Norwest Mortgage v. Salinas
| Decision Date | 10 September 1991 |
| Citation | 999 S.W.2d 846 |
| Court | Texas Court of Appeals |
| Parties | (Tex.App.-Corpus Christi 1999) NORWEST MORTGAGE, INC. Appellant, v. JOSE B. SALINAS AND VICTORIA B. SALINAS, Appellees. NUMBER 13-96-552-CV July, 1 1999. On appeal from the 117th District Court of Nueces County, Texas. Before Chief Justice Seerden and Justices Yanez and Chavez O P I N I O N Opinion by Justice Reyna Mr. and Mrs. Jose B. Salinas ("the Salinases") instituted this suit against Norwest Mortgage, Inc. ("Norwest") for recovery of damages in connection with a loan agreement financing the construction and purchase of a home. The jury found Norwest liable for breach of contract, fraud, negligent misrepresentation, gross negligence, and knowing violations of the Deceptive Trade Practices Act ("DTPA"). <A HREF="#fr1-1" name="fn1-1">1 The Salinases elected to recover under the DTPA and the trial court awarded damages based solely on the DTPA claims. Norwest raises seventeen points of error, contending: (1) the evidence is legally and factually insufficient to support the jury's findings of fraud, negligent misrepresentation, gross negligence, violations of the DTPA, and the mental anguish damages awarded under the DTPA; (2) the trial court erred in instructing the jury, admitting improper witness testimony, and in awarding damages for mortgage payments made by the Salinases and attorneys' fees as a percentage of DTPA damages; (3) that the jury's answers are inconsistent; and (4) the judgment improperly includes the jury's findings on issues other than violations of the DTPA. In two conditional cross-points, to be considered only if we reverse any aspect of the trial court's judgment based on the DTPA, the Salinases contend (1) the trial court erred in failing to include prejudgment interest from the calculation of additional damages under the DTPA and (2) the evidence is sufficient to support the jury's findings of negligent misrepresentation and gross negligence. We affirm the judgment of the trial court. I. Facts In August of 1991, the |
On appeal from the 117th District Court of Nueces County, Texas. [Copyrighted Material Omitted]
[Copyrighted Material Omitted]
[Copyrighted Material Omitted]
[Copyrighted Material Omitted] Before Chief Justice Seerden and Justices Yanez and Chavez
O P I N I O N
Opinion by Justice Reyna
Mr. and Mrs. Jose B. Salinas ("the Salinases") instituted this suit against Norwest Mortgage, Inc. ("Norwest") for recovery of damages in connection with a loan agreement financing the construction and purchase of a home. The jury found Norwest liable for breach of contract, fraud, negligent misrepresentation, gross negligence, and knowing violations of the Deceptive Trade Practices Act ("DTPA").1 The Salinases elected to recover under the DTPA and the trial court awarded damages based solely on the DTPA claims. Norwest raises seventeen points of error, contending: (1) the evidence is legally and factually insufficient to support the jury's findings of fraud, negligent misrepresentation, gross negligence, violations of the DTPA, and the mental anguish damages awarded under the DTPA; (2) the trial court erred in instructing the jury, admitting improper witness testimony, and in awarding damages for mortgage payments made by the Salinases and attorneys' fees as a percentage of DTPA damages; (3) that the jury's answers are inconsistent; and (4) the judgment improperly includes the jury's findings on issues other than violations of the DTPA. In two conditional cross-points, to be considered only if we reverse any aspect of the trial court's judgment based on the DTPA, the Salinases contend (1) the trial court erred in failing to include prejudgment interest from the calculation of additional damages under the DTPA and (2) the evidence is sufficient to support the jury's findings of negligent misrepresentation and gross negligence. We affirm the judgment of the trial court.
In August of 1991, the Salinases contacted several builders, including Bay Area Builders ("Bay Area"), for the purpose of soliciting a bid for the construction of a new home. The Salinases became interested in Bay Area when they visited a "Parade of Homes," which featured homes advertised as built by Bay Area and financed by Norwest. The Salinases met with Bay Area's Bertha Ortiz, who told them that Norwest would consider financing their home construction loan if they put up $200 in earnest money and agreed to purchase a home from Bay Area. The Salinases signed an "Agreement to Sell" with Bay Area on or about September 10, 1991. The agreement provided for a sales price of $124,900 and a loan in the amount of $138,100.2 Shortly thereafter, Ortiz arranged a meeting, held at Bay Area's offices, between the Salinases and Randy Smith, a Norwest loan officer. At the meeting, Smith described the benefits of Norwest's "Single Closing Construction Loan Agreement," which provides, among other things, for interim and permanent financing and supervision by Norwest over a phased disbursement of funds to approved builders. The Norwest single closing agreement, signed by the Salinases and Bay Area on or about October 31, 1991, provides for a note in the amount of $138,100, construction to be completed by February 25, 1992, and for the commencement of mortgage payments on March 1, 1992, whether or not construction is complete. It further provides authorization for Norwest to "inspect and check the construction of the improvements," advance funds "in proportion to its inspector's report of progress of construction," and that Bay Area was required to provide Norwest with lien waivers from all parties furnishing labor and materials to the job prior to each advance of funds. The agreement also provides for the Salinases to execute a "Security Instrument" in favor of Norwest and for "assignment" to Norwest of any indebtedness owing to Bay Area by the Salinases under the separately executed "Builder's and Mechanic's Lien Contract."
Bay Area did not complete construction of the home by the February 25 completion date. Nonetheless, the Salinases were required to begin making regular mortgage payments starting March 1, 1992.
In late March 1992, Smith contacted several Norwest clients, including the Salinases, whose homes were then under construction by Bay Area. Norwest held a meeting to inform the clients of recently acquired information regarding problems with Bay Area. Smith and several Norwest management officials, including an attorney and the regional manager, attended the meeting. The Salinases were told that Bay Area had ceased working on the house and that Norwest had refused to provide additional funds because of reports that Bay Area had not paid outstanding bills related to the construction. Norwest advised the Salinases that liens totaling approximately $47,000 had been filed on the property and that if they so desired, they could select another builder. Further attempts to resolve the problems with Bay Area were unsuccessful. In May 1992, the Salinases sought legal representation.In October 1992, Norwest accepted a $57,700 proposal from North Padre Properties ("North Padre") to complete construction on the Salinas home within approximately sixty days. The Salinases knew Norwest had solicited bids from several builders, but were not involved in the selection of North Padre to complete the work. Mr. Salinas testified he had some reservations about the decision because he did not believe North Padre was a member of the local builder's association. North Padre began work at the site in November 1992.
In February or March of 1993, the Salinases met with Pat Childers of North Padre to discuss the progress of the work and various related matters. Childers testified that he expected payment from the Salinases for some "extra" work performed at their request.3 Mr. Salinas did not pay North Padre because the work on the house was incomplete and he feared North Padre would stop work altogether if payment was made. Shortly thereafter, North Padre ceased working on the house. Childers testified that North Padre was paid approximately $57,000 by Norwest for work performed on the house.4
Even though the house was incomplete, the Salinases obtained a certificate of occupancy and began living in the house in March of 1993, after having made regular mortgage payments for a year. Shortly thereafter, the Salinases solicited a $13,700 proposal from another builder to repair and/or complete work on the house. At the time of trial, Mr. Salinas testified that liens totaling approximately $11,000 were on file related to construction on the home.
On February 12, 1993, the Salinases filed suit against Norwest and Bay Area, alleging various theories of recovery. After trial began, the Salinases accepted an offer of settlement from Bay Area. The jury found Norwest liable for breach of contract, fraud, negligent misrepresentation, gross negligence, and for knowingly violating the DTPA by both deceptive and unconscionable acts. The jury awarded damages on all causes of action, and the Salinases elected to recover under the DTPA. The trial court entered judgment, awarding the Salinases $659,917.23 in damages, including an additional award of two times the DTPA recovery and attorney's fees of forty percent (40%) of the total DTPA award.
In reviewing a legal sufficiency challenge, we consider all the evidence in the light most favorable to the prevailing party, indulging every reasonable inference in that party's favor. Associated Indem. Corp. v. Cat Contracting, 964 S.W.2d 276, 286 (Tex 1998). We sustain a legal sufficiency challenge when the record discloses: (1) that there is a complete absence of evidence of a vital fact; (2) that the court is barred by rules of law or of evidence from giving weight to the only evidence offered to prove a vital fact; (3) that the evidence offered to prove a vital fact is no more than a mere scintilla; or (4) that the evidence conclusively establishes the opposite of the vital fact. Merrell Dow Pharms., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997); City of Alamo v. Casas, 960 S.W.2d 240, 249 (). "More than a scintilla of evidence exists when the evidence supporting the finding, as a whole, rises to a level that would enable reasonable and fair-minded people to differ in their conclusions." Associated Indem. Corp., 964 S.W.2d at 286; Merrell Dow, 953 S.W.2d at 711 (quoting Transportation Ins. Co. v. Moriel, 879 S.W.2d 10, 25 (Tex. 1994)). When confronting a factual insufficiency challenge, we overturn findings only if they are so against the great weight and preponderance of the evidence as to be clearly wrong and unjust. Ortiz v. Jones, 917 S.W.2d 770, 772 (Tex. 1996).
We will begin with the appellant's challenges to the findings in appellees' favor on their various theories of liability. In points of error nine through twelve, Norwest challenges the jury's findings of liability for violations of the DTPA. Norwest contends: (1) the Salinases are not "consumers" within the meaning of the DTPA because the injuries they suffered did not occur in connection with the lending of money; (2) the evidence is legally and factually insufficient to support the jury's findings that Norwest knowingly engaged in deceptive acts; (3) the evidence is legally and factually insufficient to support the jury's findings that Norwest engaged in unconscionable acts; and (4) the evidence is legally and factually insufficient to support the jury's finding that Norwest's violations of the DTPA were the producing cause of the Salinases' damages.
To recover under the DTPA, a plaintiff must establish "consumer" status, that the defendant...
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Table of Cases
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