Gaspard v. Beadle

• Decision Date: 11 January 2001
• Parties: <!--36 S.W.3d 229 (Tex.App.-Houston 2001) MARSHALL T. GASPARD, Appellant v. DIANE CHRISTINA BEADLE & KENNETH LUPO, Appellees NO. 01-99-00962-CV In The Court of Appeals For The First District of Texas
• Court: Texas Court of Appeals

Page 229

36 S.W.3d 229 (Tex.App.-Houston [1st Dist.] 2001)

MARSHALL T. GASPARD, Appellant v DIANE CHRISTINA BEADLE & KENNETH LUPO, Appellees

NO. 01-99-00962-CV

In The Court of Appeals For The First District of Texas

January 11, 2001

On Appeal from the County Civil Court at Law No. 4 Harris County, Texas Trial Court Cause No. 686611

[Copyrighted Material Omitted]

[Copyrighted Material Omitted] Panel consists of Chief Justice Schneider, and Justices Taft and Smith ^*.

OPINION

Schneider, Chief Justice.

Appellant, Marshall "Mitch" Gaspard, sued appellee, Diane Christina Beadle, for past due legal fees for services rendered. Beadle hired appellee, Kenneth Lupo, to represent her. Lupo filed a counterclaim for fraud and misrepresentation on Beadle's behalf. Beadle also sued for emotional distress and sought exemplary damages. Gaspard amended his petition to add Lupo as a defendant, and sued Lupo for filing a frivolous counterclaim, perjury, slander, and defamation. The judge dismissed all of Gaspard's non-contractual causes of action. The jury found in favor of Beadle, finding Gaspard both defrauded Beadle and intentionally inflicted emotional distress upon her. Beadle recovered actual damages, mental anguish damages, and exemplary damages. The judge sanctioned Gaspard for filing a frivolous counterclaim against Lupo. Gaspard appeals. We reverse the damages award to Beadle, but affirm the sanctions imposed against Gaspard.

A. Facts and Procedural Background

Because the sufficiency of the evidence is challenged, we begin with a detailed summary of the facts. Gaspard, an attorney, met Beadle and her husband in September 1993. The Beadles entered into a written agreement with Gaspard, agreeing to pay him a fee of $150 per hour for legal representation in a real estate matter. In December 1993, Beadle filed for a divorce. The divorce proceedings lasted three years, and the divorce was finally granted in December 1996.

In March 1994, while both the divorce and the real estate matters were still pending, Beadle and Gaspard began dating. They maintained a sexual relationship. The stopped dating in December 1994. In October 1995, Gaspard wrote Beadle a letter indicating that he missed her. Beadle and Gaspard resumed their relationship in October 1995 and dated until February 1997.

Gaspard was not Beadle's attorney during the divorce; however, he assisted her with a usury claim that arose during the divorce proceedings ¹ in December 1995 and January 1996. Gaspard suggested he might be able to help, and so Beadle called her divorce attorney to offer Gaspard's assistance in drafting the pleadings on the usury issue. Gaspard drafted the pleadings and did the initial research. The facts are in dispute as to the method of payment intended for this legal assistance. Gaspard takes the position that he intended to bill Beadle for the work after the divorce action was completed. But Beadle testified that Gaspard never mentioned to her that she would have to pay for the services at an hourly rate. Beadle also testified that Gaspard agreed to perform the work for no compensation, and when he could "no longer work for free," he told her to hire another attorney.

Beadle testified she was emotionally and financially vulnerable, and continued the sexual relationship with Gaspard because of his numerous false representations. These representations included: (1) she would not have to pay him for the legal work in the usury matter; and (2) he loved her, would marry her, and take care of her. In January 1997, Beadle and Gaspard began to argue about Gaspard's ex-wife. Beadle was upset that Gaspard was spending time with his ex-wife instead of with Beadle and her children. Gaspard ended his relationship with Beadle in February 1997.

On June 16, 1997, Gaspard sent Beadle an invoice for the legal work he did on the usury matter. Gaspard acknowledged that he waited almost two years to send the invoice. He explained that the delay was so Beadle could receive the settlement money from her divorce and would be in a position to pay him. Beadle failed to pay the bill. She argues she was unable to pay the invoice because her only source of income was a meager monthly child support payment, some of which had been returned for insufficient funds.

Beadle's attorney, Lupo, urged Gaspard to "write off the fees" because Lupo felt Gaspard had breached his fiduciary duty to Beadle by maintaining a sexual relationship with a client. Nevertheless, Gaspard sued Beadle for the past-due legal fees. Beadle countersued for fraud, intentional infliction of emotional distress, and punitive damages, alleging Gaspard fraudulently represented he had romantic feelings for Beadle and implied he would marry her in order to entice her into a sexual relationship. Gaspard amended his petition and also sued Lupo for filing a frivolous counterclaim, perjury, slander, and defamation. He also filed a Motion to Disqualify Lupo as Beadle's counsel, which was denied. The judge dismissed Gaspard's non-contractual causes of action and sanctioned him under Rule 13 of the Texas Rules of Civil Procedure for filing a frivolous pleading.

The jury returned a verdict in Beadle's favor on both the fraud and intentional infliction of emotional distress claims, and they found no attorney-client relationship existed between Gaspard and Beadle. The jury awarded Beadle the following: (1) $3,800 in actual damages for fraud; (2) $12,500 for intentional infliction of emotional distress; and (3) $65,000 in punitive damages. The trial court assessed monetary sanctions against Gaspard in the amount of $20,000. Gaspard appeals. We affirm in part and reverse in part.

B. Fraud

In his first issue, Gaspard contends the pleadings and evidence were insufficient to support a finding of fraud. In his second issue, Gaspard argues that the evidence was legally and factually insufficient to support the jury's award of $3,800 in actual damages.

1. The Pleadings

In Beadle's Verified First Amended Answer and Counterclaims, she pleaded fraud both as an affirmative defense and as a counterclaim. A pleading is sufficient if it gives notice of the cause of action and facts being alleged so that the opposing party may adequately prepare his defense. See Tex. R. Civ. P. 45(b), 47(a); Roark v. Allen, 633 S.W.2d 804, 809-10 (Tex. 1982); Transmission Exch. Inc. v. Long, 821 S.W.2d 265, 269 (Tex. App.-Houston [1st Dist.] 1992, writ denied). The actual cause of action and the elements do not have to be specified in the pleadings; it is sufficient if a cause of action can be reasonably inferred. See Boyles v. Kerr, 855 S.W.2d 593, 601 (Tex. 1993). In the absence of filed special exceptions, a petition should be liberally construed in favor of the pleader. See id. Our review of the pleadings indicates a fraud cause of action can reasonably be inferred. Because Gaspard did not file any special exceptions, and because he had notice of the fraud claim via the pleadings, we find the pleadings were sufficient to support a fraud cause of action. We overrule issue one in part.

2. The Evidence: The Finding of Fraud

In reviewing the legal sufficiency of the evidence, we consider only the evidence and reasonable inferences tending to support the jury's finding, viewing it in the light most favorable to the verdict. See Havner v. E-Z Mart, 825 S.W.2d 456, 458 (Tex. App.-Houston [1st Dist.] 1994, writ denied). A legal sufficiency challenge will be overruled if there is more than a scintilla of evidence to support the finding. See Star Houston, Inc. v. Shevack, 886 S.W.2d 414, 417 (Tex. App.-Houston [1st Dist.] 1994, writ denied).

We will only set aside the jury's findings for factual insufficiency if, after reviewing, weighing, and considering all the evidence, the jury finding was so against the great weight and preponderance of the evidence that the verdict was manifestly unjust. See Lofton v. Texas Brine Corp., 720 S.W.2d 804, 805 (Tex. 1986); Miller v. Kendall II, 804 S.W.2d 933, 939 (Tex. App.-Houston [1st Dist.] 1991, no writ). All evidence in the record must be considered in the light most favorable to the verdict. See Formosa Plastics Corp. v. Presidio Eng'g Contractors, 960 S.W.2d 41, 48 (Tex. 1998).

Proof of fraud requires establishing: (1) a material representation was made; (2) the representation was false; (3) when the representation was made, the speaker knew it was false or made it recklessly without any knowledge of its truth; (4) the speaker made the representation with the intent that it should be acted upon by the party; (5) the party acted in reliance upon the representation; and (6) the party thereby suffered injury. See Eagle Properties, Ltd. v. Scharbauer, 807 S.W.2d 714, 723 (Tex. 1990); Transmission Exch., 821 S.W.2d at 270. These elements were correctly presented to the jury for consideration in Question 9 of the charge. Some courts have also held that fraud is "an elusive and shadowy term which has been defined in some cases as any cunning or artifice used to cheat or deceive another." Santana Natural Gas Corp. v. Hamon Operating Co., 954 S.W.2d 885, 890 (Tex. App.-Austin 1997, pet. denied); see also First State Band v. Fatheree, 847 S.W2d 391, 395-96 (Tex. App.-Amarillo 1993, writ denied).

The jury found Gaspard committed fraud against Beadle. However, we find the evidence legally and factually insufficient to support the jury's fraud finding because there was no false misrepresentation made. Beadle based her claim of fraud on two alleged misrepresentations. We consider each in turn.

First, Beadle alleged that Gaspard acted as though he loved her and promised he would take care of her. ² This is not an actionable misrepresentation. A misrepresentation is a falsehood or untruth with the intent to deceive. See Great S. Life Ins. Co. v. Doyle, 151 S.W.2d 197, 201 (Tex. 1941); Vela v. Marywood, 17 S.W.3d 750, 760 (Tex. App.-Austin 2000, pet. filed). The jury charge correctly defined a...