Appeal from the 151st Judicial District Court Harris County,
Texas Trial Court Case No. 2012-38756
consists of Chief Justice Radack and Justices Jennings and
Wayne Correll, challenges the trial court's judgment,
entered after a jury trial, in favor of appellee, Michelle
Hartman, in her suit against him for breach of contract,
defamation, fraud, and, alternatively, violations of the
Texas Deceptive Trade Practices Act
("DTPA"). In three issues, Wayne contends that the
evidence is legally insufficient to support the jury's
findings against him on Hartman's fraud and DTPA
claims and the trial court erred in awarding
Hartman her attorney's fees.
separate appeal, under this same appellate cause number,
Hartman, as appellant, challenges the trial court's
judgment notwithstanding the verdict ("JNOV") in
favor of appellee, Peggy Correll, in Hartman's suit
against her for fraud and violations of the
DTPA. In four issues, Hartman contends that the
trial court erred in granting Peggy a JNOV on the ground that
there is no evidence supporting the jury's findings
against her on Hartman's fraud and DTPA
affirm in part and reverse and render in part.
Second Amended Petition, Hartman alleged that in May 2011,
Wayne and his wife, Peggy, fraudulently induced her to
purchase their retail jewelry business, Correll's
Jewelry, and to lease their store. At the time, Wayne was an
experienced business owner with over 30 years of experience
in the retail jewelry industry, and she was a court reporter
with "little or no business experience" and no
experience in retail jewelry. Wayne induced Hartman to
purchase the business by falsely overstating its past sales
revenues in an advertisement and refusing to furnish her with
copies of his and Peggy's sales tax records and federal
tax returns. Hartman asserted that she, in entering the
parties' "bill of sale, " or purchase contract,
and a lease of the store, "relied to her detriment upon
the truth of [Wayne's] representations." She also
alleged that Wayne and Peggy sold her the business assets at
arbitrarily inflated values. Some of the assets were
permanently affixed to the leasehold and, after the business
failed, could not be removed without substantial damage to
the real property.
further alleged that after she had purchased Wayne and
Peggy's business and moved into the store, Wayne began
interfering with her business by operating a competing
jewelry business and coming into Hartman's store and
interfering with her customers. Moreover, Wayne breached the
bill of sale and the lease, constructively evicting Hartman,
by leasing the parking area dedicated to the jewelry store to
a used-car sales business, and actually evicting her, by
locking her out of the store for eight days.
sought actual damages, including recovery of her $95, 000
investment and her lost profits, past and future;
consequential damages; certain exemplary damages; and
trial, Hartman testified that after her divorce, she looked
for a business opportunity for her adult son. In May 2011,
she saw an advertisement on Craigslist offering Correll's
Jewelry for sale, along with the building and real property
on which it was situated. In the advertisement was a link to
a website for more information. The website, a printout of
which the trial court admitted into evidence, stated, in
pertinent part, as follows:
A perfect career opportunity to get in the retail wholesale
jewelry business with a well established store with an
excellent reputation. In operation for over 32 years and
located in N.W. Houston fronting on a major 6 lane road,
great signage, easy parking with a gated driveway for after
Owner will train buyers, and will sell the real estate or
lease jewelry store space, perfect chance to get into the
small box/big box type retail jewelry store, which seems to
the be trend nowadays. For more real estate information go to
link at . . . .
[photographs of building]
Owner will sell store with or without inventory, priced
without inventory at $90, 000 including safes, signage,
alarms, shop equipment, showcases and lighting, etc.
Sales are in the range of $300, 000 to $500, 000 with a
small ad budget, increases are certain with more promotion
and longer hours. . . .
website contained a "Company Overview, " which
stated, in pertinent part, as follows:
Correll's Jewelry is a fine jewelry store retail business
located in northwest Houston . . . [and] for sale by owner .
. . . The company was established in 1979 by the present
owner. The retail business specializes in all facets of
retail and wholesale jewelry. The on premises shop has all
the capabilities to reproduce, design and manufacture most
items of jewelry as well as complete repair facilities. . . .
The business has enjoyed a[n] outstanding reputation for good
prices, honesty, fast service and dependability. We have also
expanded into the internet business world with our web site .
. . . Visit our site for more information about our company
or e-mail us at: . . . The owner . . . is willing to provide
training and guidance during the transitional period after
the sale in order to make not only you but the stores
customers feel comfortable.
The building may be leased for $3, 200 per month or purchased
outright with business for $890, 000. This includes other
rental income from secondary buildings. Business alone, less
inventory, $90, 000.
website also included an extensive list of equipment and
assets, along with assigned values.
further testified that on or near May 29, 2011, she
telephoned Wayne, told him that she "had seen his ad,
" inquired about purchasing the business and real
property, and arranged to visit and see the store. Days
later, Hartman, with "the entire printout" of the
website in hand, went to the store, met with Wayne, and
"spent a whole lot of time there." He explained
that the Corrells owned four parcels of land and another
building they could rent out. And they had a house behind the
store, where they lived. Wayne told Hartman that he had built
everything from the income from his jewelry business, which
he had operated for over 30 years. Hartman noted that he had
"a huge motor home, " "rings on every [finger]
and lots of gold, " and "[i]t was just
impressive." Wayne offered to sell her all four parcels
of land and improvements for $850, 000. She explained to him
that her house, worth $800, 000, had been paid off in her
divorce and she would consider taking out a mortgage against
it to make the purchase.
Hartman visited the property with her son, who declined to
live at the location, Wayne suggested that Hartman "just
buy the business" and, "if [she] still like[d] it
after a year, " she could purchase the real estate. And
he told her that if she did not like the business, he would
buy it back from her. Wayne also stated that he had, on a
past occasion, bought the business back from a purchaser.
Hartman, along with her fiancé, Kelly Sumrall, met
with Wayne, and asked to view the store's financial
records. According to Hartman, Wayne abruptly refused,
insisting that "jewelry stores don't do that"
and "[n]o jewelry store would ever do that."
Hartman explained that she accepted his answer and, after
Wayne told her that other parties wanted to buy the business
and she needed to make a decision, she decided to move
forward with the purchase.
and Wayne then exchanged emails, negotiating the language of
the bill of sale, the list of assets to be included in the
sale, and the terms of the lease. Hartman noted that Peggy
had not participated in any of the discussions or
negotiations, she had not met Peggy in person, and she had
not had any conversations with her over a telephone. On June
12, 2011, Wayne arranged for Hartman to meet with him and
Peggy to close the sale. On June 13, 2011, Hartman met with
Wayne and Peggy, gave them a cashier's check for $87,
000, paid them $12, 750 from her credit cards and executed a
bill of sale for the purchase of the business and a lease of
the store. The trial court admitted into evidence the bill of
sale and lease.
bill of sale provides that Wayne and Peggy, for the amount of
$95, 000 cash at closing, agreed to sell to Hartman the
"retail business known as Correll's Jewelry."
Included in the sale was "all furniture, fixtures,
equipment, trade fixtures and lighting, " and all items
included on the attached equipment and asset list; use of the
assumed name of "Correll's Jewelry" for up to
one year; "$15, 000 worth of fine jewelry priced at
wholesale . . . and to be chosen by buyer from sellers
inventory with advice from seller considered"; and
"no more than 30 days" assistance with the
transition and training. And Wayne and Peggy "offer[ed]
no guarantees of success or amount or sale potential of
buyer" and "all due diligence" was to be
"completed by" Hartman.
lease was for a term of one year and to commence on June 15,
2011, with an automatic renewal for one year, unless Hartman
provided notice otherwise within 30 days before the renewal
date. Rent of $3, 100 per month was due on the first day of
each month and considered late after the tenth day. The lease
also created "a lien upon and security interest in all
property" of Hartman located at the leased premises.
admitted that she did not read the bill of sale before she
signed it. Rather, she "perused it kind of quickly"
and "it looked pretty simple" to her. She explained
that she believed that the business had been established for
a "long time and had good customers." Hartman
explained that her grandfather had had a jewelry store and
she understood that Wayne, who had been in the business for a
long time, would provide training. She trusted Wayne and
relied "a hundred percent" on his representations
about the store's sales being "$300, 000 to $500,
000" per year. And she anticipated purchasing the store
and real estate on which it was situated at the end of the
further testified that within two weeks after she had
purchased the business, her relationship with Wayne began to
deteriorate. She and her son did not "get along"
with Wayne during the training period, and she asked Wayne to
leave. Thereafter, the store did not generate the income that
Hartman had anticipated. Her 2011 tax records for the
business, which the trial court admitted into evidence,
reflect a loss of $77, 422. Hartman noted that although she
had sold a "lot" of jewelry in February 2012,
around Valentine's Day, she had been forced to sell all
of it on credit to "no-credit-check" customers that
had failed to fully pay. She was further forced to cover
operating expenses from her personal funds. And, on two
occasions, the store's utilities were shut off for