Cain v. Pruett

• Decision Date: 23 December 1996
• Docket Number: No. 05-95-01439-CV,05-95-01439-CV
• Citation: 938 S.W.2d 152
• Parties: John Richard CAIN, Appellant, v. Jamie PRUETT and Bonnie West, Appellees.
• Court: Texas Court of Appeals

Page 152

938 S.W.2d 152

John Richard CAIN, Appellant, v. Jamie PRUETT and Bonnie West, Appellees.

No. 05-95-01439-CV.

Court of Appeals of Texas Dallas.

Dec. 23, 1996.

David W. Whitehurst, Robert Keith Drummond, Dennis L. Roossien, Jr., Strasburger & Price, L.L.P., Dallas, for Appellant.

Johnny R. Brown, Attorney at Law, Gary D. Corley, Jim Clements, Stagner & Corley, Sherman, for Appellees.

Before MORRIS, JAMES, and WOLFE, JJ.

OPINION

WOLFE, Justice.

Jamie Pruett and Bonnie West sued John Richard Cain, the owner of a McDonald's restaurant, claiming that they were injured when they consumed soft drinks containing shattered glass fragments. A jury found in favor of Pruett and West and awarded them a total of $1,525 in actual damages and $29,250 in attorney's fees. The trial court eventually entered an amended judgment that trebled the damages and added $50,000 in appellate attorney's fees. In seventeen points of error, Cain contends generally that the trial court erred in (1) refusing to find that his settlement offer precluded any award of attorney's fees under the Texas Deceptive Trade Practices Act (DTPA); (2) denying his motion for new trial and awarding attorney's fees to Pruett and West in the face of insufficient evidence to support such an award; (3) awarding Pruett and West appellate attorney's fees when the jury awarded none; (4) awarding Pruett and West more than actual damages; (5) awarding prejudgment interest on attorney's fees and treble damages; and (6) overruling his Edmonson challenge. We reform the judgment in part. As reformed, we affirm the judgment of the trial court.

On October 30, 1991, Pruett and West were eating lunch at a McDonald's franchise owned and operated by Cain in Denison, Texas. Both women testified that while consuming soft drinks they bit down on glass fragments. They spit out the fragments and immediately complained to a restaurant employee who, in turn, notified the restaurant shift manager, Tasha Moore.

Moore went to the women's table where she saw two napkins containing glass fragments which the women said they found in their drinks. Moore kept a fragment of the glass which was produced at trial. Moore informed the women that earlier that morning the maintenance man was changing a fluorescent light bulb in the rear area of the restaurant near the ice bin. A box containing a bulb tipped over, and the bulb broke. However, Moore claimed that this accident could not have accounted for the glass in the drinks because she immediately cleaned and double-checked the rear area for glass fragments. Moore refunded the women's money. She called Maurine Cain, Cain's wife, who suggested that Pruett and West go to a nearby medical center. Ms. Cain met them at the medical center and asked about their condition, and there was conflicting testimony as to whether Ms. Cain offered to pay any medical bills.

Subsequently, Pruett and West incurred dental bills and bills for medical tests which they claimed were necessitated by the incident at Cain's restaurant. The doctors' examinations on the day of the incident and afterwards indicated some dental problems and throat irritation, but no glass other than the piece saved by the restaurant manager was produced at trial, and there was no evidence that either woman sustained any internal injury.

On October 21, 1993, Pruett and West filed separate lawsuits against Cain. By letters dated November 11, 1993, and February 4, 1994, Cain offered to settle Pruett's and West's claims for a total of approximately $7,000. These settlement offers did not include offers to pay reasonable attorney's fees. Pruett and West continued to pursue their claims against Cain, and on December 7, 1994, each filed a first amended original petition stating for the first time claims under the DTPA. Cain's settlement offers remained in effect, but they were not amended to include an offer to pay reasonable attorney's fees.

At trial, Cain's counsel raised an Edmonson challenge when Pruett's counsel struck the sole African-American venireperson. At a hearing on the matter, Pruett's counsel explained that the potential juror appeared too conservative and hesitated in giving his opinion on pain and suffering or mental anguish damages. The Edmonson challenge was overruled.

Along with the evidence regarding Pruett's and West's injuries, counsel for the two women put on evidence of their reasonable attorney's fees. This evidence consisted of testimony by Gary Corley, counsel for Pruett, that his rates were reasonable and that his fees up to the first day of trial totaled $11,937.50. He also stated that he had a contingency fee arrangement with Pruett under which he would receive forty percent of Pruett's recovery. Corley further testified that $7,500 would be a reasonable fee for an appeal to the court of appeals, $2,500 would be a reasonable fee for filing an application for writ of error in the Texas Supreme Court, and $5,000 would be a reasonable fee to argue the case before the Texas Supreme Court if the writ were granted. Johnny Brown, counsel for West, elicited testimony from Corley showing that Brown had performed essentially the same services for his own client.

The jury found that the negligence of an employee of Cain proximately caused injuries to Pruett and West and that the failure of one of Cain's employees to comply with a warranty was a producing cause of Pruett's and West's damages. The jury awarded $1,002.50 to Pruett and $522.50 to West for loss of earnings and medical care. In addition, the jury awarded attorney's fees of $15,000 to Pruett and $14,250 to West. The jury made no award of appellate attorney's fees.

After the verdict, counsel for Pruett and West submitted a proposed judgment to the trial court without first showing a copy of that document to counsel for Cain. The court signed the judgment as presented. The judgment awarded Pruett "actual damages" of $20,867.27 and West "actual damages" of $19,202.85. The judgment did not award any appellate attorney's fees. This judgment did not satisfy any of the litigants. Cain moved for a new trial. Alternatively, he moved for entry of a modified judgment limited to the actual damages as found by the jury. Pruett and West also moved to modify the original judgment by trebling the first $1,000 of actual damages and moved for judgment notwithstanding the verdict on the issue of appellate attorney's fees.

Counsel for Pruett and West unilaterally submitted a proposed amended judgment that the court signed as submitted. This amended judgment awarded compensation for medical expenses, loss of earnings, attorney's fees, and prejudgment interest in the total amount of $24,757.86 to Pruett and $22,053.62 to West. The amended judgment also awarded Pruett and West $25,000 each for appellate attorney's fees. Cain brings this appeal from the amended judgment. At oral argument, Corley, counsel for Pruett, stated that a typographical error committed by someone at his office led to the inclusion of the $50,000 award for appellate attorney's fees.

Pruett's and West's claims for attorney's fees and treble damages are predicated upon a finding that Cain violated the DTPA. TEX.BUS. & COM.CODE ANN. §§ 17.01-.826 (Vernon 1987 & Supp.1997). On appeal, Cain argues that his settlement offer precludes an award of attorney's fees, treble damages, and some prejudgment interest. In the alternative, Cain argues that the evidence is insufficient to support the jury's finding regarding attorney's fees.

The DTPA makes unlawful "[f]alse, misleading, or deceptive acts or practices in the conduct of any trade or business." TEX.BUS. & COM.CODE ANN. § 17.46(a) (Vernon 1987). A consumer may maintain an action under the DTPA where breach of an express or implied warranty constitutes a producing cause of economic damages or damages for mental anguish. Id. § 17.50(a)(2). In this case, the jury found that a breach of warranty was a producing cause of both Pruett's and West's damages. Thus, the DTPA applies to this case.

Under the DTPA, a settlement offer must be in writing and must include an agreement to reimburse the consumer for reasonable attorney's fees. Id. § 17.505(c); Cail v. Service Motors, Inc., 660 S.W.2d 814, 815 (Tex.1983) (interpreting the same provision formerly codified at § 17.50A(b)). If the amount tendered in the settlement offer is the same or substantially the same as the actual damages found by the trier of fact, the consumer may not recover an amount in excess of the amount tendered in the settlement offer or the amount of actual damages found by the trier of fact, whichever is less. Id. § 17.505(d). Thus, a proper settlement offer precludes an award of damages and attorney's fees in excess of the offer.

The settlement offers in this case did not conform to the requirements of section 17.505(c) because the offers did not include an agreement to reimburse Pruett and West for their reasonable attorney's fees. As a result, these offers do not limit the recovery of damages or attorney's fees. Cain's points of error five, nine, twelve, and sixteen are overruled.

Nevertheless, Cain's settlement offers impact the calculation of prejudgment interest. Generally, judgments in personal injury cases must include prejudgment interest. TEX.REV.CIV.STAT.ANN. art. 5069-1.05, § 6(a) (Vernon Supp.1997). Prejudgment interest accrues on the amount of the judgment beginning on the 180th day after the defendant receives written notice of a claim or on the day the suit is filed, whichever occurs first, and ending on the day preceding the date judgment is rendered. Id. If judgment for a claimant is less than a settlement offer by the defendant, however, prejudgment interest does not accrue on the amount of the judgment for the period during which the offer may be accepted. Id. § 6(b).

In the instant case, Cain first received written notice of Pruett's and West's claims by letter dated January 24, 1992. Cain made no settlement...