Reed v. Israel Nat. Oil Co., Ltd.

• Decision Date: 25 October 1984
• Docket Number: No. 01-83-00730-CV,01-83-00730-CV
• Citation: 681 S.W.2d 228
• Parties: Robert Wayne REED, Appellant, v. ISRAEL NATIONAL OIL COMPANY, LTD., Appellee. (1st Dist.)
• Court: Texas Court of Appeals

Page 228

681 S.W.2d 228

Robert Wayne REED, Appellant, v. ISRAEL NATIONAL OIL COMPANY, LTD., Appellee.

No. 01-83-00730-CV.

Court of Appeals of Texas Houston (1st Dist.).

Oct. 25, 1984.

Donald G. Roberts, Kirkham & Roberts, Joe M. Kirkham, Kirkham & Roberts, J. Clifford Gunter, III, Bracewell & Patterson,

Susan J. Brandt, Bracewell & Patterson, Houston, for appellant.

Edmund L. Cogburn, Charity O'Connell, Dow, Cogburn & Friedman, Houston, for appellee.

Before DUGGAN, DOYLE and LEVY, JJ.

OPINION

DUGGAN, Justice.

This is an appeal from a plaintiff's judgment awarding treble damages and attorney's fees under the Texas Deceptive Trade Practices Act.

A jury awarded plaintiff, Israel National Oil Company, Ltd. ("Israel Oil"), actual damages of $72,407.70, and attorney's fees of $57,500, subject to credit if there were no appeals. The trial court trebled the actual damage award, added prejudgment interest to date of judgment, and deducted a stipulated credit in the amount of $53,644. The total judgment against the defendant, Reed, including attorney's fees, was for $252,392.53, subject to attorney's fees credit.

The appellant asserts fourteen points of error, and the appellee brings two cross-points.

Israel Oil's pleadings initially alleged a cause of action for fraud, breach of warranty, breach of contract, and failure to pay a promissory note given by Reed in partial payment for losses resulting from used drilling pipe purchased from him. Shortly before trial, Israel Oil amended its pleadings to allege violations of the DTPA by Reed.

Reed's answer consisted of a general denial and a claim of fraudulent misrepresentation pertaining to a labor contract that he said provided the consideration for his execution of the promissory note.

The transaction upon which plaintiff's cause of action is based took place in late 1975 in Singapore, where Michael Kisch, an officer of Israel Oil, was handling the renovation of an oil rig for drilling operations in the Gulf of Suez. Kisch did a great deal of business at this time with Jack Enen & Associates, a supply company whose president was Reed.

Reed, knowing that Kisch needed a supply of drill pipe for the rig, located and purchased a string of used pipe from Key Drilling in late December of 1975 for $2 per foot and sold it to Israel Oil for $11 per foot. Reed was acting in the transaction only in behalf of himself and Jack Enen, Jr., not Jack Enen & Associates. This pipe had been taken out of service by Key in October of 1975 and stored in Enen's Singapore yard. Key gave Reed a receipt showing that the pipe was "Class III." Reed never showed the receipt to Kisch.

Reed hired Vetco, a commercial inspection company, to inspect the pipe for Israel Oil. Vetco inspected ten joints of the pipe and submitted a report to Reed certifying that these ten joints were "Class II" pipe. On the basis of this inspection report, Reed's representations as to the class of the pipe, and a visual inspection, Kisch approved the purchase of the pipe.

During the purchase negotiations, Kisch and Reed discussed a contract to provide labor for the rig's operation. While Reed was in Israel in March of 1976 to pursue this contract, an inspection of 49 joints of the pipe in Israel revealed that it was "Class III" or "Class IV" pipe.

As a result of meetings with Kisch, and later with David Schlosberg, an attorney for Israel Oil, Reed signed two sworn statements admitting his liability for Israel Oil's losses, and a letter agreement and promissory note providing for restitution.

Reed ultimately defaulted in payment of the note and broke off communication with Israel Oil. Israel Oil then sued Reed and Jack Enen, Jr., and accepted a $53,644 settlement from Enen & Associates, which was never sued.

Appellant's first two points of error contend that the trial court erred in rendering judgment for plaintiff under the 1975 version of the Texas Deceptive Trade Practices Act because there was no evidence, or insufficient evidence, that plaintiff Israel Oil was a "consumer" under that act, and because the finding of "consumer" was against the great weight and preponderance of the evidence.

The proper predicate for a legal insufficiency, or "no evidence," point of error is either a motion for instructed verdict, an objection to the submission of a vital fact issue, a motion to disregard a jury finding, a motion for judgment non obstante veredicto, or a motion for new trial that distinctly raises the "no evidence" point. Calvert, "No Evidence" and "Insufficient Evidence" Points of Error, 38 Tex.L.Rev. 361, 362 (1960).

Appellant presented no motion for instructed verdict. He did file a motion for judgment on the verdict, a motion for new trial, and a motion to vacate, correct or reform judgment, but in none of these motions does he distinctly raise the "no evidence" point he now urges. Likewise, appellant filed no motion for judgment non obstante veredicto.

Whether or not a plaintiff is a consumer is a question of law to be determined by the trial court from the evidence. If the trial court concludes that a plaintiff is not a consumer, it will not submit jury questions as to the violation of the terms of the Act. Ridco v. Sexton, 623 S.W.2d 792, 795 (Tex.App.--Fort Worth 1981, no writ). Since the trial court did submit jury questions as to the violation of the terms of the DTPA by Special Issues No. 1 and No. 3, it can be presumed that the trial court concluded that plaintiff was a consumer under the Act.

Furthermore, appellant's only objections to these two issues were (1) that the definition of the term "recklessly" in issue number 1 was erroneous, and (2) that issue number 3 did not state the basis for any legal ground of recovery because it "does not inquire as to whether the Defendant made any misstatement as to any material fact." These two objections do not reach the "no evidence" point complaining that plaintiff is not a consumer. Hence, no proper predicate was laid in the trial court for our consideration of appellant's "no evidence" point of error.

In determining factual insufficiency of the evidence, or "great weight and preponderance" points, this court must consider and weigh all of the evidence, including any evidence contrary to the jury's finding on the special issues. In Re King's Estate, 150 Tex. 662, 244 S.W.2d 660 (1951).

The judgment entered by the trial court herein stated that "[b]ased on the findings of the jury, judgment should be rendered for plaintiff under the [DTPA] as it was prior to the 1977 amendments thereto, but after amendments thereto added in 1975."

Section 17.45(4) of the DTPA, as amended in 1975, defined a "consumer" as follows:

(4) 'Consumer' means an individual, partnership or corporation who seeks or acquires, by purchase or lease, any goods or services.

Section 17.45(1) defined "goods" as follows:

(1) 'Goods' means tangible chattels or real property purchased or leased for use.

Finally, sec. 17.45(2) of the Act defined "services" as follows:

(2) 'Services' means work, labor, or services purchased or leased for use, for other than commercial or business use, including services furnished in connection with the sale or repair of goods.

The appellant argues that the trial court's judgment was in error because: (1) the plaintiff did not plead and prove that it was a "consumer" and failed to obtain a jury finding to that effect; (2) the plaintiff purchased the pipe for commercial purposes, i.e., for use in production of other goods, and therefore does not fit within the Act's definition of consumer; and, (3) the plaintiff was a "governmental entity", and therefore not a "consumer" under the 1975 version of the Act. Each of these arguments is without merit.

In order to maintain a private cause of action for treble damages under sec. 17.50 of the Act, the complainant must qualify as a "consumer," as defined in sec. 17.45(4) of the 1975 version of the Act. Cameron v. Terrell & Garrett, Inc., 618 S.W.2d 535, 538 (Tex.1981); Riverside Nat'l Bank v. Lewis, 603 S.W.2d 169, 173 (Tex.1980). The plaintiff has the burden of proof on all elements of his cause of action under the Act, including proof that he was a consumer. Farmers and Merchants State Bank v. Ferguson, 617 S.W.2d 918, 920 (Tex.1981). The Act does not require that a complainant use the word "consumer" to describe himself in pleading his cause of action; however, he must allege facts which show him to be a person within the statutory definition of "consumer." First Title Co. of Corpus Christi v. Cook, 625 S.W.2d 814, 817 (Tex.App.--Fort Worth 1981, writ dism'd); Cameron, supra; Ridco, supra.

Plaintiff's Fourth Amended Original Petition did not specifically allege that it was a "consumer" as defined in sec. 17.45(4) of the Act. However, it did allege the following: that defendant Reed sold plaintiff a quantity of drill pipe which Reed represented and warranted was merchantable and usable for its intended purposes; that the plaintiff relied on these representations made by the defendant and purchased the pipe; that the pipe was in fact worthless and unusable for the purpose intended; that the plaintiff suffered damages because of the defendant's false representations; that because of these false and misleading representations the defendant violated the Texas Deceptive Practices--Consumer Protection Act; and, that because of such violation of the Act, plaintiff's damages should be trebled as provided by the Act.

A petition is sufficient if it gives fair and adequate notice of the facts upon which the pleader bases his claim. Tex.R.Civ.P. 45 and 47. The court will look to the pleader's intendment and will uphold the pleading even if some element of a cause of action has not been specifically alleged. Every fact will be supplied that can reasonably be inferred from what is specifically stated. Roark v. Allen, 633 S.W.2d 804, 809 (Tex.1982); Gulf, Colorado & Santa Fe Railway Co. v. Bliss, 368 S.W.2d...