Texas Nat. Bank v. Karnes

Citation717 S.W.2d 901
Decision Date22 October 1986
Docket NumberNo. C-5546,C-5546
Parties2 UCC Rep.Serv.2d 1133 TEXAS NATIONAL BANK, Petitioner, v. Dewey J. KARNES, et ux, Respondents.
CourtTexas Supreme Court

Dewey J. Gonsoulin, Mehaffy, Weber, Keith & Gonsoulin, Beaumont, for petitioner.

Joe Lee Register, Lufkin, for respondents.

PER CURIAM.

This is a secured transaction case involving issues of the scope of appellate review and the recoverability of punitive damages. Respondents Dewey and Alice Karnes sued Texas National Bank for improper disposition of repossessed collateral and for conversion. The trial court rendered judgment for the plaintiffs which included punitive damages. The court of appeals modified the trial court's judgment by granting attorney's fees and ordering remittitur of some punitive damages. 711 S.W.2d 389. We reverse the court of appeals' attorney's fees judgment because it was based on unassigned error. We also reverse the court of appeals' punitive damage judgment because there was no finding of actual damages in tort.

David Karnes, the son of Dewey and Alice Karnes, arranged financing with the Texas National Bank to buy a van. The note impressed a lien on the van's certificate of title and was co-signed by his mother.

In May of 1979, David defaulted on the note, and the bank repossessed the van. The Karneses had a joint savings account at Texas National Bank and the entire note balance, $3,474.41, was charged against their account. The Karneses discovered the charge approximately four months later. The bank did not sell the van until five years after repossession. Moreover, the Karneses never received credit for the value of the vehicle.

The Karneses sued alleging that Texas National Bank converted the funds it debited from their savings account and disposed of the van in a commercially unreasonable manner. The jury found that the bank failed to make a commercially reasonable disposition of the collateral; fraudulently obtained possession of the savings account funds; and intentionally concealed the withdrawal from the savings account. The jury also found that the Karneses were entitled to punitive damages and attorney's fees.

The trial court rendered judgment for $3474.41. The parties had stipulated this damage amount in the event the jury returned a verdict against the bank on the commercially reasonable disposition issue. No actual damage issues were submitted to the jury nor were there any other stipulations. Based on the jury's verdict, the trial court also awarded $50,000 in punitive damages. The court refused to make a separate award of attorney's fees holding that the fees were an element considered by the jury in determining the amount of punitive damages.

On appeal, the parties did not brief or argue that the trial court's failure to specifically award attorney's fees was erroneous. Nevertheless, the court of appeals independently granted attorney's fees because it disagreed with the trial court's judgment.

The court of appeals may not reverse a trial court's judgment in the absence of properly assigned error. Central Educ. Agency v. Burke, 711 S.W.2d 7, 8 (Tex.1986); Prudential Ins. Co. v. J.R. Franclen, Inc., 710 S.W.2d 568, 569 (Tex.1986); Gulf Consol. Int'l Inc. v. Murphy, 658 S.W.2d 565, 566 (Tex.1983). Here, the trial court's refusal to grant attorney's fees was not assigned as error by either party. Accordingly, the court of appeal's modification of the trial court's judgment conflicts with our decisions in Central Educ. Agency, Prudential Ins. Co., and Gulf Consol. Int'l Inc.

The court of appeals also modified the trial court's punitive damage judgment. The court concluded the award of "some" punitive damages was justified based on its finding that the bank committed seven separate and independent torts. The court held that $50,000 was excessive and ordered a $30,000 remittitur.

Punitive damages are not recoverable for breach of contract. Jim Walter Homes, Inc. v. Reed, 711 S.W.2d 617, 618 (Tex.1986); Bellefonte Underwriters Ins. Co. v. Brown, 704 S.W.2d 742, 745 (Tex.1...

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132 cases
  • Texas Farmers Ins. Co. v. Soriano
    • United States
    • Texas Court of Appeals
    • November 30, 1992
    ...remittitur was in order. Id. at 347. In Texas Nat'l Bank v. Karnes, 711 S.W.2d 389, 391 (Tex.App.--Beaumont), rev'd in part, 717 S.W.2d 901 (Tex.1986), the cosigner of a note and her husband brought suit against a bank for removing money from their savings account after repossession of a ve......
  • Valdez v. Church's Fried Chicken, Inc.
    • United States
    • U.S. District Court — Western District of Texas
    • March 30, 1988
    ...explicitly recognized by several courts interpreting Texas law. E.g., Mack v. Newton, 737 F.2d 1343 (5th Cir.1984); Texas National Bank v. Karnes, 717 S.W.2d 901 (Tex. 1986); City Products Corp. v. Berman, 610 S.W.2d 446 (Tex.1980). Accordingly, the Court need not independently consider whe......
  • In re Doe, 14-16-00555-CV
    • United States
    • Texas Court of Appeals
    • September 8, 2016
    ...Compare id. (stating court of appeals may decide appeal in Judicial Bypass Proceeding without any briefing), with Texas Nat'l Bank v. Karnes, 717 S.W.2d 901, 903 (Tex.1986) (stating that "the court of appeals may not reverse a trial court's judgment in the absence of properly assigned error......
  • Riley v. Champion Intern. Corp.
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    • U.S. District Court — Eastern District of Texas
    • July 17, 1997
    ...are not recoverable for a breach of contract absent an independent tort with accompanying actual damages. Texas Nat'l Bank v. Karnes, 717 S.W.2d 901, 903 (Tex.1986) (per curiam); Bellefonte Underwriters Ins. Co. v. Brown, 704 S.W.2d 742, 745 (Tex.1986); see also Donnelley Mktg. v. Lionel So......
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