Opinion

Court: Texas Court of Appeals, 3rd District (Austin)
Filed: Mar 23, 2000
Status: Published
Cited by: 0 cases
Authority: More cited than 35.9%

The opinion

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

NO. 03-99-00285-CV

Major Help Center, Inc. and Robert Berz, Appellants

Ivy, Crews & Elliott, P.C.; Guy C. Fisher, Esq.; Earl K. Straight, Esq.; Richard T.

Jones, Esq.; James P. Borne, Esq.; and McGraw, Brinkley & Irwin, Appellees

FROM THE COUNTY COURT AT LAW NO. 1 OF TRAVIS COUNTY

NO. 241,712, HONORABLE ORLINDA NARANJO, JUDGE PRESIDING

Major Help Center, Inc. is a California corporation that sold television advertising

to six lawyers or small law firms in Austin. When the dissatisfied Lawyers (1) sued Major Help and

its Texas representative Robert Berz for violations of the Deceptive Trade Practices Act (DTPA),

the defendants moved to dismiss the cause, citing a forum selection clause in their contract with

the Lawyers which designated Los Angeles, California as the agreed forum. The trial court

denied the motion to dismiss, and a jury found Major Help and Berz each liable for deceptive

trade practices and attorneys' fees. On appeal, Major Help contends that the trial court erred in

refusing to apply the forum selection clause to this dispute and that the evidence was legally or

factually insufficient to support the DTPA violations, the alleged double recovery from each

defendant, and the award of attorneys' fees. We will affirm the trial court's judgment.

FACTUAL AND PROCEDURAL BACKGROUND

In April and May of 1998, Major Help contacted each of the Lawyers for the

purpose of selling them television advertising. According to Major Help's initial representations,

the advertising would be a cooperative venture among twelve local attorneys or law firms. (2) Each

attorney or firm would contribute a sum certain; in return, Major Help would prepare a television

advertisement featuring each Lawyer's name and would purchase air time to run the ads.

After the initial telephone contact, Berz visited the Lawyers in person and presented

a video depicting the television advertisement that would be broadcast. Major Help proposed to

add the names of each participating lawyer to the advertisement once they had reached an

agreement. According to Berz's representations, the content of the television advertisement had

been approved by the State Bar of Texas. Berz also represented to each of the Lawyers that the

advertisements would air according to a particular schedule and that Major Help would spend a

certain amount of money to purchase the air time.

The advertisement included a phone number that would be answered by Major

Help. Berz represented that Major Help would forward all incoming calls to the participating

lawyers on a rotating basis. Major Help was not to screen the calls; rather, it represented that it

would automatically forward them with a recording identifying the referral as a "Major Help

Center call."

Each of the named Lawyers agreed to participate in the cooperative advertising

arrangement. Each deposited a sum of money with Major Help and agreed to deposit additional

installments throughout the course of the agreement. Subsequently, each of the Lawyers

discovered that Major Help had misrepresented their proposed arrangements in several respects:

the television advertisement had not been approved by the State Bar of Texas; the advertisements

were not identical to the one they had previewed; the ads did not air according to the promised

schedule; and Major Help screened some calls rather than automatically forwarding them as it had

represented.

After Major Help failed to respond to the Lawyers' demand for a refund of the

funds they had paid, the Lawyers filed suit alleging breach of contract and violations of the

Deceptive Trade Practices Act. In response, Major Help filed a special appearance and a motion

to dismiss based on the forum selection clause in its agreement with the Lawyers (the

Agreement). (3) The Lawyers then dismissed their breach-of-contract claim and proceeded solely

on their DTPA claim. The trial court denied the special appearance and the motion to dismiss,

and the parties tried the case to a jury.

At the close of evidence, Major Help moved for an instructed verdict, arguing that

the only basis for the Lawyers' DTPA claim was breach of contract, which alone does not

constitute a DTPA violation. The court denied the motion for an instructed verdict and submitted

the issues to the jury. The jury found Major Help and its representative liable for DTPA

violations and assessed $38,250 in actual damages and $18,000 in attorneys' fees against each of

the two defendants.

DISCUSSION

On appeal, Major Help (4) first argues that the trial court erred in denying the motion

to dismiss because the forum selection clause was valid and should have been applied in this case.

Second, Major Help asserts that the Lawyers presented no evidence or insufficient evidence of

DTPA violations and that the written contract negated any reliance by the Lawyers on the alleged

deceptive misrepresentations. Third, Major Help alleges that the jury's award of damages against

each of the two defendants resulted in a double recovery for the same act and that the trial court

should have found Berz and Major Help jointly and severally liable. Finally, Major Help

contends that the Lawyers failed to establish that the attorneys' fees they sought were reasonable

and necessary.

I. Forum Selection Clause

Forum selection clauses are valid in Texas. See Busse v. Pacific Cattle Feeding

Fund No. 1, Ltd., 896 S.W.2d 807, 812 (Tex. App.--Texarkana 1995, writ denied). "When a

party contractually consents to the jurisdiction of a particular state, that state has jurisdiction over

that party as long as the agreed-to state will enforce the type of forum selection clause signed by

the parties." Accelerated Christian Educ., Inc. v. Oracle Corp., 925 S.W.2d 66, 72 (Tex.

App.--Dallas 1996, no writ). However, forum selection clauses will not apply if construction of

the rights and liabilities of the parties under the contract is not involved. See Busse, 896 S.W.2d

at 813 . Thus, in determining whether the forum selection clause applies in this case, we must

review the nature of the Lawyers' claims to determine whether they could stand alone or are so

interwoven with the Agreement that they could not be maintained without reference to the

Agreement. See Valero Energy Corp. v. Wagner & Brown, II, 777 S.W.2d 564, 566 (Tex.

App.--El Paso 1989, writ denied).

Major Help contends that the Lawyers' DTPA claim specifically implicates the

written contract terms. For support, Major Help relies primarily on Texas Source Group, Inc.

v. CCH, Inc., 967 F. Supp. 234 (S.D. Tex. 1997), and Accelerated Christian , 925 S.W.2d at 68-69 . In Accelerated Christian , the appellate court affirmed the trial court's dismissal of contractual,

tort, and DTPA claims, reasoning that "pleading alternate noncontractual theories of recovery will

not alone avoid a forum selection clause if those alternate claims arise out of the contractual

relations and implicate the contract's terms." Accelerated Christian , 925 S.W.2d at 72 .

Similarly, the federal district court in Texas Source Group enforced a forum selection clause and

dismissed the plaintiffs' contractual and noncontractual claims, holding that the claims arose out

of the parties' contractual relationship and implicated the agreement. See Texas Source Group ,

925 F. Supp. at 238.

The Lawyers counter that their DTPA suit did not arise under the Agreement and

therefore the forum selection clause does not apply. Citing Busse , the Lawyers argue that where

the wrongs arise from misrepresentations inducing a party to execute the contract and not from

breach of the contract, the remedies and limitations specified by the contract do not apply. See

Busse, 896 S.W.2d at 813 .

Texas Source Group, Accelerated Christian, and Busse all turned on the issue of

whether the claims pleaded implicated the terms of the contract, thereby triggering the forum

selection clause. Accelerated Christian and Texas Source Group included contractual and

noncontractual claims that necessarily implicated the terms of the contract. See Accelerated

Christian , 925 S.W.2d at 72 ; Texas Source Group, 967 F. Supp. at 237-38 . Indeed, in both cases

the noncontractual claims were premised on the defendant's failure to comply with a contractual

duty--a claim that could not have been maintained without reference to the terms of the contract.

See Accelerated Christian , 925 S.W.2d at 69 ; Texas Source Group, 967 F. Supp. at 237-38 .

Busse , on the other hand, involved misrepresentations and fraud in the inducement to sign a

contract and thus did not implicate the terms of the contract. See Busse , 896 S.W.2d at 813 .

In this case, the Lawyers assert a single noncontractual cause of action based on

alleged misrepresentations made by Major Help prior to the date the parties signed the Agreement.

The Lawyers do not rely on the terms of the Agreement as the basis for their claims. They do

not attempt to enforce duties or obligations arising under the Agreement. These facts are

analogous to those in the Busse decision, which we find persuasive. Consequently, we hold that

the Lawyers' DTPA claim is independent of the Agreement, and the forum selection clause does

not apply. To the extent Accelerated Christian or Texas Source Group can be read to compel a

different conclusion, we decline to follow them. We overrule Major Help's first issue. (5)

II. DTPA Violations

In its second issue, Major Help asserts that the Lawyers presented no evidence or

insufficient evidence of DTPA violations. Major Help also contends that the Lawyers failed to

prove reliance on Major Help's representations because the written agreement between the parties

negates any reliance on statements made prior to the signing of the Agreement.

When a case is tried to a jury, factual-insufficiency complaints must be preserved

through a motion for new trial. See Tex. R. Civ. P. 324(b); Cecil v. Smith , 804 S.W.2d 509, 510

(Tex. 1991). Major Help did not file a motion for new trial and thus has failed to preserve its

factual-insufficiency issues.

No-evidence points must be preserved through one of the following procedural

steps in the trial court: (1) a motion for instructed verdict, (2) a motion for judgment

notwithstanding the verdict, (3) an objection to the submission of the issue to the jury, (4) a

motion to disregard the jury's answer to a vital fact issue, or, (5) a motion for new trial. See

Steves Sash & Door Co. v. Ceco Corp. , 751 S.W.2d 473, 477 (Tex. 1988). Major Help filed a

motion for instructed verdict asserting that a breach of contract is not a deceptive trade practice

violation, citing Rocky Mountain Helicopters, Inc. v. Lubbock County Hosp. Dist. , 987 S.W.2d

50 (Tex. 1998). The Lawyers claim that the stated basis for the instructed verdict was not

sufficiently specific to preserve Major Help's no-evidence issues. Although Major Help's motion

for instructed verdict did not specifically address the no-evidence issues that Major Help now

advances on appeal, it did generally draw the trial court's attention to a lack of evidence to

support the DTPA violations. In the interest of justice, we will address Major Help's no-evidence

claims regarding the DTPA violations.

In deciding a no-evidence point, we must consider only the evidence and inferences

tending to support the finding of the trier of fact and disregard all evidence and inferences to the

contrary. See Burroughs Wellcome Co. v. Crye , 907 S.W.2d 497, 499 (Tex. 1995); Best v. Ryan

Auto Group, Inc. , 786 S.W.2d 670, 671 (Tex. 1990). We will uphold the finding if more than

a scintilla of evidence supports it. See Crye , 907 S.W.2d at 499 ; Seideneck v. Cal Bayreuther

Assocs. , 451 S.W.2d 752, 755 (Tex. 1970); In re King's Estate , 244 S.W.2d 660, 661 (Tex.

1951). The evidence supporting a finding amounts to more than a scintilla if reasonable minds

could arrive at the finding given the facts proved in the particular case. See Crye , 907 S.W.2d

at 499 ; Transportation Ins. Co. v. Moriel , 879 S.W.2d 10, 25 (Tex. 1994); see also William

Powers, Jr. & Jack Ratliff, Another Look at "No Evidence" and "Insufficient Evidence," 69 Tex.

L. Rev. 515 , 522 (1991); Michol O'Connor, Appealing Jury Findings , 12 Hous. L. Rev. 65

(1974).

We first consider Major Help's argument that the written agreement between the

parties negated any evidence of reliance. Specifically, Major Help emphasizes the clause in the

Agreement that places on the Lawyers the sole responsibility for complying with all applicable

marketing and advertising laws, rules, and regulations pertaining to the Lawyers' profession.

This clause, according to Major Help, should have alerted the Lawyers of their duty to obtain

approval from the State Bar of Texas for the advertisements and negated any reliance they may

have placed on Major Help's representations that the ads had already been approved. We

disagree.

The Lawyers' burden was to prove that Major Help engaged in false, misleading,

or deceptive acts that were the producing cause of the Lawyers' injuries. See Church & Dwight

Co. v. Huey , 961 S.W.2d 560, 567 (Tex. App.--San Antonio 1997, pet. denied). The Lawyers

were not required to prove reliance before they could recover under the DTPA. See Weitzel v.

Barnes , 691 S.W.2d 598, 600 (Tex. 1985). Furthermore, although the Lawyers were responsible

under the Agreement for complying with their professional rules regarding advertising, this fact

does not negate Major Help's representations that the proposed broadcast had been examined and

approved by the State Bar. The Lawyers' complaint is that their individual responsibilities would

have been easier if the proposed broadcast had been preapproved by the State Bar of Texas as

represented. The record reflects sufficient evidence to conclude that preapproval of the

advertisements induced the Lawyers to enter the Agreement.

Major Help also argues that the Lawyers should not have relied on the proposed

broadcast or advertising schedule because they were simply proposals and depended on the

participation of twelve lawyers; only six lawyers eventually signed the Agreement. As stated

above, the Lawyers were not required to prove reliance in order to recover under the DTPA.

Moreover, sufficient evidence exists to support a finding that Major Help represented to the

Lawyers that the completed television advertisement would be identical to the proposed

advertisement and that Major Help would obtain the requisite number of participants. Even if the

Lawyers later learned that only six attorneys would participate in the cooperative advertising

venture, it was Major Help's initial representations made prior to the Agreement that induced the

Lawyers to enter into the Agreement and forms the basis for their DTPA claim.

Major Help further contends that the Lawyers presented no evidence that the

television advertisements violated the State Bar of Texas rules, that Major Help failed to expend

a certain amount of funds for the purchase of air time, that Major Help modified the advertising

schedule, and that Major Help improperly screened phone calls. We disagree.

First, it was not necessary for the Lawyers to prove that the advertisement violated

State Bar rules or that Major Help's method of answering phone calls was improper in order to

prevail on their DTPA claim. Rather, the Lawyers' claim is that Major Help engaged in false,

misleading, or deceptive acts that induced the Lawyers to enter the Agreement. We hold that

more than a scintilla of evidence exists to support the Lawyers' claims, including

misrepresentations regarding the manner in which Major Help would answer phone calls, alleged

State Bar approval of the advertisements, the amount of funds Major Help would expend on the

purchase of air time, and the advertising schedule it would run. Because we find legally sufficient

evidence that Major Help violated the DTPA by several misrepresentations, we overrule

appellant's second issue.

III. Double Recovery and Unreasonable Attorneys' Fees

In its third issue, Major Help argues that the evidence does not support recovery

from both Major Help and its representative Berz and that assessing damages against both amounts

to a double recovery for the same injury. Major Help requests that this Court reform the

judgment to clarify that Major Help and Berz are jointly and severally liable.

We read Major Help's third issue as a challenge to the measure of damages

submitted by the trial court and as a complaint of excessiveness of the damages. However, a

review of the record reveals that Major Help failed to preserve this error for appeal. Major Help

failed to object to the jury charge on the alleged improper measure of damages, and although

Major Help submitted a motion for instructed verdict, that motion did not address the double

recovery of damages. See Tex. R. Civ. P. 274, 268; see also United Postage Corp. v.

Kammeyer , 581 S.W.2d 716, 722 (Tex. Civ. App.--Dallas 1979, no writ). Major Help also failed

to file a motion for new trial to preserve its excessive-damages complaint. See Tex. R. Civ. P.

324(b)(4). In no way was the trial court given an opportunity to address or correct the alleged

error.

In its fourth issue, Major Help argues that the Lawyers presented no competent

evidence to establish that their attorneys' fees were reasonable and necessary. Again, Major Help

has failed to preserve this error for appeal. Major Help's motion for instructed verdict did not

address this alleged lack of evidence. See Tex. R. Civ. P. 268; Steves Sash & Door, 751 S.W.2d

at 477 . Nor did Major Help make any other attempt to preserve this issue by bringing it to the

trial court's attention. Therefore, we hold that issues three and four were not preserved for

appeal.

CONCLUSION

Because we determine that the forum selection clause did not apply to the Lawyers'

DTPA claim, we hold the trial court did not err in denying Major Help's motion to dismiss. We

further hold that the evidence is legally sufficient to support a violation of the DTPA and that

Major Help failed to preserve its complaints about double recovery and attorneys' fees for appeal.

We therefore affirm the trial court's judgment.

Bea Ann Smith, Justice

Before Chief Justice Aboussie, Justices Kidd and B. A. Smith

Affirmed

Filed: March 23, 2000

Do Not Publish

1. Appellees include Ivy, Crews & Elliot, P.C.; Guy C. Fisher, Esq.; Earl K. Straight,

Esq.; Richard T. Jones, Esq.; James P. Borne, Esq.; and McGraw, Brinkley & Irwin. For

convenience, we will refer to appellees as the Lawyers.

2. Ultimately only six lawyers or law firms participated in the advertising arrangement.

3. The forum selection clause provided: "Any action brought by either party under this

agreement shall be instituted only in a court in the County of Los Angeles in the State of

California having the appropriate monetary limits of jurisdiction."

4. We will refer to the appellants collectively as Major Help because their claims on appeal

are identical, except as addressed in note 5.

5. Since we hold that the trial court was correct in deciding not to apply the forum selection

clause, we reject the argument that at least the action against Berz should be dismissed because

as a mere participant in the transaction, he derives some added benefit from the forum selection

clause.

Lawyers to enter the Agreement. We hold that