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Apodaca v. Rios

Court of Appeals of Texas, Eighth District, El Paso

April 28, 2005

RUBEN APODACA AND CHRISTINE APODACA, Appellants
v.
JOE RIOS AND LESLIE RIOS, Appellees.

          Appeal from the 327th District Court of El Paso County, Texas (TC# 2002-2758)

          Before Panel No. 4 Barajas, C.J., Larsen, and McClure, JJ.

          OPINION

          RICHARD BARAJAS, CHIEF JUSTICE

         This is an appeal filed by Appellants, complaining of the trial court's entry of judgment in favor of Appellees after a bench trial. The trial court judge found in favor of Appellees and awarded money damages for a breach of contact and claims related to fraud. The trial court entered Findings of Fact and Conclusions of Law. Appellants filed a Motion for New Trial and/or Judgment N.O.V. which was denied by the trial court. This appeal follows. For the reasons stated, we affirm.

         I. SUMMARY OF THE EVIDENCE

         Appellees originally sued Appellants for damages based upon a breach of contract claim arising from Appellants' failure to repay a loan in the amount of $40, 000 made by Appellees. The case was tried to the judge. During the presentation of the evidence during the case-in-chief, evidence was presented by Appellees that they contend establishes the elements of fraud on the part of Appellants. Appellees moved for an oral trial amendment which was granted by the court. After the trial of the case and before judgment was entered, Appellees filed a Motion for Leave to file their First Amended Original Petition. The trial court granted the motion and the First Amended Original Petition, which included a claim for fraud, was filed shortly before the filing of the court's Judgment. The trial court entered a judgment finding that Appellees were entitled to judgment against Appellants for damages in the amount of $32, 000, pre- and post-judgment interest, and costs of court. The court included a finding that Appellants were responsible for false representations constituting fraud against Appellees. The court filed minimal Findings of Fact and Conclusions of Law which essentially tracked the judgment. Appellants did not tender requested findings nor did they object to the findings as filed. Appellants timely filed a Motion for New Trial and\or Judgment N.O.V.

         The underlying factual basis for the claim is not disputed. Appellant Ruben Apodaca was a certified public accountant who performed accounting services for Appellees. Appellant Christine Apodaca, the wife of Ruben Apodaca, was employed by her husband's firm. Appellants provided general accounting services on a monthly basis for Appellees and were familiar with Appellees' business. On February 22, 2002, Christine Apodaca telephoned Leslie Rios and inquired whether the Rioses wanted to loan $40, 000 to an undisclosed client of the Apodacas. The Rioses prepared a check for $40, 000 payable to Christine Apodaca which was endorsed by Christine Apodaca and deposited into Ruben Apodaca's account. Appellees believed that the money was a loan for one of the Appellants' clients on a short-term basis and would be repaid in one week's time. Appellant Christine Apodaca represented that a client of the Apodaca firm needed a short-term loan to cover payroll and she offered to repay the $40, 000 plus an additional $15, 000. In response to several questions about the specific details of the transaction, Christine Apodaca "invoke[d] the fifth" and refused to answer the question. [1] The judge informed Christine Apodaca that she would "take notice and take that into consideration." Ruben Apodaca was also questioned about the various transactions that Christine Apodaca was involved in and "invoke[d] the Marital Privilege to [not] testify against her" and refused to answer the specific questions asked.

         The money originally came from a business account belonging to both Appellees. Once the money was not repaid, Appellees went to Appellants' business office and demanded repayment. Both Appellants assured Appellees that they would repay the money within a short time. Appellants presented two separate checks to Appellees as repayment of the loan, but both checks were dishonored pursuant to a "stop payment" instruction received by the issuing bank. Ultimately, Appellants made a partial payment in the amount of $8, 000 paid to Appellees' attorney's trust account. Appellees filed suit for the balance.

         II. ISSUES ON APPEAL

         On appeal, Appellants present eight issues attacking the judgment entered by the trial court awarding Appellees $32, 000 in damages, pre- and post-judgment interest, and costs of court. Issue No. One complains about the timing of an oral trial amendment allowed by the court that they contend alleged a new cause of action. We read this issue as a complaint that the allowance of the amendment was an abuse of discretion. Issue Nos. Two through Five and Issue No. Seven complain of the sufficiency of the evidence to support the judgment as written. Issue No. Six appears to be a rhetorical question regarding whether the judgment as entered was based upon a breach of contract or fraud. We read this as a redundant issue attacking the judgment on the grounds of legal and factual sufficiency of the evidence. We will address Issue Nos. Two through Seven together. Issue No. Eight complains that the trial court should have entered judgment in favor of Appellants on the basis of a counterclaim for usury.

         A. Trial Amendment

         The case was tried to the judge. During the course of the trial, Appellant Christine Apodaca was questioned by Appellees' attorney regarding the specific details of the transaction surrounding the $40, 000, but refused to answer the questions propounded. Appellees' attorney requested leave of court to file an oral trial amendment regarding allegations of fraud. Appellants' attorney objected and requested a recess. The trial court granted the oral trial amendment and denied the recess. After the conclusion of the trial but before judgment had been entered, Appellees filed a Motion for Leave to File First Amended Pleading. The court signed an Order granting same and they filed their First Amended Original Petition on September 26, 2003, immediately before the Judgment was filed.

         Rule 66 of the Texas Rules of Civil Procedure governs the procedure at issue in the present case:

[I]f during the trial any defect, fault or omission in a pleading, either of form or substance, is called to the attention of the court, the court may allow the pleadings to be amended and shall do so freely when the presentation of the merits of the action will be subserved thereby and the objecting party fails to satisfy the court that the allowance of such amendment would prejudice him in maintaining his action or defense upon the ...

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