Gulf Const. Co. v. Mott, 252

• Decision Date: 28 May 1969
• Docket Number: No. 252,252
• Citation: 442 S.W.2d 778
• Parties: GULF CONSTRUCTION COMPANY et al., Appellants, v. George E. MOTT, Individually and d/b/a George E. Mott Construction Company, Appellee. . Houston (14th Dist.)
• Court: Texas Court of Appeals

Page 778

442 S.W.2d 778

GULF CONSTRUCTION COMPANY et al., Appellants, v. George E. MOTT, Individually and d/b/a George E. Mott

Construction Company, Appellee.

No. 252.

Court of Civil Appeals of Texas.

Houston (14th Dist.).

May 28, 1969.

Rehearing Denied July 2, 1969.

Stanley B. Binion, Reynolds, White, Allen & Cook, Houston, for appellants.

Tom R. Letbetter, Law officers of Max Garrett, Houston, for appellee.

BARRON, Justice.

This is a slander action wherein the plaintiff, George E. Mott, individually and doing business as George E. Mott Construction Company, sought recovery of actual and exemplary damages from the defendants, H. R. Walker, Helen Walker and Gulf Construction Company . Defendants answered the suit, and in addition to denying the making of the alleged slanderous statements referred to below, they also pled truth as a complete defense and further pled that the statements if made by Mr. and Mrs. Walker, were made under a qualified privilege.

The suit was tried to a jury and based upon the jury's answers to special issues a judgment was entered below that plaintiff recover from defendants the sum of $15,000 actual damages and $10,000 punitive damages. Defendants have perfected an appeal to this Court from such judgment.

Defendants contend that the trial court erred in refusing to sustain their motion for judgment non obstante veredicto and to disregard answers of the jury, because the statements made by defendants were not slanderous under the facts and circumstances as a matter of law, and because there is no evidence or finding that such statements contained a defamatory meaning; that the evidence and judicial admissions conclusively establish that the plaintiff has in fact gone broke or bankrupt and that the statements when made were substantially true; that the statements were privileged when made and that there is no evidence of malice; that the judgment is grossly excessive and a remittitur should be ordered, and that there is no evidence to support the damage issues submitted.

In response to special issues the jury found:

(1) that in the fall of 1966 Mrs. Helen C. Walker stated on the telephone to Mrs. W. K. Arthur that 'George Mott is bankrupt,' and that the defendant meant bankrupt as understood by the average person;

(2) that H. R. Walker stated by telephone in the fall of 1966 to W . K. Arthur that 'George Mott is going bankrupt or has gone bankrupt,' and that the defendant meant bankrupt as understood by the average person;

(3) that H. R. Walker stated in September or October of 1966 to C. A. Zachary that 'I believe George Mott is going bankrupt,' and such was understood by the average person;

(4) that H. R. Walker stated to Herb Bailey during the latter part of 1966 that 'George Mott is bankrupt and broke,' and that such was understood by the average person;

(5) that Mrs. Helen C. Walker stated to Tom Wisdom in October of 1966 that 'George Mott is going under or going bankrupt and everyone knew about it,' and that such was understood by the average person;

(6) that the words spoken above by defendants were with malice toward George E. Mott;

(7) that Gulf Construction Company was the alter ego of H. R. Walker and Helen C. Walker;

(8) that the statements made by defendants were not substantially true at the time they were made;

(9) and the jury found $15,000 actual damages and $10,000 punitive damages in response to two special issues submitted to them.

A detailed statement of the facts is necessary. The plaintiff and defendants became acquainted in May, 1966. The occasion for their meeting was that the defendants were planning to build a home near Richmond in Fort Bend County, Texas, and the plaintiff was a building contractor. As a result of their meeting, the plaintiff bid on the job, and subsequently a contract was entered into between George E. Mott Construction Company and H. R. Walker and Helen C. Walker, acting by and through Gulf Construction Company, for the construction of the residence. The contract of May 25, 1966 provided for a total contract price of $57,000 to be paid by defendants to plaintiff in a lump sum upon the completion of the entire project. On June 2, 1966, the parties entered into a supplemental contract which amended the original contract to the extent necessary to provide for installment payments as the work progressed. Pursuant to the contracts, the plaintiff began construction of the residence called for in the plans and specifications, and the structure was ultimately completed in January, 1967. It was during this period of time, more specifically in the fall of 1966, that the alleged defamatory statements were made by defendants concerning plaintiff. The persons to whom the statements were made were Fred Guidry, Tom Wisdom, C. A. Zachary, and Herb Bailey, each subcontractors or suppliers of material to Mott. Statements were also made by defendants to Mr. and Mrs. Arthur. Mr. and Mrs. W. K. Arthur were at the time having a home constructed by George Mott, who had been in the custom home business since 1963 in the Fort Bend County area. Mott as a rule made arrangements for financing principally through Sugar Land State Bank in Sugar Land, Texas. Mott did not have any problems in obtaining financing of his homes prior to January of 1967. It can fairly be said that Mott's credit and his ability to get loans were necessary to the success of his business as a builder. He had to be able to obtain interim financing to be able to exist as a custom home builder, and he built many homes and other structures in the area from 1964 until 1968.

Mott testified that he did not require his first 'draw' under the Walker contract, because he was in good shape financially and did not need the money at the time. Mr. Mott and Mr. Walker had problems concerning his draws from the third draw until the very end of the contract, and there is still a lawsuit pending involving the contract matters themselves. Mott first became aware that statements were being made about his financial condition sometime in September of 1966. At the time the statements were allegedly made, Mott had seven jobs in progress. He testified that he showed a net profit of $13,000 in 1964, a net profit of $19,673.84 in 1965, an approximated net profit of $10,000 in 1966, and an estimated net profit of $1,000 in 1967. He testified that he had no net profit in 1968 at the time of trial. When he attempted to secure jobs after the statements were made, most of the people he contacted wanted to know whether he was bankrupt. A man named Cox refused to deal with him, because he had heard some 'unstable' talk concerning Mott's financial condition. This happened more than once. Mott has not started construction of any custom homes since February of 1968, and for all intents and purposes he was bankrupt at the time of trial in November of 1968, and he is now out of the custom home building business.

Plaintiff testified that he had no problems with his subcontractors concerning his finances. Prior to January 1, 1967, Sugar Land State Bank did not refuse to loan him money on interim financing, and no supplier of Mott's refused to give him goods on credit. In the eight months before trial, no one from Fort Bend County contacted Mott about building anything for them. Officials of the bank told Mott that because of the Walker job, and the talk that they heard, the bank was not going to be able to make any more interim financing for Mott, and that the bank was scared of him. When plaintiff's volume of work ceased, with 'all of the talk going around,' he had trouble keeping up with his bills. In September, October or November, 1966, Mott was in a precarious position financially on the Walker job, and this was before the statements, or most of them, had been made. He limited his statement above to the Walker job. He stated that he was having financial problems because Walker would not pay his construction draws, and that he had to take money from other jobs in order to pay off the subcontractors and suppliers so he could obtain the affidavits or waivers necessary to enable him to get the installment draws on the Walker job.

Mr. Mott admitted that he still has not paid all of the bills on either the Walker job, the Arthur job, the Kells job, the Cangelosi job or on the Galindo job, and that some of the contractors had talked about filing Mechanic's and Materialmen's liens. He admitted that on the Walker job subcontractors hounded him for payment and that he could not always timely pay the subcontractors.

H. R. Walker, defendant, testified that two things had happened in the fall of 1966 to make him aware that Mr. Mott had financial difficulties. Those were that after Mr. Mott had certified that all bills had been paid for material in order to obtain a draw, Walker had received calls from numerous merous people which had proved to him that even though the bills had been certified as paid, they, in fact, had not been paid. Secondly, that a lien had been filed against his property. The lien turned out to be an error, and it was later released. While Walker denied stating to anyone that Mott was going bankrupt or had gone bankrupt, he did testify that Mr. Mott's general financial reputation was the subject of pretty nearly every subcontractor or supplier that called him. When subcontractors asked him about Mott's financial condition, he gave them his opinion. Walker testified that as owner of the project, he was interested in seeing that the subcontractors were paid so as to avoid having liens filed upon his property.

The supplemental contract between the parties expressly provided that plaintiff furnish the owners, Walker and wife, an affidavit that all bills for labor and material used in said residence were paid as of the respective stage of each installment payment as the installment payments were made, and to further furnish evidence of such payment if required by the owners. This provision was...