Zaragoza v. Jessen, 08–14–00260–CV

• Court: Court of Appeals of Texas
• Writing for the Court: ANN CRAWFORD McCLURE, Chief Justice
• Citation: 511 S.W.3d 816
• Parties: Manuel ZARAGOZA and Eloisa Zaragoza, Appellants, v. Gunnar JESSEN and Elizabeth Jessen, Appellees.
• Docket Number: No. 08–14–00260–CV,08–14–00260–CV
• Decision Date: 08 June 2016

511 S.W.3d 816

Manuel ZARAGOZA and Eloisa Zaragoza, Appellants,
v.
Gunnar JESSEN and Elizabeth Jessen, Appellees.

No. 08–14–00260–CV

Court of Appeals of Texas, El Paso.

June 8, 2016

Enrique Lopez, El Paso, TX, Attorney for Appellants.

Ken Slavin, Kemp Smith, El Paso, TX, Attorney for Appellees.

Before McClure, C.J., Rodriguez, and Hughes, JJ.

OPINION

ANN CRAWFORD McCLURE, Chief Justice

This is an appeal from a final judgment after a bench trial in which the trial court awarded Appellees, Elizabeth and Gunnar Jessen, actual damages in the amount of $131,277, punitive damages totaling $25,000, and attorney's fees, interest, and costs. For the reasons that follow, we affirm.

511 S.W.3d 819

FACTUAL BACKGROUND

Appellants, Eloisa Zaragoza and her husband, Manuel Zaragoza, owned a home located at 704 Dorsey in El Paso, Texas. Mrs. Zaragoza currently maintains her real estate license, but for a period of five years, from 2003 to 2008, she worked as a hair stylist at a salon and day spa owned by Mrs. Jessen. The Jessens' daughter, Jessica Ramirez, also worked for a period of time at her mother's salon and day spa. Jessica suffered from serious health issues which caused her financial difficulty. As a result, she was unable to afford housing for herself and her three children. Accordingly, the Jessens searched for a house to buy for Jessica. The Jessens believed it was better for them to purchase a house for their daughter so that she could pay them rent and in the event she could not make rental payments, the Jessens would be able to cover the payments. The Zaragozas offered to sell the Jessens the Dorsey Home. During trial, the parties disputed whether Jessica was involved in the negotiations.

Two documents were admitted into evidence describing the terms of the sale. The Jessens offered the first document ("Document 1"), dated June 15, 2007. Mrs. Jessen testified that she and Mrs. Zaragoza prepared Document 1. Document 1 required the Jessens to pay $107,000 as the purchase price. Mrs. Jessen specifically testified that Jessica was not part of these negotiations with the Zaragozas. Document 1 was not signed by the parties. Despite the parties' failure to sign Document 1, the Jessens complied with its terms and ultimately paid over $107,000 for the Dorsey Home. Document 1 additionally required that the Jessens pay the Zaragozas a significant down payment of $73,010 and assume payment of the first mortgage on the property held by Regions/EverHome.¹ The Regions/EverHome mortgage had a remaining balance of $33,990.00. Document 1 further required that on January 18, 2007, the Zaragozas utilize $34,000 of the Jessens' $73,010 down payment to pay off a second mortgage held by Beneficial. Mrs. Jessen testified that the Zaragozas agreed to deed the Dorsey Home to them once they paid the Regions/EverHome mortgage. The Zaragozas introduced a similar document at trial, also dated June 15, 2007 ("Document 2"). Document 2 differed from Document 1 in that it appeared to be a contract between Jessica and the Zaragozas, not between the Jessens and the Zaragozas. Mrs. Jessen testified that she had never seen Document 2 until the day of the trial. Document 2 contained a provision that required Jessica to obtain other financing within one year from the date of the contract. The Zaragozas signed Document 2 but neither the Jessens nor Jessica did so. On June 18, 2007, the Jessens tendered a cashier's check for the down payment to the Zaragozas, which the Zaragozas endorsed and deposited into their bank account. The Zaragozas immediately turned possession of the house over to the Jessens. The Jessens subsequently made improvements and renovations totaling $9,717.41.

On September 9, 2009, the Jessens paid the $33,990.00 Regions/EverHome mortgage in full and Regions/EverHome released the lien. The Jessens asked the Zaragozas to deed the house to them as they represented they would do. The Zaragozas did not do so. Nor did the Zaragozas pay off the second $34,000 Beneficial mortgage as required under both Document

511 S.W.3d 820

1 and Document 2. In fact, the Zaragozas never disclosed this information to the Jessens and in April of 2010, the Jessens apparently discovered on their own that the Beneficial mortgage still encumbered the house. According to Mrs. Jessen, this was the first time that she and her husband realized that the Zaragozas lied to them. Also included in the Regions/EverHome mortgage payments were taxes and insurance escrow for the Dorsey house. Once the Jessens paid off the Regions/EverHome mortgage, these escrow funds were reimbursed back to the Zaragozas because they still held title. Because the Zaragozas did not distribute these funds, the Jessens personally paid the 2009 property taxes, despite the fact that the escrow funds were readily available.

On August 6, 2010, the Jessens' attorney sent a formal written demand to the Zaragozas to either deed the house to the Jessens unencumbered or return the money they had paid. Mrs. Zaragoza testified at trial that instead of paying off the $34,000 Beneficial mortgage, she used the Jessens' $73,010 down payment to first invest in a certificate of deposit, then purchase a truck for their son and pay for some personal living expenses while her mother was ill. The Zaragozas did not pay the Beneficial mortgage until 2013, two years after the lessens filed suit.

Unrelated to the Dorsey Home transaction, the Zaragozas asked to borrow $5,000 from the Jessens on January 13, 2010. The Zaragozas told the Jessens they would pay them back within thirty days. The Jessens loaned the Zaragozas the $5,000 but were never repaid in full.

In 2011, the Jessens sued the Zaragozas. After several amended petitions, the Jessens ultimately asserted claims for breach of contract and fraud in a real estate transaction, and sought to recover damages related to the real estate transaction, collection of the separate $5,000 loan, attorney's fees, punitive damages, interest, and costs. At the conclusion of the bench trial, the trial court issued findings of fact and conclusions of law in which it found that despite the fact that the parties did not have a signed contract, the Jessens had a viable breach of contract claim against the Zaragozas under the doctrine of substantial performance of an oral contract; the Zaragozas breached the contract to sell and deed the Dorsey Home to the Jessens; the Zaragozas committed fraud in a real estate transaction; and due to the Zaragozas' fraudulent and malicious conduct, the Jessens were entitled to recover punitive damages and reasonable attorney's fees. The trial court ultimately awarded judgment to the Jessens for $131,277 of actual damages, punitive damages in the amount of $25,000, attorney's fees, interest, and costs. This appeal follows.

The Zaragozas initially presented several arguments within their first issue challenging many of the trial court's findings of facts and conclusions of law. However, in their actual argument section, they fail to actually argue most of those initial assertions. Therefore, according to our understanding of their brief, we identify the following issues: (1) whether the trial court erred in determining that the lessens had standing; (2) whether the trial court erred in not allowing the Zaragozas to present a statute of frauds defense and as a result, determined that the Zaragozas breached their contract after the Jessens rendered full compliance with the terms of the contract; (3) whether the evidence supports the finding that the Zaragozas committed fraud in a real estate transaction; and (4) and whether the trial court erred in denying the Zaragozas' motion for new trial.

511 S.W.3d 821

STANDARDS OF REVIEW

Findings of Fact

Unchallenged findings of fact are binding on an appellate court unless the contrary is established as a matter of law or there is no evidence to support the finding. In re K.R.P., 80 S.W.3d 669, 673 (Tex.App.–Houston [1st Dist.] 2002, pet. denied) ; Waggoner v. Morrow, 932 S.W.2d 627, 631 (Tex.App.–Houston [14th Dist.] 1996, no writ) ; McGalliard v. Kuhlmann, 722 S.W.2d 694, 696 (Tex.1986). Challenged findings have the same force and dignity as a jury's verdict upon questions. Anderson v. City of Seven Points, 806 S.W.2d 791, 794 (Tex.1991). The evidence supporting them is thus reviewable for legal and factual sufficiency by the same standards as evidence supporting a jury's answer. Catalina v. Blasdel, 881 S.W.2d 295, 297 (Tex.1994) ; Spiller v. Woodard, 809 S.W.2d 624, 627 (Tex.App.–Houston [1st Dist.] 1991, no writ) ; MCZ, Inc. v. Smith, 707 S.W.2d 672, 678 (Tex.App.–Houston...