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Campbell v. Luong

Court of Appeals of Texas, Fourth District, San Antonio

July 19, 2017

Jason CAMPBELL, Appellant/Cross-Appellee
v.
Ben LUONG, Appellee/Cross-Appellant

         From the 408th Judicial District Court, Bexar County, Texas Trial Court No. 2014-CI-10868 Honorable Solomon Casseb, III, Judge Presiding

          Sitting: Sandee Bryan Marion, Chief Justice, Rebeca C. Martinez, Justice, Irene Rios, Justice.

          MEMORANDUM OPINION

          SANDEE BRYAN MARION, CHIEF JUSTICE

         This appeal and cross-appeal arise from a dispute over a 0.5% real estate commission. After a bench trial, the trial court awarded judgment in favor of Dr. Ben Luong, finding Jason Campbell violated the DTPA, breached a fiduciary duty owed to Luong, and engaged in common law fraud.[1] Campbell presents five issues on appeal contending: (1) the statute of frauds bars the enforceability of any commission agreement between the parties; (2) Luong ratified the agreement to pay Campbell a 2.45% commission by closing the sale of the property; (3) the evidence is insufficient to support the trial court's liability findings or, alternatively, Luong was not entitled to pursue tort claims against Campbell; and (4) the trial court erred in awarding appellate attorney's fees that were not conditioned on a successful appeal. In his cross-appeal, Luong contends the trial court erred by: (1) reducing the amount of attorney's fees awarded; (2) not awarding appellate attorney's fees and denying Luong's request to introduce a supplemental affidavit as evidence to support an award of appellate attorney's fees; (3) failing to find Campbell engaged in fraud in a real estate transaction; (4) failing to award expert witness fees; and (5) failing to award prejudgment interest. We affirm the trial court's judgment

         Background

         After Campbell successfully located a tenant for a property owned by Luong, Luong requested his services in listing two of his other properties for sale. One property was located on Encino Valley, and the other on Gramercy.

         Luong purchased the properties with the intent to remodel them and sell them for a profit. Luong was working with Evan Jacobson to "flip" the properties but subsequently alleged Jacobson had stolen some of the money Luong paid him for work to be performed on the properties. Because Jacobson had threatened to place liens on the properties, Luong wanted to quickly sell the properties.

         In an initial email, Luong offered to pay Campbell a 4.95% commission, [2] with Campbell receiving a 1.95% commission as the seller's agent and the buyer's agent receiving a 3.0% commission. Luong testified he had two other realtors willing to accept a 5.0% commission, but Campbell agreed to the 4.95% commission if Luong listed multiple properties with him.

         Campbell sent listing agreements to Luong for both the Encino Valley and Gramercy properties which listed the total commission as 1.95% (instead of the 4.95%) out of which Campbell would pay the buyer's agent a 3.0% commission. Luong made several changes to the agreements before signing them and returning them to Campbell. One of the changes stated, "if the seller finds a buyer himself, realtor will not receive 1.95% commission."

         Upon receiving the agreements from Luong, Campbell discovered the agreements provided the total commission to be paid was 1.95% instead of 4.95%. Campbell testified he changed the commission in the Encino Valley agreement to 4.95% before signing the agreement. Although Campbell testified he emailed the amended agreement to Luong, Luong testified he never received the amended agreement and introduced evidence from his internet email provider to further prove he did not receive an email with the amended agreement.

         After Campbell located a buyer for the Encino Valley property, Luong and the buyer signed an earnest money contract. Although the commission to be paid the buyer's agent was typewritten in the broker information section of the earnest money contract as 3.0%, that percentage was marked through and a 2.5% commission was interlineated. Campbell testified he spoke with Luong about this change, and Luong agreed the additional 0.5% commission would be paid to Campbell for the extra work he performed in locating a buyer. Luong, however, testified he never discussed the reduction in the amount of the commission to be paid the buyer's agent with Campbell and believed the 0.5% savings contained in the earnest money contract would reduce the total amount of the commission Luong would be required to pay. The buyer's realtor testified Campbell contacted him and stated Luong would only pay 2.5%, and he agreed to the change. The buyer's agent was not aware the listing agreement provided the buyer's agent would be paid 3.0%.

         Although the earnest money contract provided the buyer would purchase the property in its present condition, Luong and the buyer subsequently signed an addendum to adjust the portion of the purchase price to be paid in cash.[3] The addendum also contained the following language which Luong testified was a mistake because the buyer was supposed to fix the defects:

Within 6 months, Buyer is to show proof to seller after closing that seller will fix defects listed on buyer's inspection report by licensed contractor(s) with permits (if permit is required) so the house is in good and sellable condition in case buyer defaults on the mortgage. Seller will try to obtain refund from seller's contractor. If refund is obtained, Seller will credit Buyer refund toward his monthly payment.

         The buyer's realtor testified the additional language in the addendum was a surprise and a bonus to the buyer because they had not negotiated for Luong to fix the defects. Campbell testified Luong contacted him to prepare the addendum because he agreed to those terms with the buyer. Campbell also testified and introduced an email to show he informed Luong he should obtain an additional hold harmless agreement from the buyer because of the language in the addendum. Luong testified he was not aware of the mistake until after closing, and Campbell told him the mistake was Luong's problem.

         Prior to closing, Luong received the HUD-1 showing the amounts that would be deducted from the sales price at closing. The HUD-1 showed that Campbell would receive a 2.45% commission, and the buyer's agent would receive a 2.5% commission. Luong contacted the title company's escrow officer, Cheryl Luna, who told him he would need to speak with Campbell. An email was introduced into evidence showing that Campbell provided Luna with the commission percentages to be paid at closing in response to Luna's request for that information. Although Luong provided Luna with a copy of the listing agreement showing Campbell was to be paid a 1.95% commission, Luong proceeded to close without any revisions to the HUD-1 because he believed a "compliance agreement" provision in one of the documents signed at closing would allow him to recover the 0.5% commission erroneously paid to Campbell.[4]

         After closing, Campbell asked Luong to sign a hold harmless agreement stating Campbell would not be responsible for the mistake in the addendum to the earnest money contract, but Luong refused. Approximately one month after closing, Luong emailed Campbell requesting his assistance in locating a buyer for the Gramercy property. Campbell refused to help Luong if Luong did not sign the hold harmless agreement. In response to Campbell's refusal, Luong made his first reference to Campbell illegally taking the additional 0.5% commission. Approximately two years later, Luong filed the underlying lawsuit asserting claims for breach of contract, violations of the DTPA, common law fraud, fraud in a real estate transaction, and breach of fiduciary duty.

         As previously noted, after a bench trial, the trial court awarded judgment in favor Luong, finding Campbell violated the DTPA, breached a fiduciary duty owed to Luong, and engaged in common law fraud. The trial court awarded Luong $1, 175 in actual damages, $3, 525 in treble damages under the DTPA, and $14, 000 in attorney's fees. Campbell and Luong both appeal.

         Standard of Review

         Both Campbell and Luong raise various sufficiency challenges in their briefs.

         In an appeal from a bench trial, we apply the same sufficiency standards in reviewing the trial court's factual findings as we apply in determining whether sufficient evidence exists to support a jury's finding. Anderson v. City of Seven Points, 806 S.W.2d 791, 794 (Tex. 1991); In re Guardianship of Tischler, 505 S.W.3d 73, 76 (Tex. App.-San Antonio 2016, no pet.). As the factfinder, the trial court is the sole judge of the credibility of the witnesses and the weight to be given their testimony. See City of Keller v. Wilson, 168 S.W.3d 802, 819 (Tex. 2005); In re Guardianship of Tischler, 505 S.W.3d at 76. "The trial court may believe or disbelieve the testimony of a witness, in whole or in part, and it may resolve any inconsistencies in a witness's testimony." In re Guardianship of Tischler, 505 S.W.3d at 76. We "may not pass upon the witnesses' credibility or substitute [our] judgment for that of the [trial court, ] even if the evidence would clearly support a different result." Maritime Overseas Corp. v. Ellis, 971 S.W.2d 402, 407 (Tex. 1998).

         With regard to issues on which the opposing party had the burden of proof, the test for legal sufficiency is "whether the evidence at trial would enable reasonable and fair-minded people to reach the verdict under review." City of Keller, 168 S.W.3d at 827. In making this determination, we credit evidence favoring the finding if a reasonable factfinder could, and disregard contrary evidence unless a reasonable factfinder could not. Id. If there is more than a scintilla of evidence to support the finding, the legal sufficiency challenge fails. BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 795 (Tex. 2002).

         "A party attempting to overcome an adverse fact finding as a matter of law [on an issue upon which that party had the burden of proof] must surmount two hurdles." Sterner v. Marathon Oil Co., 767 S.W.2d 686, 690 (Tex. 1989). First, we examine the record for evidence that supports the finding, while ignoring all evidence to the contrary. Id. Second, if no evidence supports the finding, we ...


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