Superior Trucks, Inc. v. Allen, 01-82-0297-CV

• Decision Date: 08 December 1983
• Docket Number: No. 01-82-0297-CV,01-82-0297-CV
• Citation: 664 S.W.2d 136
• Parties: SUPERIOR TRUCKS, INC., Appellant, v. Jumel ALLEN, et al., Appellees. (1st Dist.)
• Court: Texas Court of Appeals

Page 136

664 S.W.2d 136

SUPERIOR TRUCKS, INC., Appellant, v. Jumel ALLEN, et al., Appellees.

No. 01-82-0297-CV.

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

Dec. 8, 1983.

Rehearing Denied Dec. 29, 1983.

Wayne Adams, James Earl Elskes, Houston, for appellant.

Larry Watts, Houston, for appellees.

Before SMITH, BULLOCK and COHEN, JJ.

OPINION

BULLOCK, Justice.

This is an appeal from a judgment entered after a jury verdict for the appellees in an action for violations of the Texas Deceptive Trade Practices Act (DTPA) and express breach of warranty in connection with the sale of a truck.

In 1977, Jumel Allen, one of the two appellees, decided to enter the hauling business. Richard Allen, the other appellee and Jumel's brother, was going to do the driving. Early in April of 1977, Jumel contacted a local carrier, T. Inc., and determined that if he obtained a used truck that was not too old and was in good condition, this company would give him a hauling contract. Jack Cobb of T. Inc., testified that although his firm was willing to lease a 1973 used truck with a new dump body, they would not have given Jumel a contract on a truck as old as 1969.

After looking elsewhere, Jumel contacted Bert McDonough, salesman for the appellant, Superior Trucks, Inc., and explained to him what he needed. McDonough told him that he was familiar with the T. Inc. hauling business, had sold a lot of trucks to people who worked there, and that he knew just what Jumel needed. Jumel called several times and looked at trucks on the appellant's lot, but rejected them because they were too old for the intended purpose. McDonough later telephoned Jumel and told him that he had located a good truck for him, a 1973 truck, with new tires, and a new dump bed added by National Truck. On McDonough's instructions, Jumel and Richard went to see the truck at National's yard, and Richard test-drove it. When Jumel called to discuss the sale, McDonough again assured him, "I know it's a good truck ... I looked at it and it's a good truck."

After accumulating the $3,500 down payment, Jumel went to close the sale with the appellant. The remainder of the financing was arranged by the appellant through Associates Finance. The owner of the appellant company personally intervened to transfer title to the truck from National to the appellant, and Jumel and Richard picked up the truck at the appellant's yard shortly thereafter.

Although the appellant's credit manager testified that it was his company's policy that all trucks have a "make-ready" and that no truck leaves the lot in a dangerous condition, and McDonough testified he was responsible for giving the credit manager all the information on the specifications of the truck, including year, no employee of the appellant bothered to examine the truck to determine that it was, in fact, a 1973 model or that the body was bolted to the frame of the cab as opposed to being welded. McDonough testified that he did not examine the truck to ascertain these matters.

As planned, Richard began driving the truck, hauling building materials for T. Inc., and the business was operating at a profit. The managers of T. Inc. testified that the appellees did a good job for them, and that the contract could reasonably be expected to continue. After seven weeks, however, the truck collapsed in the middle while Richard was hauling a load. Richard's head hit the back of the cab, the force of the blow breaking a plate in his mouth. Although the collapse ruined the brakes and left the fuel tank dragging on the ground and leaking diesel fuel, Richard managed to steer the truck off the road and escaped by breaking out a window.

After the collapse, the appellees discovered for the first time that the truck frame had been welded instead of bolted as it should have been. It had collapsed along the weld seam. Jumel called the appellant to find out what to do and was told to have the truck towed to National's yard to "fix up." The wrecker driver placed the nondrivable truck in the garage at National, but it was later moved into the fenced yard. At National, Jumel rebuffed promises of money in his pocket and a new truck if he told a lie as to the true condition of the truck.

Jumel called McDonough again and told him that the truck was "totaled." McDonough told Jumel that if he did not do what National asked him to do, he could not help. Jumel, however, still refused to lie and was very upset by these communications. He called his attorney for assistance in getting a truck from the appellant. Shortly thereafter, he learned that the truck had disappeared from National's yard. The truck has not been located.

Subsequently, the appellees learned that the truck was originally titled in Florida as a 1969 model, but the title had been altered to show it as a 1973 model sometime after it came into National's possession.

In addition to the DTPA and breach of warranty claims, the appellees also pled fraud. The trial court submitted special issues to the jury under the DTPA, inquiring whether or not Jumel was adversely affected by misrepresentations found by the court; whether or not Richard was adversely affected by the misrepresentation of the uses, characteristics or benefits of the truck, and as to the amount of money which would fairly compensate each of them for any loss suffered; and regarding the breach of express warranty that the truck was suitable for hauling. Issues addressing malice, mental anguish, and exemplary damages were also submitted.

The jury found for the appellees on all issues. Jumel elected to claim exemplary damages awarded by the jury for the breach of warranty, rather than treble damages under the DTPA. The trial court disregarded special issue no. 11 which awarded Jumel compensation for mental anguish.

The court entered judgment for compensatory damages in the amount of $21,568.80 and exemplary damages of $73,137.60 for Jumel and for $5,000 under the DTPA for the personal injuries suffered by Richard when the truck collapsed.

The appellant urges thirteen points of error, and the appellees present two cross-points.

The judgment of the trial court is affirmed as reformed.

In his first point of error, appellant argues that the trial court erred in rendering judgment which permitted appellee, Jumel Allen, to recover exemplary damages for a breach of warranty which, according to the jury, "was a malicious or wanton disregard of the rights of plaintiff, Jumel Allen." We agree.

Texas law is clear that exemplary damages are not allowed for breach of contract. Amoco Production Co. v. Alexander, 622 S.W.2d 563 (Tex.1981); A.L. Carter Lumber Co. v. Saide, 140 Tex. 523, 526, 168 S.W.2d 629, 631 (1943). Even if the breach is malicious, intentional or capricious, exemplary damages may not be recovered unless a distinct tort is alleged and proved. Amoco Production Co., supra; City Prods. Corp. v. Berman, 610 S.W.2d 446, 450 (Tex.1980); A.L. Carter Lumber Co., supra. A suit for breach of an express warranty, such as here, is based on contract and is governed by the law of contracts. Smith v. Kinslow, 598 S.W.2d 910 (Tex.Civ.App.--Dallas 1980, no writ). Thus, absent pleading and proof of an independent tort, the breach of an express warranty, even committed maliciously or wantonly, will not support an exemplary damages recovery.

The appellees urge that such a distinct tort, namely fraud, was both pled, proved, and found by the jury, and, therefore, the award of exemplary damages was proper. Alternatively, they urge that any element of fraud not found expressly by the jury is supported by the evidence and should be implied pursuant to Tex.R.Civ.Pro. 279. Neither of these contentions, however, is supported by the record or the law of this State.

In order to recover on an express warranty, the appellees had the burden of establishing:

(1) that a warranty was made;

(2) that it was breached; and

(3) that, as a result of the breach, an injury resulted.

Indust-Ri-Chem. Lab v. Par-Pak Co., Inc., 602 S.W.2d 282 (Tex.Civ.App.--Dallas 1980, no writ). The appellee, Jumel Allen, sustained this burden by pleading and proving his cause of action, the result of which prompted affirmative responses to the following special issues:

SPECIAL ISSUE NO. 4

Do you find from a preponderance of the evidence that Defendant, Superior Trucks, Inc., by and through its authorized agent, expressly warranted that the truck was suitable for use by Plaintiff, Jumel Allen, in his hauling business?

* * *

* * *

SPECIAL ISSUE NO. 6

Do you find from a preponderance of the evidence that Defendant, Superior Trucks, Inc., breached the express warranty?

* * *

* * *

SPECIAL ISSUE NO. 7

Do you find from a preponderance of the evidence that Defendant's, Superior Trucks, Inc's, breach of express warranty was the proximate cause of damages, if any, suffer by Plaintiff, Jumel Allen?

The elements of actionable fraud, however, are the following:

(1) that a material representation was made;

(2) that it was false;

(3) that, when the speaker made it, he knew it was false or made it recklessly without knowledge of its truth and as a positive assertion;

(4) that he made it with the intention that it should be acted upon by the party;

(5) that the party acted in reliance upon it; and

(6) that he thereby suffered injury.

Custom Leasing, Inc. v. Texas Bank & Trust Co. of Dallas, 516 S.W.2d 138 (Tex.1974). The appellees argue that all of the elements of actionable fraud were found by the jury pursuant to its answers to the three special issues outlined above, and, in addition, by its answers to special issues no. 5 and 12 which inquired:

SPECIAL ISSUE NO. 5

Do you find from a preponderance of the evidence that Plaintiff, Jumel Allen, reasonably relied upon the representation made by Defendant, Superior Trucks, Inc., that the truck in question was fit for use in his hauling business to his detriment?

Answer: "We do," or "We do not."

[To which the jury...