Advanced Messag. Wireless v. Campus Design

• Decision Date: 31 October 2005
• Docket Number: No. 07-04-0348-CV.,07-04-0348-CV.
• Citation: 190 S.W.3d 66
• Parties: ADVANCED MESSAGING WIRELESS, INC., Noel Bunyan, and Don Nichols, Appellants, v. CAMPUS DESIGN, INC., Appellee.
• Court: Texas Court of Appeals

Page 66

190 S.W.3d 66

ADVANCED MESSAGING WIRELESS, INC., Noel Bunyan, and Don Nichols, Appellants, v. CAMPUS DESIGN, INC., Appellee.

No. 07-04-0348-CV.

Court of Appeals of Texas, Amarillo.

October 31, 2005.

Van W. Northern, Northern Law Firm, Amarillo, for Appellant.

Anna McKim, William J. Wade, Jr., Field, Manning, Stone, Hawthorne & Aycock, P.C., Lubbock, for Appellee.

Before QUINN, C.J., and REAVIS, J., and BOYD, S.J.¹

OPINION

DON H. REAVIS, Justice.

Advanced Messaging Wireless, Inc., Noel Bunyan, and Don Nichols, (collectively Advanced Messaging unless otherwise specified), challenge the judgment of the trial court following a post-answer default judgment that Campus Design, Inc. recover damages in the sum of $857,653, plus attorney's fees in the amount of $33,700 with interest thereon at the rate of 18 percent. Presenting 12 points of error, Advanced Messaging raises trial court error in failing to grant its motion for new trial and to set aside the default judgment for violating the scheduling order and Texas Rules of Civil Procedure, legal and factual insufficiency to support fraud, improperly estimated damages, satisfaction of the Craddock v. Sunshine Bus Lines test, legal and factual insufficiency to establish fraud as guarantors, legal and factual insufficiency to support 18 percent post-judgment interest, and contends the judgment is void against guarantors in bankruptcy. We reform the judgment, and as reformed, affirm.

By written contract dated September 30, 2002, Campus Design, Inc., as seller, sold its communications business operated under the name of Digicom PCS to Advanced Messaging for the purchase price of $250,000, plus additional sums to be paid by the buyer for the inventory, the ACB account,² and future activation payments. Among other things, by the contract, the buyer agreed to assume and perform all leases of retail sale locations in Arkansas, Missouri, New Mexico, Texas, and elsewhere, and agreed to indemnify the seller, its shareholders, officers, and directors from any losses or damages for the breach of any agreement or non-performance of any assumed obligations. By separate written guaranty agreements, Bunyan and Nichols³ each executed commercial guaranties by which they guaranteed payment of the promissory note executed by Advanced Messaging and all other obligations of the buyer to the seller pursuant to the contract of sale.

After Advanced Messaging defaulted in payment of rentals to various landlords and of the promissory note, Campus Design filed suit to recover on the promissory note and the contract of sale. Campus Design also sought to recover its damages against Bunyan and Nichols pursuant to the written guaranties. By its answer Advanced Messaging asserted fraud as an affirmative defense, but did not plead payment. Further, Bunyan and Nichols did not present any verified pleadings contending they were not liable in the capacity sued, did not execute the guaranties, asserted no consideration for the contract or guaranties, nor presented any other matter covered by Rule 93 of the Texas Rules of Civil Procedure.⁴ Campus Design filed a motion for partial summary judgment on the promissory note and a motion to sever the action on the promissory note from the remainder of the suit on July 22, 2003.⁵ After granting counsel's motion to withdraw as attorney for Advanced Messaging, on June 6, 2003, the trial court signed a judgment that Campus Design recover $276,877.22, plus attorney's fees and interest in the amount of $9,250, and severed that judgment into a separate cause number on August 25, 2003.⁶

On March 17, 2004, Campus Design filed its first amended original petition. A copy of the note, guaranty, and contract of sale were attached and incorporated into the amended petition which was served on Advanced Messaging by mail; however, no answer was filed to the amended pleading.⁷ No answer having been filed and per the scheduling order, at a non-jury hearing on March 29, 2004, after taking evidence and examining the pleadings and evidence, the court rendered judgment for Campus Design. Although counsel for Advanced Messaging filed a motion for new trial on April 16, 2004, a request for findings of fact and conclusions of law was not filed.

Standard of Review

No Findings or Conclusions

Rule 296 of the Texas Rules of Civil Procedure authorizes requests for findings of fact and conclusions of law in a nonjury case. Where, as here, neither party requested findings of fact and conclusions of law and a reporter's record has been provided, we presume the trial court found all fact questions in support of its judgment and must affirm the judgment on any legal theory supported by the pleadings and evidence. Point Lookout West, Inc. v. Whorton, 742 S.W.2d 277, 278 (Tex.1987). When a reporter's record has been provided the implied findings may be challenged for legal and factual insufficiency "the same as jury findings or a trial court's findings of fact." Roberson v. Robinson, 768 S.W.2d 280, 281 (Tex.1989). In that regard, when making a legal sufficiency determination, we consider only the evidence most favorable to the implied findings of fact and disregard all contradictory evidence. Burnett v. Motyka, 610 S.W.2d 735, 736 (Tex.1980). In considering whether the evidence is factually sufficient to support the implied findings, we consider and weigh all the evidence, including any evidence contrary to the trial court's judgment. Id.

Among other things, the judgment provides in part that the court:

finds that Defendants are in breach of their contractual agreements with Plaintiff and have defrauded Plaintiff. The court finds that Plaintiff has been damaged by such acts in the amount of $857,653.

However, the judgment does not allocate the broad form damages finding of $857,653 to breach of contract or fraud. Moreover, because no findings of fact and conclusions of law were requested and filed, the damages determination is similar to a finding of damages submitted by a broad form question to a jury.⁸

We commence our analysis with Advanced Messaging's fourth point of error and address the remaining points in a logical rather than sequential manner.

Fraud

By point four, Advanced Messaging contends there was no evidence or alternatively insufficient evidence to support the finding that it defrauded Campus Design, and by point of error ten, it contends the evidence is legally and factually insufficient to establish that Bunyan and Nichols defrauded Campus Design in their capacities as guarantors. We agree.

The mere breach of contract or failure to perform a contract is not evidence of fraud. Schindler v. Austwell Farmers Co-op., 841 S.W.2d 853, 854 (Tex. 1992). Citing other authorities, the Court held:

[f]ailure to perform, standing alone, is no evidence of the promissor's intent not to perform when the promise was made. However, that fact is a circumstance to be considered with other facts to establish intent.

The Court further held there was no evidence that Schindler had no intention of paying for the goods purchased. Id.

Campus Design's president testified as to numerous defaults by Advanced Messaging. He also testified he believed that the representations of Advanced Messaging were fraudulent. However, no testimony or documentary evidence was presented to support any implied finding that at the time any representations were made Advanced Messaging had any intent to deceive or of not performing at the time they were made. Accordingly, points of error four and ten are sustained.

Damages

By its multifarious points five, six, and seven and two subpoints, Advanced Messaging challenges the findings and argument. In summary, it contends:

5. Insufficient evidence to support finding of "defrauded" or "owes" Campus Design $657,653.

6. Insufficient evidence to support finding of "defrauded" or "owes" Campus Design $200,000 on residual payments.

7. The testimony in the record about fraud was not connected to the residual payments or the mall lease damages.

Having sustained Advanced Messaging's no evidence challenge to fraud findings, we next focus on the subpoints challenging obligations "owed" connected to the fraud subpoints. Disagreeing, we overrule points five, six, and seven for the following reasons.

Advanced Messaging's failure to challenge the trial court's findings of breach of contract is significant and controlling. Further, the points do not take into consideration the fact that the trial court did not allocate the broad form damages award to any specific category of damages, i.e., damages for breach of contract or for fraud.

Points of error five, six, and seven concern unspecified and implied awards of $657,653, $200,000, and "residual payments on the mall leases," but any such allocation is totally foreign to the judgment. Advanced Messaging does not cite any authority which would suggest it can challenge specific "subpoints" without findings of fact and conclusions of law. To the contrary, these points present a claim similar to the challenge to a broad form jury verdict of $500,000. See Thomas v. Oldham, 895 S.W.2d 352, 359 (Tex.1995). In Thomas, the city challenged the sufficiency of the evidence supporting certain elements of the verdict upon broad form submission. Holding that the margin notations on the charge could not constitute separate damage awards for purposes of evidentiary review, the insufficiency challenge was denied. In the context of these points, we have the damage award by the trial court as the trier of fact in a broad form. Advanced Messaging's challenges via the subpoints to segregate the damage award is outside the record. No findings of fact having been presented, following the reasoning in Thomas, we reject the no evidence and factually insufficient evidence challenge. Id. at 360.

By its eighth point of error, Advanced Messaging contends the damages awarded are inaccurate, speculative, and improperly estimated. We disagree....