And v. Flores
| Decision Date | 25 February 2011 |
| Docket Number | CIVIL ACTION NO. C-09-312 |
| Parties | VANDERBILT MORTGAGE AND FINANCE, INC., Plaintiff, v. CESAR FLORES, et al, Defendants. |
| Court | U.S. District Court — Southern District of Texas |
On November 10, 2010, trial of the above-styled action began. On November 18, 2010, the jury found in favor of Defendants/Counter-Plaintiffs Cesar Flores ("Flores") and Alvin King ("King") on each of their three claims against Plaintiff/Counter-Defendant Vanderbilt Mortgage and Finance, Inc. ("Vanderbilt"). The jury also found in favor of Intervenors Maria and Arturo Trevino on their claim under the fraudulent lien statute under Tex. Civ. Prac. & Rem. Code § 12.002.
Now pending before the Court is Defendants/Counter-Plaintiffs Cesar Flores and Alvin King's and Intervenors Maria and Arturo Trevino's Opposed Motion to Enter Judgment. (D.E. 249.) The Clayton parties responded with objections. (D.E. 252, D.E. 267.) The Court heard oral arguments on the motion on February 15, 2011.
The jury found in favor of Flores and King on each of their three claims against Vanderbilt.
First, the jury found that Vanderbilt violated the Texas Debt Collection Practices Act ("TDCA") and that Flores and King each bore 20% responsibility for causing their own injuries. (D.E. 245, Question #9, Question #10.) The jury awarded Festion #12.) Compensatory damages for the TDCA violation are reduced to $12,000 ealores and King each $15,000 in compensatory damages for the TDCA claim. (D.E. 245, Quch due to the jury's finding of 20% proportionate responsibility. (D.E. 245, Question #10.)
Second, the jury found Vanderbilt committed common law fraud and that Flores and King bore no personal responsibility for causing their own injuries. (D.E. 245, Question #10, Question #11.) The jury awarded Flores and King each $15,000 in compensatory damages for the fraud claim. (D.E. 245, Question #12.)
Third, the jury found that Vanderbilt violated the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 28 U.S.C. § 1962(c). (D.E. 245, Question #15.) The jury awarded Flores and King $15,000 each to compensate them for their actual damages arising from Vanderbilt's RICO violation. (D.E. 245, Question #17.)
The jury further found that Vanderbilt's conduct with respect to the state law fraud claim and the state law TDCA violation resulted from malice or fraud. (D.E. 245, Question #13.) Based on Vanderbilt's conduct constituting common law fraud and/or violation of the TDCA, the jury awarded Flores and King exemplary damages in the amount of $300,000 each. (D.E. 245, Question #14.)
The jury also found in favor of Maria and Arturo Trevino on their claim under the fraudulent lien statute under Tex. Civ. Prac. & Rem. Code § 12.002.
The jury found that each of the three Intervention-Defendants, Vanderbilt, CMH Homes ("CMH") and Clayton Homes, Inc. ("CHI"), violated the fraudulent lien statute by filing the Deed of Trust ("DOT") with respect to both Maria Trevino and Arturo Trevino. (D.E. 245,
Question #18.)
The jury found that each of the three Intervention-Defendants violated the fraudulent lien statute by filing the Builder's and Mechanic's Lien ("BML") with respect to both Maria and Arturo Trevino. (D.E. 245, Question #22.)
The jury found that Maria and Arturo Trevino suffered no actual damages and awarded no damages. (D.E. 245, Question #19, Question #23.)
Having considered the jury's findings as well as the parties' arguments and the relevant authorities, the Court renders judgment as follows.
As said, the jury awarded Flores and King $15,000 each in compensatory damages for each of their state law claims and also awarded them $15,000 each as compensatory damages for their RICO claims. The facts adduced at trial indicate that Flores and King suffered only one injury as a result of the Clayton parties' conduct: they made approximately $26,000 in payments on their home after their debt had been released. The jury did not find that Flores and King incurred additional mental anguish damages as a result of the Clayton parties' conduct in violation of the TDCA. (D.E. 245.)
Based on these circumstances, it is apparent that the jury's compensatory damages awards for Flores and King's TDCA and common law fraud claims, as well as their RICO claim, were based upon the same injury. Allowing Flores and King to recover this amount for each of their claims would amount to "double recovery, " which is prohibited under Texas law. See Waite Hill Servs. v. World Class Metal Works, 959 S.W.2d 182, 184 (Tex. 1998). Accordingly, Flores and King may each obtain only one award of compensatory damages from Vanderbilt.
In addition, under Texas law, Flores and King's exemplary damages are limited to $200,000, despite the jury's award of $300,000. See Tex. Civ. Prac. & Rem. Code § 41.008(c).
With respect to Flores and King's RICO claim, the Fifth Circuit has indicated that prevailing RICO plaintiffs may not obtain both state law exemplary damages and treble damages under RICO. See Smoky Greenhaw Cotton Co., Inc. v. Merrill Lynch, 785 F.2d 1274, 1281 (5th Cir. 1986) (citing Alcorn County v. U.S. Interstate Supplies, Inc., 731 F.2d 1160, 1169-71 (5th Cir. 1984) (); see also Heller Financial, Inc. v. Grammco Computer Sales, 71 F.3d 518, 530, n. 1 (5th Cir. 1996) (J. Reavley, concurring.) Accordingly, Flores and King may not recover both exemplary damages based on their state law claims and RICO treble damages.
However, Flores and King have a right to judgment on the theory of recovery entitling them to the greatest or most favorable relief. See Quest Medical, Inc. v. Apprill, 90 F.3d 1080, 1085 (5th Cir. 1996) (citing Boyce Iron Works, Inc. v. Southwestern Bell Tel. Co., 747 S.W.2d 785, 787 (Tex. 1988)). Accordingly, the Court will allow Flores and King to collect, upon entry of this judgment, damages on the theory of recovery entitling them to greatest relief: namely, recovery based on their state law fraud claims. However, Flores and King may, at a later date, choose to collect based on either their state law TDCA claims or their RICO claims, depending on the outcome of the Intervention-Defendants' appeal.
Flores and King's individual recoveries are laid out in detail below.
It is ORDERED, ADJUDGED, AND DECREED that Defendant/Counter-Plaintiff Flores shall recover the following amount against Plaintiff/Counter-Defendant Vanderbilt:
Flores shall recover from Vanderbilt $15,000 in compensatory damages based on his state law fraud claim and $200,000 in exemplary damages.1 This totals damages in the amount of $215,000. Flores shall recover prejudgment interest based on his non-exemplary damages in the amount of $1076.25.2
Should the jury's finding of fraud be overturned on appeal, Flores may, in the alternative, recover from Vanderbilt $12,000 in compensatory damages based on his state law TDCA claim, $200,000 in exemplary damages, and prejudgment interest based on his non-exemplary daqmages in the amount of $861.00.
Should Flores' total damages based on his state law claims be reduced on appeal to below $45,000, Flores may, in the alternative to state law damages, recover based on his RICO claim. Under RICO, a plaintiff may recover three times the damages he or she sustained as a result of a defendant's RICO violation, and the cost of suit, including a reasonable attorney's fees. 28 U.S.C. § 1962(c). Thus, Flores would recover $45,000 in treble damages under RICO from Vanderbilt.3
Postjudgment interest is payable on all of the above amounts at the rate of.29%, from the date this judgment is entered until the date the judgment is paid.
It is FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant/Counter-Plaintiff King shall recover the following amount against Plaintiff/Counter-Defendant Vanderbilt:
King shall recover from Vanderbilt $15,000 in compensatory damages based on his state law fraud claim and $200,000 in exemplary damages. This totals damages in the amount of $215,000. King shall recover prejudgment interest based on his non-exemplary damages in the amount of $1076.25.
Should the jury's finding of fraud be overturned on appeal, King may, in the alternative, recover from Vanderbilt $12,000 in compensatory damages based on his state law TDCA claim, $200,000 in exemplary damages, and prejudgment interest based on his non-exemplary damages in the amount of $861.00.
Should King's total damages based on his state law claims be reduced on appeal to below $45,000, King may, in the alternative to state law damages, recover based on his RICO claim. Under RICO, a plaintiff may recover three times the damages he or she sustained as a result of a defendant's RICO violation, and the cost of suit, including a reasonable attorney's fees. 28 U.S.C. § 1962(c). Thus, King would recover $45,000 in treble damages under RICO from Vanderbilt.4
Postjudgment interest is payable on all of the above amounts at the rate of.29%, from the date this judgment is entered until the date the judgment is paid.
Pursuant to Texas Civil Practice & Remedies Code 12.002(b), "[a] person who violates [§ 12.002(a)] is liable to each injured person for
(1) the greater of:
(A) $10,000; or
(B) the actual damages caused by the violation;
(2) court costs;
(3) reasonable attorney's fees; and
(4) exemplary damages in an amount determined by the court.
§ 12.002(b) (emphasis added).
The Intervention-Defendants contend the Trevinos may not recover statutory damages under Section 12.002(b) because the jury found the Trevinos suffered no actual damages. They contend the...
To continue reading
Request your trial