Rhey v. Redic

408 S.W.3d 440

Ellen E. RHEY d/b/a Rhey Properties, Appellant,

v.Carolyne REDIC and John E. Redic, Individually and d/b/a Victory Warriors Drill and Dance Academy, and Victory Chapel Ministries, Appellees.

No. 08–11–00069–CV.

Court of Appeals of Texas, El Paso.

March 20, 2013.

Anthony C. Aguilar, El Paso, TX, Appellant.

Enrique Moreno, Law Offices of Enrique Moreno, Ela Paso, TX, for Appellees.

Before McCLURE, C.J., RIVERA, and ANTCLIFF, JJ.

OPINION

ANN CRAWFORD McCLURE, Chief Justice.

Ellen Rhey d/b/a Rhey Properties appeals from a money judgment in favor of Carolyn Redic and John Redic, Individually and d/b/a Victory Warriors Drill and Dance Academy and d/b/a Victory Chapel Ministries. In portions of the record, Victory Chapel Ministries is erroneously referred to as Victory Chapel Industries. The court's charge and the jury's verdict reflect the correct name, Victory Chapel Ministries, but the judgment uses the incorrect name. We therefore reform the judgment to reflect the correct assumed name, Victory Chapel Ministries and affirm the judgment as reformed.

FACTUAL SUMMARY

At the time of trial, Carolyne and John Redic had been married for forty-four years. The Redics lived in El Paso for a while when John was in the military and when he retired in 1978, they decided to return to El Paso to begin a ministry. John was ordained in 1979 and Carolyne became ordained in 2000. John became the pastor of Second Baptist Church in 1979 where he continued to work until 1988. During that time, Carolyne worked as a youth minister in south El Paso. In 1988, the Redics and a group of people began Victory Chapel Ministry. Carolyne described it as an outreach ministry and explained that although they had a congregation, the focus of the ministry was to address the needs of the community known as the “Devil's Triangle” located in Northeast El Paso. Victory Chapel has Sunday services and has several different ministries including a women's ministry, drug and alcohol ministry, and a prison ministry. It also provides food and clothing to needy people through a program known as Abigail Pantry. Victory Chapel is not a corporation and it does not operate for profit. John filed an assumed name for Victory Chapel Ministries. In 1995, Carolyne began the ministry known as Victory Warriors Drill and Dance Academy to strengthen children and families. Victory Warriors serves children from the age of six through seventeen and the majority of the children are from single parent families living below the poverty level. It is an after-school program and children are referred through schools and law enforcement. It provides tutoring for children who require it and children who are doing well in school can participate in drill, the team leadership program, or the fine arts department. It also has a program called Court One which allows children to do community service through Victory Warriors. Victory Warriors is not a corporation and it does not operate for profit. Project Change El Paso is the fiscal agent for Victory Warriors. Victory Warriors receives funding from a variety of sources and it has a number of community partners including the El Paso Sheriff's Department, the El Paso Police Department, the Victim's Council, El Paso Community College, the United States Holocaust Memorial Museum, and Wounded Warriors. It also has a relationship with three El Paso schools and the El Paso Times.

Victory Chapel and Victory Warriors have been located in a strip mall in northeast El Paso since 2000. The Redics initially leased two units from Rhey and eventually occupied five units due to their ministries' growth. The leases, which were prepared by Rhey, identified the lessees as John or Carolyne Redic d/b/a VictoryChapel or Victory Warriors. In the latter part of 2007, the leases were about to expire but the Redics were concerned about the condition of the premises. They discussed their concerns with both Gordon Schuetz, the property manager, and Rhey before they signed new leases. The Redics were particularly concerned about the roof. Schuetz agreed that the roof was the lessor's responsibility and said it would be fixed. Nothing was immediately done but in March 2008 Rhey spoke with Carolyne because they had not signed a new lease. Carolyne discussed their concerns about the roof and asked if she would repair it. Rhey said that the roof was her responsibility and she would repair it. She also said she would look into their other concerns about the property. A short time later, Rhey had an electrician working on the property so the Redics believed that Rhey was going to make the repairs they had discussed and they executed the new leases in March 2008. Carolyne would not have signed the leases if Rhey had not promised to fix the roof. The roof was not repaired and Rhey did not have plans to do so.

One rainy day in July 2008, Carolyne heard the dance instructor and the children screaming. She ran into the building and saw that water was gushing through the electric outlets and the lights were “fluttering.” Fearing that someone would get electrocuted, Carolyne made everyone exit the building. She talked to Schuetz the next day and he said that he was sorry they had not fixed the roof and he “thought we would be able to hold out.” Two or three days later, it rained again and flooded additional portions of the buildings. The second rain caused even more damage than the first. The Redics tried to save what they could, but they lost everything in the children's rooms and the pantry, including the food in the freezers because they had to cut the electricity. Furniture and musical equipment was also damaged. The Redics had to stay out of the buildings for about five weeks. They attempted to continue with the various programs in tents but the summer heat eventually forced them to cancel summer camp, the food bank, and a workshop. They also had to cancel a dance performance at the historic Plaza Theater because the children had no facilities where they could practice. This resulted in the loss of a grant from the Museum of Culture and the National Endowment for the Arts. The Redics also had to cancel prayer services, and consequently, they could not collect offerings. The Redics could not meet their financial obligations, including the rent on the property, for a period of time in 2008. Rhey eventually repaired the roof. The Redics filed suit against Rhey for breach of contract, statutory fraud, common-law fraud, and negligent misrepresentation. Rhey answered and filed a counterclaim for breach of contract. The jury found in favor of the Redics on their negligent misrepresentation claims and found that Rhey had committed statutory fraud with respect to Carolyne, but found there was no common law fraud. The jury found against the Redics and Rhey on the breach of contract claims. The jury awarded damages to the Redics d/b/a Victory Warriors and Victory Chapel for expenses and loss of use in the amount of $28,085.25 It awarded Carolyne damages in the amount of $87,500 for damage to her reputation and awarded John Redic $50,000 for damage to his reputation. The jury awarded attorney's fees to the Redics d/b/a Victory Warriors and Victory Chapel in the total amount of $60,000 for preparation and trial, and additional amounts in the event of an appeal to the Court of Appeals and the Texas Supreme Court. The trial court rendered judgment on the verdict. Rhey appeals raising thirty-eight issues.

LIABILITY FINDINGS

In Issues 1 through 3, Rhey challenges the legal and factual sufficiency of the evidence supporting the jury's liability findings.

Standard of Review

On appeal, a legal sufficiency or “no evidence” challenge will be sustained if the party suffering the adverse decision at trial shows: (1) the complete absence of a vital fact; (2) the court is barred by rules of law or 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 evidences establishes conclusively the opposite of the vital fact. City of Keller v. Wilson, 168 S.W.3d 802, 810 (Tex.2005); Stanley Works v. Wichita Falls Independent School District, 366 S.W.3d 816, 828 (Tex.App.-El Paso 2012, pet. filed). When conducting a legal sufficiency review, we must view the evidence in the light favorable to the verdict, crediting favorable evidence if a reasonable fact finder could, and disregarding contrary evidence unless a reasonable fact finder could not. City of Keller, 168 S.W.3d at 830. The final test for legal sufficiency must always be 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.

When the appellant challenges the factual sufficiency of an adverse finding on which the other party had the burden of proof, the appellant must demonstrate that there is insufficient evidence to support the adverse finding. Escalante v. State Office of Risk Management, 355 S.W.3d 341, 345 (Tex.App.-El Paso 2011, no pet.); Texas Property & Casualty Guaranty Association v. National American Insurance Company, 208 S.W.3d 523, 542 (Tex.App.-Austin 2006, pet. denied). We will consider, weigh, and examine all of the evidence in the record, both in support of, and contrary to, the finding. Escalante, 355 S.W.3d at 345;Insurance Network of Texas v. Kloesel, 266 S.W.3d 456, 470 (Tex.App.-Corpus Christi 2008, pet. denied). The jury's findings will be set aside only if they are so contrary to the overwhelming weight of the evidence as to be clearly wrong and manifestly unjust. Escalante, 355 S.W.3d at 345.

Breach of Contract and Common Law Fraud

In her first issue, Rhey attacks the sufficiency of the evidence to support the Redics' breach of contract theory of liability.¹ Similarly, she argues in a portion of Issue 3 that the evidence is insufficient to prove common law fraud.² The jury made negative findings...