Jamie Genender & Critter Stuff, LLC v. USA Store Fixtures, LLC

• Decision Date: 23 December 2014
• Docket Number: NO. 14–14–00048–CV,14–14–00048–CV
• Parties: Jamie Genender and Critter Stuff, LLC, Appellants v. USA Store Fixtures, LLC, Appellee
• Court: Texas Court of Appeals

451 S.W.3d 916

Jamie Genender and Critter Stuff, LLC, Appellants

v.USA Store Fixtures, LLC, Appellee

NO. 14–14–00048–CV

Court of Appeals of Texas, Houston (14th Dist.

Opinion filed December 23, 2014.

Cameron Weir, Jan Woodward Fox, Houston, TX, for Appellants.

Jerrad D. Bloome, Houston, TX, for Appellee.

Panel consists of Justices McCally, Brown, and Wise.

OPINION

Sharon McCally, Justice

Appellee USA Store Fixtures, LLC sued appellants Jamie Genender and her business Critter Stuff, LLC in justice court after Genender successfully obtained a chargeback on her credit card related to her purchase of $2,303.42 in used shelving from Store Fixtures. Store Fixtures appealed a take-nothing judgment from the justice court to the county court, which held a trial de novo. A jury awarded Store Fixtures damages of $2,303.42 and attorney's fees of $38,000 for trial, $20,000 for an appeal to the court of appeals, and $20,000 for an appeal to the Supreme Court of Texas. In three issues, appellants contend the county court lacked jurisdiction over Store Fixtures' breach of contract claim, the evidence is legally insufficient, and Store Fixtures is not entitled to attorney's fees because it failed to plead and prove presentment of its claim.

We hold that the trial court had jurisdiction over Store Fixtures' breach of contract claim and the evidence is legally sufficient to support the jury's finding on that claim, but Store Fixtures failed to prove presentment. Accordingly, we modify the trial court's judgment to delete the award of attorney's fees and affirm the trial court's judgment as modified.

I. Background

Using a credit card, Genender purchased some used shelving from Store Fixtures for Genender's business. Store Fixtures shipped the shelving to Genender in Wisconsin. But she was disappointed with the quantity and quality of the shelving she received and with Store Fixtures' response to her concerns, so she filed a dispute with her credit card company that resulted in a chargeback to Store Fixtures. Store Fixtures sued appellants in justice court; all parties were pro se. After a bench trial, the justice court signed a take-nothing judgment in appellants' favor, and Store Fixtures appealed to the county court. The parties hired attorneys and ultimately proceeded to a de novo jury trial with each side asserting claims for breach of contract and attorney's fees.

The only issues submitted to the jury were whether any party failed to comply with the agreement, and if so, the amounts of damages and attorney's fees. The jury found that appellants failed to comply with the agreement, Store Fixtures did not fail to comply with the agreement, Store Fixtures suffered damages of $2,303.42, and Store Fixtures' reasonable and necessary attorney's fees were $38,000 for preparation and trial, $20,000 for an appeal to the court of appeals, and $20,000 for an appeal to the Supreme Court of Texas. The county court signed a final judgment consistent with the jury's verdict. This appeal followed.

II. Subject Matter Jurisdiction

In their first issue, appellants contend the county court's judgment is void because the county court lacked subject matter jurisdiction over the only claim and basis for attorney's fees supporting the judgment. Appellants argue that Store Fixtures did not plead a breach of contract claim in the justice court, and Store Fixtures' contract claim was a “new ground of recovery” pleaded for the first time on appeal to the county court. See Tex.R. Civ. P. 574a, 50 Tex. B.J. 868 (1987, repealed 2013) (on appeal from justice court, “no new ground of recovery shall be set up by the plaintiff”).

Store Fixtures contends that it pleaded a breach of contract claim in the justice court because Store Fixtures reserved the right to plead orally and, at the justice court trial, Store Fixtures “sought to recover the total invoice amount under the theory that Genender and Critter Stuff had breached the contract by not paying for the shelving.”

First we will review the relevant proceedings and evidence in the record. Then we overrule appellant's issue because appellants failed to rebut the presumption that Store Fixtures orally pleaded its breach of contract claim in the justice court.

A. Background and Evidence

Store Fixtures, acting through its president,¹ filed two petitions in justice court. The petition naming Genender as a defendant alleged as follows:

That the defendant is legally indebted to the plaintiff in the sum of $10,000.00 based upon the following facts: Defendant, Jaimie Michele Genender, purposefully intended to defraud USA Store Fixtures LLC from financial gain by refusing payment on her credit card. Defendant also acted outside of her title and personally defamed and slandered this company in writing. Invoice $2,303.42 damages for slander $7,697.58.

The petition naming Critter Stuff as a defendant alleged as follows:

That the defendant is legally indebted to the plaintiff in the sum of $10,000.00 based upon the following facts: Defendant, Jamie Michele Genender, purposefully intended to defraud USA Store Fixtures LLC from financial gain by refusing payment on her credit card. Defendant also slandered and defamed this company in writing. Invoice amount $2,303.42 plus damages for slander and defamation.

Both petitions stated, “THAT plaintiff reserves the right to plead further orally upon trail [sic] of this matter.” See Tex.R. Civ. P. 525, 3 Tex. B.J. 607 (1940, repealed 2013) (in justice court, “[t]he pleadings shall be oral, except where otherwise specially provided”).

After Store Fixtures appealed to the county court and retained counsel, it filed an amended petition asserting claims for breach of contract, negligent misrepresentation, fraud, fraud in the inducement, and quantum meruit. Store Fixtures also sought attorney's fees. Appellants filed counterclaims for breach of contract and violations of the Deceptive Trade Practices—Consumer Protection Act (DTPA), Tex. Bus. & Com.Code Ann. subch. E. Appellants also sought attorney's fees.

Store Fixtures filed a plea to the jurisdiction and motion to dismiss all of appellants' counterclaims under former Rule 574a. The rule provided,

Either party may plead any new matter in the county or district court which was not presented in the court below, but no new ground of recovery shall be set up by the plaintiff, nor shall any set-off or counterclaim be set up by the defendant which was not pleaded in the court below.

Tex. R Civ. P. 574a, 50 Tex. B.J. 868 (1987, repealed 2013). Store Fixtures alleged dismissal was the proper remedy because the county court lacked subject matter jurisdiction over appellants' newly pleaded counterclaims.² Appellants responded that severance was the proper remedy³ and also requested severance of Store Fixtures' newly pleaded claims of breach of contract, quantum meruit, fraudulent inducement, and negligent misrepresentation. The county court granted partial relief to both sides, ordering severance of Store Fixtures' negligent misrepresentation claim and appellants' DTPA claim. At the de novo trial, only the contract claims were tried, along with the amounts of attorney's fees.

B. Analysis

Regardless of whether Store Fixtures alleged a breach of contract claim in its written petitions in justice court, the law recognizes a presumption that Store Fixtures orally pleaded its breach of contract claim in justice court. See Gordon v. Zoes, 125 S.W.2d 1049, 1049–50 (Tex.Civ.App.—Galveston 1939, no writ) (holding that the county court's judgment was not void based on an allegation that the plaintiff brought a new cause of action not pleaded in justice court; “While plaintiff filed certain written pleadings in the justice court, he expressly reserved the right in said pleadings to plead orally on the trial of the case. It is uniformly held in this State that in cases originating in the justice court, pleadings may be either oral or written, or partly oral and partly written. In the absence of a showing to the contrary, it will be presumed that said written pleadings were supplemented by such oral amendments as cured any defects therein, and that such pleadings as amended supported the judgment rendered by the trial court.”); Garcia v. Rendon, 59 S.W.2d 881, 881 (Tex.Civ.App.—San Antonio 1933, no writ) (“If the oral plea made by appellee was not pleaded in the justice's court, appellant should have shown it. The mere fact that the justice of the peace did not note the oral pleadings did not prove that they were not made.”).⁴ This presumption exists because the rules specifically require oral pleadings in the justice court. See Tex.R. Civ. P. 525, 3 Tex. B.J. 607 (1940, repealed 2013) (“The pleadings shall be oral ...”).⁵

The presumption is rebuttable. See Gordon, 125 S.W.2d at 1049–50 ; Garcia, 59 S.W.2d at 881. For example, a statement regarding the oral pleadings may be noted on the justice court's docket. See Tex.R. Civ. P. 525, 3 Tex. B.J. 607 (1940, repealed 2013) (“The pleadings shall be oral ... but a brief statement thereof may be noted on the docket ....”); see also Subcomm. on Interpretation of Rules of Civil Procedure, State Bar of Tex., Op. 27–a, 5 B.J. 287 (1942) (noting that this statement may be necessary because “it may become important to show what the old pleadings were with ... contentions that a new cause of action has been set up for the first time in the county court”).

The record here contains no such notation, but the lack of a notation does not rebut the presumption of oral pleading. See Gordon, 125 S.W.2d at 1049–50 ; Garcia, 59 S.W.2d at 881 ; Amarillo Commercial, 140 S.W. at 378. Nor does the record contain any evidence that Store Fixtures did not orally plead a breach of contract claim in the justice court.⁶ Because appellants did not rebut the presumption of oral pleading, we presume that Store Fixtures orally pleaded a breach of contract claim in the justice court, and therefore, the claim was not a new ground of recovery in the county court.

App...