DA APARTMENTS LIMITED PARTNERSHIP, DA APARTMENTS GENPAR, LTD., DA APARTMENTS I CORPORATION, and DALCOR PROPERTY MANAGEMENT, INC., Appellants v. FLUID CONCEPTS, INC., Appellee

Reversed and Rendered in part; Affirmed in part; Opinion Filed July 10, 2008.
 
 
 
In The
Court of Appeals
Fifth District of Texas at Dallas
............................
No. 05-06-01497-CV
............................
DA APARTMENTS LIMITED PARTNERSHIP, DA APARTMENTS
GENPAR, LTD., DA APARTMENTS I CORPORATION, and
DALCOR PROPERTY MANAGEMENT, INC., Appellants
V.
FLUID CONCEPTS, INC., Appellee
.............................................................
On Appeal from the 116th Judicial District Court
Dallas County, Texas
Trial Court Cause No. 01-04242-F
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MEMORANDUM OPINION
Before Justices Moseley, Bridges, and Lang-Miers
Opinion By Justice Lang-Miers
        Appellant Dalcor Property Management, Inc.   See Footnote 1  appeals a judgment in favor of appellee Fluid Concepts, Inc., awarding Fluid Concepts damages for Dalcor's negligence. In two issues, Dalcor challenges (1) the sufficiency of the evidence to support Fluid Concepts' negligence claim against Dalcor, and (2) the sufficiency of the evidence to support the damages awarded. We sustain Dalcor's first issue, reverse the trial court's judgment against Dalcor, and render judgment that Fluid Concepts take nothing against Dalcor.
Factual Background
 
        The material underlying facts of this case are largely undisputed. In 1994, Fluid Concepts leased five water-treatment systems to owners of an apartment complex in Austin. The systems were installed in five boiler rooms within the apartment complex and were used to reduce scale build-up in the apartments' water pipes. The systems were leased for an initial one-year term, after which the lease was renewed at the apartment owners' discretion on a quarterly basis. The lease provided that Fluid Concepts would service the systems on a quarterly basis.
        Dalcor began managing the apartment complex when it was sold to new owners in 1998. The new owners assumed the existing lease for the water-treatment systems and did not sign a new lease. Dalcor was not a party to that lease. Fluid Concepts serviced the five systems in July 1999, after which a dispute apparently arose concerning those systems. The exact nature of that dispute is not not clear from our appellate record; but the record does demonstrate that in September 2000, Fluid Concepts personnel arrived at the complex planning to retrieve the systems and discovered that all five systems had been removed from the boiler rooms. Allen McCracken, II, Fluid Concepts' president, testified that he accompanied his employees that day. He said that the systems “had been surgically cut out” and that nothing else was missing from the boiler rooms. One system that had been in one of the boiler rooms had been replaced by another product. In the other four boiler rooms, valves were closed to bypass the missing systems. All five systems had been removed without interrupting the water service in the apartments.
        Dalcor kept the boiler rooms locked because of potential danger from equipment, as well as from natural gas, open flames, and electricity. According to Randy Plitt, Dalcor's vice-president, the only people who had been granted access to the boiler rooms were plumbers, the gas company, Dalcor maintenance personnel, and Fluid Concepts personnel.
        The parties agree that there is no evidence in the record concerning who took the systems, why they were taken, or precisely when they were taken. Plitt denied that any Dalcor employee removed the systems. Although McCracken testified that he did not know who took the systems, he admitted that he could not say whether his employees cut out the systems “maybe the last time they were there.” McCracken testified that Fluid Concepts was not able to replicate the systems and that his employees knew that the systems were valuable to Fluid Concepts.
        Fluid Concepts sued the property owners and Dalcor, claiming breach of the lease, negligence, and conversion of the leased equipment. The trial court initially granted summary judgment for all defendants, but that judgment was reversed by this Court and remanded for trial.   See Footnote 2  On remand, the trial court directed a verdict against the property owners on liability and submitted the issues of Dalcor's negligence   See Footnote 3  and Fluid Concepts' damages to the jury. The jury found that Dalcor was negligent, and that $250,000 in damages was “proximately caused by the negligence of Dalcor.” The trial court signed a final judgment awarding Fluid Concepts (1) $250,000 in damages jointly and severally against Dalcor and the property owners, (2) $107,013.12 in pre-judgment interest, and (3) post-judgment interest at eight percent per annum, compounded annually. The trial court also rendered judgment against the property owners for attorneys' fees and interest on those fees.
Issues on Appeal
 
        Dalcor raises two issues on appeal. In its first issue, Dalcor argues that the evidence is legally and factually insufficient to support the jury's finding that Dalcor was negligent. In its second issue, Dalcor argues that the evidence is insufficient to support the jury's finding that $250,000 in actual damages was proximately caused by Dalcor.
 
Standard of Review
 
        We will sustain a legal-sufficiency, or no-evidence, point if the record reveals one of the following: (1) the complete absence of evidence of a vital fact; (2) the court is barred by rules of law or of evidence from giving weight to the only evidence offered to prove a vital fact; (3) the evidence offered to prove a vital fact is no more than a scintilla; or (4) the evidence established conclusively the opposite of the vital fact. See Uniroyal Goodrich Tire Co. v. Martinez, 977 S.W.2d 328, 334 (Tex. 1998). When we conclude that the evidence is legally insufficient to support the judgment, “it is our duty to render judgment for the appellant because that is the judgment the trial court should have rendered.” City of Weatherford v. Catron, 83 S.W.3d 261, 267 (Tex. App.-Fort Worth 2002, no pet.) (citing Tex. R. App. P. 43.3 and Vista Chevrolet, Inc. v. Lewis, 709 S.W.2d 176, 176 (Tex. 1986) (per curiam)).
Analysis
 
        In its first issue, Dalcor argues that the evidence is legally and factually insufficient because “Dalcor owes no legal duty to Fluid Concepts.” Alternatively, Dalcor argues that if it owed Fluid Concepts a duty, “there is no evidence of an act or omission that breached it.”
        In response, Fluid Concepts argues that Dalcor created an “implied mutual benefit bailment” by “exercis[ing] dominion and control over the property.” It argues that Dalcor had the duties of a bailee and that, because of an implied bailment, Fluid Concepts was required to show only that the systems were not returned. It contends that the burden then shifted to Dalcor “to show how the loss occurred and that it resulted from some other cause than its own negligence.”
        Dalcor argues that “Fluid Concepts has waived any claim of bailment or of a presumption of negligence,” because Fluid Concepts did not plead bailment or a presumption of negligence, did not ask the trial court to submit issues or instructions to the jury on this issue, and did not object to the charge that was submitted to the jury, which placed the burden on Fluid Concepts to prove negligence.   See Footnote 4 
        During oral argument, Fluid Concepts' counsel did not argue that the bailment theory was preserved below. In fact, he admitted that he could not contend that there was a “true bailment” between Dalcor and Fluid Concepts, and explained that he was unable to find an opinion from a Texas court that has addressed a similar situation. Nevertheless, he argued that Dalcor's negligence should be presumed because the systems were not returned to Fluid Concepts, and Dalcor had possession of the systems, had the keys to the boiler rooms, and had denied Fluid Concepts access to the boiler rooms on one occasion in late 1999.
        We agree with Dalcor that Fluid Concepts cannot rely on an unpleaded bailment claim, or on the presumption of negligence that might apply with a bailment claim, as a substitute for evidence to support the jury's finding of negligence in this case. Fluid Concepts did not plead or offer evidence of a bailment.   See Footnote 5  Instead, it pleaded a negligence claim and the court submitted the negligence claim to the jury. It was Fluid Concepts' burden to prove Dalcor's negligence by submitting sufficient evidence to support the elements of its negligence claim.   See Footnote 6  We conclude that it did not do so.
        It is uncontested that Dalcor was not a party to the lease for the water treatment systems and did not have a contractual duty to Fluid Concepts. Nevertheless, even apart from whether Fluid Concepts proved Dalcor owed a duty to Fluid Concepts, there is no evidence of a breach of any duty. In fact, Fluid Concepts concedes that there are five possible explanations for what happened to the systems: (1) they were repossessed by Fluid Concepts' employees; (2) they were stolen by Dalcor employees; (3) they were stolen by a third party; (4) they were disconnected by a third party and discarded by Dalcor employees because they did not know what they were; or (5) they were disconnected and discarded by Dalcor employees. But “when the circumstantial evidence is so slight that any plausible inference is purely a guess, it is in legal effect no evidence.” Lozano v. Lozano, 52 S.W.3d 141, 148 (Tex. 2001) (Philips, C.J., concurring and dissenting); see also Haynes & Boone v. Bowser Bouldin, Ltd., 896 S.W.2d 179, 183 (Tex. 1995) (if evidence is so weak as to do no more than create mere surmise or suspicion, it is no evidence). Although circumstantial evidence may be used to establish any material fact, “it must transcend mere suspicion.” Lozano, 52 S.W.3d at 149.
        In summary, based on our review of the record in this case, we conclude that the evidence is not legally sufficient to support the jury's finding that Dalcor was negligent. We sustain the first part of Dalcor's first issue concerning the legal sufficiency of the evidence to support the jury's finding that Dalcor was negligent.
Conclusion
 
        We sustain the first part of Dalcor's first issue, reverse the trial court's judgment against Dalcor and render judgment that Fluid Concepts take nothing against Dalcor. We do not address the factual sufficiency of the evidence concerning negligence, or Dalcor's second issue concerning the sufficiency of the evidence of damages, because our decision on those issues would not change
the final disposition of this appeal. See Tex. R. App. P. 47.1 (opinion need only address issues “necessary to final disposition of the appeal”).
 
                                                          
                                                          ELIZABETH LANG-MIERS
061497F.P05                                                  JUSTICE
 
 
Footnote 1 The four defendants below filed a combined notice of appeal, but only Dalcor filed an appellate brief. According to Dalcor, the remaining appellants “have elected not to pursue their appeal.” Because the remaining appellants did not file a brief or otherwise pursue their appeal, we affirm the judgment as to them.
Footnote 2 Fluid Concepts, Inc. v. DA Apartments L.P., 159 S.W.3d 226 (Tex. App.-Dallas 2005, no pet.).
Footnote 3 During oral argument, Fluid Concepts counsel explained that Fluid Concepts did not pursue its conversion claim against Dalcor because it could not prove that Dalcor converted the systems for its own use.
Footnote 4 Dalcor also raises two additional arguments. First, Dalcor argues that “Fluid Concepts is judicially estopped from claiming any express or implied contractual relationship, such as bailment, with Dalcor,” because it already proved that its lease agreement was with the owners of the property, not Dalcor, and obtained a judgment against the owners for breach of contract. Second, Dalcor argues that a presumption of negligence does not apply when “there is evidence that the property has been stolen.” Because we resolve this appeal based on the legal insufficiency of the evidence to support Fluid Concepts' negligence claim, we do not need to address these alternative arguments.
Footnote 5 “A bailment is a delivery of goods to another which creates a duty of trust on the part of the bailee to return the deposited goods as directed.” 8A Tex. Jur. 3d Bailments § 1 (2007). A bailment may be implied under certain circumstances, but only if the bailor establishes the basic elements of a bailment: (1) the delivery of personal property from one person to another for a specific purpose; (2) acceptance by the transferee of such delivery; (3) an agreement that the purpose will be fulfilled; and (4) an understanding that property will be returned to the transferor. See, e.g., Cessna Aircraft Co. v. Aircraft Network, L.L.C., 213 S.W.3d 455, 462 (Tex. App.-Dallas 2006, pet. denied); Soto v. Sea-Road Int'l, Inc., 942 S.W.2d 67, 72 (Tex. App.-Corpus Christi 1997, writ denied). In the case of certain implied bailments, a presumption of negligence may arise against the bailee. See Buchanan v. Byrd, 519 S.W.2d 841, 843 (Tex. 1975).
Footnote 6 The elements of a negligence claim are: (1) the existence of a legal duty, (2) a breach of that duty, and (3) damages proximately caused by that breach. Kroger Co. v. Elwood, 197 S.W.3d 793, 794 (Tex. 2006).