Dillard Dept. Stores, Inc. v. Owens

• Decision Date: 21 August 1997
• Docket Number: No. 13-96-074-CV,13-96-074-CV
• Citation: 951 S.W.2d 915
• Parties: DILLARD DEPARTMENT STORES, INC., Appellant, v. Richard L. OWENS, Appellee.
• Court: Texas Court of Appeals

Page 915

951 S.W.2d 915

DILLARD DEPARTMENT STORES, INC., Appellant, v. Richard L. OWENS, Appellee.

No. 13-96-074-CV.

Court of Appeals of Texas,

Corpus Christi.

Aug. 21, 1997.

Rehearing Overruled Sept. 18, 1997 .

Bruce L. Collins, III, Ellis & Prehn, William A. Abernethy, Carlos A. Mattioli, Meredith, Donnell & Abernethy, Corpus Christi, for Appellant.

L. Scott Smith, Law Office L. Scott Smith, Corpus Christi, for Appellee.

Before SEERDEN, C.J., and YANEZ and CHAVEZ, JJ.

OPINION

SEERDEN, Chief Justice.

Dillard Department Stores appeals from a judgment denying its claim against Richard Owens for payment of a charge card debt and awarding Owens attorney's fees. Dillard raises ten points of error complaining of the award of attorney's fees and, alternately, of the admission of improper evidence at trial. We affirm in part, and reverse and suggest remittitur in part.

Owens opened an account with Dillard in 1970 and received a charge card in his own name. Owens then married Davis on November 1, 1990. However, shortly thereafter, the couple separated, Davis moved to Kansas, and Owens filed for divorce in Nueces County, Texas, at the beginning of December 1990. While in Wichita, Kansas, Davis obtained from Dillard a temporary charge card on Owens' account on December 22, 1990. Between December 23, 1990, and December 28, 1990, Davis purchased some $5,000 worth of goods from Dillard on the charge card.

When Owens received the bill for Davis' purchases in January 1991, he protested by sending a letter of dispute to Dillard complaining that the charges were unauthorized. Dillard acknowledged the dispute and requested that Owens come into its Corpus Christi store, examine the receipts and sign an affidavit declaring that the purchases were fraudulently made. Owens did so. Dillard then contacted Davis, who informed Dillard of the marriage and said that the purchases had been authorized. Dillard then sent a letter to Owens on April 1, 1991, denying his assertions of fraud.

Dillard sued Owens and Davis to recover payment for Davis' purchases under theories of breach of contract, quantum meruit, implied contract, unjust enrichment, and community debt. Owens generally denied Dillard's petition and counterclaimed for a declaratory judgment that no contract exists with Dillard whereby he authorized Davis to charge purchases to his account, and that he is not liable for such charges. Owens alleged that he made a good faith attempt to resolve his disagreement with Dillard under the Federal Truth-in-Lending Act, 15 U.S.C. § 1666i. Finally, Owens requested attorney's fees from Dillard.

The case was tried to a jury on the uncontroverted facts set forth above. The jury rejected Dillard's theory that Owens authorized Davis to make purchases on his Dillard's charge card, or that Davis' purchases were for necessaries. The jury found that Owens made a good faith attempt to obtain satisfactory resolution of the disputed charges with Dillard, that Dillard did not send a written explanation or clarification to Owens after having conducted an investigation setting forth the reasons Dillard believes the account was correctly shown in the statement, and that Dillard should have deleted all of the disputed charges from Owens' account. The jury further found that reasonable and necessary attorney's fees for Owens' attorney were $10,000 for trial, $7,500 for appeal to the Court of Appeals, $3,500 for application for writ of error to the Texas Supreme Court, and $3,500 if the writ of error is granted.

The trial court rendered judgment that Dillard take nothing from Owens, and that Owens recover attorney's fees from Dillard in the amounts found by the jury. However, the trial court's judgment did not grant any declaratory relief in favor of Owens.

Dillard generally has not challenged the take-nothing judgment on its claims against Owens. However, by nine points of error, Dillard complains of the trial court's award of attorney's fees to Owens.

By its first and second points of error, Dillard complains that, because declaratory relief was inappropriate and ultimately not awarded to Owens, the trial court erred in granting attorney's fees under the authority of the Uniform Declaratory Judgments Act. Owens concedes that the trial court granted no additional declaratory relief to him and that he has no claim for attorney's fees under the Uniform Declaratory Judgments Act. TEX. CIV. PRAC. & REM.CODE ANN. § 37.009 (Vernon 1997); see HECI Exploration Co. v. Clajon Gas Co., 843 S.W.2d 622, 638 (Tex.App.--Austin 1992, writ denied) (party may not recover attorney's fees under the Uniform Declaratory Judgments Act if its counterclaim is no more than a mere denial of the plaintiff's cause of action). However, Owens claims that he is entitled to attorney's fees under the Federal Truth-in-Lending Act ("TILA"). 15 U.S.C. § 1601 et seq.

By its third through seventh points of error, Dillard complains that TILA likewise does not support an award of attorney's fees to Owens, because he asserted no affirmative claim for relief under the Act, nor was he awarded damages for a violation thereof.

The Truth-in-Lending Act generally regulates specified aspects of consumer credit and billing practices. Its overall purpose is "to protect the consumer against inaccurate and unfair credit billing and credit card practices." 15 U.S.C. § 1601(a); see Fairley v. Turan-Foley Imports, Inc., 65 F.3d 475, 477 (5th Cir.1995). Accordingly, TILA is enforced strictly against creditors and construed liberally in favor of the consumer. Fairley, 65 F.3d at 482; Thomas v. Myers-Dickson Furniture Co., 479 F.2d 740, 748 (5th Cir.1973).

The provision of TILA dealing with civil liability states generally that "any creditor who fails to comply with any requirement imposed under [specified parts of the Act] with respect to any person is liable to such person in an amount equal to the sum of--(1) any actual damage sustained by such person as a result of the failure; (2) [statutory penalties]; (3) in the case of any successful action to enforce the foregoing liability or in any action in which a person is determined to have a right of rescission under section 1635 of this title, the costs of the action, together with a reasonable attorney's fee as determined by the court;...." 15 U.S.C. § 1640(a).

In the present case, if Dillard, as creditor, failed to comply with a provision of TILA in its attempt to collect the asserted credit card debt against Owens, and if Owens was successful in an action to enforce liability against Dillard for such noncompliance, then Owens also has a right to reasonable attorney's fees. Our first question is whether Dillard breached any duty to Owens under TILA for which Owens could hold it liable.

The responsibilities of creditor and debtor under the TILA with regard to billing disputes are generally set forth in section 1666, which requires the debtor to initiate written notice of any billing error. The creditor must then acknowledge the disputed charge and either correct it or "send a written explanation or clarification to the obligor, after having conducted an investigation, setting forth to the extent applicable the reasons why the creditor believes the account of the obligor was correctly shown in the statement and, upon request of the obligor, provide copies of documentary evidence of the obligor's indebtedness. ...." 15 U.S.C. 1666(a)(B)(ii). The creditor's failure to comply with these requirements causes him to forfeit the right to collect the disputed amounts up to $50.00. 15 U.S.C. 1666(e). Section 1666i generally preserves the claims and defenses of the debtor against the creditor arising out of a credit card transaction, if the debtor has, among other things, "made a good faith attempt to obtain satisfactory resolution of a disagreement or problem relative to the transaction from the person honoring the credit card." 15 U.S.C. 1666i(a).

The jury findings in the present case show that, while Owens complied with section 1666i by making a good faith attempt to obtain a satisfactory resolution of the billing error, Dillard did not comply with the requirement of section 1666(a)(B)(ii) concerning a written explanation or clarification setting forth the reasons the account was correctly shown.

By its sixth point or error, Dillard challenges the legal and factual sufficiency of the evidence to support the jury's finding that it violated this requirement. In considering a "no evidence," "insufficient evidence" or "against the great weight and preponderance of the evidence" point of error, we follow the well-established test set forth in Pool v. Ford Motor Co., 715 S.W.2d 629, 635 (Tex.1986). See also Calvert, No Evidence and Insufficient Evidence Points of Error, 38 TEX. L.REV. 361 (1960).

It is undisputed that Dillard sent its April 1, 1991, letter to Owens asserting his liability for the debt in the following terms:

We are in receipt of a fraud affidavit in [sic] which you completed. However, after research and investigation, we find that you and Dianna McKay Owens were legally married at the time the purchases in question were made. For this reason, we are unable to process your request as fraud. We feel this should be handled as a civil matter.

We conclude that the letter itself demonstrates Dillard's failure to comply with the requirements of TILA concerning a satisfactory explanation for why it continued to hold Owens liable for Davis' purchases. Although Dillard did mention Owens' marriage to Davis as an impediment to "processing" his fraud claim, this ambiguous and conclusory statement offers no justification as to the basis on which Dillard asserted that Owens remained liable for such purchases. Dillard's theory at trial, that the purchases were for "necessaries" which one spouse is obliged to provide to the other, was never mentioned in the letter or investigated beyond merely a cursory review of the items purchased. Accordingly,...