Texas Judiciary Online - HTML Opinion

The jury question = that Regal=20 requested on the existence of a fiduciary duty did not pertain to = the=20 existence of a formal fiduciary duty, such as a partnership or=20 principal-agent relationship (and none would have been appropriate = for=20 such questions of law), but was instead directed to the existence = of an=20 informal fiduciary duty, as would arise in another context as a = question=20 of fact.^{^[15]} In=20 addition, to whatever extent the accompanying questions that Regal = requested on breach of duty, damages, and comparative = responsibility would=20 have been applicable to a formal fiduciary relationship, Regal = made no=20 request to submit them without the question on the existence of an = informal relationship. Under these circumstances, Regal has = not=20 preserved the complaint it has presented on appeal regarding the = trial=20 court=3Ds failure to submit = the=20 questions, definitions, and instructions it requested on breach of = fiduciary duty, and the sole issue in its conditional cross-appeal = is=20 overruled.

Accordingly, we: (1) = reverse=20 the portions of the judgment awarding Regal damages, = attorney=3Ds fees, and interest, = and=20 render judgment that Regal take nothing on its claims; (2) reverse = the=20 portion of the judgment denying Tex Star recovery of its claim for = money=20 had and received, render judgment that Tex Star is entitled to = recovery on=20 that claim in accordance with the jury=3Ds verdict, and remand = the case=20 to the trial court for entry of judgment, including determination = and=20 award of attorney=3Ds fees, costs, and = interest, if=20 any; and (3) affirm the judgment in denying Tex Star recovery for = breach=20 of contract, statutory damages, and penalties.

/s/ =20 Richard H. Edelman

Justice

Judgment rendered and = Opinion=20 filed July 19, 2007.

Panel consists of = Justices=20 Anderson, Edelman, and Hudson.

^{^[1]} =20 See Tex. Bus. & Com. Code Ann. '' 9.610(b), 9.627(a), (b)(3) (Vernon = 2002). =20 The PSAs also require the sale of a repossessed vehicle to be = conducted in=20 a commercially reasonable manner in conformity with the Uniform = Commercial=20 Code. In addition to the Areasonable commercial = practices@ standard set forth in the jury = instruction, a=20 disposition of collateral can also be commercially reasonable if = it is=20 made in the usual manner in any recognized market or at the = price=20 current in any recognized market at the time of the=20 disposition. Id. ' 9.627(b)(1), (2). However, for = this=20 purpose, Arecognized markets@ are limited to those that provide = standardized=20 price quotations for fungible items, such as stock = exchanges. See=20 id. ' 9.627 Uniform Commercial Code cmt = 4. =20 Conversely, a market in which prices are individually negotiated, = or the=20 items are not fungible, is not a recognized market, even if the = items are=20 the subject of widely disseminated price guides or are disposed of = through=20 dealer auctions. Id. ' 9.610 cmt. 9. Therefore, those = alternative=20 standards for determining commercial reasonableness were not = applicable in=20 this case. Moreover, Regal asserted no objection to the = commercial=20 reasonableness instruction in the charge, and Tex Star=3Ds objection to it sought to add a list = of other=20 factors for the jury=3Ds consideration, which would have = thereby lessened=20 Regal=3Ds burden of proof relative to the = instruction=20 submitted.

^{^[2]} =20 McIngvale and his wife, Deborah, are co-owners of Tex=20 Star.

^{^[3]} =20 The National Automobile Dealers Association, or NADA, provides, = among=20 other things, used vehicle pricing and information for buyers and=20 sellers. See http://www.nada.com.

^{^[4]} =20 The parties dispute whether the procedure employed by Regal was, = in fact,=20 a sealed bid process.

^{^[5]} =20 The trial court denied Regal=3Ds request to allow Wright to testify on = standard=20 practices in the used vehicle market and Regal=3Ds compliance with those practices = because he had=20 not been timely designated as an expert witness. Regal has = not=20 assigned error to that ruling on appeal.

^{^[6]} =20 It is arguable that obtaining a commercially reasonable price for = a=20 vehicle, such as that published by the NADA, supports an inference = that a=20 commercially reasonable practice was employed to obtain that = price. =20 However, the charge instructed the jury that every aspect of the=20 disposition was required to be commercially reasonable, = i.e.,=20 without regard to the outcome, and there is no evidence to support = an=20 inference that a NADA price could only be obtained if commercially = reasonable practices were followed and not by mere=20 happenstance.

^{^[7]} =20 There is, however, evidence that: (1) Regal did not advertise any = of its=20 sales; (2) Wright=3Ds only method of soliciting bids was to = call=20 wholesalers he knew; (3) Regal accepted bids that were well below = NADA=20 values; (4) those who purchased from Regal usually resold the = vehicles=20 quickly at higher prices, with little or no repair work, including = many=20 that were taken directly to auction by the purchasers; (5) Regal = deviated=20 from its own procedures in having no NADA value sheet in the file = for more=20 than 300 repossessions, selling 200 vehicles with only one bid, = and having=20 no condition report in numerous files; (6) Regal=3Ds claim that it was unable to obtain as = high a=20 yield on ten vehicles it sold at auction as with private sales to=20 wholesalers is unsupported by the evidence in that files for eight = of the=20 ten sales made at auction do not contain any other bids for = comparison=20 purposes, and the remaining two files establish that the auction = price was=20 actually higher than the wholesalers=3D bids; (7) of the 287 vehicles for which = Tex Star=20 had resale information, 138 were sent to wholesale public auctions = after=20 Regal sold them to a wholesaler, and yielded an average profit of = $874=20 above what Regal received; and (8) although Wright testified that = any=20 licensed wholesaler with adequate credit was allowed to bid on=20 Regal=3Ds repossessed vehicles, Thorpe testified = that=20 Wright did not permit him to do so on several = occasions.

^{^[8]} =20 Because we conclude that there was no evidence of commercial=20 reasonableness of any kind in this case, we do not address whether = expert=20 testimony would be required to prove commercial = reasonableness. We=20 cannot, for example, rule out the possibility that, in a given set = of=20 facts and jury charge language, sufficient proof could be provided = by a=20 fact witness with extensive experience, by reference to = promulgated=20 industry or trade association guidelines, or otherwise to enable a = jury to=20 decide this issue.

^{^[9]} =20 In Aconsumer transactions,@ a secured party that fails to prove = compliance=20 with the statutory requirements for disposition of collateral is = barred=20 from collecting any deficiency. See Tex. Bus. & = Com. Code=20 Ann. ' 9.626(a), State Bar Committee cmt. = (Vernon=20 2002). Because Question 6 instructed the jury, in deciding = damages,=20 to consider only notes relating to vehicles that Regal sold in a=20 commercially reasonable manner, such that a recovery of = deficiencies on=20 any other vehicles would be barred, it thereby treated the = transactions as=20 consumer transactions for this purpose, and neither party = objected=20 or has assigned error to that aspect of the = charge.

^{^[10]} =20 We cannot discern from the record whether the jury could have = deducted=20 this amount from any of the damages it awarded.

^{^[11]} =20 Nor did the alleged oral agreement purport to modify or replace = any of the=20 existing reserve provisions or other obligations under the=20 PSAs.

^{^[12]} =20 Regal also contends on appeal that Tex Star waived its right to = judgment=20 on the disregarded jury finding by failing to challenge all = grounds=20 asserted in the motion to disregard. However, Regal does not = specify, and we have not found, any such unchallenged=20 grounds.

^{^[13]} =20 See, e.g., Carl J Battaglia, M.D., P.A. v. Alexander, 177 = S.W.3d=20 893, 903 (Tex. 2005); Sterner v. Marathon Oil Co., 767 = S.W.2d 686,=20 690 (Tex. 1989); Morris v. Holt, 714 S.W.2d 311, 313 (Tex. = 1986);=20 Grenwelge v. Shamrock Reconstructors, Inc., 705 S.W.2d 693, = 694=20 (Tex. 1986); C & R Transp., Inc. v. Campbell, 406 = S.W.2d 191,=20 194 (Tex. 1966).

^{^[14]} =20 See Tex. R. App. P. 38.1(h) (requiring = appellant=3Ds brief to contain a clear and concise = argument=20 for the contentions made, with appropriate citations to = authorities and to=20 the record). In this regard, even Regal=3Ds reply brief in support of its = conditional=20 cross-appeal focuses almost exclusively on the existence of the=20 relationship and merely states with regard to the breach, = AMcIngvale does not even contest the = sufficiency of=20 the evidence on the element of breachChe simply argues that no fiduciary duty=20 existed. Therefore we will not belabor that = point.@

^{^[15]} =20 See Comm. on Pattern Jury Charges, State Bar of Tex., Texas = Pattern=20 Jury Charges: Business, Consumer, Insurance, Employment PJC = 104.1=20 = (2003).