Janell S. Marin v. IESI TX Corporation

Opinion issued February 11, 2010

In The

Court of Appeals

For The

First District of Texas

____________

NO. 01-08-00539-CV

____________

JANELL S. MARIN, Appellant

V.

IESI TX CORPORATION, Appellee

On Appeal from the 412th Judicial District Court

Brazoria County, Texas

Trial Court Cause No. 33146

OPINION ON REHEARING

Appellant, Janell S. Marin, has filed a motion for rehearing and for en banc

reconsideration of our opinion issued on October 15, 2009. We withdraw our opinion

and judgment of October 15, 2009 and substitute this opinion and judgment in their

place. Because we issue a new opinion in connection with the denial of rehearing,

Marin's motion for en banc reconsideration of our prior opinion is moot.

Richardson-Eagle, Inc. v. William M. Mercer, Inc. , 213 S.W.3d 469, 472 (Tex.

App.--Houston [1 Dist.] 2006, pet. denied).

Marin appeals from a judgment in favor of appellee, IESI TX Corporation

("IESI") . The judgment was rendered in accordance with the jury's findings that

Marin committed forgery, misapplication of fiduciary property, fraud, and conversion.

In nine issues, Marin challenges the trial court's admission of evidence, the legal and

factual sufficiency of the evidence, and the award of exemplary damages. We

conclude that the trial court did not err in the admission of the evidence, that the

evidence is legally and factually sufficient, and that the trial court properly awarded

exemplary damages. We affirm. Background IESI is a waste management company based in Fort Worth, Texas. IESI

purchased Envirotex, Inc. ("Envirotex") in December 1998. Marin was the president

and a co-owner of Envirotex. After the purchase, Envirotex became IESI's Alvin

Division and Marin was hired as the Alvin Division manager. IESI also gave Marin

accounting and financial responsibilities for the Alvin Division because she was a

certified public accountant in Texas.

As part of an audit conducted during the first quarter of 2004, IESI's

accounting firm, Ernst & Young, sent out balance confirmation notices to three

customers in the Alvin Division. These customers were the City of Alvin, the City

of League City, and the City of Friendswood. The notices sought to confirm that the

amount the customer owed to IESI matched the amount owed in IESI's records. All

three customers responded that their numbers did not match IESI's. Marin was asked

to investigate in order to reconcile the discrepancies in the amounts. Several days

later, at IESI's office where the audit was being done, Ernst & Young received three

letters purportedly from Alvin, League City, and Friendswood confirming that the

original amount listed in the balance confirmation request was actually correct.

Ernst & Young and IESI immediately suspected at least one of the letters was

a forgery. The signature of Lonna Stein on the followup letter received from League

City differed significantly from her signature on the response to the original balance

confirmation request. IESI called Lonna Stein, who denied the letter or signature had

come from her.

IESI began an investigation of the Alvin Division. Marin denied any

involvement with the letters when IESI inquired whether she knew anything about

them. The investigation found that (1) all three letters were forgeries; (2) the fax

header indicated the letters were sent from Marin's office; (3) Melissa Lawler, a clerk

in the Alvin Division, had been asked by Marin to obtain sample letterheads from

Alvin, League City, and Friendswood; (4) money owed to IESI by its customers had

been overstated by $1.585 million; and (5) customer checks payable to IESI were

deposited into an Envirotex account in the amount of $112,209.33. After the

completion of the investigation, IESI determined that inaccuracies on accounts

receivable and payable resulted in an overstatement of the Alvin Division's profits

by $2.4 million. IESI terminated Marin's employment shortly after the investigation.

IESI filed suit against Marin seeking (1) some of the expenses associated with

the Alvin Division investigation; (2) the IESI money deposited by Marin in the

Envirotex account; (3) bonuses paid to Marin based on the financial performance of

the Alvin Division that would not have been paid had the Division's earnings been

accurately stated; and (4) exemplary damages based on Marin's intentional conduct.

During discovery, Marin sent a request for disclosure under Texas Rule of

Civil Procedure 194 to IESI. (1) In its response, IESI designated Steve Moody and

Alyssa Martin as fact witnesses, allowing for the possibility that their testimony may

include expert opinion. Specifically, in response to the request for disclosure of

"persons having knowledge of relevant facts," IESI disclosed the following

information regarding Moody and Martin:

Mr. Moody has knowledge of IESI's accounting systems, corporate

policies, and corporate procedures. He has knowledge of the facts and

circumstances surrounding the activities at the IESI Alvin office that

form the basis of this lawsuit.

. . . .

Ms. Martin is an accountant who was hired by IESI to conduct an

investigation into the activities at the Alvin office.

In response to the request for disclosure seeking information concerning testifying

experts, IESI disclosed, in pertinent part, the following:

Mr. Moody is a fact witness and an employee of IESI. He has

knowledge of IESI's accounting systems, corporate policies, and

corporate procedures. He has knowledge of the facts and circumstances

surrounding the activities at the IESI Alvin office that form the basis of

this lawsuit. As an accounting professional, some of his testimony may

take the form of expert testimony regarding accounting matters.

. . . .

Ms. Martin is an accountant who was hired by IESI to conduct an

investigation into the activities at the Alvin office for IESI business

purposes and not specifically for the purpose of providing expert

testimony. She is a fact witness, but as an accounting professional,

some of her testimony may take the form of expert opinion testimony

regarding accounting matters.

At trial, Moody and Martin testified about their employment at IESI. During

their testimony, IESI documents were admitted into evidence. The trial court

overruled Marin's objection that the documents were inadmissible due to IESI's

failure to produce the documents prior to trial, as required for evidence reviewed by

experts. The trial court admitted the documents, determining that Moody and Martin

were fact witnesses and not experts.

After the jury trial, the trial court awarded (1) $97,239.15 in actual damages to

IESI for accounting expenses related to the investigation, bonuses paid based on

inaccurate financial information, and conversion; (2) $17,678.87 to IESI in

prejudgment interest; and (3) $310,105 in exemplary damages to IESI for intentional

fraud and misapplication of fiduciary property. The trial court denied Marin's Motion

for Remittitur and Motion for New Trial. Admissibility of Evidence

In her first issue, Marin contends "the trial court abused its discretion in

admitting evidence that was subject to a mandatory exclusion for not being produced

in discovery." Specifically, Marin contends that IESI designated Moody and Martin

as expert witnesses but did not disclose any documents reviewed by them, which

required exclusion of the non-produced documents under the Texas Rules of Civil

Procedure. See Tex. R. Civ. P. 193.6(a), 194.2 (f)(4)(A). The exhibits about which

Marin complains are Exhibits 6, 7, 10, 11, 12, 13, 14, 15, 33, 35, 36, 37, 38, and 39 . (2)

In her ninth issue, Marin contends that the admission of the documents deprived her

of the jury's reasonable consideration of her counterclaim.

A. Applicable Law

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

sound discretion." Benavides v. Cushman, Inc. , 189 S.W.3d 875, 878-79 (Tex.

App.--Houston [1st Dist.] 2006, no pet.) (citing City of Brownsville v. Alvarado , 897

S.W.2d 750, 753 (Tex. 1995)). A trial court abuses its discretion when it rules

without regard for any guiding rules or principles. See Alvarado , 897 S.W.2d at 754 .

We uphold the district court's evidentiary ruling if there is any legitimate basis for the

ruling. Owens-Corning Fiberglas Corp. v. Malone , 972 S.W.2d 35, 43 (Tex. 1998).

A fact witness may give opinion testimony if his opinions are "(a) rationally

based on the perception of the witness and (b) helpful to a clear understanding of the

witness' testimony or the determination of a fact in issue." Tex. R. Evid. 701. An

expert is a witness qualified by "knowledge, skill, experience, training, or education"

in an area of "scientific, technical, or other specialized knowledge." Tex. R. Evid.

702. An expert may testify in the form of opinions or otherwise if it "will assist the

trier of fact to understand the evidence or to determine a fact in issue." Id. A witness

may qualify as both a fact witness and an expert witness . Rogers v. Dep't of Family

& Protective Servs. , 175 S.W.3d 370, 377 (Tex. App.--Houston [1st Dist.] 2005, pet.

dism'd w.o.j.) (stating witness may qualify and testify as both fact and expert

witness); see also Tex. First Nat'l Bank v. Ng , 167 S.W.3d 842, 858 (Tex.

App.--Houston [14th Dist.] 2005, judgment vacated w.r.m.) (noting bank's senior

vice president "testified as both a fact and expert witness").

Rule 194 of the Texas Rules of Civil Procedure provides that if an expert is

retained by a party, the other party may request disclosure of "all documents, tangible

things, reports, models, or data compilations that have been provided to, reviewed by,

or prepared by or for the expert in anticipation of the expert's testimony." Tex. R.

Civ. P. 194.2(f)(4)(A). Texas Rule of Civil Procedure 193.6(a) provides that a party

who fails to make, amend, or supplement a discovery response in a timely manner

may not introduce in evidence the material or information that was not timely

disclosed, unless the court finds that there was good cause for the failure to make,

amend, or supplement the discovery response timely, or that the other parties will not

be unfairly surprised or prejudiced by the failure to make, amend or supplement.

Tex. R. Civ. P. 193.6(a). The party seeking to introduce the evidence carries the

burden of establishing good cause, lack of unfair surprise, or lack of unfair prejudice.

Tex. R. Civ. P. 193.6(b). A finding of good cause, lack of unfair surprise, or lack of

unfair prejudice must be supported by the record. Id. The expert disclosure rules do

not apply to fact witnesses. Rather, the Texas Rules of Civil Procedure provide for

requests for production to obtain documents within the possession, custody, or

control of parties. See Tex. R. Civ. P. 196.1-.6. Moody, an employee of IESI, and

Martin, an auditor that contracted for IESI, were both subject to the control of IESI,

a party to these proceedings.

Hearsay is "a statement, other than one made by the declarant while testifying

at the trial or hearing, offered in evidence to prove the truth of the matter asserted."

Tex. R. Evid. 801(d). The rules of evidence classify some evidence as non-hearsay

and some evidence as hearsay that is admissible under an exception to the hearsay

rule. See Tex. R. Evid. 802 ("Hearsay is not admissible except as provided by statute

or these rules . . . ."); Tex. R. Evid. 803 ("The following are not excluded by the

hearsay rule . . . ."). For example, one exception to the hearsay rule is records of

"regularly conducted activity." Tex. R. Evid. 803(6).

B. Analysis

Marin challenges the trial court's ruling that Moody and Martin are fact

witnesses rather than expert witnesses by asserting that the witness list supplied by

IESI lists them as experts. Marin, however, misstates the record. In response to

Marin's requests for disclosure, IESI designated Moody and Martin as fact witnesses,

but also identified them as "accounting professionals," stating some of their testimony

"may take the form of expert opinion regarding accounting matters." The record,

therefore, shows that some of the testimony by Moody and Martin could take the form

of an expert opinion concerning accounting matters. Although IESI designated

Moody and Martin as experts as to some accounting matters on the witness list, the

trial court ruled their testimony was admissible as testimony from fact witnesses. We

conclude the mere fact that the witness list identified Moody and Martin as possibly

giving expert testimony does not establish that they did actually give expert

testimony. See Rogers , 175 S.W.3d at 377 ; Tex. First Nat'l Bank , 167 S.W.3d at 858 .

In this appeal, Marin does not specifically refer to any portion of the record

where Moody and Martin testified as experts, with the exception of Moody's

testimony concerning the fees paid to Weaver and Tidwell, which is addressed in the

discussion below pertaining to Exhibit 10. Marin makes no assertion that Martin was

an expert for any reason other than the fact that she was designated as possibly giving

some expert opinion concerning "accounting matters." Marin's argument is that

Moody gave his opinion based on hearsay, which Marin contends necessarily made

Moody an expert and that Moody had to be an expert in order to testify to the

reasonableness and necessity of the Weaver and Tidwell fees. The documents

admitted through Moody, however, were not admitted as hearsay evidence relied on

by an expert. Rather, as detailed below, the documents were admitted as either non-hearsay evidence, under an exception to the hearsay rule, or were repetitive of

unobjected to testimonial evidence.

1. Exhibits 6 and 7

Exhibits 6 and 7 are copies of the forged letters received from Friendswood and

League City that misstate the cities' account balances. These exhibits were

introduced through Moody. Moody testified that the letters were given to him by the

auditors from Ernst & Young. Moody stated these forged letters contradicted the

earlier letters and were the event that triggered the need for an investigation of the

Alvin Division. IESI offered the exhibits for that limited purpose and not for the

truth of any matter asserted in the letters. The trial court admitted the letters on that

basis and instructed the jury accordingly.

Marin's complaint on appeal is that Moody testified to hearsay, which only an

expert can do. But Exhibits 6 and 7 were not offered to prove the truth of the matter

asserted and, therefore, were not hearsay. See Tex. R. Evid. 801; Ash v. Hack Branch

Distrib. Co. , 54 S.W.3d 401, 411 (Tex. App.--Waco 2001, pet. denied) (concluding

out-of-court statements not hearsay because not offered for truth of matter asserted).

We overrule Marin's first issue with respect to Exhibits 6 and 7.

2. Exhibit 10

Exhibit 10 is an accounting summary created by Moody showing the amount

of accounting fees incurred during the investigation of the Alvin Division, which IESI

sought as damages in this case. Marin objected that Moody would have to testify as

an expert to prove the fees were reasonable and necessary. Marin asserted that

Moody, as an expert, had reviewed Exhibit 10 in forming his opinion that the fees

were reasonable and necessary, and, therefore, Exhibit 10 was subject to the exclusion

of Rule 193.6 because it had not been timely disclosed. When Marin objected to the

admission of Exhibit 10 and Moody's testimony concerning the accounting fees, she

complained that opposing counsel had not "given any good cause for not producing

this. And they [sic] are not showing failure to prejudice." After examining the

exhibit and questioning counsel, the trial court allowed Moody to testify to the

amount of the fees incurred.

On appeal, Marin asserts that IESI did not carry its burden of showing good

cause or lack of unfair surprise. Marin cites only a single unpublished case to support

her contention that she was unfairly surprised. See Hatch v. Tex. Prop. & Cas. Ins.

Guar. Assoc. , No. 01-06-00631-CV, 2007 WL 2011041 (Tex. App.--Houston [1st

Dist.] July 12, 2007, no pet.). However, Hatch is distinguishable. In that case, this

Court reviewed the record to see if any evidence supported the trial court's finding

that there was unfair surprise. See id. at *6. Here, we review the record to see if any

evidence supports the trial court's finding that Marin was not unfairly surprised. As

noted in Hatch , "We must uphold the trial court's evidentiary ruling if there is any

legitimate basis for the ruling." Id. (citing Owens-Corning Fiberglas Corp. , 972

S.W.2d at 43 ).

The record shows that Moody testified at trial that the Weaver and Tidwell fees

were "necessitated by the things that had happened [at the Alvin Division]." Moody

also testified that the amounts charged by Weaver and Tidwell were reasonable

charges. Marin did not object to either of these statements. When IESI's counsel

began to ask Moody if he knew what accountants were paid and if he was an

accountant, Marin's counsel objected.

In a discussion before the bench, the trial court stated it found no unfair

surprise to Marin because the petition specifically sought damages based on the costs

of investigating the Alvin Division. IESI sought damages for "[t]he costs incurred

by IESI in investigating and remedying the accounting and management problems

caused by [Marin's] conduct. This amount is not in excess of $200,000.00." Within

the factual allegations, IESI specifically named Weaver & Tidwell, but not Ernst &

Young. Although it did not disclose a precise amount, IESI disclosed it was seeking

economic damages for "the cost of IESI's investigation into and correction of the

false accounting entries" at the Alvin Division. Furthermore, during his deposition,

Moody testified concerning the amounts paid to Weaver & Tidwell and to Ernst &

Young for the investigation. The trial court also stated there was no surprise with

respect to the Ernst & Young invoice because it was a single amount and was not

itemized or detailed. In finding no surprise as to Exhibit 10, the trial court said it was

also ruling to "sustain the objection as to any further testimony by this witness as to

what's reasonable and necessary as to any further questioning along those lines."

Marin did not request the jury be instructed to disregard the previous testimony that

the fees were reasonable and necessary.

Concerning the Weaver & Tidwell fees, we hold the record supports the trial

court's finding that Marin was not unfairly surprised. Both the petition and discovery

responses gave her notice that IESI sought as damages its costs for investigating the

Alvin Division. See Williams v. County of Dallas , 194 S.W.3d 29, 33 (Tex.

App.--Dallas 2006, pet. denied) (upholding trial court's determination of lack of

unfair surprise concerning back taxes accrued after filing of suit where petition gave

notice lawsuit covered all claims for delinquent taxes, including taxes becoming

delinquent after filing of suit until judgment). We also note that the amount of

damages reflected in Exhibit 10 and awarded by the jury was $47,840.31,

significantly below the amount of $200,000 pleaded.

With respect to the Ernst & Young fees, we hold that the error, if any, in

admitting the evidence was harmless. The jury awarded "$0" in damages for the

Ernst & Young fees.

We overrule Marin's first issue with respect to Exhibit 10.

3. Exhibits 11, 12, 13, 14, and 15

Exhibits 11, 12, 13, and 14 are IESI's profit and loss statements for the

calendar years 2000, 2001, 2002, and 2003. Exhibit 15 is a summary of Marin's

earnings and bonuses paid from IESI. Marin contends these documents, "which go

to the amount and theory of damages," should have been produced in response to her

requests for disclosure because they "had all been reviewed by, if not prepared by,

Steve Moody."

Moody was the controller for IESI. As such, Moody was the employee in

charge of the books and records of IESI. Moody was also personally involved in

investigating the Alvin Division. Moody's testimony was based on his perception as

the primary person at IESI in charge of making, maintaining, and reviewing the

corporate books and accounts. We conclude the trial court properly characterized

Moody's testimony concerning these exhibits as that of a fact witness and not an

expert witness. See Hartis v. Century Furniture Indus., Inc. , 230 S.W.3d 733, 736

(Tex. App.--Houston [14th Dist.] 2007, no pet.) (furniture store's controller's

opinion testimony concerning fair market price admissible as fact witness testimony

because it was based on controller's perception and experience in selling furniture).

The provisions of Rule 194.2(f) do not apply to fact witnesses. Therefore, Exhibits

11, 12, 13, 14, and 15 were not required to be produced in response to Marin's

request for disclosure and are not subject to the exclusion provisions of Rule 193.6.

We overrule Marin's first issue with respect to Exhibits 11 , 12, 13, 14, and 15.

4. Exhibit 33

Exhibit 33 is a list of accounts for the Alvin Division. Marin objected that it

was a document prepared or reviewed by Martin and not disclosed. IESI responded

that Martin, as an accountant that performed the audit of IESI, would be testifying to

the facts found in the audit and not offering an opinion based on Exhibit 33. On

appeal, Marin asserts Exhibit 33 "goes directly to the amount and method of

calculating damages."

Martin testified to the content of Exhibit 33, including that she found a number

of customers of the Alvin Division that had been charged but not made any payments.

She also stated the records of the accounts looked suspicious to her as an auditor.

Marin did not object to any of this testimony, but only to the admission of Exhibit 33.

Because she failed to object to Martin's testimony, Marin waived any objection

to the admission of Exhibit 33. See Bay Area Healthcare Group, Ltd. v. McShane ,

239 S.W.3d 231, 235 (Tex. 2007) (complaining party waives error in admission of

evidence if evidence introduced elsewhere without objection).

We overrule Marin's first issue with respect to Exhibit 33.

5. Exhibit 35

Exhibit 35 is an accounting "analytic" run by IESI. Marin's objection to the

admission of this document was initially sustained. However, IESI re-offered Exhibit

35 during redirect examination, asserting Marin "spent a half hour cross-examining

[Moody] on that document." The trial court allowed the document to be admitted on

that basis and Marin did not object when it was re-offered. Error in the improper

admission of evidence is usually deemed harmless if the objecting party "opens the

door" by introducing the same evidence or evidence of a similar character. Sw. Elec.

Power Co. v. Burlington N. R.R. Co. , 966 S.W.2d 467, 473 (Tex. 1998). Furthermore,

by failing to object to its admission when it was re-offered under a different theory,

any error is not preserved. See Bay Area Healthcare Group, Ltd. , 239 S.W.3d 231

at 235 .

We overrule Marin's first issue with respect to Exhibit 35. (3)

6. Exhibit 36 , 37, 38, and 39

Exhibits 36 through 39 are invoices from landfill companies charging IESI for

their services. Marin's objection to the admission of these invoices was initially

sustained. However, when IESI offered these a second time, Marin did not object.

Therefore, Marin waived any error in the admission of these documents. See id.

We overrule Marin's first issue with respect to Exhibits 36, 37, 38 and 39.

Forgery, Fraud, and Misapplication of Fiduciary Property In her fourth, fifth, and sixth issues, Marin challenges the legal and factual

sufficiency of the evidence to support the findings that she committed forgery, fraud,

and misapplied fiduciary property. The instructions to the jury for each of these

allegations required that proof meet the clear and convincing evidentiary standard.

A. Sufficiency of Evidence under Clear and Convincing Standard

Clear and convincing evidence is "proof that will produce in the mind of the

trier of fact a firm belief or conviction as to the truth of the allegations sought to be

established." In re J.O.A. , 283 S.W.3d 336, 345 (Tex. 2009). "When the legal

sufficiency of the evidence is challenged: [A] court should look at all the evidence

in the light most favorable to the finding to determine whether a reasonable trier of

fact could have formed a firm belief or conviction that its finding was true." Id. "To

give appropriate deference to the factfinder's conclusions and the role of a court

conducting a legal sufficiency review, looking at the evidence in the light most

favorable to the judgment means that a reviewing court must assume that the

factfinder resolved disputed facts in favor of its finding if a reasonable factfinder

could do so." Id. "A corollary to this requirement is that a court should disregard all

evidence that a reasonable factfinder could have disbelieved or found to have been

incredible." Id. "This does not mean that a court must disregard all evidence that

does not support the finding." Id. "Disregarding undisputed facts that do not support

the finding could skew the analysis of whether there is clear and convincing

evidence." Id. "If, after conducting its legal sufficiency review of the record

evidence, a court determines that no reasonable factfinder could form a firm belief or

conviction that the matter that must be proven is true, then that court must conclude

that the evidence is legally insufficient." Id. at 345-46 .

"When the factual sufficiency of the evidence is challenged, only then is

disputed or conflicting evidence under review." Id. at 346 . "If, in light of the entire

record, the disputed evidence that a reasonable factfinder could not have credited in

favor of the finding is so significant that a factfinder could not reasonably have

formed a firm belief or conviction, then the evidence is factually insufficient." Id.

"The court of appeals should further explain in its opinion 'why it has concluded that

a reasonable factfinder could not have credited disputed evidence in favor of the

finding.'" Id.

Any ultimate fact may be proved by circumstantial evidence. Russell v.

Russell , 865 S.W.2d 929, 933 (Tex. 1993); see also Lee Lewis Const., Inc. v.

Harrison , 70 S.W.3d 778, 785 (Tex. 2001) (circumstantial evidence can prove gross

negligence to support award of punitive damages).

B. Forgery

In her fourth issue, Marin challenges the legal and factual sufficiency of the

evidence under the clear and convincing standard to support the finding that she

committed forgery.

1. Applicable Law

Under section 32.21, a person commits an offense if he forges a writing with

intent to defraud or harm another. Tex. Penal Code Ann. § 32.21 (b) (Vernon Supp.

2008). "Forge" means to alter, make, complete, execute, or authenticate any writing

so that it purports: (1) to be the act of another who did not authorize that act; (2) to

have been executed at a time or place or in a numbered sequence other than was in

fact the case; or (3) to be a copy of an original when no such original existed. Id.

§ 32.21(a)(1)(A). The intent to defraud or harm may be established by circumstantial

evidence. Williams v. State , 688 S.W.2d 486, 488 (Tex. Crim. App. 1985).

2. The Jury Instructions

Within her fourth issue, Marin contends the "key element of intent to defraud

or harm was omitted from the jury charge." Marin asserts that without a jury

instruction on that element, the award of exemplary damages cannot stand. Texas

Rule of Civil Procedure 278 provides, in pertinent part, "Failure to submit a definition

or instruction shall not be deemed a ground for reversal of the judgment unless a

substantially correct definition or instruction has been requested in writing and

tendered by the party complaining of the judgment." Tex. R. Civ. P. 278; see

McCarthy v. Wani Venture, A.S. , 251 S.W.3d 573, 585-86 (Tex. App.--Houston [1st

Dist.] 2007, pet. denied) (holding complaint concerning definition in jury charge

waived despite party's objection because Rule 278 requires tender of substantially

correct instruction).

Question 9, the forgery question, asked the jury, "Do you find by clear and

convincing evidence that JANELL S. MARIN knowingly or intentionally committed

forgery?" The trial court instructed the jury on the burden of proof for "clear and

convincing evidence," as well as the definitions of "knowingly" and "intentionally."

Finally, the trial court instructed the jury as follows:

"Forgery" means:

(A) to alter, make, complete, execute, or authenticate any writing so that

it purports:

(i) to be the act of another who did not otherwise act;

(ii) to have executed at a time or place in a numbered

sequence other than was in fact the case; or

(iii) to be a copy of the original when no such original

existed.

During the charge conference, Marin made the following objection to Question 9:

Question 9 is again, another, quote "cap busting" question. And again,

there are no pleadings that would justify submitting Question No. 9

under the penal code. It's making allegations with regards to forgery

that are not within the original petition that -- the current active petition.

And there is insufficient evidence or no evidence that would support

this. Any documents that might be used to justify any -- this allegation

should have been produced in response to legitimate discovery requests

under our requests for disclosure and were not. No good cause has been

shown and we would object to the submission of Question No. 9.

Marin did not object that the instruction accompanying Question 9 was not correct,

nor did she request a "substantially correct definition or instruction." Because Marin

never objected on the ground that the jury was not instructed on the "key element of

intent to defraud or harm," any error on this ground is not preserved for appeal. See

Tex. R. Civ. P. 278; McCarthy , 251 S.W.3d at 585-86 . We must also address the

sufficiency of the evidence in light of the charge given to the jury. See St. Joseph

Hosp. v. Wolff , 94 S.W.3d 513, 530 (Tex. 2002) (noting that when charge is submitted

without objection, sufficiency of evidence is measured against charge given).

3. Analysis

The record shows that while Ernst & Young was conducting a routine audit of

IESI, it sent balance confirmation letters to a number of IESI's clients, including the

cities of Alvin, Friendswood, and League City. All three cities responded, stating

they owed less than the amount reflected in IESI's books. Marin was asked to contact

the cities concerning the discrepancies. Within days, the auditors working at IESI

received letters from the three cities stating their earlier letters were incorrect and

they owed the amounts stated in IESI's books. The letters were all faxed from the

Alvin Division. The auditors immediately noticed the signature of Lonna Stein, the

controller for League City, was not the same on the second confirmation letter as on

the first letter. At trial, Stein and the city employees from Alvin and Friendswood all

testified that the later confirmation letters were not written by them and that their

signatures were forged.

Tom Brown, one of IESI's vice-presidents, testified that when he confronted

Marin with the forged letters, she reacted strangely and this caused him to believe she

had something to do with the forged letters. Brown also testified that an Alvin

Division employee told him that Marin instructed the employee to get samples of the

letterheads from the cities of Alvin, Friendswood, and League City.

Melissa Lawler, another former Alvin Division employee, testified that, shortly

before the time the forged letters were sent to the auditors, Marin asked her to get

samples of the letterhead from Alvin, Friendswood, and League City. The time and

date stamp on all three forged letters matches the stamp from Marin's fax machine.

Marin identifies evidence that she contends renders the above evidence legally

and factually insufficient. Marin asserts, "Lawler testified she never gave Marin the

supposedly requested letterhead from the City of Friendswood and only gave Marin

letterhead from the League City Chamber of Commerce ( not the City). None of the

documents had anything to do with the forged letters IESI claimed, and only one, (a

letter from City of Alvin) was even on similar letterhead." Marin also emphasizes

that no witness testified directly that Marin forged the letters from the cities. For

example, Moody testified that he had no idea who created the letters or whether

Marin was involved. Similarly, Stein testified that she had no knowledge that Marin

had anything to do with Stein's name appearing on the letter that purported to be from

League City. Marin also contends that Lawler's testimony was unreliable because

she was on paid leave from IESI and because she testified inconsistently concerning

whether IESI money had been deposited into the Envirotex account. Furthermore,

IESI's accounting manager and chief development officer said they never observed

Marin act inappropriately or violate her duties as an employee of IESI.

It is undisputed that the letters from the cities were not from the city officials

whose names appear on the letters--in other words the letters purported "to be the act

of another who did not otherwise act." As charged, the only remaining element that

the jury needed to form a firm belief or conviction was the matter whether it was

Marin who "alter[ed], ma[d]e, complete[d], execute[d], or authenticate[d]" the letters.

Here, circumstances introduced into evidence allowed the jury to form that firm belief

or conviction. Marin asked for samples of the cities' letterheads shortly before the

forged letters were sent to the auditors. Although Lawler did not provide the copies

of the letterhead that were used, the fact remains that shortly before the forged letters

were sent to the auditors Marin asked for the same or similar type of letterheads as

the ones used in this case. Additionally, the forged letters were faxed from Marin's

fax machine. When confronted about the forgeries, Marin acted suspiciously. The

letters were sent to confirm erroneous account balances--balances that could reflect

upon the amount of Marin's bonuses, which were tied to the performance of the Alvin

Division. Finally, the credibility of Lawler and any other witness is to be decided by

the jury, along with the weight to be given any testimony. See Golden Eagle Archery,

Inc. v. Jackson , 116 S.W.3d 757, 761 (Tex. 2003). A reasonable juror could form a

firm belief or conviction Marin made the letters so that they purported "to be the act

of another who did not otherwise act." See Chapa v. Tony Gullo Motors I, L.P. , No.

09-03-00568-CV, 2004 WL 1902533 , at *8 (Tex. App.--Beaumont, Aug. 26, 2004),

rev'd on other grounds , 212 S.W.3d 299 (Tex. 2006) (holding evidence legally

sufficient to support forgery finding under clear and convincing standard where

plaintiff testified her signature and signature of her deceased husband were forged

and presented proof of her usual signature for jury to review). Likewise, the disputed

evidence is such that a reasonable factfinder could have resolved that disputed

evidence in favor of the finding of forgery. See id. (holding evidence factually

sufficient to support forgery finding under clear and convincing standard). Therefore,

we hold the evidence is legally and factually sufficient to support the jury's finding

concerning forgery.

We overrule Marin's fourth issue.

C. Fraud

In her fifth issue, Marin challenges the legal and factual sufficiency of the

evidence under the clear and convincing standard to support the finding that she

committed fraud by making the same assertions she makes in the forgery case.

The jury was instructed,

Fraud occurs when--

a. [A] party makes a material representation[,]

b. The misrepresentation is made with knowledge of its

falsity or made recklessly without any knowledge of the

truth and as a positive assertion,

c. The misrepresentation is made with the intention that it

should be acted on by the other party, and

d. The other party relies on the misrepresentation and thereby

suffers injury.

"Misrepresentation" means a false statement of fact.

See Ernst & Young, L.L.P. v. Pac. Mut. Life Ins. Co. , 51 S.W.3d 573, 577 (Tex. 2001)

(stating elements of common-law fraud: (1) material representation that was false

when made; (2) when representation was made, speaker knew it was false or made it

recklessly as positive assertion without any knowledge of its truth; (3) speaker made

representation with intent that other party should act upon it; (4) other party actually

and justifiably relied on representation; and (5) thereby suffered injury).

The record shows the books of the Alvin Division contained customers or other

accounts receivable that did not exist. In addition, the books overstated the balances

owed by Friendswood, League City, and Alvin. The incorrect account information

resulted in the Alvin Division appearing to be more profitable than it was. Marin was

paid bonuses based on the profitability of the Alvin Division, as incorrectly stated in

the books. Moody testified that Marin, as the manager for the Alvin Division, was

in charge of the books and tracking the accounts for the division. Moody also

testified that Marin's user identification was linked with some of the falsified

accounts and transactions.

Furthermore, the jury was presented with evidence that the letters from Alvin,

League City, and Friendswood were forgeries. A former Alvin Division employee

testified that Marin had asked her to obtain sample letterheads from Alvin, League

City, and Friendswood. The fax header indicated the forged letters were sent from

Marin's office. The three forged letters contained misstatements of fact concerning

the balance owed by the three cities.

A reasonable juror could form a firm belief or conviction Marin knowingly

misrepresented the accounts with the intention that IESI would act upon the

information in paying Marin's bonuses, and, therefore, the evidence is legally

sufficient to establish fraud. See Foley v. Parlier , 68 S.W.3d 870, 880-81 (Tex.

App.--Fort Worth 2002, no pet.) (holding evidence legally sufficient to support

jury's finding of fraud under clear and convincing standard where plaintiff testified

defendant misrepresented value of business plaintiff wished to purchase, but

defendant testified she did not). Also, the disputed evidence is such that a reasonable

factfinder could have resolved that disputed evidence in favor of the finding of fraud.

See id. (holding evidence factually sufficient to support fraud finding under clear and

convincing standard). Therefore, we hold the evidence is legally and factually

sufficient to support the jury's finding concerning fraud.

We overrule Marin's fifth issue.

D. Misapplication of Fiduciary Property

In her sixth issue, Marin challenges "[w]hether the evidence was legally and

factually sufficient to support the jury's findings that by clear and convincing

evidence Janell Marin committed [sic] misapplied fiduciary property." Specifically,

Marin contends the evidence is insufficient because there was no evidence that Marin

withdrew money from the Envirotex account that belonged to IESI.

Question 8 asked the jury, "Do you find by clear and convincing evidence that

JANELL S. MARIN knowingly or intentionally misapplied fiduciary property?" The

definitions accompanying this question informed the jury of the meaning of "clear

and convincing evidence," "intentionally," and "knowingly." The jury was also told,

"Misapply" means deal with property contrary to

(A) An agreement under which the fiduciary holds the property

or

(B) A law prescribing the custody or disposition of the property.

See also Tex. Penal Code Ann. § 32.45 (a)(2) (Vernon Supp. 2009).

The evidence shows that Marin deposited checks tendered for payment to IESI

into the Envirotex account she controlled. Moody testified that customer payments

should have been deposited into an IESI account and Marin did not have the authority

to deposit customer payment checks into Envirotex's account. Furthermore, IESI did

not know or approve of Marin's depositing of customer payment checks into the

Envirotex account. Moody also testified that he examined Envirotex's account and

saw that $112,209.33 of checks payable to IESI were deposited in the account and

that only $96,757,96 worth of checks had been written to IESI out of that account, so

that the Envirotex account had approximately $15,000 in its account that should have

been in the IESI account.

Marin contends there is no evidence she "ever got money out of the Envirotex

account that was not hers." However, the withdrawal of the money was not part of

the definition of misapplication of fiduciary property given to the jury. We address

the sufficiency of the evidence in light of the charge given to the jury. See St. Joseph

Hosp. , 94 S.W.3d at 530 . Here, the evidence supports the jury's finding that Marin

deposited IESI money into the Envirotex contrary to her duties as an IESI employee.

A reasonable juror could form a firm belief or conviction Marin dealt with

property contrary to an agreement with IESI concerning the property. See Bailey v.

State , No. 03-02-00622-CR, 2003 WL 22859984 , at *6 (Tex. App.--Austin Dec. 4,

2003, pet. ref'd) (evidence legally sufficient to support finding beyond reasonable

doubt defendant misapplied fiduciary property by depositing funds from joint account

into defendant's personal account). Looking to all the evidence, the disputed

evidence is such that a reasonable factfinder could have resolved that disputed

evidence in favor of the finding of misapplication of fiduciary property. See id.

(evidence factually sufficient to support finding beyond reasonable doubt defendant

misapplied fiduciary property by depositing funds from joint account into defendant's

personal account).

We overrule Marin's sixth issue.

Exemplary Damages

In her third issue, Marin asserts that an award of exemplary damages in excess

of the statutory cap cannot be supported "without having any pleadings or without

being tried by consent." Marin contends in her second issue that "the judgment for

exemplary damages was excessive and exceeded the statutory cap." Marin presents

the same argument for her second issue as she does for her seventh issue, in which

she asserts the evidence is legally and factually insufficient to support exemplary

damages.

A. Exemplary Damages and the Statutory Cap

Exemplary damages may be awarded only if the claimant proves by clear and

convincing evidence that the harm with respect to which the claimant seeks recovery

of exemplary damages results from fraud, malice, or gross negligence. Tex. Civ.

Prac. & Rem. Code Ann. § 41.003 (a) (Vernon Supp. 2009). In addition, exemplary

damages awarded against a defendant may not exceed an amount equal to the greater

of (1) two times the amount of economic damages; plus an amount equal to any non-economic damages found by the jury, not to exceed $750,000; or (2) $200,000. Id.

§ 41.008(b) (Vernon Supp. 2009). This section requiring a cap on exemplary

damages does not apply if the plaintiff seeks recovery of exemplary damages based

on certain enumerated acts committed intentionally or knowingly, including forgery,

misapplication of fiduciary property, and certain types of fraudulent conduct. Id.

§ 41.008(c)(8), (10), (11) (Vernon Supp. 2009). Here, the jury awarded $310,105 for

exemplary damages. The judgment shows actual damages at $97,239.15. Therefore,

if the exemplary damages cap applies in this case, the exemplary damages should be

capped at $200,000. See id. § 41.008(b).

The judgment awards exemplary damages for breach of fiduciary duty and

fraud. The jury was asked to assess exemplary damages based upon its answer to

Question 1 concerning a breach of fiduciary duty or its answer to Question 2

concerning fraud. The breach of fiduciary duty exception to the damages cap refers

to section 32.45 of the Texas Penal Code that provides that a person commits an

offense if he intentionally or knowingly misapplies property he holds as a fiduciary

in a manner that involves substantial risk of loss to the owner of the property. See id.

§ 41.008(c)(11); Tex. Penal Code Ann. § 32.45 (Vernon Supp. 2009). Because the

jury instructions and judgment refer to breach of fiduciary duty this was properly one

basis for exceeding the exemplary damages cap.

The exceptions for the cap that refer to fraudulent conduct refer to sections

32.46 and 32.47 of the Texas Penal Code. Section 32.46 is called "Securing

Execution of Document by Deception," and states, "A person commits an offense, if

with intent to defraud or harm any person, he, by deception: . . . causes another to

sign or execute any document affecting property or service or the pecuniary interest

of any person." Tex. Penal Code Ann. § 32.46 (Vernon Supp. 2009). Section 32.47

is called "Fraudulent Destruction, Removal, or Concealment of Writing," and it

states, "A person commits an offense if, with intent to defraud or harm another, he

destroys, removes, conceals, alters, substitutes, or otherwise impairs the veracity,

legibility, or availability of a writing, other than a governmental record." Id. § 32.47.

As noted above, the jury was instructed that a fraud occurrs when

a. [A] party makes a material representation[,]

b. The misrepresentation is made with knowledge of its

falsity or made recklessly without any knowledge of the

truth and as a positive assertion,

c. The misrepresentation is made with the intention that it

should be acted on by the other party, and

d. The other party relies on the misrepresentation and thereby

suffers injury.

The finding of fraud here, therefore, does not conform with either of the penal code

sections mentioned in the section that allows the cap to be exceeded. See id.

§§ 32.46, 32.47. Because the jury instructions and judgment refer to fraudulent

conduct that was not the type of conduct described in section 41.008 that allows the

damages cap to be exceeded, the type of fraud found here was not a proper basis for

exceeding the exemplary damages cap. See Madison v. Williamson , 241 S.W.3d 145,

161 (Tex. App.--Houston [1st Dist.] 2007, pet. denied) ("Before a court will apply

the exception to the statutory damage caps in section 41.008(c), a plaintiff must

obtain jury findings that the defendant violated one of the criminal code provisions

listed in the statute, and that the violation was committed knowingly or

intentionally.").

In summary, there was no instruction pertaining to exemplary damages for the

forgery itself; thus, the judgment does not award exemplary damages for forgery.

Furthermore, the finding of fraud by the jury does not conform with the type of fraud

for which the exemplary damages cap may be exceeded. We, therefore, focus solely

on whether the exemplary damages cap could be exceeded for the breach of fiduciary

duty.

B. Notice from the Pleadings

Marin contends the trial court's judgment is erroneous by failing to cap the

damages at $200,000 because the pleadings by IESI did not specifically plead a

request to exceed the damages cap. Texas follows a "fair notice" standard for

pleading, which looks to whether the opposing party can ascertain from the pleading

the nature and basic issues of the controversy and what testimony will be relevant.

Horizon/CMS Healthcare Corp. v. Auld , 34 S.W.3d 887, 896 (Tex. 2000). Rule 47

of the Texas Rule of Civil Procedure provides a pleading "shall contain . . . a short

statement of the cause of action sufficient to give fair notice of the claim involved

. . . ." Tex. R. Civ. P. 47. "The purpose of this rule is to give the opposing party

information sufficient to enable him to prepare a defense." Roark v. Allen , 633

S.W.2d 804, 810 (Tex. 1982). The test of fair notice is whether an opposing attorney

of reasonable competence, on review of the pleadings, can ascertain the nature and

the basic issues of the controversy and the testimony probably relevant. Bowen v.

Robinson , 227 S.W.3d 86, 91 (Tex. App.--Houston [1st Dist.] 2006, pet. denied).

The "fair notice" requirement of Texas pleading relieves the pleader of the burden of

pleading evidentiary matters with meticulous particularity. Id.

In addition to the general "fair notice" standard of Rule 47, Rule 56 states,

"When items of special damage are claimed, they shall be specifically stated. " Tex.

R. Civ. P. 56. This Court has stated the recovery of exemplary damages must be

"supported by express allegations." Al Parker Buick Co. v. Touchy , 788 S.W.2d 129,

130 (Tex. App.--Houston [1st Dist.] 1990, orig. proceeding).

Here, IESI states in its petition under a section entitled "Exemplary Damages"

that

Considering the wrongful nature of Ms. Marin's transactions, her

fraudulent acts and omissions, her intentional acts, her breach of the

fiduciary duties she owed to IESI, and the degree to which her actions

offend the public's traditional sense of justice and propriety, an award

of exemplary damages is justified and warranted in this case. IESI sues

for exemplary damages.

IESI's petition gives fair notice that IESI sought exemplary damages based on

Marin's conduct, specifically alleging "breach of fiduciary duties owed to IESI."

IESI includes factual allegations that Marin forged letters from Alvin, Friendswood,

and League City and that she deposited checks payable to IESI in accounts that she

controlled. See Tex. Civ. Prac. & Rem. Code Ann. § 41.008 (c)(8), (10).

We conclude IESI's petition seeking exemplary damages provides fair notice

of the basic issues supporting its claim for intentional misapplication of fiduciary

property and, therefore, necessarily alerted Marin that the exemplary damages cap

would not apply because the statute governing exemplary damages provides that the

cap may be exceeded for that circumstance. See Horizon/CMS Healthcare Corp. , 34

S.W.3d at 896 ; cf. Al Parker Buick Co. v. Touchy , 788 S.W.2d 129, 130 (Tex.

App.--Houston [1st Dist.] 1990, orig. proceeding) (denying discovery of defendant's

net worth because petition alleged "no facts that might establish [plaintiff's] right to

a recovery of exemplary damages from [defendant]").

Marin also contends that under Rule 56, a party seeking exemplary damages

must not only specifically plead for exemplary damages but also must specifically

plead the intent to "bust the cap"--i.e., the intent to exceed the limit on exemplary

damages imposed by section 41.008 of the Texas Civil Practice and Remedies Code.

See Tex. Civ. Prac. & Rem. Code Ann. § 41.008 (b). Marin cites no authority for

this proposition, stating it is a matter of first impression. We decline to create a new

pleading requirement in exemplary damages cases.

Although not directly on point, several courts have addressed the pleading

requirement for the cap on punitive damages, holding the cap is an affirmative

defense and must be specifically pleaded by the defendant for it to apply. Wackenhut

Corrections Corp. v. de la Rosa , 2009 WL 866791, at *50 (Tex. App.--Corpus

Christi Apr. 2, 2009, no pet.); Horizon/CMS Healthcare Corp. v. Auld , 985 S.W.2d

216, 233 (Tex. App.--Fort Worth 1999), rev'd in part on other grounds , 34 S.W.3d

887 (Tex. 2000). (4) In addition, the Supreme Court of Texas, addressing a different

statutory cap on damages, (5)

referred to the entitlement to the cap as an affirmative

defense. Horizon/CMS Healthcare Corp. , 34 S.W.3d at 904 . Finally, in addressing

the cap on exemplary damages in the prior version of Chapter 41, the Supreme Court

of Texas held that a defendant's pleading gave "fair notice" of defendant's intent to

invoke the statutory cap on exemplary damages, despite referring to incorrect section

of Chapter 41. Id. at 896-97 .

Here, the pleadings gave fair notice of the intent to seek exemplary damages,

including allegations of conduct to which the cap does not apply, which necessarily

alerted Marin of its intent to exceed the damages cap. The jury made findings,

supported by sufficient evidence, that such conduct occurred. Because Marin cites

to no authority to support her contention concerning the requirement of pleading an

intent to "bust the cap" on exemplary damages, and authority from the Supreme Court

of Texas suggests her position is incorrect, we overrule Marin's third issue.

C. Sufficiency of Evidence for Exemplary Damages

In her seventh issue, Marin challenges "[w]hether the evidence was legally and

factually sufficient to support the jury's findings that by clear and convincing

evidence Janell Marin be assessed punitive damages."

Marin challenges exemplary damages for forgery, but the jury did not award

exemplary damages for forgery. The judgment can be upheld if the evidence is

legally sufficient concerning breach of fiduciary duty.

In her brief, Marin's sole challenge to the award for exemplary damages for

fraud or breach of fiduciary duty states,

It is impossible for a jury to find in favor of [IESI] on this issue by

"clear and convincing evidence" in the face of all the witnesses[']

statements that they had no proof that Janell Marin or anyone on her

behalf was, in any way, involved in forgery or fraud.

The record is absent of any evidence [sic] that links Janell Marin to

forgery, fraud, or misapplying fiduciary property.

(Emphasis in original).

We have already addressed the sufficiency of the evidence supporting the

jury's findings of forgery, fraud, and misapplication of fiduciary duty and found the

evidence both legally and factually sufficient. We therefore overrule Marin's second

and seventh issue.

Conversion

In her eighth issue, Marin challenges the legal and factual sufficiency of the

evidence that IESI proved by a preponderance of the evidence it "suffered actual

damages from the deposit of the City of Oyster Creek and Jamaica Beach checks in

the Envirotex, Inc. Account."

In reviewing the trial court's verdict for legal sufficiency, we credit evidence

that supports the verdict if reasonable jurors could, and disregard contrary evidence

unless reasonable jurors could not. City of Keller v. Wilson , 168 S.W.3d 802, 827

(Tex. 2005). A challenge to the legal sufficiency of evidence will be sustained when,

among other things, the evidence offered to establish a vital fact does not exceed a

scintilla. Id. at 810 . Evidence does not exceed a scintilla if it does no more than

create a mere surmise or suspicion that the fact exists. Ford Motor Co. v. Ridgway ,

135 S.W.3d 598, 601 (Tex. 2004).

In determining the factual sufficiency of the evidence to support a jury's

finding, courts of appeals are to weigh all the evidence, both for and against the

finding. Dow Chem. Co. v. Francis , 46 S.W.3d 237, 242 (Tex. 2001). In reviewing

a factual sufficiency challenge to a finding where the burden of proof is not on the

complaining party, we set aside the verdict only if the evidence in support of the

finding is so weak as to render the verdict clearly wrong and manifestly unjust. Cain

v. Bain , 709 S.W.2d 175, 176 (Tex. 1986). In reviewing a factual sufficiency

challenge to a finding where the burden of proof is on the complaining party, that

party must show that "the adverse finding is against the great weight and

preponderance of the evidence." Dow Chem. Co. , 46 S.W.3d at 242 . In conducting

our review, we may not substitute our judgment for that of the jury, which is the sole

judge of the credibility of witnesses and the weight to be given to their testimony.

Golden Eagle Archery, Inc. , 116 S.W.3d at 761 .

We address the sufficiency of the evidence in light of the charge given to the

jury. See St. Joseph Hosp. , 94 S.W.3d at 530 .

Jury Question 3 concerning conversion states,

Do you find that JANELL S. MARIN converted the check from the City

of Oyster Creek in the amount of $4,559.14 and/or the check from the

Village of Jamaica Beach in the amount of $9,839.70?

INSTRUCTION

"Conversion" as used in this charge means the wrongful exercise of

dominion and control over IESI TX CORPORATION'S checks, in

denial of or inconsistent with its rights. A conversion may occur from

the unauthorized and wrongful control, wrongful acquisition or

wrongful withholding of the checks which is to its exclusion or

inconsistent with its property rights.

The jury answered yes for both Oyster Creek and Jamaica Beach. In response to

Question 4, the damages question, the jury determined the damages in the amount of

each check.

On appeal, Marin contends that the only witness at trial who examined the

Envirotex account was Moody, who testified "he did not have any information that

Janell Marin ended up getting any money out of the Envirotex account for her

personal use that was not hers." Marin's concluding argument in this section of her

brief is that "it is pure speculation as to whether IESI was owed the funds from the

City of Oyster Creek and Village of Jamaica Beach."

The evidence is legally and factually sufficient to support the jury's finding of

conversion. Although Marin contends there is no evidence that she "got any money

out of the Envirotex account that was not hers," whether she took money that was not

hers out of the account is irrelevant based on the jury charge. The jury was instructed

that "conversion may occur from the unauthorized and wrongful control, wrongful

acquisition or wrongful withholding of the checks which is to its exclusion or

inconsistent with its property rights." The evidence is undisputed that Marin

deposited the checks into her Envirotex account when they were properly payable to

IESI. This is more than a scintilla of evidence from which a rational juror could

determine that Marin had exercised control over the checks in a manner inconsistent

with IESI's rights to the checks. We therefore hold the evidence is legally sufficient

to support the jury's finding concerning conversion. See Am. Network Leasing Corp.

v. Corporate Funding Houston, Inc. , No. 01-00-00789-CV, 2002 WL 31266230 , at

*15 (Tex. App.--Houston [1st Dist.] Oct. 10, 2002, pet. dism'd) (mem. op.)

(overruling sufficiency of evidence challenge to claim for conversion of partnership

checks deposited in account of partner instead of partnership account, as required by

agreement).

We also conclude the evidence is not so weak as to render the verdict clearly

wrong and manifestly unjust and is, therefore, factually sufficient. See id. at *15.

We overrule Marin's eighth issue.

Actual Damages

In her motion for rehearing, Marin asserts that the evidence is legally

insufficient to support the jury's award of actual damages to IESI for reasonable and

necessary accounting fees paid to Weaver and Tidwell for the investigation of the

Alvin Division. Specifically, Marin contends there is no evidence that the fees were

"reasonable and necessary." Marin also contends the evidence is legally insufficient

to support the jury's award of actual damages for bonuses wrongfully paid to Marin

for any year other than 2003.

A. Weaver and Tidwell Fees

Concerning the Weaver and Tidwell fees, Marin asserts that this Court held

that Moody testified as a fact witnesses, not an expert. Marin also contends that

because the fees had to be proved reasonable and necessary by an expert, there is no

longer any expert evidence in the record to support a finding that the fees were

reasonable and necessary. First, as we stated above, a witness can testify as both a

fact witness and an expert witness in the same case. See Rogers , 175 S.W.3d at 377 ;

Tex. First Nat'l Bank , 167 S.W.3d at 858 . In our discussion above concerning

Exhibit 10, concerning the Weaver and Tidwell fees, we did not hold that Moody was

not an expert with respect to the reasonableness and necessity of the fees. Rather, our

holding concerning Exhibit 10 accepted Marin's assertion that Moody was an expert

on this subject matter and addressed whether there was unfair surprise in admitting

Exhibit 10. Second, as also discussed above, Moody testified, without an objection

from Marin, that the fees were necessary due to the accounting problems at the Alvin

Division and were reasonable.

We overrule this assertion in Marin's motion for rehearing.

B. Bonuses

Marin did not raise the issue concerning actual damages for the bonuses paid

to her in her original brief to this court. This issue is therefore waived. See Coastal

Liquids Transp., L.P. v. Harris County Appraisal Dist. , 46 S.W.3d 880, 885 (Tex.

2001) (holding that appellate issue not raised until motion for rehearing was waived);

Jacobs v. Satterwhite , 65 S.W.3d 653, 655-56 (Tex. 2001) (holding that party waives

error by failing to raise issue on appeal); Wheeler v. Methodist Hosp. , 95 S.W.3d 628,

646 (Tex. App.--Houston [1st Dist.] 2002, no pet.) (stating that issue in motion for

rehearing is waived if the original brief "is not sufficient to acquaint the Court with

the issue and does not present an argument that would allow the court to decide the

issue").

We overrule this assertion in Marin's motion for rehearing.

Conclusion

We affirm the judgment of the trial court.

Elsa Alcala

Justice

Panel consists of Justices Keyes, Alcala, and Hanks.

1. See Tex. R. Civ. P. 194.1, 194.2 (providing basic discovery of specific categories of

information without objection).

2. Marin's brief mistakenly refers to Exhibit 8. Based on the description of the exhibit

and the record, it is clear she is referring to Exhibit 7. Moreover, in her original brief,

Marin included eight other exhibits, but she concedes in her reply brief that she did

not properly object to those exhibits at trial. The challenge to those exhibits,

therefore, is waived. See Mieth v. Ranchquest, Inc. , 177 S.W.3d 296, 307 (Tex.

App.--Houston [1st Dist.] 2005, no pet.) (holding failure to object to evidence at trial

waives complaint on appeal) (citing Tex. R. App. P. 33.1).

3. In the motion for rehearing, Marin suggests that IESI's law firm has a pattern of not

complying with discovery, citing to Thompson v. Winkelman , No. 01-06-00457-CV,

2008 WL 921041 (Tex. App.--Houston [1st Dist.] Apr. 3, 2008, no pet.). This

assertion is made for the first time in the motion for rehearing and is therefore waived.

See Coastal Liquids Transp., L.P. v. Harris County Appraisal Dist. , 46 S.W.3d 880,

885 (Tex. 2001) (holding that appellate issue not raised until motion for rehearing was

waived); Jacobs v. Satterwhite , 65 S.W.3d 653, 655-56 (Tex. 2001) (holding that

party waives error by failing to raise issue on appeal); Wheeler v. Methodist Hosp. ,

95 S.W.3d 628, 646 (Tex. App.--Houston [1st Dist.] 2002, no pet.) (stating that issue

in motion for rehearing is waived if original brief "is not sufficient to acquaint the

Court with the issue and does not present an argument that would allow the court to

decide the issue"). Moreover, in Thompson , the appellants did not raise an issue

concerning any purported discovery abuse. Therefore, this Court's opinion contains

no discussion relevant to this case.

4. But see Hall v. Diamond Shamrock Refining Co., L.P. , 82 S.W.3d 5, 22-23 (Tex.

App.--San Antonio 2001), overruled on other grounds, 168 S.W.3d 164 (Tex. 2005)

(holding cap is not affirmative defense and automatically applies in all cases where

plaintiff does not plead and prove exception to cap); Seminole Pipeline Co. v. Broad

Leaf Partners, Inc. , 979 S.W.2d 730, 759 (Tex. App.--Houston [14th Dist.] 1998)

(same).

5. See Tex. Rev. Civ. Stat. art. 4590i. Act of June 16, 1977, 65th Leg., R.S., ch. 817,

§ 11.02, 1977 Tex. Gen. Laws 2039 , 2052 (formerly Tex. Rev. Civ. Stat. art. 4590i).

Article 4590i was repealed by Act of June 2003, 78th Leg., R.S., ch. 204, § 10.09,

2003 Tex. Gen. Laws 847 , 884.