Haynes & Boone v. Bowser Bouldin, Ltd.

• Decision Date: 15 September 1993
• Docket Number: No. 04-91-00555-CV,04-91-00555-CV
• Citation: 864 S.W.2d 662
• Parties: HAYNES & BOONE, Appellant, v. BOWSER BOULDIN, LTD., a Texas Limited Partnership & Bouldin Development Company, Appellees.
• Court: Texas Court of Appeals

Page 662

864 S.W.2d 662

HAYNES & BOONE, Appellant, v. BOWSER BOULDIN, LTD., a Texas Limited Partnership & Bouldin

Development Company, Appellees.

No. 04-91-00555-CV.

Court of Appeals of Texas,

San Antonio.

Sept. 15, 1993.

Order of Voluntary Remittitur Sept. 17, 1993.

Rehearing Denied Nov. 2, 1993.

George H. Spencer, Clemens & Spencer, San Antonio, Mike A. Hatchell, Molly H. Anderson, Ramey, Flock, Jeffus, Crawford, Harper & Collins, Tyler, for appellant.

Bernard Wm. Fischman, Franklin D. Houser, Tinsman & Houser, Inc., San Antonio, for appellees.

Before REEVES, C.J., and CHAPA and GARCIA, JJ.

ON APPELLANT'S AND APPELLEES' MOTIONS FOR REHEARING

REEVES, Chief Justice.

Our original opinion which was delivered and filed on July 14, 1993, is withdrawn and this opinion is substituted therefore.

This appeal questions a legal malpractice judgment. Bowser Bouldin/Bouldin Development Company (appellees) successfully sued its former law firm Haynes & Boone (appellant) under the theories of common law negligence and the DTPA. Bowser Bouldin/Bouldin Development Company (Bouldin) conditionally elected the DTPA remedy and recovered both actual and punitive damages. Bouldin won by establishing that the law firm's conduct, through one of its attorneys, caused an unfavorable settlement in a lawsuit which led to the eventual financial loss of its shopping center.

Haynes & Boone admits their breach of duty caused some injury. They assert, however, that they did not cause all the injury for which the jury found them liable; Haynes & Boone finds error with certain elements of the judgment award for actual and punitive damages. ¹ In our original opinion we reversed and remanded to the trial court for a new trial. Pursuant to TEX.R.APP.P. 85(e), appellees filed a voluntary remittitur to damages awarded in answer to jury question 12(4). This court denies appellees' request for voluntary remittitur. We grant appellees' and appellant's motion for rehearing. Appellees are free to file another voluntary remittitur order subsequent to the issuance of this opinion.

FACTS

Rudy Belton is the president of Bouldin Development Company. Together with his partnership Bowser Bouldin, he developed a two-story strip center on Lemmon Avenue at Dallas in 1985-1986. Blockbuster Video (Blockbuster) pre-leased before development financing was obtained. Bouldin's expert labeled Blockbuster the "anchor tenant" because Blockbuster leased a significant amount of square footage and gave financial credibility. It was projected that Blockbuster would draw customers for all ground level tenants that depended on walk-up traffic. According to Bouldin's legal theory for recovery, without an anchor tenant, the strip center is a mere collection of stores without meaning to customers; consequently, customers do not come and the stores go out of business. There was testimony that the anchor tenant is the most important factor to a strip center's viability. The strip center was completed November 1986 and had a 95% occupancy rate.

In early 1987 two problems arose with Blockbuster concerning the second floor lessee Sparx, a punk rock dance club. First, water leaked into the Blockbuster store allegedly damaging $25,000.00 worth of rental tapes. Second, parking congestion resulted from valet parking provided by Sparx. Also, Blockbuster customers complained about intoxicated, drugged, teenagers hanging around the store. Blockbuster was not satisfied with Bouldin's attempt to cure the problems and subsequently obtained a temporary restraining order to reserve parking spaces for Blockbuster customers. ² Once the temporary restraining order was granted, Blockbuster sued Bouldin claiming breach of lease (with a plea for rescission), breach of the covenant of quiet enjoyment, and fraudulent misrepresentations. Richard Capshaw, an associate attorney at Haynes & Boone, was retained to defend Bouldin.

The Blockbuster trial was set for December 1987. Blockbuster requested a continuance. Belton protested to Capshaw, but In June 1987, Bouldin executed a $5.35 million earnest money contract for the purchase of the strip center. On January 27, 1988, the potential buyer refused to purchase the strip center citing the following reasons: (1) liens against the property; and (2) lease disagreements with Blockbuster.

Capshaw accepted the request since little or no discovery had been completed. The trial was reset for May 9, 1988.

Blockbuster delivered interrogatories to Haynes & Boone. Haynes & Boone arguably responded late with incomplete interrogatory answers. On April 18, Blockbuster filed a motion for sanctions against Bouldin for failing to timely answer interrogatories. The vacationing Capshaw missed the hearing and the trial judge ordered sanctions striking Bouldin's pleadings. A default judgment was entered against Bouldin on the issues of liability. Upon returning from vacation, Capshaw filed a motion to reconsider which was granted. A new sanctions order was signed which instructed Bouldin to complete and serve the interrogatories on Blockbuster by June 30, 1988. Additionally, by July 19, 1988, Bouldin was to pay Blockbuster $1500.00 to reimburse it for attorney fees. If Bouldin failed to satisfy these two requirements, then the pleadings would be struck automatically and a default judgment would be entered in favor of Blockbuster without a further motion or hearing. The $1500.00 was not paid by July 19, 1988. Consequently, Bouldin's pleadings were struck and a default judgment on liability issues was entered in favor of Blockbuster.

On April 14, 1988, during the sanction order problem, a $4.4 million earnest money contract was executed for the purchase of the center. This earnest money contract fell through and, according to Belton, it fell through because of the Blockbuster dispute.

According to Belton, because of the default judgment, Bouldin was forced subsequently into an unfavorable settlement with Blockbuster which allowed Blockbuster to rescind its lease with 90 days notice. Belton could neither sell the project nor obtain long-term financing. Consequently, Bouldin defaulted on his construction note. Haynes & Boone admitted ratifying Capshaw's activities. Bouldin sued successfully the law firm Haynes & Boone for legal malpractice and conditionally elected the DTPA cause of action.

STANDARD OF REVIEW

Haynes & Boone asserts factual and legal sufficiency points of error. In deciding a no evidence point, we consider only the evidence and inferences that support the jury findings and disregard all evidence and inferences to the contrary. McKnight v. Hill & Hill Exterminators, Inc., 689 S.W.2d 206, 207 (Tex.1985); East Texas Theatres, Inc. v. Rutledge, 453 S.W.2d 466, 467 (Tex.1970). The point must be sustained if there is a complete absence of, or no more than a scintilla of evidence which supports the verdict. McKnight, 689 S.W.2d at 207; Freeman v. Texas Compensation Ins. Co., 603 S.W.2d 186, 191 (Tex.1980).

In determining the sufficiency of the evidence, the court will consider and weigh all evidence. The finding will be set aside only if it is so contrary to the overwhelming weight of the evidence as to be clearly wrong and unjust. Plas-Tex, Inc. v. U.S. Steel Corp., 772 S.W.2d 442, 445 (Tex.1989); In re King's Estate, 150 Tex. 662, 244 S.W.2d 660, 661 (1951).

ACTUAL DAMAGES

Haynes & Boone asserts there is no evidence or factually insufficient evidence that certain damage elements in Jury Question No. 12 are proper or resulted from the occurrence in question. Specifically, Haynes & Boone complains that the following elements of damage, which were awarded by the jury under the DTPA, are improper: (1) $1,087,800.18 invested by or on behalf of Bouldin in the shopping center (lost because of mortgage foreclosure); (2) $284,639.00 in lost rents to Bouldin resulting from Blockbuster's rescission of lease; (3) $60,000.00 paid by or on behalf of Bouldin in settlement of liability under mortgage; and (4) $38,484.00 paid to settle Blockbuster suit.

Actual damages under the DTPA means those recoverable at common law.

                Brown v. American Transfer & Storage Co., 601 S.W.2d 931, 939 (Tex.1980), cert. denied, 449 U.S. 1015, 101 S.Ct. 575, 66 L.Ed.2d 474 (1980).  The DTPA must be "liberally construed and applied to promote its underlying purposes, which are to protect consumers against false, misleading, and deceptive business practices, unconscionable actions, and breaches of warranty.    TEX.BUS. & COM.CODE ANN. § 17.44 (Vernon 1987).  The amount of actual damages recoverable under the DTPA is determined by the total loss sustained as a result of the deceptive trade practice.  Kish v. Van Note, 692 S.W.2d 463, 466 (Tex.1985).  Two measures of damages are recognized under the DTPA:  the "out of pocket" measure and the "benefit of the bargain" measure.  W.O. Bankston Nissan, Inc. v. Walters, 754 S.W.2d 127, 128 (Tex.1988).  These measures of damages are not exclusive;  other measures of damages are permitted to ensure the plaintiff is made whole.  Henry S. Miller Co. v. Bynum, 836 S.W.2d 160, 162 (Tex.1992) (lost capital investment recovered);  see, e.g., White v. Southwestern Bell Tel. Co., 651 S.W.2d 260 (Tex.1983) (jury entitled to consider lost profits question).  Consequently, if Haynes & Boone's wrongful acts were a producing cause of the contested damage elements, we will uphold them in order to make Bouldin whole.  See TEX.BUS. & COM.CODE ANN. § 17.50(a) (Vernon 1987)
                

Haynes & Boone asserts there must be a "causal nexus" between an injury and monetary damages. Under the DTPA, Haynes & Boone is liable if its deceptive trade practice is a producing cause of actual damages. See TEX.BUS. & COM.CODE ANN. § 17.50(a) (Vernon 1987). Unlike proximate cause, "producing cause" under the DTPA does not encompass the element of foreseeability; a consumer only needs to prove the amount of actual damages factually caused by the deceptive trade practice. Hycel, Inc. v....