Oyster Creek Financial Corp., & Alfred J. Antonini, Trustee v. Richwood Investments II, Inc.

Opinion issued August 12, 2004

In The

Court of Appeals

For The

First District of Texas

NO. 01-02-00788-CV

OYSTER CREEK FINANCIAL CORP. AND ALFRED J. ANTONINI,

TRUSTEE, Appellants

V.

RICHWOOD INVESTMENTS II, INC., Appellee

***

RICHWOOD INVESTMENTS II, INC., Appellant

V.

OYSTER CREEK FINANCIAL CORP. AND ALFRED J. ANTONINI,

TRUSTEE, Appellees

On Appeal from the 239th District Court

Brazoria County, Texas

Trial Court Cause No. 94G1907

O P I N I O N

The Oyster Creek Financial Corporation (Oyster Creek) and Alfred J. Antonini,

Trustee (Antonini), appellants and cross-appellees, appeal the jury’s verdict in favor

of Richwood Investments II, Inc. (Richwood), appellee and cross-appellant, in a suit

on a note, a usury counterclaim, and mutual claims for attorney’s fees. The parties

tried the case once with a verdict also favoring Richwood, but the Amarillo Court of

Appeals reversed and remanded. On retrial, after applying a $750,000 settlement

credit and computing pre-judgment interest, the trial court rendered judgment to

Richwood for $176,263.83, together with post-judgment interest in the amount of

$86.92 per day.

We conclude that (1) the trial court did not abuse its discretion in the admission

of evidence; (2) legally and factually sufficient evidence supports the jury’s findings

in favor of Richwood; (3) the jury’s failure to find in favor of Oyster Creek and

Antonini on their claims is not against the great weight and preponderance of the

evidence; (4) the jury’s answers are not irreconcilable; (5) the trial court did not err

in calculating pre-judgment interest, based upon the findings Richwood obtained; (6)

the trial court did not err in applying a settlement credit to the jury’s verdict; and (7)

the trial court correctly rendered judgment against Antonini in his capacity as trustee.

We therefore affirm.

The Facts

Antonini borrowed $900,000 in a promissory note dated June 17, 1988.

Richwood is a subsequent holder of the note. Oyster Creek is a company owned, at

least in part, by Antonini. At issue in this case is the amount of interest and attorney’s

fees owed on the note, and the manner in which Richwood should calculate such

costs.

Antonini borrowed the $900,000.00 from the Columbia Savings & Loan

Association (Columbia), for the purchase and renovation of a 256 unit apartment

complex in Brazoria County, Texas. In connection with the loan, Antonini executed

a deed of trust and a security agreement covering the apartments. The note provides

for the payment of interest at a variable rate, and for quarterly “interest only”

payments for the first two years. Beginning July 16, 1990, the note’s principal and

interest became payable in monthly installments on the 16th day of each month until

June 16, 1993, when the entire amount then unpaid became due.

Before Antonini paid the note in full, Columbia failed. Following its demise,

the Resolution Trust Corporation assigned the note and deed of trust to the Bank of

America National Trust & Savings Association (Bank of America). In October 1991,

Antonini ceased making payments on the note, placing it in default. Antonini

remained in default for over two years. In February 1994, Bank of America engaged

BEI Management, Inc. (BEI), to act as a debt servicer for the note. In March 1994,

BEI’s asset manager, Anthony Felker, inquired into the note’s payment status,

repayment prospects, and the condition of the apartments — the collateral on the note.

In response to Felker’s inquiries, and to improve his prospects of purchasing back his

note at a deep discount, in April 1994, Antonini informed Felker that the apartments

were in bad condition, the taxes had not been paid, and that he was broke and near

judgment-proof.

Previously, in March 1993, Elaine Knight, Richwood’s president, had offered

to buy the apartments from Antonini for $1.6 million, but he refused to sell. In early

1994, however, Knight learned the apartments were subject to foreclosure, and she

contacted Felker to explore whether Richwood could acquire the apartments by

purchasing the note and deed of trust. In March 1994, Felker offered to sell the note

to Richwood for $1.17 million. Richwood declined to purchase it at that time.

Meanwhile, in December 1993, Antonini sold the apartments to a third party

for $3.7 million. In May 1994, the apartments were sold for $3.72 million to Oyster

Creek. In March 1994, unbeknownst to BEI and the Bank of America, Antonini and

Oyster Creek borrowed $5 million from the Southeast Texas Housing Finance

Authority, and secured it with a second lien on the apartments. The Service Title

Company withheld $1,040,000 of the loan amount in escrow for the first lienholder,

the Bank of America, but did not remit the funds to the Bank of America at that time.

In a letter dated July 11, 1994, attorneys for Bank of America notified Antonini

of his default, and announced a private foreclosure sale under the deed of trust. The

notice advised Antonini that as of March 31, 1994, he owed a balance of

$1,233,270.08, including $890,841.14 in principal and $342,428.94 in unpaid

interest, accruing at a per diem of $358.81. On July 14, 1994, before the scheduled

date of foreclosure, BEI sold the note and deed of trust to Richwood for $1.17

million.

Richwood’s asset sale agreement provided that it acquired “any and all claims

able to be assigned” by Bank of America. Richwood thereafter entered into a 25%

contingency fee agreement with legal counsel to enforce the note and foreclose on the

apartments. In a July 25, 1994 letter, Richwood’s counsel notified Antonini that

Richwood had purchased the note, and planned to proceed with the previously

noticed private foreclosure on August 2, 1994.

On August 1, 1994, one day before the scheduled private foreclosure, Antonini

met with Knight and Barry Brown, Richwood’s attorney. At the meeting, Antonini

offered to purchase the note for $25,000.00 over Richwood’s cost, but Richwood

rejected his offer. Instead, Brown presented Antonini with an unitemized written

demand for $1,637,015.00 (“the August 1 demand letter”). Antonini pointed out that

Richwood’s demand exceeded the amount Bank of America had demanded.

According to Antonini, Brown responded that BEI and Bank of America used the

wrong post-maturity interest rate to calculate the amount owed on the note. Brown

did not present any interest calculations, however, and Antonini declined to tender

the new amount claimed to be due.

Oyster Creek, Antonini, and U.S. Trust Company of Texas (U.S. Trust) as

trustee, then filed two separate lawsuits seeking a temporary restraining order to

avoid the imminent foreclosure under the deed of trust. Service Title Company,

which had held the $1,040,000.00 in escrow to protect Bank of America as the first

lienholder, tendered a check into the court’s registry, payable to Richwood, in the

amount of $1,040,000.00. On August 2, 1994, the trial court entered a temporary

restraining order, prohibiting Richwood from conducting the private foreclosure. The

parties later agreed to extend the temporary restraining order, via an agreed

injunction, pending trial on the merits.

The trial court consolidated the two actions. In the consolidated suit, Antonini

alleged that Richwood had made an “excessive demand,” and had charged him

usurious interest, thus excusing portions of the interest and all the attorney’s fees

Richwood claimed to be owed on the note. In particular, Antonini claimed that

Richwood charged usurious interest by disguising interest as attorney’s fees. In

response, Richwood counterclaimed against Oyster Creek, Antonini, and U.S. Trust

for principal, interest, and collection related attorney’s fees due under the note, and

added claims in tort. Richwood also sued Service Title Company, and the United

General Title Insurance Company (United General). United General had insured title

as to U.S. Trust’s second lien on the $5,000,000 note Antonini had obtained from the

Southeast Texas Housing Financing Authority. Richwood and United General

disputed which lien had priority. In an amended pretrial order, the trial court severed

all parties except Antonini, Oyster Creek, Richwood, its attorney, and its substitute

trustee, appointed to conduct the private foreclosure.

Four days before the first trial, Antonini and Oyster Creek subpoenaed Brown,

Richwood’s attorney, to compel him to produce the principal, interest, and attorney’s

fees calculations that formed the basis of Richwood’s August 1 demand letter.

Richwood asserted an attorney work product privilege. The trial court agreed, and

granted Richwood’s motion to quash. The first jury favored Richwood on its claims,

and the trial court awarded it $567,477.15, plus post-judgment interest. The Amarillo

Court of Appeals reversed, however, concluding that Richwood’s attorney’s

handwritten calculations of principal and interest did not constitute attorney work

product, and that the error was harmful. Oyster Creek , 957 S.W.2d at 648. The court

of appeals remanded the case for a new trial.

The jury in the second trial found Antonini liable for $890,841.14 in principal.

In addition, it awarded: (1) $198,824.17 in accrued interest; (2) a per diem of

$537.369 in daily interest; and (3) $327,630.97 in attorney’s fees. The jury further

found that Richwood did not charge usurious interest or unreasonable attorney’s fees.

Finally, the jury found that Richwood did not make an excessive payment demand to

Antonini. In post-verdict proceedings, Antonini contended that the judgment should

reflect a settlement credit based on agreements between Richwood and United

General. The trial court agreed, and after applying a settlement credit of $750,000

and the $1,040,000 tendered to the court registry, it rendered judgment that Richwood

recover $176,263.83, plus post-judgment interest.

Antonini appeals the jury findings. Antonini contends that: (1) the trial court

abused its discretion in admitting evidence of Antonini’s criminal fraud conviction;

(2) the trial court abused its discretion in admitting Antonini’s testimony from the

first trial; (3) the trial court abused its discretion in admitting evidence of other

judgments, tax liens, and pending lawsuits against Antonini; (4) the jury’s finding of

no excessive demand is against the great weight and preponderance of the evidence;

(5) the trial court erred in awarding prejudgment interest and attorney’s fees, because

Antonini had made an effective tender; (6) the jury’s award of $327,630 in attorney’s

fees is unreasonable, excessive, and factually insufficient evidence supports it; (7) the

trial court erred in overruling Antonini’s judgment notwithstanding the verdict,

because Richwood charged usurious interest as a matter of law; or alternatively, the

jury’s failure to find that Richwood charged usurious interest is against the great

weight and preponderance of the evidence; and (8) the jury’s answers are in fatal

conflict with each other.

Richwood also appeals, contending that the trial court erred in its (1)

prejudgment interest calculation; (2) application of the settlement credit; and (3)

rendition of judgment against Antonini solely in his capacity as trustee, rather than

both individually and in his capacity as trustee.

The Evidentiary Matters

Standard of Review

The admission and exclusion of evidence is committed to the trial court’s

sound discretion. Moore v. Bank Midwest, N.A. , 39 S.W.3d 395, 401 (Tex.

App.—Houston [1st Dist.] 2001, pet. denied) .

The Admission of the Conviction

Antonini did not attend the second trial because, at the time, he was

incarcerated in a California federal prison for bank fraud. Richwood offered

Antonini’s testimony from the first trial, and then moved to admit Antonini’s felony

conviction to impeach the credibility of this testimony. Antonini contends that the

trial court abused its discretion in admitting evidence regarding his conviction and

incarceration.

In admitting Antonini’s conviction, the trial court observed that Antonini’s

counsel “opened the door,” by stating during voir dire that Antonini lives in

California and could not attend the trial. Antonini’s counsel made no objection to the

“opening the door” ruling. Rather, Antonini’s counsel stated, “I object on the

grounds previously stated,” but the record contains no statement by the court or

counsel as to the substance of the objection. In admitting the conviction, the trial

court allowed counsel a running objection. The running objection apparently stems

from an earlier off-the-record discussion in chambers that the parties were not to

divulge the conviction before approaching the bench.

On appeal, Antonini contends that Rules 404(b) and 609 of the Texas Rules of

Evidence preclude admission of his conviction. To preserve error for appeal,

however, Antonini must have made a timely, specific objection at the earliest possible

opportunity. T ex. R. App . P. 33.1. Failure to object in a timely and specific manner

during trial forfeits complaints about the admissibility of evidence. Atlantic Richfield

Co. v. Misty Prods., Inc ., 820 S.W.2d 414, 421 (Tex. App.—Houston [14th Dist.]

1991, writ denied). A discussion of matters in limine off-the-record is insufficient to

preserve an evidentiary ruling for review. See Tex. Capital Sec. Inc. v. Sandefer , 58

S.W.3d 760, 770 (Tex. App.—Houston [1st Dist.] 2001, pet. denied). Antonini

therefore did not preserve his complaint for appellate review.

Moreover, Antonini’s former trial testimony involved an important issue in the

case — usurious interest. Antonini alleged that Richwood charged him usurious

interest based upon a conversation he had with Brown regarding the August 1

demand letter, and Antonini thus placed his credibility squarely at issue. Although

we disagree that the mere mention of an absent party’s whereabouts opens the door

to the admissibility of a conviction, we nevertheless conclude that the conviction here

is admissible, where the party’s credibility as a witness is at issue. See T ex. R. Evid .

609. If a trial court properly admits evidence, we uphold its ruling on any permissible

ground. See Owens-Corning Fiberglas Corp. v. Malone , 972 S.W.2d 35, 43 (Tex.

1998).

Antonini further contends that the trial court should have confirmed its ruling

on the admissibility of his conviction before voir dire, so that he could question

prospective jurors about any bias they may have as a result of his conviction.

Antonini contends that the trial court’s later ruling admitting the conviction violates

his due process rights. Antonini, however, did not seek a definitive ruling before trial

regarding the conviction, nor did he complain in the trial court that to admit the

conviction after an off-the-record limine order violated his due process rights. Like

his primary complaint about admitting the conviction, his complaint as to the timing

of the trial court’s ruling has not been preserved for appeal. T ex. R. App . P. 33.1.

Former Testimony

Antonini contends that the trial court abused its discretion in admitting his trial

testimony from the first trial of this case. Antonini objects that Richwood did not

prove that Antonini was unavailable pursuant to Rule 804, and Richwood had not

shown due diligence in attempting to secure Antonini’s attendance at trial. See T ex.

R. Evid . 804. Richwood responded that an incarcerated witness confined in a

California prison is outside the subpoena power of the trial court. The trial court

heard evidence outside the presence of the jury that Antonini was serving a 60-month

sentence in a federal penitentiary in California, and concluded that Antonini was

unavailable. The trial court also found that any efforts to use due diligence would

have been fruitless, because “they won’t release anyone from a prison for testimony

in a civil case.”

Antonini argues that his prior trial testimony is hearsay, and Richwood did not

satisfy the Rule 804(b)(1) hearsay exception for former testimony. If a declarant’s

statement is not hearsay, however, then no hearsay exception is needed to admit the

statement, and Rule 804(b)(1) is irrelevant. Kemmerer v. State , 113 S.W.3d 513, 518

(Tex. App.—Houston [1st Dist.] 2003, no pet.). If the record discloses a legitimate

basis for a trial court’s evidentiary ruling, we uphold the ruling. See Owens-Corning

Fiberglas , 972 S.W.2d at 43 .

Richwood offered Antonini’s former testimony, or in other words, his own

statements about the note transaction — in particular, the events surrounding

Richwood’s August 1 demand. Rule 801(e)(2) provides that statements by a party

opponent are not hearsay if offered against a party, and they are the party’s own

statement in either an individual or representative capacity. T ex. R. Evid .

801(e)(2)(A); Worley v. Butler , 809 S.W.2d 242, 245 (Tex. App.—Corpus Christi

1990, no writ). Here, the statements at issue are those of a party, and Richwood

offered them as testimony in the same lawsuit. We therefore conclude that Antonini’s

former trial testimony is not hearsay, but is an admission by a party opponent, and as

such, the Texas Rules of Evidence do not require the trial court to have found

Antonini unavailable as a preliminary condition to admitting his testimony. See T ex.

R. Evid . 801(e)(2). Accordingly, the trial court did not abuse its discretion in

admitting Antonini’s prior trial testimony.

The Evidence of Judgments, Tax Liens, and Pending Lawsuits

Antonini contends that the trial court abused its discretion in admitting

evidence of extraneous judgments, tax liens, and pending lawsuits against him. To

prove that its request for attorney’s fees was reasonable, Richwood offered exhibit

19, a letter that Antonini wrote and sent to BEI, in which he discusses his

deteriorating financial condition. To his letter, Antonini attached an IRS audit letter,

a credit history report, a notice of a tax lien, and a list of over 50 lawsuits or claims,

thirteen of which include Antonini as a party.

After Richwood offered exhibit 19, Antonini’s counsel responded that the

evidence was not relevant, and only offered to impeach a witness — Antonini — who

was not present. The trial court overruled the objection, and admitted the evidence

to show Knight’s state of mind when she agreed to a 25% contingency fee contract

for collection services on the note. Knight testified that exhibit 19 forewarned her

that the note would be difficult to collect and would take a great deal of attorney

hours.

On appeal, Antonini contends that the evidence was inadmissible based on

Rules 404(a)-(b) and 405(b) of the Texas Rules of Evidence. Here, we conclude that

the trial court did not abuse its discretion in admitting the evidence. A main issue at

trial was whether Richwood’s attorney’s fees are reasonable. The trial court

determined that exhibit 19 was admissible to show Knight’s state of mind when she

agreed to a 25% contingency fee contract. Because the jury had to determine

attorney’s fees, and their necessity and reasonableness were disputed, the trial court

did not abuse its discretion in admitting evidence of Antonini’s course of conduct

during the pendency of the underlying note, including his own efforts to convince the

note-holder that he was judgment proof. Such evidence is relevant to the jury’s

determination of whether Richwood was justified in agreeing to a 25% contingent

fee.

Legal and Factual Sufficiency Claims

The Excessive Demand Finding

Antonini contends that Richwood’s August 1 demand is excessive as a matter

of law, or alternatively, that the jury’s failure to find that Richwood made an

excessive demand is against the great weight and preponderance of the evidence.

Antonini attacks the legal and factual sufficiency of an adverse jury finding on which

he has the burden of proof, and thus he must demonstrate that the evidence

conclusively establishes, as a matter of law, all facts in support of the issue (for

rendition), or alternatively, that the jury’s adverse finding is against the great weight

and preponderance of the evidence (for remand). Vickery v. Vickery , 999 S.W.2d 342,

375 (Tex. 1999); Holley v. Watts, 629 S.W.2d 694, 696 (Tex. 1982). In reviewing a

claim that the evidence conclusively establishes liability as a matter of law, we

consider evidence and inferences supporting the jury’s finding, and ignore all

evidence and inferences to the contrary. Havner v. E-Z Mart Stores, Inc., 825 S.W.2d

456, 458 (Tex. 1992); Sterner v. Marathon Oil Co. , 767 S.W.2d 686, 690 (Tex.

1989). In reviewing a claim that the verdict is against the great weight and

preponderance of the evidence, we consider and weigh all of the evidence, and may

set aside the verdict only if the finding is so against the great weight and

preponderance of the evidence that it is clearly wrong and unjust. Cain v. Bain , 709

S.W.2d 175, 176 (Tex. 1986). The jury may believe one witness and disbelieve

another, and it may resolve inconsistencies in any testimony. Eberle v. Adams, 73

S.W.3d 322, 327 (Tex. App.—Houston [1st Dist.] 2001, pet. denied).

Generally, a creditor who makes an excessive claim upon a debtor is not

entitled to attorneys’ fees for subsequent litigation required to recover the debt.

Findlay v. Cave , 611 S.W.2d 57, 58 (Tex. 1981). A demand is not excessive,

however, simply because it is greater than that which a jury later determines is

actually due. Panzio v. Young Men’s Christian Ass’n of Greater Houston Area , 938

S.W.2d 163, 169 (Tex. App.—Houston [1st Dist.] 1996, no writ). Although this may

be some evidence of an excessive demand, it is not the only factor to consider,

particularly if the amount due is unliquidated. Id . Thus, a claimant is not required

to present the exact amount it is entitled to recover at trial. Id . at 169. The

dispositive question in determining whether a demand is excessive is whether the

claimant acted unreasonably or in bad faith. See Findlay , 611 S.W.2d at 58 ; Standard

Constructors, Inc. v. Chevron Chem. Co. , 101 S.W.3d 619 , 627–28 (Tex.

App.—Houston [1st Dist.] 2003, pet. denied).

Antonini contends that Richwood made an excessive demand, despite the jury’s

finding to the contrary, because Richwood’s initial demand of $1,637,015 is

approximately $220,000 more than the jury’s ultimate award. Relying on Findlay ,

Antonini suggests that Richwood’s August 1 demand for more money than the jury

eventually awarded is evidence of bad faith as a matter of law. See Findlay , 611

S.W.2d at 58 .

Antonini misstates the holding in Findlay . Findlay recognizes that “any claim

for an amount appreciably greater than that which a jury later determines is actually

due . . . may indeed be some evidence of excessive demand,” but such a result does

not establish excessive demand as a matter of law. Findlay , 611 S.W.2d at 58 .

Indeed, our court has held that a demand is not excessive simply because it is greater

than that which a jury later determines is actually due. Panzio , 938 S.W.2d at 169 .

Rather, the dispositive question is whether Richwood acted unreasonably or in bad

faith. See id .

Richwood’s expert, Patrick Cantrell, testified that principal and interest due on

August 1 was $1,310,524.05. By that time, Richwood also had entered into a 25%

contingency attorney’s fee agreement for collection of the sums owed on the note.

Using his principal and interest amount, Cantrell multiplied it by 25% to calculate

$327,631.01 due in attorney’s fees. The principal, interest, and attorney’s fees total

$1,638,155.06. The jury awarded $890,841.14 in principal, $198,824.17 in accrued

interest, plus a per diem of $537.369 in daily interest, and $327,630.97 in fees. As

discussed below, the difference between the August 1 demand and the jury’s award

lies with applicability of the per diem daily rate, and Richwood’s failure to obtain

specific prejudgment interest jury findings. As Richwood offered expert testimony

at trial to support a demand that is higher than it actually made on August 1, we

cannot conclude that the jury’s finding that Richwood did not make an excessive

demand is insupportable as a matter of law. The expert’s calculations undercut

Antonini’s claim that Richwood acted unreasonably or in bad faith as a matter of law.

See id .

In his great weight and preponderance of the evidence challenge, Antonini does

not direct us to any evidence in the record that demonstrates Richwood’s bad faith,

other than his contention that the jury’s finding is less than Richwood’s initial

demand. Based on our review of the appellate record, we cannot conclude that

Richwood’s conduct in making its initial demand of $1,637,015.00 and subsequently

receiving a jury award in a lesser amount — $1,417,296.28 — alone means that the

jury’s finding is against the great weight of the evidence.

Gary McConnell, Antonini’s expert, testified regarding Antonini’s claim for

excessive demand on August 1. McConnell testified that Richwood’s demand

included $597,355 that he would categorize as interest, and thus it included an

overcharge of $359,025. As Cantrell testified to the jury, however, McConnell’s

testimony ignored Richwood’s claim for attorney’s fees, also included in the August

1 letter. The jury was free to disbelieve McConnell’s opinion of excessive demand,

and to credit Cantrell’s opinion that the letter includes claims for principal, interest,

and attorney’s fees — the latter amount not included as part of McConnell’s analysis.

Cantrell’s testimony is some evidence to support the jury’s conclusion that

Richwood’s demand was not excessive.

Accordingly, Antonini has not shown that

the jury’s finding of no excessive demand is against the great weight and

preponderance of the evidence.

The “Effective Tender”

Antonini contends that the trial court erred in awarding prejudgment interest

and attorney’s fees to Richwood because he made an effective tender on August 2,

1994.

Antonini contends that the May 28, 2002 judgment reflects that Antonini

owes $521,010.93 in prejudgment interest and $327,630.00 in attorney’s fees.

Antonini contends he deposited $1,280,000.00 into the trial court’s registry after

Richwood made its demand. Antonini therefore argues that he should not have to pay

interest or attorney’s fees that accrued on the note after he effectively tendered the

money on August 2, 1994.

A tender is an unconditional offer by a debtor to pay another a sum not less in

amount than that due on a specified debt. Baucum v. Great Am. Ins. Co ., 370 S.W.2d

863, 866 (Tex. 1963). A valid and legal tender of money consists of the actual

production of the funds to pay the debt involved. Id . The tenderer must relinquish

possession of the funds under such circumstances as to enable the person to whom

it is tendered, without special effort on his part, to acquire possession. Id . As a

general rule, a tender of payment must include everything to which the creditor is

entitled; any less sum is ineffective. Collision Ctr. Paint & Body v. Campbell , 773

S.W.2d 354, 357 (Tex. App.—Dallas 1989, no writ). The burden of proving a valid

tender is on the party asserting it. Bray v. Cadle Co ., 880 S.W.2d 813, 818 (Tex.

App.—Houston [14th Dist.] 1994, no writ).

Antonini did not request a jury issue on his defense of effective tender.

Whether Antonini effectively tendered the full amount due was a fact question and

required a jury finding. See T ex. R. Civ . P. 273. The trial court in fact refused

Richwood’s requests for questions and instructions regarding effective tender, to

which Antonini did not join. Because Antonini failed to request a jury question on

this issue, the complaint is waived. T ex. R. Civ . P. 279; Vickery v. Comm’n for

Lawyer Discipline , 5 S.W.3d 241, 253 (Tex. App.—Houston [14th Dist.] 1999, pet.

denied).

The Attorney’s Fees Verdict

Antonini contends that the jury’s award of $327,630.00 in attorney’s fees is

excessive and requests that we suggest a remittitur. In addition, Antonini contends

that the jury’s finding that Richwood did not charge unreasonable attorney’s fees is

contrary to the great weight and preponderance of the evidence. Antonini further

argues that the jury’s finding of reasonable attorney’s fees in favor of Richwood is

factually insufficient.

An attorney’s fee award may be challenged for the sufficiency of the evidence

to support the award. Stewart Title Guar. Co. v. Sterling , 822 S.W.2d 1, 12 (Tex.

1991). In order to show the reasonableness and necessity of attorney’s fees, a

plaintiff must show that it incurred the fees while suing the defendant, on a claim

allowing recovery of such fees. Id . at 10. We review the factual sufficiency of the

evidence under the standards discussed above. Antonini contends that Richwood’s

attorneys spent 32 hours in collecting the note before Antonini filed his lawsuit.

Based on 32 hours of actual time spent collecting the note, Antonini calculates that

the jury’s award amounts to over $10,000 per hour in attorney’s fees, an amount

unreasonable as a matter of law.

Richwood sought attorney’s fees for collection work that not only occurred on

or before August 1, but also presented evidence to claim fees for the numerous

additional hours its attorneys expended in trying to collect on the note, after Antonini

filed suit, and had requested and received a TRO — including the first trial, an

appeal, and the second trial. Contrary to Antonini’s argument, Richwood did not seek

attorney’s fees solely for collection efforts on or before August 1.

The note Richwood purchased from Bank of America specifically provides that

the maker (Antonini, Trustee) is liable for collection-related attorney’s fees. The

provision in the note regarding attorney’s fees states, “If the note is collected by suit

. . . or any other judicial proceedings . . . and is placed in the hands of an attorney for

collection, then the Maker promises to pay, reasonable attorneys’ fees in addition to

all other amounts owing hereunder, at the time this Note is placed in the hands of

such attorney . . . .” Sarah Powers, one of Richwood’s attorneys, thus testified that

attorney fees are to be included in the demand. Richwood signed a contingency

contract with its attorneys to collect the note. The contract provided that Richwood

would pay 25% of the principal and interest collected on the note.

In determining whether a request for attorney’s fees is reasonable, a factfinder

may consider a contingency fee contract, but must also consider the factors articulated

in the Rules of Professional Conduct governing fees. Arthur Anderson & Co. v. Perry

Equip. Corp. , 945 S.W.2d 812 , 818–19 (Tex. 1997); T ex. Disciplinary R. Prof’l

Conduct 1.04(b), reprinted in T ex. Gov’t Code Ann ., tit. 2, subtit. G app. A

(Vernon 1998); see Aquila , 48 S.W.3d at 240–41 (applying factors to breach of

contract claims). A party must prove that the amount of fees incurred was both

reasonable and necessary to the prosecution of the case, and must ask the jury to

award the fees in a specific dollar amount, not as a percentage of the judgment.

Arthur Andersen , 945 S.W.2d at 819 .

The jury heard extensive testimony concerning the factors listed in section

1.04(b) of the Texas Disciplinary Rules of Professional Conduct, and the reasons for

entering into a contingency fee agreement in this case. Specifically, Knight testified

that exhibit 19, in which Antonini represented that the note was uncollectible, and

that he was litigious with respect to similar transactions, influenced her decision

regarding a reasonable attorney’s fee for collection of the note. To collect from

Antonini, she knew that court intervention was necessary. She expressed concerns

that Antonini might place the property in bankruptcy to prevent foreclosure. She was

also aware of a second mortgage on the property that Antonini and Oyster Creek had

executed before Richwood purchased the note. She testified that the contingent fee

agreement was reasonable, based on her appreciation of the facts.

Barry Brown, Richwood’s attorney in the second trial, testified that his

compensation will “depend both on the amount of the judgment and my ability to

collect it.” He expected resistance in collection because — “somebody like Mr.

Antonini and circumstances as this one where there were conflicting senior liens.”

Brown also testified to the factors in section 1.04. Brown testified that various

factors made collection seem uncertain. He referred to exhibit 19 and the $5 million

second mortgage. He also testified to viewing loan portfolios involving Antonini’s

other entities. He recognized that the same issues asserted in this case were arising

in cases involving other Antonini loans.

Brown calculated that in the first Antonini suit, the appeal, the U.S. Trust

litigation, and the second trial, he worked approximately 1,200 hours. He testified

that his hourly rate of $300 is a reasonable rate for Harris and Brazoria County. In

1994, his hourly rate was $250 per hour. He testified that the legal issues in this case

are complicated. Brown stated that taking this case precluded employment by other

clients. In another case with similar issues, he charged a contingency fee of 33 1/3 %.

He testified that his contingency fee is on the low end of reasonable and that it could

have been more.

Sarah Powers, Richwood’s attorney when Knight bought the note, testified that

the contingency fee agreement of 25% was on the lower end of contingency fee

arrangement contracts for note collections. Based on the provisions in the note, she

was concerned about litigation. She testified that the note’s terms made it necessary

for her to determine attorney’s fees at the beginning, as opposed to waiting until after

all the litigation was over. She also realized that collection would involve a long,

expensive process. She opined that the fee agreement was reasonable.

Antonini adduced evidence that Richwood’s request for fees was excessive.

McConnell, Antonini’s expert, testified that in his opinion, a 25% contingency fee for

the work that had been completed as of August 1, 1994 was not reasonable, because

only 32 hours had been completed as of August 1. A reasonable fee instead would

be $6,470. Thus, the jury heard conflicting evidence as to the appropriate amount of

fees.

The trial court instructed the jury on the factors to consider in awarding

attorney’s fees. Absent any indication to the contrary, we assume that a jury follows

the trial court’s instructions. Harris County v. Smith , 96 S.W.3d 230, 237 (Tex.

2002). Based on the evidence presented on the reasonableness of the attorney’s fees,

we conclude that the jury did not award unreasonable or excessive fees. Moreover,

the evidence is factually sufficient to support the amount of attorney’s fees the jury

awarded.

The Usury Verdict

Antonini contends that the trial court erred in overruling Antonini’s motion for

judgment notwithstanding the verdict, because Richwood’s written demand

constituted usury as a matter of law. Alternatively, he contends that the jury’s finding

that Richwood did not charge usurious interest is against the great weight and

preponderance of the evidence.

The standard of review for a trial court’s denial of a motion for judgment

notwithstanding the verdict is to determine whether the evidence conclusively proves

a fact that establishes a party’s right to a judgment as a matter of law. Fort Bend

County Drainage Dist. v. Sbrusch , 818 S.W.2d 392, 394 (Tex. 1991). If so, then the

trial court erred in denying the motion for judgment notwithstanding the verdict. Id .

On review, this court considers the evidence and inferences tending to support the

trial court’s decision, and disregards evidence and inferences to the contrary.

Minyard Food Stores, Inc. v. Goodman , 80 S.W.3d 573, 577 (Tex. 2002).

A usurious transaction is: (1) a loan of money; (2) with an absolute obligation

to repay the principal; and (3) the exaction of greater compensation than that allowed

by law for the borrower’s use of the money. First Bank v. Tony’s Tortilla Factory,

Inc ., 877 S.W.2d 285, 287 (Tex. 1994). “Interest” means compensation for the use,

forbearance, or detention of money. T ex. Fin. Code A nn . § 301.002(a)(4) (Vernon

Supp. 2004). “Usurious interest” is interest that exceeds the applicable maximum

amount allowed by law. Id . § 301.002(a)(17) (Vernon Supp. 2004). Usury statutes

are penal in nature and should be strictly construed. Tony’s Tortilla , 877 S.W.2d at

287 .

Whether an amount of money is interest depends not on what the parties call

it, but on the substance of the transaction. First USA Mgmt., Inc. v. Esmond , 960

S.W.2d 625, 627 (Tex. 1997). Not every obligation on a borrower in connection with

a loan is interest. Id . For example, fees that are an additional charge, supported by

distinctly separate and additional consideration, are not interest and thus do not

violate the usury laws. Id . Courts examine the form of the transaction and its

substance in determining the existence or non-existence of usury. Gonzales County

Sav. & Loan Assn. v. Freeman , 534 S.W.2d 903, 906 (Tex. 1976). A court will not

hold a contract in violation of usury laws unless, upon reasonable interpretation of all

terms, the lender intended to charge more interest than allowed by the law. Smart v.

Tower Land & Inv. Co ., 597 S.W.2d 333, 341 (Tex. 1980).

Any dispute in the evidence as to whether a charge in addition to interest is

actually for an additional consideration raises a fact issue. Tex. Commerce

Bank-Arlington v. Goldring , 665 S.W.2d 103, 104 (Tex. 1984). If the facts are

undisputed, however, courts have determined as a matter of law whether a charge is

additional interest for the lending of money or is for separate, additional

consideration. Id . (holding that attorneys’ service, consideration in addition to

lending money, was not interest); Tony’s Tortilla , 877 S.W.2d at 287–88 (holding as

a matter of law that bank’s fees were not interest).

Antonini contends that Richwood employed usury on the basis of the jury’s

answers. He interprets the jury’s findings to mean that the total amount owed to

Richwood for principal, interest, and attorney’s fees as of August 1, 1994 is

$1,417,296. Antonini then reasons that Richwood’s demand of $1,637,015 exceeded

the amount lawfully due by almost $220,000. He concludes that the excess $220,000

can only be attributable to interest, at twice the legal rate, and therefore, that the

transaction is usurious.

Richwood offered evidence at trial that it did not charge usurious interest.

Richwood’s expert, Patrick Cantrell, testified that on August 1, $1,310,524.05 was

due. For missed payments, he calculated $35,689.11 in past due interest. He also

determined that $220,858.74 was due on the balloon obligation from June 16, 1993

until August 1, 1994, based on 18% interest. He opined that the August 1 letter did

not charge usurious interest, because the attorney’s fees demanded were not interest,

and Richwood’s demand did not exceed the lawful rate.

Richwood also responds that Antonini’s contention lacks merit, because it is

entitled to an additional $220,858.65 in accrued interest between June 17, 1993 and

August 1, 1994, and raises an issue on appeal to correct the judgment to reflect the

proper calculation of prejudgment interest. Although we agree that evidence in the

record exists to support such an award of additional interest, as discussed below,

Richwood failed to obtain an affirmative jury finding to support that amount. The

failure to properly request an affirmative jury issue on interest for that time period,

however, does not support a finding of usury as a matter of law.

In addition to Cantrell’s testimony, Antonini ignores that Gary McConnell,

Antonini’s trial attorney from the first trial, calculated and testified to the jury that on

August 1, 1994, principal and interest due on the note amounted to $1,280,583.79,

and did not include attorney’s fees. His testimony provides further support for the

jury’s finding because the jury awarded $327,630.97 in attorney’s fees.

Brown testified that he charged interest at the maximum lawful rate, as allowed

by the note. He then calculated that principal and interest equaled $1,310,000. This

number included roughly $900,000 in principal and $400,000 in accrued interest. To

the contrary, McConnell, Brown, and Cantrell’s testimony support Richwood’s

contention that it did not charge usurious interest. We therefore conclude that

Antonini has not established usury as a matter of law. In addition, this testimony

provides sufficient evidence to support the jury’s verdict that Richwood did not

charge usurious interest, and thus the jury’s finding is not against the great weight of

the evidence.

The Reconcilable Jury Answers

Antonini contends that the trial court erred in overruling his motion for new

trial because of irreconcilable conflicts between the jury’s answers to questions

regarding interest and usury. The standard of review of the denial of a motion for

new trial is abuse of discretion. Champion Int’l Corp. v. Twelfth Court of Appeals ,

762 S.W.2d 898, 899 (Tex. 1988) (orig. proceeding). A trial court abuses its

discretion when it acts in an arbitrary or unreasonable manner, or if it acts without

reference to any guiding rules or principles. Downer v. Aquamarine Operators, Inc .,

701 S.W.2d 238 , 241–42 (Tex. 1985).

Antonini failed to preserve error on this issue when he failed to object to the

purported conflict before the trial court discharged the jury. See Coastal Chem, Inc.

v. Brown , 35 S.W.3d 90, 99 (Tex. App.—Houston [14th Dist.] 2000, pet. denied);

City of Port Isabel v. Shiba , 976 S.W.2d 856, 860 (Tex. App.—Corpus Christi 1998,

pet. denied); Torres v. Caterpillar, Inc ., 928 S.W.2d 233, 244 (Tex. App.—San

Antonio 1996, writ denied); see also T ex. R. Civ . P. 295. Accordingly, the trial court

did not abuse its discretion in denying Antonini’s motion for new trial on this issue.

RICHWOOD’S ISSUES ON APPEAL

The Prejudgment Interest Calculation

Richwood contends that the trial court’s judgment fails to include the proper

amount of accrued interest. Specifically, it argues that the judgment erroneously

omits interest from the period between June 17, 1993 — the note’s maturity date —

and August 1, 1994.

The trial court instructed the jury to answer with four different interest figures.

The charge reads: (1) Principal balance; (2) Accrued interest; (3) Daily interest; and

(4) Reasonable attorney’s fees for collection of the note, together with the jury’s

answers. As the trial court read the verdict, it noted a “figure times a certain number

of days and then you have got what I think is a total of that figure” in the space

entitled “Daily Interest.” The trial court returned the jury to the jury room to calculate

a per diem interest, rather than a lump sum. None of the parties objected. After the

jury returned, it found a daily rate of interest of $537.369, and crossed out the lump

sum amount, as initialed by a member of the jury. Upon re-reading the verdict,

Richwood offered no objection.

Based on these events, Richwood contends that the jury’s originally calculated

lump sum amount of $220,858.65 should have been included in the trial court’s

judgment, as this interest accrued is a simple calculation of the per diem multiplied

by the dates for which the jury did not award interest in the first blank.

Richwood casts its complaint as a trial court error in rendering judgment. The

trial court, however, merely rendered judgment based upon the jury’s answers that it

had received — without objection from Richwood. Richwood’s real disagreement

is instead one with the jury’s answer to the charge Richwood offered. The charge

asked the jury to determine the accrued interest “as of August 1, 1994,” and did not

distinguish between interest accrued pre- and post-default. The jury thus found that

Antonini owed Richwood $198,841.14 in accrued interest on August 1, 1994 — a

time frame that includes the dates that Richwood now argues were excluded.

Richwood did not object to the form of the jury issue. The trial court, in fact,

submitted the issue that Richwood proposed.

Richwood now asks this court to reform the judgment to reflect an additional

$220,858.65

in accrued interest, based on the jury’s per diem finding, for the dates

it contends are not included in the computed interest — but dates that are included

in the charge. For a disputed amount of damages — as the amount of interest owed

on the note in this case surely was — we have no authority to employ additur. See

Pac. Coast Eng’g Co. v. Trinity Const. Co ., 467 S.W.2d 635, 639 (Tex. Civ.

App.—Houston [1st Dist.] 1971), aff’d in part and rev’d in part , 481 S.W.2d 406

(Tex. 1972). To sustain Richwood’s point, we would have to find that the amount of

interest owed is established as a matter of law. Id .

Cantrell testified that from June 16, 1993 to August 1, 1994, Antonini owed

$220,858.74 in interest. Richwood also offered two exhibits reflecting interest

calculations as to the dates that Richwood contends the jury excluded. Exhibit 39

states that interest accrued between June 17, 1993 and August 1, 1994 (411 days) at

18% is $178,230.15. Exhibit 40 states that interest from the same dates, but counted

at 410 days, is $178,230.15. Richwood’s exhibit 43 states that interest due on

delinquent payments calculated using default rate for June 17, 1993 through August

1, 1994 is $220,858.74. Antonini’s exhibit 64 contended that the amount of interest

owed was $238,330.73 as of August 1, 1994, but as a total amount of interest. The

jury thus heard conflicting evidence about the amount of interest owed on the note.

Richwood did not establish the correct amount of interest as a matter of law. See Pac.

Coast Eng’g , 467 S.W.2d at 639 . Although the evidence would have supported a

finding of additional interest, Richwood’s complaint is one that can be corrected only

by granting a new trial. See Aztec , 758 S.W.2d at 800. Richwood did not raise a

factual sufficiency claim as to the jury’s interest answer, and does not seek relief in

the form of a new trial. We thus overrule its claim for additional interest.

Settlement Credit

Richwood contends that the trial court erred in applying a $750,000 settlement

credit to the final judgment rendered in its favor. After the verdict, but before

judgment, Richwood moved to dismiss with prejudice its claims against United

General, based on a settlement in which United General paid Richwood $750,000.

Five days later, Antonini moved to obtain a settlement credit. The trial court held a

hearing on the issue. At the hearing, Brown admitted that Richwood and United

General had executed a settlement agreement. The trial court ordered Brown to

produce the document in camera , and after reviewing it, ordered Brown to produce

it to Antonini. When asked whether the consideration for the settlement included a

(1) release of the lien on the apartment property securing Richwood’s note and (2)

release of the claims made against United General, Brown replied, “Whatever the

document says.” Frank Oliver, attorney for United General, testified that part of the

$750,000 went to the release of Richwood’s lien, and part went to release his client

from Richwood’s counterclaims against it with prejudice. He also testified that

United General bought a right to “participate” in the collections on the Antonini debt,

as opposed to making a “payment” on the debt. Based upon this testimony, Antonini

requested that the trial court apply the settlement credit under the one satisfaction

rule.

The trial court applied the settlement credit to the judgment. As the trial court

observed, after executing the settlement agreement, Richwood kept only an unsecured

note, received $750,000, and no longer had any right to foreclose on the Brazoria

property. Without the agreement, with the judgment and their lien, Richwood had a

right to foreclose on the property. By releasing the lien and accepting the $750,000,

Richwood gave up a right it had through the judgment.

On appeal, Richwood contends that the one satisfaction rule does not apply,

because Richwood did not seek tort damages in the second trial. Antonini responds

that (1) the settlement credit directly relates to rights Richwood asserts on the note;

(2) Richwood claimed that United General owed Richwood money because of

Richwood’s interest in the note; and (3) Richwood accepted money in exchange for

foregoing the security it held in connection with the note — in other words,

Richwood is not entitled to two payments for the same note.

Neither party suggests a standard of review to apply to the trial court’s decision

to apply a settlement credit. As the trial court considered evidence regarding the

character of the settlement, we conclude that an abuse of discretion standard of

review applies. Tex. Capital Sec. Inc. v. Sandefer , 108 S.W.3d 923, 925 (Tex.

App.—Texarkana 2003, pet. denied) (“A trial court’s determination of the existence

of, or the amount of, a settlement credit is reviewed for an abuse of discretion.”); see

also Utts v. Short , 81 S.W.3d 822, 829 (Tex. 2002) (“[O]nce the nonsettling

defendant presents evidence of the nonsettling plaintiff’s benefit from a settlement,

the trial court shall presume the settlement credit applies unless the nonsettling

plaintiff presents evidence to overcome this presumption.”).

We agree with Antonini that the one satisfaction rule prohibits a plaintiff from

recovering twice for a single injury. Crown Life Ins. Co. v. Casteel , 22 S.W.3d 378,

390 (Tex. 2000); Buccaneer Homes of Alabama, Inc. v. Pelis , 43 S.W.3d 586, 589

(Tex. App.—Houston [1st Dist.] 2001, no pet.). This rule applies when multiple

defendants commit the same act, or when multiple defendants commit technically

different acts that result in a single injury. Crown Life , 22 S.W.3d at 390 . Moreover,

the absence of tort liability does not preclude the application of the one satisfaction

rule. See El Paso Natural Gas Co. v. Berryman , 858 S.W.2d 362, 364 (Tex. 1993)

(holding that one satisfaction rule does not allow plaintiff to recover from

derivatively liable principal or alter ego when plaintiff has already received full

settlement on his claim).

A nonsettling party seeking a settlement credit has the burden to prove its right

to such credit. Mobil Oil Corp. v. Ellender , 968 S.W.2d 917, 927 (Tex. 1998). This

burden includes proving the settlement credit amount. The nonsettling party can meet

this burden by placing the settlement agreement or some evidence of the settlement

amount in the record. Id . If the nonsettling party meets this burden, the burden shifts

to the plaintiff to tender a valid settlement agreement allocating the settlement

between (1) damages for which the settling and nonsettling defendant are jointly

liable, and (2) damages for which only the settling party was liable. Crown Life , 22

S.W.3d at 392 . If the plaintiff cannot satisfy this burden, then the nonsettling party

is entitled to a credit equaling the entire settlement amount. Ellender , 968 S.W.2d at

928 ; Stewart Title Guar. Co. v. Sterling , 822 S.W.2d 1, 8 (Tex. 1991).

During the post verdict hearing, Antonini satisfied his burden by placing the

settlement agreement in evidence. The burden then shifted to Richwood to show an

allocation between damages for which only the settling party was liable. We

conclude that the trial court did not abuse its discretion in deciding that Richwood did

not meet its burden.

Richwood testified that the consideration for the settlement was both a release

of its lien on the property and a release of any and all claims made against United

General in Richwood’s counterclaims. The settlement agreement contained a

“participation agreement,” providing that United General would receive 50% of any

collections on Richwood’s judgment against Antonini, after costs and other fees were

discounted. Attorneys for Richwood and United General each testified that United

General was not making a “payment” on the note, but merely paying for a

“participating interest,” a release of a lien, and a release of all claims. This contention

ignores the fact that, as part of the consideration for payment, the agreement included

a release of the lien Richwood asserted based on rights afforded it through Antonini’s

note.

Richwood contends that its injury with regard to Antonini is based on contract.

United General, it asserts, caused a different injury — insuring a lien, arguably one

which did not have priority over Richwood’s lien. Thus, Richwood contends that

United General and Antonini did not act as “joint tortfeasors” of any sort. Richwood

relies on Vogel v. Cent. Tex. Sec. Corp ., 62 S.W.2d 243 (Tex. Civ. App.—Austin

1933, writ ref’d) and Hendon v. Glover, 761 S.W.2d 120 (Tex. App.—Beaumont

1988, writ denied), to support its position that the one satisfaction rule does not apply

because United General and Antonini do not have joint liability.

In Vogel , Central Texas brought an action against Vogel on two paving

certificates which had been issued to a paving contractor, who assigned them back

to the city, which then assigned them to Central Texas. 62 S.W.2d at 244 . Vogel had

refused to execute a mechanic’s lien on his abutting homestead property to secure the

cost of the paving. Id . The contractor notified the city that because of Vogel’s

refusal, he would skip repaving the portion of the street abutting Vogel’s property.

Id . The city wanted the street completely paved, and so it agreed to issue paving

certificates upon completion of the work to the contractor, who would immediately

have the certificates reassigned to the city. Id . The city then would pay the

contractor for the paving and proceed against Vogel to collect on the certificates to

reimburse the city. Id . Once the contractor finished the paving, the city assigned its

rights against Vogel to Central Texas. Id . Vogel argued that the city discharged his

liability for the certificates when it paid the contractor. Id . at 245.

The Austin Court of Appeals disagreed, because the evidence was undisputed

that the city’s payment was involuntary and not made to discharge Vogel’s burden.

Id . Rather, the agreement between the city and the contractor provided that the city

would proceed against Vogel for collection. Id .

In Hendon v. Glover , the plaintiffs brought suit against the defendant for

payment on a note. 761 S.W.2d at 121 . After the jury returned a favorable verdict

for the plaintiff, the defendant appealed, contending that he was entitled to a credit

of $50,000 received by the plaintiff from a third party so that drilling operations could

continue. Id . at 122. The court of appeals held that the operations agreement

between the plaintiffs and the third party was completely separate and did not involve

the defendant. Id . at 123.

Each of these cases is distinguishable from the facts of this case. Neither of

these cases involve a settling party to the lawsuit. Rather, both cases involve third

parties who the plaintiff had never sued. In this case, potential liability existed for

both United General and for Antonini. Although the causes of action against

Antonini and United General are different, they resulted, at least in part, in a single

injury to Richwood — the impairment of its rights under a single note and

accompanying lien. See Cohen v. Arthur Andersen, L.L.P ., 106 S.W.3d 304, 310

(Tex. App.—Houston [1st Dist.] 2003, no pet.). In Cohen , the plaintiffs sought

damages allegedly caused by one defendant from another defendant, who also

allegedly caused the damages. The plaintiffs settled with one of the defendants for

an amount exceeding the total claimed damages. The other defendant moved for

summary judgment, contending that the plaintiffs’ damages had been satisfied by the

first settlement. The trial court granted the motion, and this court affirmed, holding

that, “Although the causes of action alleged are technically different, they resulted in

a single injury, loss of trust assets.” Id .

The same can be said for the damages at issue here. Antonini’s failure to pay

the note allegedly caused damages to Richwood. Richwood further alleged that

United General was liable for damages due under the note. These may be different

causes of action, but they both are based upon Richwood’s rights under the Antonini

note, and the result is, at least in part, a single injury to Richwood. See id . Richwood further contends that United General is “equitably subrogated” to its claim

against Antonini, similar to an insurance carrier who pays a claim on behalf of its

insured. Richwood does not dispute, however, that no contractual right or obligation

existed between it and United General until they entered into a settlement agreement .

United General did not settle with a third party on behalf of Richwood — as an

insurance carrier does in paying a claim — rather, it settled claims asserted directly

against it, as a defendant in a lawsuit, in which Richwood asserted corresponding

claims against Antonini, a co-defendant. United General may have independent

claims against Antonini in connection with his failure to satisfy the first lien

obligation, but nothing, before settlement of the suit against it, created rights United

General could assert against Antonini as a “participant” in the prosecution of

Richwood’s claim.

Richwood’s analysis further ignores the fact that (1) United General paid

substantial funds; (2) the participation agreement does not extinguish United

General’s potential claims, if any, against Antonini to recoup its funds; and (3)

Richwood agreed to forego the right of foreclosure it had through the Antonini note

— a right it could enforce to the detriment of both United General and Antonini.

We decline to read the one satisfaction rule as narrowly as Richwood suggests.

Antonini met his burden by making the trial court aware of the Richwood/United

General settlement. The burden then shifted to Richwood to demonstrate a settlement

allocation between (1) damages for which United General and Antonini are jointly

liable, and (2) damages for which only United General was liable. See Crown Life ,

22 S.W.3d at 392 . Because Richwood did not satisfy its burden by merely casting the

$750,000 settlement as a fee for participating in Richwood’s claim against Antonini,

the trial court did not abuse its discretion in applying a dollar for dollar settlement

credit. See Cohen , 106 S.W.3d at 310 (holding that defendants are entitled to a credit

equaling entire settlement amount because plaintiffs did not satisfy their burden).

Capacity

Richwood contends that the trial court abused its discretion in not reforming

the judgment to reflect liability against Antonini, individually. Richwood maintains

that through a third party action, it counterclaimed against Antonini in both his

individual capacity, and as trustee. Antonini responds that Richwood raised

Antonini’s individual liability for the first time in post-trial motions. The record

indicates that Richwood counterclaimed against Antonini “individually or as

trustee.”

Thus, Richwood contends, Antonini could have filed a verified denial if he

wanted to assert the affirmative defense that he was sued in the wrong capacity. T ex.

R. Civ . P. 93.

Richwood relies on two cases that hold that a party who fails to file a verified

denial waives any capacity defense. See Werner v. Colwell , 909 S.W.2d 866, 870

(Tex. 1995) (holding that party who fails to file verified denial waives any complaint

of judgment rendered in capacity in which party was sued); W.O.S. Const. Co. v.

Hanyard , 684 S.W.2d 675, 676 (Tex. 1985) (in failing to file verified denial, party

can be held liable in either of capacities in which he was sued). Neither of these cases

apply, however, because Antonini has no complaint as to the capacity in which the

trial court rendered judgment against him — rather, Richwood contends that the trial

court erred in failing to include both capacities.

The real culprit here is the jury charge. It plainly instructs the jury to consider

whether Antonini is liable in his capacity as trustee. Richwood did not object that the

jury questions omitted Antonini’s individual liability.

The failure to raise a

complaint at trial to a jury charge waives review of that complaint on appeal. See

T ex. R. App . P. 33.1; T ex. R. Civ . P. 274. Richwood neither complained about the

trustee limitation in the charge, nor did it request issues regarding Antonini’s

individual liability. Richwood thus failed to secure affirmative liability findings for

Antonini in his individual capacity. Without such findings, the trial court correctly

rendered judgment against Antonini in his capacity as trustee.

Conclusion

We conclude that (1) the trial court did not err in its evidentiary rulings, (2)

factually sufficient evidence supports the jury’s findings, and (3) the jury’s failure to

find in favor of Antonini on his counterclaims is not against the great weight and

preponderance of the evidence, nor is Antonini entitled to judgment as a matter of law

on them. We further conclude that Richwood’s complaints as to the trial court’s

rendition of judgment are without merit. We therefore affirm the judgment of the trial

court.

Jane Bland

Justice

Panel consists of Chief Justice Radack and Justices Alcala and Bland.