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Tan Duc Construction Limited Company, Inc. v. Tran

Court of Appeals of Texas, First District

June 13, 2017

JIMMY TRAN, Appellee

         On Appeal from the 309th District Court Harris County, Texas Trial Court Case No. 2010-48243

          Panel consists of Chief Justice Radack and Justices Higley and Huddle.


          Rebeca Huddle Justice.

         Appellee Jimmy Tran has filed a motion for rehearing of our February 7, 2017 opinion and judgment. We grant the motion, withdraw our opinion and vacate our judgment of February 7, 2017, and issue this opinion and a new judgment in their stead.

         This appeal arises from common-law tort claims adjudicated as part of a divorce proceeding. Appellee Jimmy Tran petitioned for divorce from his wife, appellant Hoang-Yen Thi Dang. Tran also asserted fraud and other tort claims against Dang and Tan Duc Construction Limited Company, Inc. ("Tan Duc"), a company Tran alleged was controlled by Dang. The trial court entered a judgment based on the jury's findings that Dang committed fraud and awarded Tran damages to compensate him for the loss of his interest in their house in Piney Point, plus exemplary damages.

         Dang challenges the trial court's judgment, contending, among other things, that (1) legally insufficient evidence supports the damages award, (2) Tran's damages expert's testimony was unreliable, and (3) the trial court erred by failing to submit a measure of damages. Tan Duc also appealed, arguing that the trial court improperly denied its request for attorney's fees.

         We affirm the trial court's judgment.


         Tran and Dang were married in 2007, after they executed a premarital agreement. The agreement provided that all then-existing separate property would remain separate property, and that any assets or liabilities acquired by either party during the marriage would remain separate property. Each party waived any right to support from the other.

         In the fall of 2010, Tran filed a petition for divorce and asserted claims for breach of the premarital agreement, common-law fraud, breach of fiduciary duty, and civil conspiracy. Tran claimed that Dang breached the agreement by failing to give him a gift of cash, stock, real estate or other assets worth $1 million within 30 days of the consummation of the marriage. Tran also alleged that Dang committed fraud and breached her fiduciary duties to him with respect to several properties that the couple jointly owned during their marriage, including their house located at 11440 Memorial.[1] Tran also sued Tan Duc, contending that it was controlled by Dang and had conspired with her to fraudulently transfer property.

         Tran's tort claims were tried to a jury. At trial, Tran testified that in October 2007, shortly after he and Dang married, he transferred a 25% interest in the house to Dang and a 25% interest to each of her two daughters. Tran did not allege that these transfers were induced by fraud. Around this same time, Tran mortgaged the house. He executed one promissory note for $2.5 million and another for $500, 000. Both notes were personally guaranteed by him alone, and both were secured by the house.

         Tran testified that in the spring of 2010, Dang told him that they should transfer their interests in the house to Tan Duc. According to Tran, Dang told him that the transfer would be financially advantageous and that he still would own his 25% interest in the house, either by gaining ownership in the entity that owned the house or by some other means. According to Tran, Dang told him that Tan Duc would pay the mortgages on the house. Tran signed a deed transferring his 25% interest in the house to Tan Duc in April 2010, and it is the ultimate loss of this 25% interest that forms the basis of Tran's fraud claim related to the house. At trial, Tran testified that at the time he transferred his 25% interest in the house, it was worth approximately $5.5 million. He also testified that he continued to be liable personally on the mortgages secured by the house after the transfer of his interest.

         Dang's testimony conflicted with Tran's. Dang testified that in the spring of 2010 Tran wanted to transfer his ownership in the house to avoid foreclosure and avoid paying property taxes. According to Dang, Tran wanted Tan Duc to assume responsibility for the house because he could not pay for the notes that burdened it.

         Tran, Dang, and her two daughters executed a deed in April 2010 transferring each of their interests-in total, 100% of the interest in the house-to Tan Duc. According to a document executed in connection with the transfer, Tan Duc purchased the house for $5.77 million, at least $2.77 million of which was assuming the obligation to pay on Tran's two notes, which had remaining balances of $2.27 million and $500, 000. Dang produced this document during discovery and introduced it into evidence at trial; Tran claimed he had never seen the document and that it was fraudulent. He also testified that Tan Duc did not assume his obligation to pay on the notes and he remained obligated on them. Tan Duc initially did make some mortgage payments, but eventually ceased, causing a foreclosure in October 2011.

         Tran's economic damages expert, Dr. Kenneth Lehrer, calculated his damages from the alleged fraud. According to Lehrer, Tran's 25% interest in the house was worth approximately $800, 000 when Lehrer prepared his report in 2013. Lehrer calculated this figure by determining the value of Tran's interest in the property at the time the premarital agreement was executed in 2007 and assuming a 20% increase in value each year. Lehrer testified that this figure would compensate Tran for the loss of the house to foreclosure in 2011. Lehrer testified that he did not account for any debt on the property and that he assumed that Tran had no obligation for any debt on the property at any point. Lehrer also did not calculate the value of the home at the time that Tran transferred his 25% interest in 2010.

         Lehrer testified that Tran's interest alternatively could be valued by calculating 25% of the $2.62 million 2011 foreclosure sales price of the house, which was $655, 000, or 25% of HCAD's assessed value of the house at the time of the foreclosure in 2011, which was $625, 000. Tran also testified about the value of his interest based on the 2011 foreclosure price, calculating that his interest was worth 25% of that price, around $600, 000.

         The jury found that Dang did not breach the premarital agreement or breach a fiduciary duty to Tran, but found that Dang committed fraud against Tran. The jury awarded Tran $650, 000 for fraud damages and $50, 000 in exemplary damages. The jury found no liability on the part of Tan Duc.

         Dang's Appeal

         Dang asserts five issues in her appeal. She argues that (1) the trial court erred by admitting unreliable testimony from Tran's damages expert, (2) there is legally insufficient evidence to support the damages award, (3) the trial court erred by failing to submit a measure of damages for the fraud, (4) the jury's fraud and damages findings were rendered immaterial by others, and (5) the award of exemplary damages should be reversed because no evidence supports the actual damages award.

         Charge Error

         In her third issue, Dang contends that the trial court erred by failing to submit a measure of damages for her alleged fraud related to the house.

         A. Standard of Review and Applicable Law

         To preserve an objection regarding charge error, the party objecting to the charge "must point out distinctly the objectionable matter and the grounds of the objection." Tex.R.Civ.P. 274; Ford Motor Co. v. Ledesma, 242 S.W.3d 32, 43 (Tex. 2007). Moreover, the party's objection must have "stated the grounds for the ruling that the complaining party sought from the trial court with sufficient specificity to make the trial court aware of the complaint, unless the specific grounds were apparent from the context." Tex.R.App.P. 33.1(a). A party must "clearly designate the alleged error and specifically explain the basis of its complaint in its objection to the charge." Hamid v. Lexus, 369 S.W.3d 291, 296 (Tex. App.- Houston [1st Dist.] 2011, no pet.) (quoting Carousel's Creamery, L.L.C. v. Marble Slab Creamery, Inc., 134 S.W.3d 385, 404-05 (Tex. App.-Houston [1st Dist.] 2004, pet. dism'd)).

         Failure to object timely to error in a jury charge constitutes a waiver of that error. Tex.R.Civ.P. 272. "Any complaint as to a question, definition, or instruction, on account of any defect, omission, or fault in pleading, is waived unless specifically included in the objections." Tex.R.Civ.P. 274; see Burbage v. Burbage, 447 S.W.3d 249, 255 (Tex. 2014) (party waives any objection to jury charge not specifically raised in trial court); Hamid, 369 S.W.3d at 296 (same) (first citing Ledesma, 242 S.W.3d at 43; then citing State Dep't of Highways & Pub. Transp. v. Payne, 838 S.W.2d 235, 241 (Tex. 1992) (op. on reh'g)).

         B. Analysis

         Tran's theory at trial was that Dang fraudulently induced him to transfer his 25% interest in the house to Tan Duc in 2010. Question 13, the damages question, asked the jury:

What sum of money, if any, if paid now in cash, would fairly and reasonably compensate Jimmy Tran for his damages, if any, that resulted from the conduct of Hoang-Yen Thi Dang?
If you answered "No" to Question 7, related to fiduciary duty, you must further find that any resultant damages were "proximately caused" by Hoang[-]Yen Thi Dang.
"Proximate cause" means a cause that was a substantial factor in bringing about 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 the degree of care required of him would have foreseen that the event, or some similar event, might ...

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