Blackstock v. Dudley

• Decision Date: 30 December 1999
• Citation: 12 S.W.3d 131
• Parties: (Tex.App.-Amarillo 1999) THOMAS E. BLACKSTOCK AND KAY BLACKSTOCK, APPELLANTS v. PHIL DUDLEY AND PAT DUDLEY, APPELLEES NO. 07-99-0117-CV
• Court: Texas Court of Appeals

Page 131

12 S.W.3d 131 (Tex.App.-Amarillo 1999)

THOMAS E. BLACKSTOCK AND KAY BLACKSTOCK, APPELLANTS v. PHIL DUDLEY AND PAT DUDLEY, APPELLEES

NO. 07-99-0117-CV

COURT OF APPEALS OF TEXAS AMARILLO.

DECEMBER 30, 1999.

[Copyrighted Material Omitted]

Before BOYD, C.J., and QUINN and REAVIS, JJ.

John T. Boyd, Chief Justice

This appeal arises from a house sale in which the sellers allegedly failed to disclose severe plumbing problems prior to the purchase. Appellees Phil and Pat Dudley (the Dudleys) filed the underlying suit against appellants Tom and Kay Blackstock (the Blackstocks), claiming various Deceptive Trade Practices Act (DTPA) violations in the sale process. Finding the Blackstocks had knowingly engaged in false, misleading, or deceptive acts or practices, the jury awarded the Dudleys $21,900 in actual damages and attorneys's fees in the amount of $15,000. In its judgment, the trial court increased the attorney fee award to $29,200, with stair-step increments in the event of appeal. We modify the trial court's judgment and, as modified, we affirm it.

In challenging the judgment, the Blackstocks contend 1) the Dudleys relied upon a home inspection which should relieve them of DTPA liability, 2) the Dudleys failed to prove all the necessary elements of their DTPA claims, 3) the trial court incorrectly calculated actual damages, 4) the trial court incorrectly calculated prejudgment interest, and 5) the trial court erred in increasing the jury's award of attorney's fees. In a cross-point, the Dudleys assert that the trial court erred by prohibiting evidence concerning both stigma value and loss on resale.

On August 25, 1986, the Dudleys purchased the Blackstock's home for $90,000. Before purchasing the home, the Dudleys inquired about the house's general condition and received a response from the Blackstocks that everything was fully operable. About two weeks after the Dudleys moved into the house, on September 9, 1986, they awoke to a flood of sewer water throughout the house. Apparently, the flood was caused by overflow from the plumbing in the two bathrooms, as well as from the back flushing of the water softener. When Mr. Dudley called Mr. Blackstock to inform him of the problems the Dudleys were experiencing, according to the Dudleys, Blackstock merely chuckled and stated, "that's your problem now."

In the course of the next 12 months, the Dudleys continued to experience numerous floods, each time requiring the assistance of plumbers and carpet cleaners to clean up the mess. When requested to share the plumbing costs with the Dudleys, the Blackstocks refused. As a result of the refusal and the continued floods, the Dudleys filed the suit underlying this appeal against the Blackstocks and Margaret Williams Realtors, Inc. (Margaret Williams), who handled the sale. During the course of trial, the Dudleys settled with Margaret Williams. Thus, the Blackstocks are the only appellants in this appeal.

CAUSATION

In connection with their first point of error, the Blackstocks assert that the Dudleys' reliance upon a professional home inspection serves "as a new and independent basis for the Home purchase that intervened and superseded the Appellant's [sic] alleged wrongful acts as a matter of law," thereby relieving them of any DTPA liability. In advancing this claim, they primarily rely upon Dubow v. Dragon, 746 S.W.2d 857 (Tex.App.-Dallas 1988, no writ). However, that case is distinguishable. In Dubow, the court held that the purchasers of a house had no basis for a DTPA action when prior to the purchase, the purchasers undertook a "careful inspection of the house." However, in that case, the purchaser's "careful inspection" led to the discovery of serious problems, as a result of which, the purchase price of the house was reduced. That being so, the court concluded, the buyers had actual knowledge of the defects and had not relied upon misrepresentations by the sellers in going ahead and closing the deal. Id. at 860. That is not true in this case. The Dudleys had no knowledge of the plumbing problem prior to the closing of the deal and, indeed, paid a higher price than originally quoted, because of a bidding war.

Additionally, although the Dudleys hired a professional home inspector, the plumbing defects were not, and because of their nature could not have been, discovered. The Blackstocks' first point is overruled.

INSUFFICIENCY OF THE EVIDENCE

The gist of the Blackstocks' second point is that there was insufficient evidence to prove that intentional misrepresentations were made, that any such representations were made knowingly, and that they acted in an unconscionable manner. While there was conflicting testimony as to what was actually said about the condition of the house, by its verdict, the jury resolved those particular conflicts in the Dudleys' favor. Thus, in that regard, the jury's findings must prevail unless they are so clearly against the great weight of the evidence as to be patently wrong and unjust. Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986).

In reviewing the Blackstocks' no-evidence challenge, we consider the evidence in a light most favorable to the Dudleys, indulging every reasonable inference in their favor. See Associated Indem. Corp. v. CAT Contracting, Inc., 964 S.W.2d 276, 285-86 (Tex. 1998). If more than a scintilla of evidence supports the finding, it must be upheld. See Burroughs Wellcome Co. v. Crye, 907 S.W.2d 497, 499 (Tex. 1995); Seideneck v. Cal Bayreuther Assocs., 451 S.W.2d 752, 755 (Tex. 1970). More than a scintilla of evidence exists where the evidence supporting the finding, as a whole, rises to a level that would enable reasonable and fair-minded people to differ in their conclusions. See Crye, 907 S.W.2d at 499; Transportation Ins. Co. v. Moriel, 879 S.W.2d 10, 25 (Tex. 1994). In reviewing a jury verdict to determine the factual sufficiency of the evidence, we consider and weigh all the evidence and set aside the judgment only if the evidence is so factually weak, or the verdict so contrary to the overwhelming weight of the evidence as to make the judgment clearly wrong and unjust. Cain, 709 S.W.2d at 176; Garza v. Alviar, 395 S.W.2d 821, 823 (Tex. 1965).

Application of those standards requires that we overrule this point. Although the Blackstocks maintained throughout the trial that they knew nothing of any plumbing problems associated with their house, there was strong circumstantial evidence of knowledge on their part. The house flooded only two weeks after the closing Subsequent to the first flood, there was evidence that the Dudleys discontinued use of two bathrooms, as well as the garbage disposal and the water softener and still experienced occasional floods for months thereafter. Although the Blackstocks testified that they had regularly used the bathrooms and the garbage disposal without experiencing such floods, under the evidence, the jury could have reasonably concluded that that was unlikely.

Further, there was evidence that when the carpet was lifted after the first flood, the baseboards were rotted and the padding contained several water rings. Although Kay Blackstock testified that some of the water rings were due to a water heater leak a few years prior to the sale of the house, her testimony about the leak was contradictory, at one point describing the leak as causing "just a little [wetness] right out in the hall" and at another point described it as "in the hall and right into the den area because that's a lot of water when the hot water heater breaks." Suffice it to say that the evidence was sufficient to allow the jury to resolve the questions in favor of the Dudleys.

CALCULATION OF ACTUAL DAMAGES

In their third point, the Blackstocks attack the calculation of actual damages. They make two arguments supporting this point asserting that 1) the Dudleys received a double recovery when they were awarded out-of-pocket damages and expenses, and 2) a set-off credit should have been applied to the damages recovered from the Margaret Williams settlement. Addressing the double recovery claim first, we agree that the trial court erred in awarding the Dudleys both measures of damages and hold they are only entitled to the greater of the two. We additionally agree that a set-off credit should have been applied to account for the Margaret Williams settlement.

In arriving at the total of the Dudleys' actual damage award, the trial court included the difference between the value of the home at the time of the sale and the price paid for it ($6,000), along with the Dudleys' out-of-pocket expenses that were reasonable and necessary ($5,900). It is in this regard that the Blackstocks contend the Dudleys received a double recovery.

It is axiomatic that Texas law does not permit a double recovery. Parkway Co. v. Woodruff, 901 S.W.2d 434, 441 (Tex. 1995); Southern County Mut. Ins. Co. v. First Bank & Trust, 750 S.W.2d 170, 173-74 (Tex. 1988). Successful DTPA plaintiffs who are entitled to actual damages for misrepresentation may elect to receive either out-of-pocket damages or benefit of the bargain damages. Bankston Nissan, Inc. v. Walters, 754 S.W.2d 127, 128 (Tex. 1988). Because the two are essentially different measures of the same thing, to receive both would amount to a double recovery. The Texas Supreme Court has defined out-of-pocket damages as being "the difference between the value of that which was parted with and the value of that which was received," and benefit of the bargain damages as being "the difference between the value as represented and the value actually received." Id. at 128.

The Dudleys argue that the $5,900 they received for out-of-pocket expenses is not the same type of out-of-pocket award defined in Bankston, but rather is a representation of their expenses to repair the plumbing problems. However, even assuming arguendo that the out-of-pocket award is a misnomer, to allow it would still be a double recovery.

In Ludt...