Fillion v. Troy, 01-81-0713-CV

• Decision Date: 10 February 1983
• Docket Number: No. 01-81-0713-CV,01-81-0713-CV
• Citation: 656 S.W.2d 912
• Parties: Henry T. FILLION, Appellant, v. Diane Thomson TROY, Appellee. Houston (1st Dist.)
• Court: Texas Court of Appeals

Page 912

656 S.W.2d 912

Henry T. FILLION, Appellant, v. Diane Thomson TROY, Appellee.

No. 01-81-0713-CV.

Court of Appeals of Texas,

Houston (1st Dist.).

Feb. 10, 1983.

Rehearing Denied June 23, 1983.

Sidney Farr, Houston, for appellant.

Thomas Conner, Houston, for appellee.

Before WARREN, BASS and BULLOCK, JJ.

WARREN, Justice.

This is an appeal from a judgment rescinding a mutual release and three deeds and awarding appellee $90,000 punitive damages.

In October, 1966, appellee's father was killed. This resulted in prolonged litigation, and as of March, 1972, appellee had received no distribution of her father's estate which he had devised her. She then hired appellant, who had been licensed to practice law for about a year and a half, to expedite the distribution of the property in the estate. Although there is evidence of an initial fee agreement under which appellee agreed to pay appellant $40 an hour for his services, the only contract admitted into evidence provided that appellant would receive $50 per hour. At that time, the will had been admitted to probate, all estate work and tax returns had been completed, and the only impediment to distribution was a lack of clearance from the Internal Revenue Service. On May 28, 1972, the probate court partitioned the estate between appellee and her mother.

From the date appellee signed the fee agreement until May, 1973, appellant engaged in an unbelievable course of conduct. He obtained from appellee deeds to three tracts of real estate, valued at $95,950, 17 oil paintings and cash. For the realty, appellant allowed appellee a credit of $18,000 on her legal fees, he delivered her a promissory note for $25,000, and assumed a $5,000 note. For the oil paintings, he gave appellee a $3,500 credit on her legal fees. He later returned 14 of these paintings in return for her giving him a $9,750 credit on the $25,000 note. Although it could be argued that appellant performed some services of value to appellee, it is difficult to glean from the record what they were. At the time of the employment agreement, appellee was 22 years old and appellant was 42. Appellee fell in love with appellant and their relations became intimate.

Appellee sued appellant, asking for recission of the deeds and release, for damages, punitive damages and other equitable relief. She alleged a violation of the attorney-client relationship, fraud, undue influence, violation of fiduciary relationship and the violation of various attorney disciplinary rules.

Among other things, the jury found:

(1) that the fees charged by appellant were unreasonable;

(2) that appellant did not make reasonable use of the confidence placed in him by Diane Troy, when he obtained the three deeds and the mutual release;

(3) that the transactions involving the deeds and release were not fair and equitable to appellee;

(4) that there was not good faith by appellant to fully inform appellee of the nature and effect of the transaction;

(5) that the fair market value of the properties, on the date of their conveyance were as follows:

(a) Texaco property--$69,450

(b) 30 acres $22,500

(c) Humble lot--$4,000

(6) that appellant represented to appellee that the execution of the release was for their mutual benefit, that this was false, that appellee acted in reliance on such representation, and that appellant knew the representations was false;

(7) that appellee was entitled to $90,000 exemplary damages, and

(8) that appellant obtained the property and release as a result of undue influence.

On the verdict, the court granted recission of the deeds and release and awarded appellee $90,000 exemplary damages.

In 15 points of error, appellant claims that certain issues were improperly submitted to the jury, that exemplary damages were improperly awarded, that the answer to certain issues were not supported by the evidence, and that the court erred in admitting the testimony of a real estate appraiser. We affirm the judgment of the trial court.

Appellant's first and second points of error complain that the court erred in submitting special issues 2, 3, and 4, contending that the pleadings did not support their submission, that the issues unduly emphasized appellee's theory of the case, that they placed a greater burden on appellant than the law imposed, and that the issues "particularized too much."

The three issues asked the jury to find whether appellant, in obtaining the release and deeds from appellee, (1) made reasonable use of the confidence placed in him by appellee; (2) whether the transactions were fair and equitable to Diane Troy; and, (3) whether appellant exercised good faith in informing appellee of the nature and effect of the transactions. The jury answered each of the issues in the negative.

The issues complained of by appellant are identical to those approved in Cole v. Plummer, 559 S.W.2d 87 (Tex.Civ.App.--Eastland 1977, writ ref'd n.r.e.) Appellant's first two points of error are overruled.

In appellant's third, fourth, and fifth points of error, appellant urges: (1) that the law does not authorize the award of punitive damages when no actual damages are awarded; (2) that the amount awarded for punitive damages is excessive; and (3) that no jury finding supports the award of punitive damages.

Although there is authority to the contrary, the greater Texas authority supports the awarding of exemplary damages when recission is allowed, even though no actual damages are awarded. Russell v. Truitt, 554 S.W.2d 948 (Tex.Civ.App.--Fort Worth 1977, writ ref'd, n.r.e.); Nolan v. Bettis, 577 S.W.2d 551 (Tex.Civ.App.--Austin 1979, writ ref'd, n.r.e.).

Appellant next contends that Tex.Bus.Com.Code Ann. § 27.01 (Vernon 1968), governing fraud in real estate transactions, limits the award of exemplary damages to twice the amount of actual damages. We are of the opinion that § 27.01 is not applicable to our facts. In Nolan v. Bettis, supra, the court held that the statute was not applicable in an action to cancel a trustee's deed procured by fraud because there was neither a contract nor a sale of land involved. In our case there was neither a contract nor a sale in the sense contemplated by the statute. The evidence suggests that the deeds and release were procured by overreaching, and lack of attentiveness by appellee, rather than by a contract or sale between the parties.

Appellant's next contention, that there is no jury finding to support the award of exemplary damages, is contrary to existing law. The jury's answers to issues 2, 3 and 4, as well as to 15 through 19, amounted to a finding of fraud, which authorizes the awarding of exemplary damages. Dennis v. Dial Finance and Thrift Co., 401 S.W.2d 803 (Tex.1966). Although issues 2, 3 and 4 were not framed as fraud issues in the traditional sense, such conduct by an attorney toward a client amounts to fraud.

Appellant alleges that the exemplary damages of $90,000 is excessive. Considering the nature of the case and the...