American Pawn and Jewelry, Inc. v. Kayal

• Citation: 923 S.W.2d 670
• Decision Date: 05 March 1996
• Docket Number: No. 13-93-638-CV,13-93-638-CV
• Parties: AMERICAN PAWN AND JEWELRY, INC., Appellant, v. Veronica KAYAL and Fahad Kayal, Appellees.
• Court: Court of Appeals of Texas

Page 670

923 S.W.2d 670

AMERICAN PAWN AND JEWELRY, INC., Appellant, v. Veronica KAYAL and Fahad Kayal, Appellees.

No. 13-93-638-CV.

Court of Appeals of Texas Corpus Christi.

March 5, 1996.

Rehearing Overruled June 6, 1996.

Larry Warner, Brownsville, Ronald C. Smith, Jackson, MI, for appellant.

Timoteo Gomez, Brownsville, for appellees.

Before SEERDEN, C.J., and FEDERICO G. HINOJOSA, Jr. and CHAVEZ, JJ.

OPINION

SEERDEN, Chief Justice.

This is a breach of contract and conversion of personalty case. Following a nonjury trial, the court rendered judgment against appellant and awarded attorneys' fees and damages to appellees. By four points of error, appellant challenges: (1) the trial court's jurisdiction, (2) the sufficiency of the evidence to support the court's award of actual damages, (3) the court's excessive award of attorneys' fees, and (4) the court's improper admission of evidence. We reverse and dismiss.

In July 1990, appellees, Veronica and Fahad Kayal, visited appellant, American Pawn & Jewelry, Inc. (American Pawn), for the purpose of securing a loan. The Kayals pawned three pieces of jewelry to secure a loan in the amount of $360.00. According to the terms of the loan agreement--the pawn ticket--upon full and final payment of the principal plus interest, the Kayals were entitled to the return of their jewelry.

Subsequent to the original loan transaction, the Kayals renewed and extended the loan agreement on three separate occasions. In July 1991, the Kayals made their final loan payment, paying American Pawn a total of $1011.60, which included the principal and accrued interest due on the loan. Having made their final payment, the Kayals asked American Pawn to return their jewelry. American Pawn, however, was unable to locate the jewelry, but assured the Kayals that, as soon as the jewelry was located, it would be returned to them. A few days later, American Pawn notified the Kayals that the jewelry was lost. Consistent with preprinted language on the Kayals' pawn ticket, American Pawn told the Kayals that it would replace their jewelry with "like kind" jewelry. The Kayals' pawn ticket reads, in pertinent part:

In the event the items you pawned are lost or damaged while in the possession of the pawnbroker it shall be the responsibility of the pawnbroker to replace the lost or damaged goods with the like kind(s) of merchandise. All such replacements are subject to the approval or rejection of the Consumer Credit Commissioner of Texas.

The Kayals telephoned the Consumer Credit Commissioner's office to file a verbal complaint against American Pawn. The Commissioner's office informed the Kayals that American Pawn would be responsible (i) for replacing their jewelry with "like kind" jewelry and (ii) for refunding their total loan payment in the amount of $1011.60. The Commissioner's office contacted American Pawn and instructed American Pawn to provide the Kayals with "like kind" replacement jewelry and to refund the loan amount.

By August 1991, American Pawn was able to obtain what it deemed to be "like kind" replacement jewelry for the Kayals and informed the Kayals as such. The Kayals went to American Pawn to pick up their replacement jewelry and left with the jewelry in their possession. Sometime later, although it is unclear how many days elapsed, the Kayals returned the replacement jewelry, rejecting it and claiming that it was "cheap." The Kayals based their claim on a verbal appraisal by a shopping mall appraiser, who had examined the replacement jewelry. At some point in time, although the record is unclear as to when, American Pawn tendered the $1011.60 refund to the Kayals, but the Kayals rejected it.

The Kayals retained an attorney, who sent two letters to American Pawn, demanding compensation (i) for the fair market value of the lost jewelry, (ii) for the loss of use of the jewelry, and (iii) for attorneys' fees. Both the Kayals and American Pawn agree the fair market value of the lost jewelry was $6000.00.

American Pawn responded to the two demand letters by offering another set of "like kind" replacement jewelry. Without looking at the proffered replacement jewelry, the Kayals rejected this offer, stating they did not consider the offer to be a good faith effort to settle their claim. The Kayals then filed suit against American Pawn in a county court at law in Cameron County, Texas.

American Pawn answered the suit and filed a motion to dismiss the suit for lack of jurisdiction. In its motion, American Pawn asserted that the Consumer Credit Commissioner has primary jurisdiction to resolve this dispute. The trial court denied American Pawn's motion. The suit was then tried before the court where the court found in favor of the Kayals and awarded them $9003.00 in actual damages, including travel and incidental expenses, and $11,000 in attorneys' fees. American Pawn now appeals the trial court's judgment.

By its fourth point of error, American Pawn contends the Consumer Credit Commissioner has primary jurisdiction to resolve this dispute; thus, the trial court erred when it denied American Pawn's motion to dismiss. To support its contention, American Pawn relies on (i) the Texas Pawnshop Act, TEX.REV.CIV.STAT.ANN. art. 5069-51.01-51.17B (Vernon 1987 & Supp.1995); (ii) portions of the Consumer Credit statutes, TEX.REV.CIV.STAT.ANN. art. 5069-2.02A-2.04 (Vernon 1987 & Supp.1995); and (iii) case law.

Before addressing the merits of point four, we note the Kayals allege that American Pawn waived this point. The Kayals allege that American Pawn's motion to dismiss is, in essence, a plea in abatement and therefore should have been verified, but was not. We disagree and conclude that American Pawn's motion to dismiss is a plea to the jurisdiction.

A plea to the jurisdiction is a dilatory plea, which is employed to challenge the trial court's subject matter jurisdiction over a cause of action. State v. Benavides, 772 S.W.2d 271, 273 (Tex.App.--Corpus Christi 1989, writ denied). A plea to the jurisdiction seeks dismissal of a cause of action when a jurisdictional defect cannot be cured. Speer v. Stover, 685 S.W.2d 22, 23 (Tex.1985). Whereas, a plea in abatement seeks suspension or abatement of the proceedings until the jurisdictional defect, or whatever defect, can be cured. Id. For reasons discussed at length below, we conclude that American Pawn's motion to dismiss is a plea to the jurisdiction. Further, American Pawn's motion is of the type that does not need to be verified. See TEX.R.CIV.P. 93.

In reviewing the merits of American Pawn's motion to dismiss, we keep in mind that whether a trial court has subject matter jurisdiction is a question of law. North Alamo Water Supply v. Texas Dep't of Health, 839 S.W.2d 455, 457 (Tex.App.--Austin 1992, writ denied); Qwest Microwave, Inc. v. Bedard, 756 S.W.2d 426, 440 (Tex.App.--Dallas 1988, orig. proceeding). If a court lacks subject matter jurisdiction, it has no discretion but to dismiss the case. Qwest Microwave, Inc., 756 S.W.2d at 440.

As we previously noted, American Pawn bases its motion to dismiss on authority of the Pawnshop Act, the Consumer Credit statutes, and case law. As per the language in the Consumer Credit statutes, the Consumer Credit Commissioner is responsible for enforcing all provisions of the Texas Pawnshop Act. TEX.REV.CIV.STAT.ANN. art. 5069-2.02A(1) (Vernon Supp.1995). Further, the Commissioner is responsible for investigating all complaints concerning the Texas Pawnshop Act. Id. art. 5069-2.03. As per the language in the Pawnshop Act, a pawnbroker shall not:

Fail to return pledged goods to a pledgor upon payment of the full amount due the pawnbroker on the pawn transaction. In the event such pledged goods are lost or damaged while in the possession of the pawnbroker it shall be the responsibility of the pawnbroker to replace the lost or damaged goods with like kind(s) of merchandise. All such replacements are subject to the approval or rejection of the [Consumer Credit] Commissioner. For the purposes of this subdivision, "lost" includes destroyed or having disappeared because of any cause, whether known or unknown, that results in the pledged goods being unavailable for return to the pledgor.

TEX.REV.CIV.STAT.ANN. art. 5069-51.16(a)(5) (Vernon Supp.1995) (our emphasis added). When an aggrieved party files a complaint with the Commissioner concerning the replacement of "lost" pledged goods, the Commissioner may conduct an investigation and hold a hearing. Id. art. 5069-2.03. Further, the Commissioner may impose upon any involved party, the fees, expenses, and costs incurred at or in connection with the hearing. Id. art. 5069-2.03(6). If an aggrieved party is dissatisfied with the Commissioner's decision on the matter, the party may then file suit against the Commissioner, but the suit must be filed in a district court in Travis County, Texas. Id. art. 5069-2.04(1) (Vernon 1987).

American Pawn asserts the language in these statutes...