law-DTPA | Houston consumer cases and case law | fraud | fraud vs breach of contract | statutory fraud | fraud in
real estate transactions | fraudulent inducement of contract | fraudulent concealment of tort or breach as
limitations tolling theory | fraudulent misrepresentation | negligent misrepresentation | breach of contract vs.
fraud claim | Deceptive Trade Practices (DTPA) claim |
TEXAS DECEPTIVE TRADE PRACTICES ACT (DTPA)
The DTPA prohibits “[f]alse, misleading, or deceptive acts or practices in the conduct of any
trade or commerce.” TEX. BUS. & COMM. CODE ANN. § 17.46(a) (West 2011). Section 17.46
(b) contains a laundry list of specifically prohibited acts. Included in that laundry list are (1)
“representing that goods or services have characteristics which they do not have,” (2)
“representing that goods or services are of a particular . . . quality, . . . if they are of another, ”
(3) “representing that an agreement confers or involves rights, remedies, or obligations which it
does not have or involve,” (4) “representing that a guarantee or warranty confers or involves
rights or remedies which it does not have or involve,” and (5) “failing to disclose information
concerning goods or services which was known at the time of the transaction if such failure to
disclose such information was intended to induce the consumer into a transaction into which the
consumer would not have entered had the information been disclosed.” Id. § 17.46(b)(5), (7),
(12), (20) and (24). Actionable representations may be oral or written. Helena Chem. Co. v.
Wilkins, 47 S.W.3d 486, 502 (Tex. 2001). Intent to make a misrepresentation is not required to
recover under section 17.46(b)(5), (7), and (12). See id.
Under section 17.50(a), a DTPA plaintiff may recover “economic damages” for which the
defendant’s misconduct was a producing cause. TEX. BUS. & COM. CODE ANN. § 17.50(a)
(West 2011). Economic damages include both benefit-of-the-bargain damages similar to those
recoverable for breach of contract and out-of-pocket damages. See W.O. Bankston Nissan, Inc.
v. Walters, 754 S.W.2d 127, 128 (Tex. 1988) (explaining that out-of-pocket and benefit-of-the-
bargain are two measures of damages under the DTPA, and noting that a plaintiff may recover
the greater of the two measures). Additionally, “recovery under the DTPA is not exclusively
limited to only these two types of damages.” Manon v. Tejas Toyota, Inc., 162 S.W.3d 743, 754
(Tex. App.—Houston [14th Dist.] 2005, no pet.). Rather, the consumer may recover its “total loss
sustained . . . as a result of the deceptive trade practice,” including “related and reasonably
necessary expenses.” Id.; see D.S.A., Inc. v. Hillsboro Indep. Sch. Dist., 973 S.W.2d at 662, 663–
64 (Tex. 1998) (explaining that a plaintiff can recover, in addition to out-of-pocket-expenses, any
loss otherwise suffered as a consequence of misrepresentations); Henry S. Miller Co. v. Bynum,
836 S.W.2d 160, 162 (Tex. 1992) (holding that DTPA damages include recovery for “lost capital
investment”). In other words, the consumer is “permitted [to recover] other damages to ensure
that the plaintiff is made whole.” Bynum, 836 S.W.2d at 162.
CONSUMER STATUS OF PLAINTIFF - DEFINITION OF CONSUMER BY DTPA
The DTPA defines a “consumer” as “an individual, partnership, corporation, this state, or a
subdivision or agency of this state who seeks or acquires by purchase or lease, any goods or
services, except that the term does not include a business consumer that has assets of $25
million or more . . . .” TEX. BUS. & COM. CODE ANN. § 17.45(4) (Vernon 2011). Whether a
person is a “consumer” for DTPA purposes is a question of law. Roberts v. Healey, 991 S.W.2d
873, 881 (Tex. App.—Houston [14th Dist.] 1999, pet. denied).
CAUSATION PROOF REQUIRED
Metro Allied Ins. Agency, Inc. v. Lin, 304 S.W.3d 830, 835 (Tex. 2009) (observing that, to recover
under DTPA, claimant must show that alleged conduct was “producing cause” of claimant’s
injury, and “[b]oth producing cause and proximate cause contain the cause-in-fact element,
which requires that the defendant’s act be ‘a substantial factor in bringing about the injury and
without which the harm would not have occurred.’”) (quoting Doe v. Boys Clubs of Greater Dallas,
907 S.W.2d 472, 481 (Tex. 1995)); Gym–N–I Playgrounds, Inc. v. Snider, 220 S.W.3d 905, 914
(Tex. 2007) (observing that causation is essential element of claims for negligence, gross
negligence, violations of DTPA and fraud).
SOME DTPA CASES FROM THE HOUSTON COURTS OF APPEALS
Brown & Brown of Texas, Inc. v. Omni Metals, Inc. (pdf) (Tex.App.- Houston [1st Dist.] Dec. 17,
2009)(Substituted opinion by Keyes) (insurance coverage, certificates of insurance, DTPA)
MODIFY TRIAL COURT JUDGMENT AND AFFIRM TRIAL COURT JUDGMENT AS MODIFIED:
Opinion by Justice Keyes
Before Justices Nuchia, Keyes and Higley
01-05-01190-CV Brown & Brown of Texas, Inc. f/k/a Poe & Brown of Texas, Inc. and
Transcontinental Insurance Company v. Omni Metals, Inc.
Appeal from 61st District Court of Harris County
Trial Court Judge: Hon. John Donovan
Dissenting Opinion by Justice Nuchia
Bejjani v. TRC Services, Inc. (Tex.App.- Houston [14th Dist.] Nov. 19, 2009)(Boyce)
(DTPA car repair, foreclosure of mechanic's lien, segregation of attorney’s fees)
AFFIRMED: Opinion by Justice Boyce
Before Justices Anderson, Frost and Boyce
14-08-00750-CV Khalil Bejjani, Individually and dba Bejjani Enterprises, Inc., and dba Bejjani
Automotive Group, Inc., and dba Toyex Bimmer Sales & Services and dba Toyex/Bimmer; Bejjani
Enterprises, Inc., Individually, Et al v. TRC Services, Inc.
Appeal from County Civil Court at Law No 2 of Harris County
Trial Court Judge: Jacqueline Lucci-Smith
Harrison v. Charlie Thomas Ford, Ltd. (Tex.App.- Houston [1st Dist.] Sep. 24, 2009)(Sharp)
(DTPA, Finance Code violations in installment sale of motor vehicle alleged,
waiver of arguments on appeal)
AFFIRM TC JUDGMENT: Opinion by Justice Sharp
Before Chief Justice Radack, Justices Taft and Sharp
01-08-00164-CV Russell W. Harrison v. Charlie Thomas Ford, Ltd., d/b/a Charlie Thomas Ford
Appeal from 61st District Court of Harris County
Trial Court Judge: Hon. John Donovan
Element of Reliance
Under section 17.50(a) of the DTPA, a consumer may maintain an action where any of the following constitute a
producing cause of economic damages or damages for mental anguish: (1) the use or employment by any
person of a false, misleading, or deceptive act or practice that is specifically enumerated under section 17.46(b)
of the DTPA and is relied on by a consumer to her detriment, (2) breach of an express or implied warranty, (3)
any unconscionable action or course of action by any person, or (4) the use or employment by any person of an
act or practice in violation of chapter 541 of the Texas Insurance Code. See Tex. Bus. & Com. Code Ann. § 17.50
(a) (Vernon Supp. 2007).
In order to prove fraud, a plaintiff must show that (1) the defendant made a material representation that was
false, (2) the defendant knew the representation was false or made it recklessly as a positive assertion without
any knowledge of its truth, (3) the defendant intended to induce the plaintiff to act upon the representation, and
(4) the plaintiff actually and justifiably relied on the representation, which caused the injury. Ernst & Young, L.L.P.
v. Pac. Mut. Life Ins. Co., 51 S.W.3d 573, 577 (Tex. 2001).
Wood v. Texas Chiropractic College (Tex.App.- Houston [1st Dist.] July 24, 2008) (Jennings)
(suit by student against private educational institution, DTPA, misrepresentation, no reliance shown, NE-SJ)
AFFIRM TC JUDGMENT: Opinion by Justice Jennings
Before Justices Taft and Jennings, The Honorable Hudson
01-07-00952-CV Kelly Wood v. Texas Chiropractic College
Appeal from 190th District Court of Harris County
Trial Court Judge: Hon. Jennifer Walker Elrod
Daniels v. Richardson (Tex.App.- Houston [1st Dist.] Apr. 16, 2009)(Hanks)
(product liability, claims against seller vs. manufacturer, warranty, DTPA, issue of jury charge error)
AFFIRM TC JUDGMENT: Opinion by Justice Hanks
Before Chief Justice Radack, Justices Alcala and Hanks
Jack Daniels d/b/a Daniel's Rentals v. Edward Richardson d/b/a Blue Saphire Lawn Care
Appeal from County Court at Law No 1 & Probate Ct of Brazoria County
Trial Court Judge: Hon. Jerri Lee Mills
SUBSEQUENT TEX.SUP. CT DECISION: Metro Allied Ins. Agency v. Lin, No. 07-1032 (Tex. Dec, 11, 2009)(per
curiam) (DTPA, negligence claim predicated on failure to procure insurance coverage, causation standard)(take-
nothing JNOV against plaintiff reinstated)
Lin v. Metro Allied Ins. Co. (Tex.App.- Houston [1st Dist.] Aug. 31, 2007)(Hanks)(DTPA, JNOV, jury)
REVERSE TC JUDGMENT AND REMAND CASE TO TC FOR FURTHER PROCEEDINGS: Opinion by Justice
Before Justices Taft, Alcala and Hanks
01-05-00196-CV Shihche E. Lin, individually and d/b/a Aptus Company, and Sung-Ping H. Lin v. Metro Allied
Insurance Agency, Inc. and C. Michael McGlothlin
Appeal from 189th District Court of Harris County (Hon. William R. Burke, Jr.)
A jury found that Metro Allied Insurance Agency, Inc. and C. Michael McGlothlin (collectively "Metro") negligently
and in violation of the Texas Deceptive Trade Practices Act ("DTPA"), caused damages to Shihche E. Lin,
individually and d/b/a Aptus Company, and Sung-Ping H. Lin (collectively "Lin"). Metro moved for and was granted
a Judgment Notwithstanding the Verdict ("JNOV") ordering that Lin take nothing. Lin complains that the trial court
erred in granting the JNOV because there was sufficient evidence: (1) to show that Metro knowingly engaged in
an unconscionable course of action that was a producing cause of damages to Lin under the DTPA, (2) to show
that Metro's negligence proximately caused damages to Lin, and (3) to justify the trial court's submission of the
issues to the jury. Metro raises three cross-points arguing that, if we hold that there was some evidence of
liability and damages under both the negligence and DTPA causes of action, we should also hold that the
evidence is factually insufficient. We reverse and remand.
In November 1998, Lin was awarded a $1,265,110 contract with the U.S. Government to upgrade the technology
in a hydroelectric plant located in Sault Sainte Marie, Michigan. The terms of the contract required Lin to
purchase and maintain both a Performance Bond, to ensure the timely performance of the contract, and a
Commercial General Liability Insurance ("CGL") policy. (1) Accordingly, Lin purchased a Performance Bond from
Chatham Reinsurance Company and began searching for a CGL policy. The search took almost one year, and
Lin testified that, in his search for a CGL policy, he was looking for a comprehensive plan that would protect him
in the event that there was a problem with his performance under the government contract. He received quotes
from two agencies: Elbert Insurance and Metro. On the Elbert quote, the line providing for "contractual coverage"
was checked. This was an indication, according to Lin, that the Elbert policy would have protected against claims
resulting from any breach of contract. Lin faxed Metro a copy of the Elbert quote as an example of the coverage
that he was seeking. McGlothlin, Metro's agent, testified that the Elbert quote was in Lin's file, but there was no
testimony reflecting that the quote he provided Lin was based on the Elbert quote. Lin accepted a policy offer
from Metro and paid the requisite premium in January 2000.
Six months later, in June of 2000, Lin's government contract was terminated, and the surety company fulfilled the
remainder of his contractual obligations in accordance with the terms of the Performance Bond. After the contract
was terminated, Lin canceled his CGL policy with Metro and was refunded a pro-rated portion of the premium.
The surety company later brought suit against Lin, seeking $200,000 in indemnity under the Performance Bond
for the expenses it incurred while completing Lin's government contract. (2)
After representing himself for more than one year in the surety's suit, Lin asked Metro to defend him under the
terms of his CGL policy. Lin testified that McGlothlin indicated that an insurance defense lawyer would be
available to represent him. According to Lin, on multiple occasions, McGlothlin promised that he was covered
under the CGL policy. Lin further testified that what followed these promises, however, was months of waiting for
an attorney to represent him. Lin notified McGlothlin that the surety had filed a motion for summary judgment in
its suit against him, and the next month Lin received a letter from McGlothlin's errors and omissions attorney
indicating that Lin's claim was denied. The summary judgment was granted, and, several months later, Lin paid
the surety company $175,000 in settlement. Lin was eventually informed by McGlothlin that no policy had actually
been written for him.
McGlothlin, on the other hand, testified that he never made any promises to Lin regarding coverage under the
CGL policy, and, that it would be unusual for a CGL policy to have included the type of coverage Lin was seeking.
He emphasized in his testimony that the only representations he made to Lin were that he had a policy. It was
not until Lin made a claim under the policy that McGlothlin realized that he could not locate Lin's file. According to
McGlothlin, he spent a substantial amount of time looking for Lin's file, and he came to the conclusion that the
file had been removed from his desk prior to the policy being written and was taken to an off-site storage facility
without his knowledge. After discovering that no policy existed, McGlothlin notified his errors and omissions
carrier and later informed Lin of the problem. (3) Lin sued Metro, alleging that Metro was negligent and violated
the DTPA by failing to obtain an insurance policy that would have covered his contractual liability to the surety
company. The jury returned a verdict in Lin's favor and awarded him $175,000 as compensation for his
negligence claim, $200,000 as compensation for his DTPA claim, and $300,000 in additional DTPA damages.
Metro moved for a JNOV and argued that Lin had presented no evidence of either causation or damages in any
of his claims. The trial court granted Metro's JNOV, and Lin filed this appeal.
In four issues, Lin complains that the trial court improperly granted Metro's motion for JNOV because there was
sufficient evidence to sustain the jury's findings that (1) Metro knowingly engaged in an unconscionable course
of action that was the producing cause of harm to Lin and (2) Metro's negligence proximately caused Lin harm.
Lin also asserts that there was sufficient evidence to justify the trial court's submission of the issues to the jury.
A. Standard of Review
An appellate court reviews a JNOV under a no-evidence standard of review. Williams v. Briscoe, 137 S.W.3d 120,
124 (Tex. App.--Houston [1st Dist.] 2004, no pet.). Under this standard of review, we will affirm the JNOV only if
the record reveals one of the following: (1) the complete absence of a vital fact, (2) the court is barred by the rules
of law or of evidence from giving weight to the only evidence offered to prove a vital fact, (3) the evidence offered
to prove a vital fact is no more than a scintilla, or (4) the evidence conclusively established the opposite of the
vital fact. City of Keller v. Wilson, 168 S.W.3d 802, 810 (Tex. 2005). More than a scintilla of evidence exists if the
evidence "rises to a level that would enable reasonable and fair-minded people to differ in their conclusions."
King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 751 (Tex. 2003). If the evidence does no more than create a mere
surmise or suspicion of fact, less than a scintilla of evidence exists. Id. In our review, we consider only the
evidence and reasonable inferences that tend to support the jury's findings. Best v. Ryan Auto Group, Inc., 786 S.
W.2d 670, 671 (Tex. 1990) (per curiam); Williams, 137 S.W.3d at 124. That is, we view the evidence in the light
most favorable to the verdict. Williams, 137 S.W.3d at 124.
In issue one, Lin argues that the trial court erred in granting the JNOV because there was sufficient evidence to
support the findings that McGlothlin engaged in an unconscionable course of action that was the producing
cause of $200,000 in damages to Lin. In issue two, Lin contends that the trial court erred in granting the JNOV
because the evidence was sufficient to support the findings that McGlothlin knowingly engaged in an
unconscionable course of action that was the producing cause of $300,000 in damages to Lin. We agree.
The jury was asked:
Did Mike McGlothlin/Metro Allied Insurance engage in any unconscionable action or course of action that was a
producing cause of damages to the Plaintiffs?
"Producing cause" means an efficient, exciting, or contributing cause that, in a natural sequence, produced the
damages, if any. There may be more than one producing cause.
An unconscionable action or course of action is an act or practice that, to a consumer's detriment, takes
advantage of the lack of knowledge, ability, experience, or capacity of the consumer to a grossly unfair degree.
Answer "Yes" or "No"
The jury found that Lin should be compensated $200,000 because of such conduct. Because it answered
Question 3 "yes," the jury was asked:
Did Mike McGlothlin and/or Metro Allied Insurance engage in any such conduct knowingly?
"Knowingly" means actual awareness, at the time of the conduct, of the falsity, deception, or unfairness of the
conduct in question. Actual awareness maybe [sic] inferred where objective manifestations indicate that a
person acted with actual awareness.
In answering this question, consider only the conduct that you have found was a producing cause of damages to
Shihche E. Lin, Individually and d/b/a Aptus and Sung-Ping Lin.
Answer "Yes" or "No"
The jury awarded an additional $300,000 to Lin because Metro's conduct was committed knowingly. (4)
As submitted, Lin's DTPA cause of action required a showing that McGlothlin (1) engaged in an unconscionable
act or course of action (2) that was a producing cause of damages. If the jury believed that McGlothlin did engage
in such an activity, then Lin must show (3) that the act or course of action was committed knowingly and (4)
caused damage to him.
1. Engaged in Unconscionable Act or Course of Action
It is undisputed that Metro did not issue a CGL policy for Lin, despite representing to him that a policy had been
issued and despite Metro's acceptance of Lin's premium payment. Lin testified that McGlothlin repeatedly
assured him that Metro's policy would cover him in his defense against the surety's claim. Lin even testified that,
on one occasion, McGlothlin told him that Lin's missing file had been found, and the file reflected that Lin was
insured by Burlington Insurance. Over the course of one year, Lin continued to pursue his right to legal
representation under his Metro policy, and, in response, Lin was assured that his lawyer would be furnished
"Tuesday," "next week," "week after next," "in ten days," and "in 60 days." Lin testified that, in May, McGlothlin told
him that he "had coverage" and that McGlothlin was "working with the insured's lawyer to defend my case."
Seven months later, Lin learned that there was no policy, no coverage, and no legal representation for him in the
surety's case. Because Lin was repeatedly assured that he was covered under the Metro policy, he did not seek
representation elsewhere, he did not attempt to negotiate with the surety company, and he went to trial
unrepresented, ultimately resulting in a $175,000 settlement.
The jury was instructed that "an unconscionable action or course of action is an act or practice that, to a
consumer's detriment, takes advantage of the lack of knowledge, ability, experience, or capacity of the consumer
to a grossly unfair degree." We conclude that there is more than a scintilla of evidence that, to Lin's detriment,
McGlothlin's course of action took advantage of Lin's lack of knowledge to a grossly unfair degree.
2. Action was Producing Cause of Damages
We must next determine if there was more than a scintilla of evidence to show that McGlothlin/Metro's action or
course of action was the producing cause of Lin's damages. The jury was instructed that '"[p]roducing cause'
means an efficient, exciting, or contributing cause that, in a natural sequence, produced the damages, if any.
There may be more than one producing cause." The evidence, when reviewed in the light most favorable to Lin,
establishes that, had McGlothlin not represented to Lin that he was covered under the policy, Lin would have had
an opportunity to obtain coverage elsewhere, such as from Elbert Insurance, which gave him the original
coverage quote. Had he been covered elsewhere, Lin would not have been personally responsible for the
settlement of the surety's claim. We conclude that there is more than a scintilla of evidence to support the jury's
affirmative finding to jury Question 3--"Did Mike McGlothlin/Metro Allied Insurance engage in any unconscionable
action or course of action that was a producing cause of damages to the Plaintiffs?" Accordingly, we sustain
3. Action was Knowingly Committed
Under the additional DTPA damages claim, the jury was asked if McGlothlin/Metro engaged in the conduct
knowingly. The jury was instructed that '"[k]nowingly' means actual awareness, at the time of the conduct, of the
falsity, deception, or unfairness of the conduct in question. Actual awareness maybe [sic] inferred where
objective manifestations indicate that a person acted with actual awareness."
Lin testified that McGlothlin knew "early on" that no policy had been issued, but he continued to mislead Lin to
Lin's detriment. McGlothlin even told Lin that he had been in contact with the lawyer who would be representing
Lin in the surety suit when, in fact, there was no such lawyer. Lin testified that McGlothlin repeatedly told him not
to communicate with the surety's lawyers until his lawyer became available. We conclude that there is more than
a scintilla of evidence that McGlothlin/Metro knowingly engaged in the action or course of action.
4. Action Caused Damage
The jury was asked to determine if McGlothlin/Metro's knowing conduct was a producing cause of damages to
Lin. As previously stated, had Lin been insured, he would not have been personally liable for the surety's claim.
Furthermore, Lin testified that he was in the process of entering into settlement negotiations with the surety
when McGlothlin told him not to contact the surety's lawyers until his lawyer became available. Three months
later, the surety filed a motion for summary judgment, which was ultimately granted. We conclude that there is
more than a scintilla of evidence to support the jury's affirmative finding to jury Question 5. Accordingly, we
sustain issue two.
In issue three, Lin argues that the trial court erred in granting the JNOV because there was sufficient evidence to
sustain the jury's finding that Metro's negligence proximately caused him damages in the amount of $175,000.
We agree. Here, the jury was asked:
Did the negligence, if any, of Michael McGlothlin/Metro Allied Insurance Agency, Inc., proximately cause the injury
Answer "Yes" or "No": (YES)
"Negligence," when used with respect to the conduct of any person, means failure to use ordinary care, that is,
failing to do that which a person of ordinary prudence would have done under the same or similar
circumstances or doing that which a person of ordinary prudence would not have done under the same or
"Ordinary care," when used with respect to the conduct of any person, means that degree of care that would be
used by a person of ordinary prudence under the same or similar circumstances.
"Proximate cause" means that cause which, in a natural and continuous sequence, produces an event, and
without which cause such event would not have occurred. In order to be a proximate cause, the act or omission
complained of must be such that a person using ordinary care would have foreseen that the event, or some
similar event, might reasonably result therefrom. There may be more than one proximate cause of an event.
The jury's finding was unanimous, but the trial court granted Metro's motion for JNOV. If there is more than a
scintilla of evidence that "the negligence, if any, of [Metro], proximately cause[d] the injury in question," the trial
court erred. See City of Keller, 168 S.W.3d at 810.
In the context of the instant appeal, it is well established that an insurance agent agreeing to obtain insurance
owes the legal duty to obtain the insurance and, if he cannot, he must notify his principal of failure. May v. United
Servs. Ass'n of Am., 844 S.W.2d 666, 669 (Tex. 1992); Frazer v. Tex. Farm Bureau Mut. Ins. Co., 4 S.W.3d 819,
822 (Tex. App.--Houston [1st Dist.] 1999, no pet.). Implicit in a case alleging negligent failure to obtain insurance
is the requirement that the loss be one that is covered in some policy. See Hardware Dealers Mut. Ins. Co. v.
Berglund, 393 S.W.2d 309, 310-11 (Tex. 1965); see also Stinson v. Cravens, Dargen & Co., 579 S.W.2d 298, 300
(Tex. Civ. App.--Dallas 1979, no writ) (affirming instructed verdict where appellant failed to bring loss under
coverage of any policy shown by evidence to be available).
Through McGlothlin's testimony, Metro conceded that it agreed to obtain a CGL policy for Lin, accepted payment
for said policy, and failed to obtain the policy. McGlothlin also testified that Lin was not notified of the failure to
obtain a policy until McGlothlin, himself, discovered the failure. McGlothlin testified that he notified his errors and
omissions carrier "[b]ecause I knew that somebody in my office had messed up and I was responsible for it, and
I was going to take responsibility for it, and provided there was a covered peril." This testimony constitutes some
evidence of the existence of a legal duty and breach of that duty on the part of Metro. See Frazer, 4 S.W.3d at 822.
In addition, the evidence admitted at trial included the Elbert quote, which Lin testified was faxed to Metro and he
asked that the Elbert quote "will be my model" and an example of the type of policy he sought. On the Elbert
quote, the line providing for "contractual coverage" was checked. According to Lin, this indicated that the Elbert
policy would have protected against claims like the surety's claims in the underlying suit. Furthermore,
McGlothlin acknowledged that he had received the Elbert quote from Lin and that it seemed to include coverage
for contractual liability. This evidence rises to a level that would enable reasonable and fair-minded people to
differ in their conclusions, and it is, thus, more than a scintilla of evidence that Lin's contractual liability would
have been covered under some policy. See Stinson, 579 S.W.2d at 300. Finally, it was forseeable to McGlothlin
that his failure to prepare or obtain a policy for Lin would leave Lin uninsured. We conclude that there is more
than a scintilla of evidence to support the jury's affirmative finding to Question 1.
Accordingly, we overrule Lin's second issue.
In his fourth issue, Lin argues that "there is sufficient evidence to require submission to the jury." Having found
more than a scintilla of evidence to support the jury's findings for each of the questions submitted, we sustain
Despite this evidence supporting the jury's findings in the case, Metro argues that it was entitled to a JNOV
because "no evidence was presented that if an attorney had been hired to represent Lin in the surety lawsuit the
outcome would have been different." Metro contends that a CGL policy is not a performance bond, and that Lin's
proof that he could have gotten a CGL policy is no evidence that a policy to cover the breach of contract could
have been obtained in this case. Thus, Metro argues that there was no evidence of causation to support any
liability findings in this case. Concerning proof of the outcome, Lin complains that he was entitled to
representation as well as coverage for the claim under the policy he requested. Further, even if a CGL policy
would not normally cover contracts, Lin presented evidence of a CGL policy that covered contractual claims, and,
thus, he created a fact issue with respect to proximate cause for the negligence claim and producing cause for
the DTPA claim that was resolved in Lin's favor. McGlothlin also testified that a CGL policy for breach on contract
would be "fairly rare," not that it was unavailable. In other words, the jury chose to believe Lin when he testified
that he would have obtained a policy that would have covered the loss he suffered had Metro not acted
negligently as found by the jury. The putative insured is not required to "prove a specific policy in order to show
that he was adversely affected" by the failure of the insurance agent to obtain the policy. Parkins v. Tx. Farmers
Ins. Co., 645 S.W.2d 775, 776 (Tex. 1983).
In three cross-points, Metro contends that there was factually insufficient evidence to support (1) the jury's
response to the liability issues under both the DTPA and negligence theories, (2) the damage findings under
Lin's DTPA and negligence theories, and (3) the jury's answer that the unconscionable conduct of
McGlothlin/Metro resulted in a damage award of $300,000.
A. Standard of Review
In reviewing a factual sufficiency point, we consider all the evidence supporting and contradicting the finding.
Plas-Tex, Inc. v. U.S. Steel Corp., 772 S.W.2d 442, 445 (Tex. 1989); HTS Servs., Inc. v. Hallwood Realty Partners,
L.P., 190 S.W.3d 108, 111 (Tex. App.--Houston [1st Dist.] 2005, no pet.). We set aside the verdict only if the
finding is so contrary to the overwhelming weight of the evidence as to be clearly wrong and unjust. Cain v. Bain,
709 S.W.2d 175, 176 (Tex. 1986). Jurors are the sole judges of the credibility of the witnesses and the weight to
give their testimony. City of Keller, 168 S.W.3d at 819. They may choose to believe one witness and disbelieve
Metro contends that there was insufficient evidence to support a finding that the breach of a contract surety claim
would have been covered by a CGL policy. On appeal, Metro argues that it "would submit to the Court that [it is]
not aware of any insurance policy, of any type, that would insure a person for his obligations in entering into a
contractual agreement as part of the purchase of a Performance Bond." McGlothlin testified that he had "never
encountered a surety issue on a CGL deal before" and, when asked if it was his understanding that the CGL
policy will cover a surety's claim, McGlothlin responded, "never." However, when asked whether he had seen an
MGA (5) [managing general agent] who provided contractual liability in a CGL policy, he acknowledged that it
"would be fairly rare," without ruling out the possibility. McGlothlin testified that it was rare for a CGL policy to
include a contract provision, but he acknowledged that the Elbert CGL policy did appear to cover contract
disputes. McGlothlin explained that, "in the surplus lines policy (6) there is no standard. It's not like your standard
Texas auto policy. Different companies buy different types risks and policies on surplus lines policies. . . ." The
company determines coverage under those policies.
Metro contends that Lin could have proved coverage by "introducing a standard CGL policy and having a qualified
insurance expert give his opinion that a surety claim would have coverage under the policy." We disagree. By
presenting evidence of some policy that would cover the claim, Lin, at the very least, created a fact question as to
coverage. See Berglund, 393 S.W.2d at 310-11; see also Stinson, 579 S.W.2d at 300. The jury may choose to
believe one witness and disbelieve another. City of Keller, 168 S.W.2d at 819. Reviewing the evidence in a
neutral light, we conclude that the finding was not so contrary to the overwhelming weight of the evidence as to
be clearly wrong and unjust. See Cain, 709 S.W.2d at 176. Accordingly, we overrule Metro's cross-point one.
1. DTPA and Negligence
In cross-point two, Metro asserts that there was factually insufficient evidence presented to the jury to support the
damage findings under Lin's DTPA and negligence theories. Specifically, Metro argues that "no evidence was
presented that if an attorney had been hired to represent Lin in the surety lawsuit the outcome would have been
different." Thus, Metro argues that there was no evidence of causation to support the damage findings. We
In its briefing, Metro states that this is the same argument that it makes with respect to causation to support any
finding of liability in this case. As noted above this argument oversimplifies Lin's complaint: Lin complains that
he was entitled to representation as well as coverage for the claim under the policy he requested. As noted
above the evidence created a fact issue with respect to causation, and the fact issue was resolved in Lin's favor.
We overrule cross-point two.
2. Mental Anguish
In cross-point three, Metro contends that there was factually insufficient evidence to support the jury's answer
that the unconscionable conduct of McGlothlin/Metro resulted in a damage award of $300,000.
After unanimously finding that McGlothlin and/or Metro knowingly engaged in an unconscionable act or course of
action, the jury was asked:
What sum of money, if any, in addition to actual damages, should be awarded to Shihche E. Lin, Individually and
d/b/a Aptus and Sung-Ping Lin against Mike McGlothlin and/or Metro Allied Insurance because their conduct was
Answer in dollars and cents, if any.
"Damages" was not defined in the charge, and Metro did not object to the wording of the charge. Metro contends
that evidence is factually insufficient to support a $300,000 finding of "mental anguish damages." However, the
jury's finding was not confined to mental anguish damages. Under a "knowing" violation, the DTPA allows an
additional award of three times the economic damages. See Tex. Bus. & Com. Code Ann. § 17.50(b)(1) (Vernon
Supp. 2006); (7) Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299, 304 (Tex. 2006) (for DTPA violation, could
recover economic damages, mental anguish, and attorney's fees, but not additional damages beyond three
times economic damages). The jury awarded $175,000 in economic damages. It could have awarded up to
$525,000 for the knowing violation and still fallen within the statutory guidelines. Accordingly, we overrule cross-
We reverse and remand for the trial court to render judgment consistent with the jury's findings.
George C. Hanks, Jr.
Panel consists of Justices Taft, Alcala, and Hanks.
1. " ' -- ' " --
3. Lin had made premium payments, and, when Lin cancelled the policy on June 26, 2000 after the government
contract was terminated, he was issued a pro rata refund. Once it was discovered that Metro had not issued a
policy, Lin was refunded the remainder of the premiums paid.
4. Lin did not object to the charge, but the trial court overruled Metro's no-evidence objection to the charge. Metro
did not object to the form of the charge.
5. McGlothlin explained that an "MGA" was a managing general agent who represents "a number of carriers."
6. A "surplus lines policy" is one where the rates are not determined by the state.
7. Section 17.50(b)(1) provides that a DTPA plaintiff may recover:
the amount of economic damages found by the trier of fact. If the trier of fact finds that the conduct of the
defendant was committed knowingly, the consumer may also recover damages for mental anguish, as found by
the trier of fact, and the trier of fact may award not more than three times the amount of economic damages; or if
the trier of fact finds the conduct was committed intentionally, the consumer may recover damages for mental
anguish, as found by the trier of fact, and the trier of fact may award not more than three times the amount of
damages for mental anguish and economic damages.
Tex. Bus. & Com. Code Ann. § 17.50(b).
Tello v. Bank One, NA (Tex.App.- Houston [14th Dist.] Jan. 9, 2007)(Seymore)
(vehicle lease, DTPA, vehicle lease, breach of contract, fraud, DTPA)
AFFIRMED: Opinion by Justice Seymore
(Before Justices Hudson, Frost and Seymore)
14-04-00888-CV Pablo Tello v. Bank One, N.A.: Banc One Texas Leasing Corp
Appeal from Co Civil Ct at Law No 2 of Harris County (Judge Gary Michael Block)
Dissenting Opinion by Justice Frost
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