern, 619 S.W.2d 557, 561 (Tex. Civ. App.--San Antonio 1981, writ ref'd n.r.e.). The consumer's claim must be proven to be motivated by a malicious or discriminatory purpose.
        We determine from the record that the Shepherds had an arguable basis for their cause of action. While they were unable to convince the trial judge of the merits of their claim, these facts still provided a legitimate basis for the initiation of this litigation. The Shepherds' suit was not legally groundless merely because they did not win at trial, nor was it brought in bad faith. We therefore sustain the Shepherds' second and third points of error and reverse the trial court's award of $5,800 in attorney's fees to Anderson. However, we affirm the trial court's assessment of costs against the Shepherds pursuant to Texas Rule of Civil Procedure 559 which states that the successful party in a suit shall recover his costs, except where it is otherwise expressly provided.
        In point of error four, the Shepherds assert that the trial court's conclusion of law that "[Anderson] was not a car dealer at the time of the purchase" is against the great weight and preponderance of the evidence. We agree with the Shepherds that the court's conclusion of law is actually a finding of fact and is appropriately attacked under a factual sufficiently point. See Ray v. Farmers' State Bank, 576 S.W.2d 607, 608 n. 1 (Tex. 1979). In reviewing a factual insufficiency point, we must consider and weigh all of the evidence in the case. Lofton v. Texas Brine Corp., 720 S.W.2d 804, 805 (Tex. 1986). The judgment may be set aside only if it is so contrary to the overwhelming weight of the evidence as to be clearly wrong and unjust. Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986).
        The evidence which the Shepherds allege favors their claim that Anderson was a car dealer includes the fact that the State records showed the 1983 Audi was owned by Anderson's Car Country, Inc.; that Anderson's wife's name was not on the title; and that Anderson did not pay sales tax on the car when he bought it from another dealership. Anderson had previously owned Anderson's Car Country, Inc., and he had a dealer's license for the year 1985. At the time he sold the car to the Shepherds, Anderson possessed a dealer's "black book" which he used to determine the value of the car. Although Anderson said that he actually took possession of the vehicle from another dealer in February 1986, it took until March 15, 1986, for the title to be changed to the name of Anderson's Car Country. This was only a week or so before he began trying to sell the car to the Shepherds. At the time of trial, Anderson worked for another car dealer.
        The evidence which supports the trial court's finding included Anderson's trial testimony that he was not a car dealer at the time the Shepherds purchased the car. Anderson stated that while he had previously been a car dealer, he sold his automobile sales business in September 1985 and his corporation was ultimately dissolved in February 1986 after winding up the dissolution activities. His dealer's license was not renewed for 1986 and he was employed as a real estate salesman at the time Vicki Shepherd saw the car. In fact, the Shepherds met Anderson at his real estate office when they test-drove the car.
        Anderson testified that the Audi was his family's personal car. He explained that he told the person from whom he bought the car to draft his bank account for the vehicle and that the bank draft was his personal obligation. He stated that because a representative in the seller's office handled the documents for the draft, he was not even aware of how the title was handled until he sold the car. Based on the foregoing, we conclude that there was sufficient evidence to support the trial court's finding that Anderson was not a dealer at the time of the sale. Point of error four is overruled.
        Point of error five contends that the trial court's finding of fact that "[Anderson] did not make any misrepresentations that caused damage to [the Shepherds]" was against the great weight and preponderance of the evidence. In their related point of error six, the Shepherds complain that there was no evidence or, alternatively, insufficient evidence to support the trial court's finding that "[the Shepherds] were not damaged by [Anderson's] actions." In support of their argument, the Shepherds claim that Gary Shepherd would not have signed the "as is" document if Anderson had told him that he was a dealer and if it had not been for Anderson's representation that he and his wife had personally owned the car for about a year.
        Anderson testified that he told the Shepherds he owned the car for less than a year and that the car was used by his wife and him as their personal vehicle. We have previously concluded that the trial court's finding that Anderson was not a dealer was supported by the evidence. Since there was sufficient evidence from which to conclude that Anderson was not a dealer, the Shepherds claim for damages based on their claim that he was a dealer cannot be sustained. Points of error five and six are overruled.
        In point of error seven, the Shepherds attack the trial court's finding that they voluntarily signed the "as is" document as being against the great weight and preponderance of the evidence. The Shepherd's claim of duress is based on the testimony of Gary Shepherd who stated that the only reason he waived any warranties on the car was because at the time he signed the "as is" document, he believed that his banker had already paid Anderson. Duress is the threat to do some act which the party threatening has no legal right to do. The threat must be of such character as to destroy the free agency of the party to whom it is directed. It must overcome his will and cause him to do that which he would not otherwise do, and which he was not legally bound to do. The restraint caused by such threat must be imminent, and must be such that the person to whom it is directed has no present means of protection. Dale v. Simon, 267 S.W. 467, 470 (Tex. Comm'n App. 1924, judgm't adopted); Creative Mfg. Inc. v. Unik Inc., 726 S.W.2d 207, 211 (Tex. App.--Fort Worth 1987, writ ref'd n.r.e.).
        There was no evidence of any threat on the part of Anderson to do anything which he had no right to do. No money had in fact been paid to Anderson at the time the document was signed. Additionally, there was testimony that Gary Shepherd insisted that changes be made to the document before his signed it. Certainly it can be argued that the changes sought by Shepherd would not have been possible had he signed the document under duress. Since the Shepherds failed to present evidence of duress, the trial court's finding that the "as is" document was voluntarily executed was not against the great weight and preponderance of the evidence. Point of error seven is overruled.
        Having sustained points of error two and three, we reverse the judgment concerning the award of attorney's fees. The judgment is in all other respects affirmed.
 
 
                                                                  PAT McCLUNG
                                                                  JUSTICE
 
 
DO NOT PUBLISH
TEX. R. APP. P. 90.
 
881182OP.U05
 
FN:1 All statutory references are to Tex. Bus. & Com. Code Ann. § § 17.46, 17.50 (Vernon 1987).
File Date[10-23-89]
File Name[881182F]