Gulf States Utilities Co. v. Low

• Decision Date: 30 May 2002
• Docket Number: No. 00-1249.,00-1249.
• Citation: 79 S.W.3d 561
• Parties: GULF STATES UTILITIES COMPANY, Petitioner, v. Wyley LOW, Respondent.
• Court: Texas Supreme Court

Page 561

79 S.W.3d 561

GULF STATES UTILITIES COMPANY, Petitioner, v. Wyley LOW, Respondent.

No. 00-1249.

Supreme Court of Texas.

May 30, 2002.

Gerald R. Flatten, Rienstra Dowell & Flatten, Beaumont, for Petitioner.

Jimmy W. Nettles, Beaumont, for Respondent.

Justice JEFFERSON delivered the opinion of the Court, in which Justice HECHT, Justice ENOCH, Justice OWEN, and Justice BAKER joined.

The principal issue in this case is whether an appellate court may modify a trial court's judgment by deeming a finding on an issue not submitted to the jury. The trial court rendered judgment that Wyley Low recover $12,100 plus pre judgment interest from Gulf States Utilities (GSU) for damages Low incurred when GSU terminated his residential electrical service. Relying on Texas Rule of Civil Procedure 279, the court of appeals deemed a finding to support a DTPA recovery, and rendered a judgment for $22,100 as actual damages, and more than $150,000 for attorney's fees. Because Rule 279 permits a finding to be deemed only "in such manner as to support the judgment" of the trial court, we reverse in part the judgment of the court of appeals. TEX.R. CIV. P. 279. We conclude that the verdict and evidence will not permit a recovery for DTPA damages. Accordingly, we render judgment for Low in the amount of $12,000.

GSU terminated Low's residential electric service after a dispute over unpaid account balances. Low sued GSU for an injunction and damages related to GSU's terminating his service. GSU counter-claimed for fraud. The trial court severed out a number of claims, and the case went to trial on Low's claims of negligence, deceptive trade practices, and wrongful termination of services, and GSU's fraud claim. A jury found: (1) both GSU's and Low's negligence proximately caused the occurrence; (2) GSU was sixty-percent responsible and Low was forty-percent responsible; and (3) GSU engaged in an unconscionable action or course of action that was a producing cause of Low's damages.

The jury found Low's damages to be $100 for spoiled food, $5,000 for past psychological treatment, and $20,000 for past mental anguish. It also determined that $150,000 was a reasonable fee for Low's legal costs. GSU moved for judgment notwithstanding the verdict, challenging the evidence of food spoilage, psychological treatment, and damages compensable under the DTPA. Low responded to the motion and prayed for judgment. After unsuccessful court-ordered mediation, Low again moved for judgment, requesting that the district court disregard the findings concerning Low's negligence and, without specifying a theory of recovery, requested that the court render judgment based upon the remainder of the jury's verdict.

In a letter to the parties, the trial court overruled Low's motions, concluding that there was evidence to support the findings concerning Low's negligence. The court granted GSU's motion to disregard the finding of past psychological damages but otherwise denied GSU's motion for judgment notwithstanding the verdict. The letter stated that it was unnecessary for the court to decide if a recovery for mental anguish under the DTPA requires a "knowing" finding, because mental anguish damages could be based on the common-law negligence findings. The letter ordered a remittitur and reduction of attorney fees to $35,000, and directed the parties to prepare a judgment accordingly.

The judgment the trial court rendered, however, differed significantly from its letter ruling. The judgment ordered that Low recover $12,100 and prejudgment interest and that the parties bear their own costs. The judgment is silent about theories of recovery or defense and does not mention attorney's fees.

After reconsolidating some of the previously severed claims, the trial court rendered a final judgment. The court permanently enjoined GSU from disconnecting electrical service to Low's residence and denied all other relief except as provided in the August 4, 1999 judgment.

GSU and Low each appealed the court's judgment with respect to damages. Neither party challenged the permanent injunction. The court of appeals modified the trial court's judgment by increasing Low's award from $12,100 to more than $179,000. The court held that Low was entitled to recover DTPA damages based on a "deemed finding" that GSU knowingly engaged in unconscionable conduct. Because the court of appeals concluded that judgment could be rendered under the DTPA, it did not reduce Low's recovery by his comparative responsibility and it added attorney's fees to the total award. 75 S.W.3d 449.

GSU petitioned this Court for review, contending that the court of appeals erred in: (1) holding that a deemed finding of knowing conduct under Rule 279 supports a mental anguish damage award under the pre-1995 DTPA; (2) allowing recovery for spoiled-food damages when Low presented no evidence about the food's market value after it spoiled; and (3) awarding Low $150,000 in attorney's fees based on a DTPA judgment. GSU prays that we reinstate the trial court's judgment except for the food-spoilage damages.

Low argues that the court of appeals was correct in reforming the judgment to award him all of the mental-anguish damages the jury found, because the jury found that GSU's conduct was unconscionable under his DTPA cause of action. Low concedes that a finding of knowing conduct is a necessary predicate to recover mental-anguish damages. Latham v. Castillo, 972 S.W.2d 66, 69 (Tex.1998); State Farm Life Ins. Co. v. Beaston, 907 S.W.2d 430, 436 (Tex.1995); Luna v. North Star Dodge Sales, Inc., 667 S.W.2d 115, 117 (Tex.1984). Although the jury was not asked if any unconscionable conduct was committed knowingly, Low asserts that a knowing finding should be deemed under Rule 279.

Rule 279 provides the circumstances permitting a deemed finding:

... When a ground of recovery or defense consists of more than one element, if one or more of such elements necessary to sustain such ground of recovery or defense, and necessarily referable thereto, are submitted to and found by the jury, and one or, more of such elements are omitted from the charge, without request or objection, and there is factually sufficient evidence to support a finding thereon, the trial court, at the request of either party, may after notice and hearing and at any time before the judgment is rendered, make and file written findings on such omitted element or elements in support of the judgment. If no such written findings are made, such omitted element or elements shall be deemed found by the court in such manner as to support the judgment. ...

TEX.R. CIV. P. 279. The court of appeals concluded that the jury's finding of unconscionable conduct was necessarily referable to a DTPA-based mental anguish recovery. The court further held that it would deem a "knowing" finding necessary to such a recovery because GSU did not object to the question's omission from the charge. 75 S.W.3d 449, 453.

We disagree. Rule 279 may support a deemed finding only when it can be deemed found "in such manner as to support the judgment." TEX.R. CIV. P. 279. Here, the trial court's judgment was for $12,100 based on the jury findings. The court of appeals misapplied Rule 279 to deem a finding, not to support the trial court's judgment, but to render a new judgment for actual damages in an amount nearly fifteen times the trial court's award. See Logan v. Mullis, 686 S.W.2d 605, 609 (Tex.1985) (holding that court of appeals erred by deeming a finding in support of the verdict instead of the trial court's final judgment).

Because the court of appeals erred in relying on Rule 279 to render its judgment, we must determine the judgment that the court of appeals should have rendered. TEX.R.APP. P. 60.2(c). We do so considering not only GSU's petition for review, but also the parties' briefs to the court of appeals. McKelvy v. Barber, 381 S.W.2d 59, 64 (Tex.1964). Both Low and GSU have consistently argued entitlement to judgment based on their respective interpretations of the legal theory underlying the trial court's judgment. Low argues that judgment should be rendered for him under the DTPA, entitling him to the full measure of DTPA damages available under the verdict. GSU contends that a court could not render a DTPA judgment, but could only render a judgment based on the negligence findings. GSU notes that the trial court's judgment has some aspects of a negligence-based judgment, such as the award of actual damages in an amount corresponding to the jury's percentage responsibility finding and the failure to award attorney's fees. Low asserts that the judgment is inconsistent with negligence because the judgment did not reduce the food spoilage damage award by Low's percentage responsibility. Both Low and GSU cite the trial court's letter ruling as evidence of the judgment the trial court intended to render.

The trial court's judgment does not adjudicate theories of recovery or defense by name. It merely awards Low a recovery of $12,100 as actual damages plus interest and costs. We would expect that a negligence recovery based on damage findings of $20,000 and $100, reduced by the proportionate responsibility findings, would produce a judgment for actual damages of $12,060. Assuming that was his intent, the court here may have failed to reduce the $100 damage finding through oversight, or concluded as a matter of law that the nominal recovery need not be reduced. If the trial judge based judgment on the DTPA findings, it erroneously reduced the recovery by the proportionate responsibility findings and omitted attorney's fees. The court's post-verdict letter ruling does not illuminate the question because it was interlocutory and its terms were never incorporated in the final judgment.

We reject the parties' respective arguments that the record establishes the trial court intended to render a different judgment. Before we address the parties' remaining...