Kendziorski v. Saunders
| Decision Date | 30 March 2006 |
| Docket Number | No. 03-04-00334-CV.,03-04-00334-CV. |
| Parties | Jeffrey A. KENDZIORSKI, Appellant, v. Don W. SAUNDERS, Appellee. |
| Court | Texas Court of Appeals |
Mark R. Lee, Austin, for Appellant.
Charles Thomas Saunders, Law Office of Don W. Saunders, San Antonio, for Appellee.
Before Chief Justice LAW, Justices PATTERSON and PURYEAR.
Jeffrey Kendziorski sued Robert Marshall for fraud and was awarded compensatory damages and court costs. Marshall appealed the justice court's judgment to the county court, and Don Saunders signed as a surety on the appeal bond. On appeal, Kendziorski was awarded compensatory damages, court costs, and exemplary damages. After Marshall died, Kendziorski attempted to obtain the judgment from Saunders. While admitting liability for the court costs and compensatory damages, Saunders denied liability for exemplary damages. Kendziorski sued Saunders on the grounds that he breached the surety agreement and that he fraudulently entered the surety agreement with no intention of paying under the terms of the bond and with insufficient assets to cover the limits of the bond. The county court granted partial summary judgment in favor of Kendziorski and concluded that Saunders was liable for compensatory damages and court costs. Subsequently, the court granted Saunders's motion for summary judgment and held that Saunders was not liable for exemplary damages or for fraud. Kendziorski appeals both the partial denial of his summary judgment motion and the granting of Saunders's summary judgment motion. We will affirm the court's judgment regarding Saunders's lack of liability for fraud, reverse the court's judgment regarding Saunders's liability for breach of contract claim and for exemplary damages, and remand the case for consideration of attorney's fees and pre-judgment interest.
Kendziorski sued Marshall for fraud in a justice court and obtained a judgment in the amount of $2,760.50. Marshall appealed the judgment and filed an appeal bond for double the amount of the judgment as required by rule. See Tex.R. Civ. P. 571 (), 574b (appeal from justice court tried de novo in county or district court).
Saunders and another individual signed as sureties on the bond. The bond stated that both sureties "acknowledge ourselves bound to pay JEFFERY A. KENDIORSKI [sic] the sum of $5,521, conditioned that Appellant shall prosecute his appeal to effect, and shall pay off and satisfy the judgment which may be rendered against him on appeal."
On appeal and after Saunders signed the surety agreement, Kendziorski specifically pleaded for exemplary damages.1 Marshall filed a special exception objecting to the request for exemplary damages on the basis that it constituted an impermissible new ground of recovery under rule of civil procedure 574a.2 See Tex.R. Civ. P. 574a.
A trial de novo was held, and the county court awarded Kendziorski $1,334 in compensatory damages for fraud, $1,399.44 in court costs, and $5,000 in exemplary damages for fraud. Prior to the judgment being signed but after the judgment was announced in court, Marshall died.
After making several unsuccessful attempts to obtain the judgment from Marshall's surviving spouse, Kendziorski sent a demand letter to Saunders. In response, Saunders sent a letter stating that he would pay the compensatory damage award and the court costs but denying liability for exemplary damages. Saunders also proposed a payment plan and included a check for $250 as the first payment. In response, Kendziorski stated that he would accept the payment plan only if Saunders agreed to be liable for the full amount of the appeal bond, $5,521. Saunders refused.
After filing suit against Saunders, Kendziorski filed a motion for summary judgment asserting that Saunders had breached the appeal bond by failing to pay the full amount of the bond. The county court granted partial summary judgment in favor of Kendziorski and held that Saunders, as a surety, was liable for the compensatory damages and court costs awarded. However, the county court denied summary judgment regarding Saunders's liability for exemplary damages. Kendziorski then filed a second amended petition adding claims that Saunders fraudulently induced Kendziorski to accept the appeal bond without any intention of paying on the bond and that Saunders falsely stated he had sufficient funds to pay the amount specified in the bond.
In response, Saunders filed a motion for summary judgment urging dismissal of all of Kendziorski's new claims and asking the court to enter judgment that Saunders was not liable for exemplary damages. Specifically, Saunders contended that he did not misrepresent that he had assets sufficient to satisfy the principal of the appeal bond, that he did not misrepresent his intention to pay the surety agreement, and that Kendziorski's claim for exemplary damages was an impermissible additional ground of recovery under rule of civil procedure 574a. See Tex.R. Civ. P. 574a.
After considering Saunders's motion for summary judgment, the county court judge sent a letter to both parties that read as follows:
After review and consideration of Mr. Saunders' Motion for Summary Judgment, the Court finds that it should be granted. The Court finds that Mr. Saunders is not liable for exemplary damages pleaded after the posting of the bond. The Court finds that Mr. Saunders is not liable for fraud damages as he possessed funds at the time he posted the bond sufficient to pay the judgment.
Mr. Saunders is directed to prepare an order accordingly.
The court entered final judgment stating that Saunders was not liable for the exemplary damages originally issued against Marshall or for Kendziorski's fraud claims against Saunders. The court further found that each party was responsible for its own attorney's fees and costs "without contribution from the other" party.
Kendziorski appeals the trial court's partial denial of his motion for summary judgment, the trial court's granting of Saunders's motion for summary judgment, and the trial court's entry of final judgment without awarding him pre-judgment interest or attorney's fees.
Due to the complex procedural history of this case, we will clarify what issues we have been asked to consider in this appeal and which judgment has been appealed to this Court. Kendziorski originally filed suit against Marshall for fraud and obtained a judgment against him in the justice court. This judgment was appealed to the county court, and Kendziorski again obtained a judgment against Marshall. However, this action is not before us. Our appeal is limited to consideration of the subsequent suit filed by Kendziorski against Saunders in which Kendziorski claims Saunders breached the surety agreement he signed to help perfect Marshall's appeal.
In this appeal, we are being asked to consider whether Saunders is liable for all or part of the exemplary damages originally issued against Marshall, whether Saunders breached the surety agreement by failing to pay the limits specified in the appeal bond, whether Saunders is liable for attorney's fees and prejudgment interest due to this breach, and whether Saunders fraudulently entered into the surety agreement with no intention of paying under its terms and with insufficient assets to cover the limits of the bond.
In addition to the issues discussed above, we will also address Kendziorski's assertions that many of the defenses to liability raised by Saunders below are inapplicable or are impermissible collateral attacks on the original judgment against Marshall. Furthermore, we will address Kendziorski's alternative contention that there was no order granting Saunders's motion for summary judgment, and, therefore, the trial court erred in entering final judgment. Finally, we will address Saunders's argument that he is not liable for the exemplary damage award because the award exceeded the county court's appellate jurisdiction and was, therefore, void.
We review the granting of a summary judgment de novo. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex.2005). In reviewing a summary judgment, we take all evidence favorable to the nonmovant as true and resolve any doubts in the nonmovant's favor. Id. A movant is entitled to summary judgment if he demonstrates there are no genuine issues of material fact and establishes all the elements of his claim as a matter of law. See Tex.R. Civ. P. 166a(c); Southwestern Elec. Power Co. v. Grant, 73 S.W.3d 211, 215 (Tex.2002). When both parties move for summary judgment, the appellate court, in reviewing the judgment of the trial court, must consider both parties' summary judgment evidence, determine all questions presented, and, if the reviewing court determines the trial court erred, render the judgment the trial court should have rendered. Valence, 164 S.W.3d at 661.
For organizational purposes, we will first address Kendziorski's claim that the court erred in entering final judgment without a proper order. Second, we will discuss Kendziorksi's fraud claims. Third, we will address Kendziorski's breach of contract claim and the extent of Saunders's liability under the appeal bond. Fourth, we will consider the argument raised by Saunders regarding the county court's appellate jurisdiction. Finally, we will discuss Kendziorski's claim for attorney's fees and prejudgment interest.
On appeal, Kendziorski asserts that the court committed reversible error by entering a final judgment when no order was signed by the court granting Saunders's summary judgment motion and "disposing of all contested issues." Specifically, he argues that the letter issued by the court does not constitute an order from the...
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