Southwestern Bell Media, Inc. v. Lyles

• Decision Date: 06 February 1992
• Docket Number: No. 01-90-00848-CV,01-90-00848-CV
• Citation: 825 S.W.2d 488
• Parties: SOUTHWESTERN BELL MEDIA, INC., Appellant, v. Vernon P. LYLES, Appellee. (1st Dist.)
• Court: Texas Court of Appeals

Page 488

825 S.W.2d 488

SOUTHWESTERN BELL MEDIA, INC., Appellant, v. Vernon P. LYLES, Appellee.

No. 01-90-00848-CV.

Court of Appeals of Texas,

Houston (1st Dist.).

Feb. 6, 1992.

Rehearing Denied March 19, 1992.

Wells & Associates, P.C., D. Brent Wells, Deborah Heaton McElvaney, Houston, for appellant.

James G. Kinser, Michael P. Kovich, Kevin Dubose, Houston, for appellee.

Before TREVATHAN, C.J., and DUGGAN and O'CONNOR, JJ.

OPINION

DUGGAN, Justice.

Southwestern Bell Media, Inc., sued Vernon Lyles, owner of Freedom Bail Bonding Company, seeking to collect balances allegedly due on advertising purchased by Lyles in the 1986 and 1987 Yellow Pages. Lyles counterclaimed asserting that Southwestern Bell had breached its contracts with him and had violated the Deceptive Trade Practices-Consumer Act (DTPA) ¹ by accepting money intended as payment for new advertising, applying that money to a disputed account for old advertising, misrepresenting its application of the money, and excluding his advertisements from the 1988 Yellow Pages.

On May 25, 1990, after a bench trial, the court signed a judgment, supported by findings of fact and conclusions of law, granting relief to both parties. The judge awarded damages to Southwestern Bell on its collection suit that, after a credit to Lyles for breach of contract, amounted to $21,000. The court also entered judgment in favor of Lyles for $100,000 on his DTPA counterclaim. The judge awarded $20,000 in attorney's fees to Southwestern Bell and $25,000 in attorney's fees to Lyles and provided for a scaled award of attorney's fees on appeal. After offsetting the awards, the court ordered Southwestern Bell to pay Lyles $78,395.91. We affirm.

Southwestern Bell raises eight points of error. In points one through four it contends that the trial court erred in failing to hold that Lyles' counterclaim was barred by the applicable statute of limitations. In point five, Southwestern Bell questions both the legal and factual sufficiency of the evidence to support the court's finding that Southwestern Bell's alleged misrepresentation was the producing cause of Lyles' damages. Points six and seven challenge the trial court's award of DTPA damages and the admission of Lyles' expert testimony on the damage issue. In point eight, Southwestern Bell claims error in the court's award of attorney's fees.

Southwestern Bell's suit against Lyles, filed in July 1988, was grounded in its claim that Lyles had breached two agreements for directory advertising in the 1986 and 1987 Yellow Pages by failing to pay for the ads. Alternatively, Southwestern Bell sought $59,830.59 in damages, including the balance on the accounts, interest, costs, and attorney's fees on the basis of quantum meruit.

In April 1990, Lyles amended his general denial to add a counterclaim, the basis for which was two-fold: (1) breach of contract, negligence, and/or fraud arising from Southwestern Bell's failure to provide advertising services as agreed in the 1986 and 1987 Yellow Pages, and (2) violations of the DTPA arising from Southwestern Bell's several alleged misrepresentations to Lyles, particularly its misrepresentation in obtaining a $5,000 deposit ostensibly for directory advertising for the 1988 Yellow Pages, applying that deposit to the balance on Lyles' 1986 and 1987 accounts, and excluding his advertisement from the 1988 directory. Lyles also sought mental anguish damages and exemplary damages. Southwestern Bell asserted the two year statute of limitations as a bar to the DTPA counterclaim. The act provides as follows in relevant part:

Section 17.565.

All actions brought under this subchapter must be commenced within two years after the date on which the false, misleading, or deceptive act or practice occurred or within two years after the consumer discovered or in the exercise of reasonable diligence should have discovered the occurrence of the false, misleading, or deceptive act or practice.

TEX.BUS. & COM.CODE ANN. § 17.565 (Vernon Supp.1991).

All parties agreed that the alleged misrepresentations, if any, were made on December 9, 1987, the date Lyles tendered and Southwestern Bell accepted the $5,000 check. Lyles' counterclaim was filed some 28 months after that date, on April 16, 1990. However, applying the discovery rule, the trial court found that the counterclaim was not barred by limitations. Specifically, the trial court found the following facts:

(1) On December 9, 1987, Southwestern Bell made a series of misrepresentations to Lyles concerning the status of his existing account and his ability to obtain future advertising in the 1988 Yellow Pages;

(2) Given the nature of the misrepresentations and the long-standing commercial relationship between Southwestern Bell and Lyles, the misrepresentations amounted to false, misleading, and deceptive trade practices actionable under the DTPA; and

(3) Lyles could not reasonably have discovered these deceptive trade practices prior to May 8, 1988, which, therefore, was the date limitations began to run on his counterclaim.

The court concluded that the counterclaim was timely filed.

Southwestern Bell contends the trial court erred as a matter of law in this holding. Specifically, Southwestern Bell claims there is no evidence to support the trial court's failure to apply the two-year statute of limitations; that the evidence conclusively established the application of limitations; and that the evidence is legally and factually insufficient to support the application of the discovery rule.

The discovery rule is a plea in confession and avoidance. Woods v. William M. Mercer, Inc., 769 S.W.2d 515, 517 (Tex.1988). In other words, assertion of the rule does not involve a claim that the suit is not barred by the statute of limitations. Instead, the plaintiff who pleads the discovery rule effectively admits that limitations would apply except for some circumstance, his inability to discover the misrepresentation sooner than he did, which justifies the court in tolling the statute of limitations. Woods, 769 S.W.2d at 517; Willis v. Maverick, 760 S.W.2d 642, 644-45 (Tex.1988).

The discovery rule provides that the statute of limitations runs from the date the plaintiff discovered or, in the exercise of reasonable diligence, should have discovered the nature of the injury suffered. Willis, 760 S.W.2d at 646. Under the DTPA, the statute of limitations begins to run when the deceptive act or practice occurs or, if the deception is concealed, when the plaintiff, in the exercise of reasonable diligence, should have discovered the occurrence of the misrepresentation made the basis of the complaint. Woods, 769 S.W.2d at 517; Black v. Wills, 758 S.W.2d 809, 816 (Tex.App.--Dallas 1988, no writ). The rule imposes a duty on the plaintiff to exercise reasonable diligence to discover the facts of the negligence or omission. Willis, 760 S.W.2d at 646. The date the plaintiff discovered or should have discovered the misrepresentation is a question of fact. Willis, 760 S.W.2d at 647; Black, 758 S.W.2d at 816. ²

We agree with appellant that, but for the trial court's application of the discovery rule, Lyles' counterclaim would have been barred by the statute of limitations as a matter of law. A simple mathematical calculation conclusively establishes the expiration of the statutorily mandated two-year limitations period to be December 9, 1989.

Therefore, the propriety of the court's application of the discovery rule is the threshold issue before us. If the discovery rule was properly applied, then the court's failure to hold the claim was time barred was also proper. If, on the other hand, as Southwestern Bell contends, there was no evidence or insufficient evidence to support the application of the discovery rule, the court's failure to apply the statute of limitations would be error. Accordingly, we consider the legal and factual sufficiency of the evidence to support the trial court's finding that Lyles reasonably could not have discovered the misrepresentations before May 8, 1988.

The standard of appellate review applied to a trial court's findings of fact is the same as that applied to a jury's verdict. See Brown v. Frontier Theatres, Inc., 369 S.W.2d 299, 301 (Tex.1963); Valencia v. Garza, 765 S.W.2d 893, 896 (Tex.App.--San Antonio 1989, no writ). A no evidence challenge requires us to review only the evidence and reasonable inferences from the evidence that tend to support the finding, disregarding all evidence and inferences to the contrary. Davis v. City of San Antonio, 752 S.W.2d 518, 522 (Tex.1988); Brown, 369 S.W.2d at 301; Zieben v. Platt, 786 S.W.2d 797, 799 (Tex.App.--Houston [14th Dist.] 1990, no writ). If there is any evidence of probative force in support of the finding, the no evidence challenge must be overruled. Zieben, 786 S.W.2d at 799. A challenge to the factual sufficiency of the evidence requires us to consider the evidence both in support of and contrary to the challenged finding. We may set aside the finding only if the evidence so is weak or the finding is so against the great weight and preponderance of the evidence as to be clearly wrong and unjust. Garza v. Alviar, 395 S.W.2d 821, 823 (Tex.1965); Zieben, 786 S.W.2d at 799.

Furthermore, in a bench trial, the trial court, as fact-finder, is the sole judge of the credibility of the witnesses. He may take into consideration all the facts and surrounding circumstances in connection with the testimony of each witness and accept or reject all or any part of that testimony. Valencia, 765 S.W.2d at 895; Electro-Hydraulics Corp. v. Special Equip. Eng'rs, Inc., 411 S.W.2d 382, 386-87 (Tex.Civ.App.--Waco 1967, writ ref'd n.r.e.).

Lyles testified that he did not realize that his advertisement was being excluded from the 1988 directory until May 7 or 8, 1988, when he was told that the book was closed and his ad was not included. Thus, the trial court had to decide whether Lyles, in the exercise of...