Edwards v. Mid-Continent Office, No. 05-06-01421-CV.

• Court: Court of Appeals of Texas
• Writing for the Court: Lang-Miers
• Citation: 252 S.W.3d 833
• Docket Number: No. 05-06-01421-CV.
• Decision Date: 25 April 2008
• Parties: W.R. EDWARDS, Jr., Appellant v. MID-CONTINENT OFFICE DISTRIBUTORS, L.P. and Inwood Office Furniture, Inc., Appellees.

252 S.W.3d 833 W.R. EDWARDS, Jr., Appellant
v.
MID-CONTINENT OFFICE DISTRIBUTORS, L.P. and Inwood Office Furniture, Inc., Appellees. No. 05-06-01421-CV. Court of Appeals of Texas, Dallas. April 25, 2008.

[252 S.W.3d 834]

Kent Frank Brooks, Dallas, for Appellant.

Darrell G. Noga, Elizabeth Flora, Fee, Smith, Sharp, Vitullo, LLP, Robert H. Renneker, Dallas, for Appellees.

Before Justices LANG, LANG-MIERS, and MAZZANT.

OPINION

Opinion by Justice LANG-MIERS.

W.R. Edwards, Jr. appeals the trial court's judgment for appellees, Mid-Continent Office Distributors, L.P. and Inwood Office Furniture, Inc., following a bench trial on a claim for money had and received. For the reasons that follow, we affirm.

BACKGROUND

The trial testimony showed that Edwards was a member of an informal lending cartel. He met Matthews through a mutual cartel acquaintance and subsequently loaned him $10,000. Matthews repaid that loan on time. A few months later, Matthews approached Edwards seeking another loan. He told Edwards that his company, MAC Group, L.L.C. (collectively Matthews or MAC), a furniture broker, needed to borrow money in connection with three of its customer orders. He explained that three customers placed furniture orders with MAC, each gave MAC a fifty percent deposit, but his suppliers would not deliver the furniture until MAC paid them the full amount. Matthews proposed to sell the receivables for these customers to Edwards at a discounted value if Edwards would agree to pay off the suppliers so the furniture could be delivered. Together, Matthews and Edwards drafted a "Factoring Agreement" which reflected the terms of their agreement. It listed the three customers, with total payments owed to MAC of approximately $70,000.00; and seven suppliers to whom MAC owed a total of $62,052.93, including $28,272.22 to Mid-Continent, a furniture wholesaler, and $15,292.34 to Inwood, a furniture manufacturer.

At Matthews' request, Edwards called Pat Henin, an operations manager at Mid-Continent, to verify the amount MAC owed. The telephone conversation lasted five minutes or less, and there is conflicting testimony about what was said. However, Edwards testified that Henin confirmed the balance MAC owed and that he understood her to say Mid-Continent was holding orders for these MAC customers until it received full payment.¹ Based on this conversation, Edwards did not think he needed to call Inwood or the other suppliers to confirm that they were also holding orders for these MAC customers,²

252 S.W.3d 835

and he signed the Factoring Agreement, agreeing to purchase MAC's receivables. He obtained a cashier's check for $28,272.22 payable to Mid-Continent and authorized Matthews to pick up the cashier's check and hand deliver it to Mid-Continent. The cashier's check contains the notation "MAC 908."³ Edwards also wrote personal checks on his Schwab account to the remaining suppliers, including a check to Inwood for $15,292.22.⁴ All of those checks contained the notation, "MAC Group Payment," in the "For" line.

Matthews wrote letters to the three MAC customers advising them that their accounts had been sold to Edwards and to forward their payments to Edwards. When Edwards did not receive their payments, he called them to find out why they had not paid him. The customers told him they never received the furniture. Edwards then called Matthews. Matthews admitted he deceived Edwards and told him the payments Edwards made to the vendors were for past-due balances on orders for other customers, not the customers whose receivables Edwards purchased.

Edwards sued Mid-Continent and Inwood for damages.⁵ The parties waived a jury and tried the case to the court. Edwards contended that he paid the money to Mid-Continent and Inwood by mistake "based [on] a fraudulent representation of another party" and appellees owed him the money he had paid them. The trial court disagreed and entered a take-nothing judgment in favor of Mid-Continent and Inwood. It subsequently issued findings of fact and conclusions of law. In two issues on appeal, Edwards specifically challenges the legal and factual sufficiency of certain of the trial court's findings of fact. He contends that he proved the claim for money had and received against appellees and the trial court erred by granting a take-nothing judgment against him.

STANDARD OF REVIEW

Appellant complains about the findings of fact issued by the court to support its judgment denying his claim for money had and received. However, a review of the findings of fact in this case does not end our inquiry. Instead, we review those findings in the context of whether they support the judgment denying him relief. Those reviews involve overlapping standards of review.⁶

252 S.W.3d 836

The claim for money had and received seeks equitable relief. See Stonebridge Life Ins. Co. v. Pitts, 236 S.W.3d 201, 203 n. 1 (Tex.2007) (per curiam); Acoustical Screens in Color, Inc. v. T.C. Lordon Co., Inc., 524 S.W.2d 346, 350 (Tex. Civ.App.-Dallas 1975, writ ref'd n.r.e.). And a trial court exercises broad discretion in balancing the equities involved in a case seeking equitable relief. See In re Gamble, 71 S.W.3d 313, 317 (Tex.2002) (orig.proceeding); Craddock v. Sunshine Bus Lines, Inc., 134 Tex. 388, 393, 133 S.W.2d 124, 126 (1939). We will not disturb a trial court's ruling on a claim seeking equitable relief unless it is arbitrary, unreasonable, and unsupported by guiding rules and principles. See Cire v. Cummings, 134 S.W.3d 835, 838 (Tex.2004). When a trial court makes written findings of fact following a non-jury trial, these assist in our review of the trial court's exercise of its discretion by revealing the trial court's reasoning and analysis and help assure both the reviewing court and the litigants that the trial court's decision resulted from thoughtful deliberation. See Williams v. Chisolm, 111 S.W.3d 811, 815 (Tex.App.-Houston [1st Dist.] 2003, no pet.). If the evidence is sufficient to support the trial court's findings and conclusions, the trial court did not abuse its discretion. See Reese v. Duncan, 80 S.W.3d 650, 659 (Tex.App.-Dallas 2002, pet. denied); El Paso County Hosp. Dist. v. Gilbert, 64 S.W.3d 200, 203-04 (Tex. App.-El Paso 2001, pet. denied).

We review challenges to the sufficiency of the evidence to support findings of fact under the same standards for reviewing evidence to support a jury's verdict. Walker v. Cotter Prop., Inc., 181 S.W.3d 895, 899 (Tex.App.-Dallas 2006, no pet.). In evaluating the legal sufficiency of the evidence to support a finding, we must determine whether the evidence as a whole rises to a level that would enable reasonable and fair-minded people to differ in their conclusions. Columbia Med. Ctr. Subsidiary, L.P. v. Meier, 198 S.W.3d 408, 414 (Tex.App.-Dallas 2006, pet. denied) (citing City of Keller v. Wilson, 168 S.W.3d 802, 822 (Tex.2005)). Anything more than a scintilla of evidence is legally sufficient to support a challenged finding. Walker, 181 S.W.3d at 899. When we review a finding for factual sufficiency, we consider all of the evidence and will set aside a finding only if it is so contrary to the overwhelming weight of the evidence as to be clearly wrong and unjust. See Dow Chem. Co. v. Francis, 46 S.W.3d 237, 242 (Tex.2001) (per curiam); Cain v. Bain, 709 S.W.2d 175, 176 (Tex.1986) (per curiam). And we review a trial court's legal conclusions de novo. See Walker v. Anderson, 232 S.W.3d 899, 908 (Tex.App.-Dallas 2007, no pet.). We evaluate those conclusions independently to determine whether the trial court correctly drew the conclusion from the facts. Id. Unchallenged findings of fact are conclusive on appeal unless the contrary is established as a matter or law or there is no evidence to support the findings. Toles v. Toles, 45 S.W.3d 252, 265 n. 6 (Tex.App.-Dallas 2001, pet. denied) (citing McGalliard v. Kuhlmann, 722 S.W.2d 694, 696 (Tex.1986)).

Consequently, we first determine whether the evidence is sufficient to support the challenged findings and then determine whether the trial court's judgment—as a decision of a claim seeking equitable relief—is arbitrary, unreasonable, or unsupported by guiding rules and principles.

252 S.W.3d 837

CLAIM FOR MONEY HAD AND RECEIVED

Edwards contends that he established each element of his claim for money had and received. As we noted, a cause of action for money had and received is equitable in nature. Stonebridge Life Ins. Co., 236 S.W.3d at 203 n. 1; Acoustical Screens in Color, Inc., 524 S.W.2d at 350. The claim "belongs conceptually to the doctrine of unjust enrichment." Amoco Prod. Co. v. Smith, 946 S.W.2d 162, 164 (Tex.App.-El Paso 1997, no writ).⁷ The doctrine of unjust enrichment applies the principles of restitution to disputes that are not governed by a contract between the parties. Id. It characterizes the result of a failure to make restitution under circumstances that give rise to an implied or quasi-contractual obligation to return those benefits. Id.

The courts describe this claim in general principles. For example, courts have stated that a claim for money had and received seeks to restore money where equity and good conscience require restitution, see id.; it is not premised on wrongdoing, but seeks to determine to which party, in equity, justice, and law, the money belongs, Staats v. Miller, 150 Tex. 581, 584, 243 S.W.2d 686, 687 (1951); and it seeks to prevent unconscionable loss to the payor and unjust enrichment to the payee. Bryan v. Citizens Nat'l Bank in Abilene, 628 S.W.2d 761, 763 (Tex.1982). As these broad and general descriptions demonstrate, a cause of action for money had and received is "less restricted and fettered by technical rules and formalities than any other form of action. It aims at the abstract justice of the case, and looks solely to the inquiry, whether the defendant holds money, which ... belongs to the plaintiff." Staats, 150 Tex. at 584, 243 S.W.2d at...