Texas Commerce Bank National Association/Jack Harpster, Independent Executor of the Estate of William R. Harpster v. Jack Harpster, Independent Executor of the Estate of William R. Harpster/Texas Commerce Bank National Association--Appeal from 98th District Court of Travis County

cv5-542.dd.tcb TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-95-00542-CV
Texas Commerce Bank, National Association/Jack Harpster, Independent
Executor of the Estate of William R. Harpster, Appellants
v.
Jack Harpster, Independent Executor of the Estate of William R. Harpster,
Deceased/Texas Commerce Bank, National Association, Appellees
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 98TH JUDICIAL DISTRICT
NO. 91-5946, HONORABLE J. DAVID PHILLIPS, JUDGE PRESIDING

PER CURIAM

 

Jack Harpster, Independent Executor of the Estate of General William R. Harpster, recovered damages plus attorney's fees from Texas Commerce Bank for the Bank's handling of money deposited by or meant for Gen. Harpster. On appeal, both Jack Harpster and the Bank complain about the judgment. The Bank complains that the court should not have awarded attorney's fees for a purely noncontractual recovery. Jack Harpster complains that the court erred by using jury instructions that unfairly limited the basis of his recovery and by granting a partial summary judgment that the Bank had no duty to investigate a questionable power of attorney. We will affirm the trial-court judgment in part, reverse the trial-court judgment in part, and render judgment in part.

 
BACKGROUND

This case arises from the misdepositing of funds intended for Gen. Harpster's bank account and the withdrawal of funds from Gen. Harpster's bank account and certificate of deposit after he suffered a stroke on February 28, 1989. In April 1989, one of Gen. Harpster's sons, David Harpster, forged two checks on Gen. Harpster's checking account; the Bank rejected these. David also that month deposited into his own account at the Bank a $19,658.05 check payable to Gen. Harpster. This check did not bear any endorsement; the only instruction was that it was for deposit only to David's account. On July 12, 1989, David wrote himself a $5,000 check on Gen. Harpster's account using a rubber-stamp signature of Gen. Harpster's name (the rubber-stamp signature did not match Gen. Harpster's signature on the signature card on file at the Bank); this was the first of many such checks. David also partially redeemed the CD on August 15, 1989 with verbal instructions to the Bank.

After the partial redemption of the CD, a Bank officer discovered a general power of attorney dated June 29, 1989 on file with the Bank; the officer testified that he may have discovered the power of attorney as late as October 15, 1989. The power-of-attorney document plainly states that Gen. Harpster gave David

 

the power to deposit or withdraw for any purpose in or from any bank or other financial institution, any funds checks or other credits which [Gen. Harpster] now or hereafter may have on deposit or be entitled to, and to endorse, cash and receive the proceeds of any and all checks vouchers or other orders for money, to open or close accounts and to receive statements, vouchers, notices or other documents from any bank or other financial institution concerning any and all accounts or banking transactions in [Gen. Harpster's] name or in which [Gen. Harpster] may have an interest.

 

In Gen. Harpster's signature space on the power-of-attorney form was an "X". No Bank employee knew when or how the document was filed at the Bank. The Bank did not investigate the power of attorney, but in October 1989 asked David to complete the Bank's specific power-of-attorney form with a signature card. He did not comply until February 16, 1990, during which time the Bank paid out $40,000 from Gen. Harpster's checking account. When David returned the form, the Bank rejected it because, when called by a Bank officer, the notary whose stamp was used admitted he had not notarized the document. David returned a second form notarized by the same notary (who, when called, said he had actually witnessed the execution of this form).

Gen. Harpster sued the Bank for negligence and breach of contract; when Gen. Harpster died, his son Jack substituted as plaintiff as the independent executor of Gen. Harpster's estate.

The parties stipulate to the amount of money involved. Jack concedes that, of the funds David extracted from their father's deposits, David spent $17,660.89 for Gen. Harpster's benefit. Jack insists that Gen. Harpster did not benefit from or authorize the removal of the remaining $140,947.16.

The trial court granted a partial summary judgment that the Bank had no duty to investigate the power of attorney. The jury found that the Bank was negligent and failed to comply with any of its agreements with Gen. Harpster. The jury found damages of $19,658.05 for both the negligence and the breach of agreements; this is the exact amount of the check payable to Gen. Harpster that the Bank deposited into David's account without proper endorsements. The court rendered judgment favoring Jack for $19,658.05 in damages plus $65,000 in attorney's fees.

 
THE ESTATE'S COMPLAINTS

We begin by addressing the crosspoints of error Jack brings on behalf of his father's estate. He contends first that the trial court erroneously granted partial summary judgment that the Bank did not have a duty to investigate the competency of Gen. Harpster before accepting the general power of attorney. The order is silent as to the basis of the lack of duty. The transcript on appeal lacks the motion for partial summary judgment, the answer, or any response to either. In summary judgment practice, "[i]ssues not expressly presented to the trial court by written motion, answer, or other response shall not be considered on appeal as grounds for reversal." Tex. R. Civ. P. 166a(c). Since we do not have the motion, answer, or any response to either, we cannot know what was expressly presented to the trial court, we cannot know on what basis the court decided, and cannot reverse. We overrule crosspoint one.

By crosspoints two and three, Jack complains of prefatory language to questions to the jury that implicitly assumed that the power of attorney was valid. Texas Rule of Civil Procedure 278 governs the submission of jury questions. Trial courts must submit properly phrased questions and instructions on issues raised by the pleadings and evidence. A judgment shall not be reversed because of the failure to submit other and various phases or different shades of the same question. Tex. R. Civ. P. 278. Failure to submit a question or instruction is not a ground for reversal unless the party relying on the question and complaining of the judgment has requested its submission and tendered it in substantially correct wording; a party not relying on the question must merely object to the failure to ask. Tex. R. Civ. P. 278.

Jack contends by crosspoint two that the court erred by prefacing three questions with language barring the jury from considering any losses after June 29, 1989, the date of the power of attorney; this limitation was invoked only by the jury finding that Gen. Harpster signed the power of attorney. This limiting instruction was supported by evidence that Gen. Harpster competently executed the power of attorney and by the presumption that an adult is competent until proven and found otherwise. See Walker v. Eason, 643 S.W.2d 390, 391 (Tex. 1982) (regarding the presumption); Arnold v. Arnold, 657 S.W.2d 506, 507 (Tex. App.--Corpus Christi 1983, no writ)(regarding the presumption); see also Tex. Health & Safety Code Ann. 576.002(b) (West 1992)(regarding the presumption). The limitation is justified because, if the power of attorney was valid, David had the authority to conduct all the disputed transactions completed after June 29, 1989; his withdrawals after June 29, 1989 would be authorized and not the source of compensable damages to Gen. Harpster's estate regardless of whether the Bank followed its own procedures in accepting the power of attorney, ensuring the validity of signatures on checks, or releasing the CD funds. The conflicting evidence and inferences regarding his competence do not render erroneous the court's asking a question conditionally limited to the time before the power of attorney.

Concordantly, the court did not err by refusing Jack's requested damage questions which were not restricted to a particular timeframe. The evidence of the validity of the power of attorney rendered the asking of unconditionally unrestricted questions incorrect. The court might also have asked a question limited to the period after the power of attorney was signed, anticipating a finding that the power of attorney was invalid. (1) No such request or objection to the failure to ask such questions appears in the record. The absence of a finding that the power of attorney was invalid erases any hint of error in the failure to ask Jack's questions. We overrule crosspoint two.

By crosspoint three, Jack complains that the court should not have prefaced Question No. 2, regarding whether David's access to Gen. Harpster's accounts was authorized, with the phrase "[n]ot considering the power of attorney dated June 29, 1989." He argues that the court's exclusion of the effect of the power of attorney from Question No. 2 removed from the jury the right to find that the power of attorney was defective, that Gen. Harpster was not competent to give his authority, or that Gen. Harpster did not give his authority when he placed his "X" upon the document. Jack's complaint in crosspoint three is more about what was not asked than about what was.

The preface was justified. Evidence that Gen. Harpster did not competently grant the power of attorney but that he competently and orally approved some transactions supported asking a question that distinguished between right of access granted by the power of attorney and right of access obtained otherwise. If Gen. Harpster approved some transactions in ways other than the power of attorney, then those transactions could not be the source of damages to his estate even if the power of attorney was invalid. We note that the jury's answer--that David had no authorized access to Gen. Harpster's accounts independent of the power of attorney--favored Jack. That the trial court might also have asked whether the power of attorney was valid or granted to David the right of access to the accounts does not show reversible error here; Jack does not raise a crosspoint of error about the court not asking such additional questions. We overrule crosspoint three.

 
THE BANK'S COMPLAINTS

The Bank complains by its sole point of error that the court erred by awarding attorney's fees because there was no substantiated contract recovery on which such an award could be based. The Bank contends that no evidence supports the breach-of-contract finding and that no other basis supports an award of attorney's fees.

Jack rightly does not dispute that his tort claim alone can support the award, so we focus on whether any evidence supports a breach-of-contract finding. (2) We review a no-evidence point by considering only the evidence and inferences supporting the finding and disregarding all contrary evidence and inferences. Weirich v. Weirich, 833 S.W.2d 942, 945 (Tex. 1992). If any evidence of probative force supports the finding, we must affirm the finding. In re King's Estate, 244 S.W.2d 660, 661 (Tex. 1951). Our review is complicated somewhat because the breach-of-contract question, unlike the breach-of-contract damage question, was not limited to the period before June 29, 1989, the date on the power of attorney.

Jack does not argue on appeal that the jury's finding that contract damages accrued before the power of attorney necessarily means that any evidence supports the breach-of-contract finding or the attorney's fee award. The $19,658.05 amount found as contract damages clearly relates solely to the check to Gen. Harpster that the Bank deposited into David's account in April. To support the breach-of-contract finding and damage award, this misdeposit would have to constitute a breach of contract. The agreements Jack contends were breached, however, relate only to funds on deposit; because the misdeposited check never was deposited into Gen. Harpster's accounts, the misdeposit, though perhaps negligent, did not breach an agreement. (On appeal, the Bank does not contest the negligence finding or the negligence damages in the same amount.) The evidence to which Jack refers in his reply brief regarding the misdeposit concerns whether the act of misdepositing violated reasonable banking practices--a negligence standard. Jack does not detail and we do not find any evidence regarding a breach of contract preceding the power of attorney's date of June 29, 1989. With no evidence of a breach of contract, the jury's finding of breach-of-contract damages preceding June 29, 1989 is likewise supported by no evidence. The tort damages thus do not arise from any breach of contract.

Because there is no breach-of-contract damage question or finding for the period after June 29, 1989, the attorney's fee award can stand only if attorney's fees can be awarded in the absence of a damage finding. Jack contends that courts have awarded attorney's fees for breaches of contracts that produced no damages, citing All Valley Acceptance Co. v. Durfey, 800 S.W.2d 672, 676 (Tex. App.--Austin 1990, writ denied) (citing First City Bank--Farmers Branch v. Guex, 677 S.W.2d 25, 30 (Tex. 1984)). These cases are distinct from this case. In both cited cases, the plaintiff recovered damages on statutory grounds. See Tex. Bus. & Com. Code Ann. 9.507 (West 1991); All Valley, 800 S.W.2d at 674; Guex, 677 S.W.2d at 27. The courts upheld the attorney's fees awards because the statutory damage awards arose from a contract. All Valley, 800 S.W.2d at 675; Guex, 677 S.W.2d at 30. This Court's holding that Durfey need not show actual damages to recover attorneys' fees referred to the lack of need to prove any damages in addition to the damages assessed as statutory penalties. All Valley, 800 S.W.2d at 675. Courts have awarded attorney's fees based on breach-of-contract findings accompanied by findings of damages only for torts arising from the breach of contract. See Gill Sav. Ass'n v. Chair King, Inc., 783 S.W.2d 674, 680 (Tex. App.--Houston [14th Dist.] 1989), aff'd as modified, 797 S.W.2d 31 (Tex. 1990). The critical difference here is that we have found that the only tort damages awarded do not correspond with a valid finding of breach of contract; the breach-of-contract finding, even if valid for the period after June 29, 1989, has no accompanying damage finding. A breach of contract generating no penalties or damages either independently or through consequent torts is not a "valid claim" within the meaning of Texas Civil Practice and Remedies Code Annotated 38.001. The attorney's fee award in this suit therefore has no basis. We sustain point of error one.

We reverse the portion of the judgment incorporating any finding of breach of contract as it pertains to the period before June 29, 1989. We render judgment that there are no damages from breach of contract under the jury charge. We reverse the award of attorney's fees to Jack and render judgment that he receive no such fees. We affirm the $19,658.05 damage award for negligence and affirm the trial-court judgment in all other respects.

 

Before Chief Justice Carroll, Justices Jones and B. A. Smith

Affirmed in Part; Reversed and Rendered in Part

Filed: July 31, 1996

Do Not Publish

1. Indeed, had the jury found that Gen. Harpster did not sign the power of attorney, the damage questions would have had an unrestricted timeframe.

2. The statute provides that a party can recover attorney's fees for a valid claim of breach of contract. Tex. Civ. Prac. & Rem. Code Ann. 38.001(8) (West 1986). No similar provision exists for a negligence claim.