Opinions Released September 2, 2016

In this weekly blog, the Law Offices of Brandy Wingate Voss, PLLC will summarize recent decisions from the Thirteenth Court of Appeals and provide links to decisions on the court’s website.

Happy Endings Dog Rescue v. Gregory, No. 13-16-00042-CV (Opinion by Justice Rodriguez; Panel Members: Justices Benavides and Perkes)

In this direct appeal, Happy Endings Dog Rescue challenged the jury verdict and trial court judgment awarding damages to the Gregories for violation of a deed restriction.

Layne Gregory and his wife Donna started a veterinary practice at 516 North Hewitt Drive in Hewitt, Texas in 1983. Twenty-three years later, the couple expanded the practice and moved to a larger space two blocks away. Gregory sold the property to Linda Robinson, who intended to use the property to start Happy Endings Dog Rescue. Robinson agreed that the land would “not be used in whole or in part as a veterinary clinic, hospital, or dispensary or as a commercial boarding kennel,” and the restriction was incorporated into the deed.

In 2008, Happy Endings hired a veterinarian to work on staff, providing free and low-cost services. Happy Endings then began leasing the neighboring lot and began offering veterinary care to rescue animals for a fee. The new clinic treated six to eight animals per day beginning in 2009. Later, the clinic moved into a renovated facility on the deed-restricted lot.

In 2013, the Gregories sued Happy Endings for breach of restrictive covenant, seeking $200 per day in statutory damages, as well as compensatory damages, exemplary damages, and attorney’s fees. The Gregories also initially sought injunctive relief, though they dropped such claim when Happy Endings agreed to stop charging for its veterinary services. Happy Endings filed special exceptions seeking clarification of the Gregories’ theory of damages, but there was not a ruling on the exceptions.

At trial, the Gregories analogized their situation to that in Texas Property Code section 202.004, which provides for $200 per day in statutory damages based on the violation of certain residential deed restrictions. The Gregories also presented evidence that Happy Endings profited from six to eight animals per day at a rate of $100 each. There was no evidence of the Gregories’ lost profits.

The jury awarded the Gregories $200,000 in damages, $44,000 in attorney’s fees, and $25,000 for appeals. Happy Endings appealed on seven issues, two of which were dispositive. Namely, Happy Endings claimed that the Gregories’ pleadings did not support the jury’s disgorgement damages. The Gregories’ petition reflected only compensatory and statutory damages, which were not supported by the evidence.

Held: The Gregories pleadings do not support the disgorgement damages awarded by the jury. The award is reversed, along with the accompanying attorney’s fees, and the Gregories take nothing.

Happy Endings claimed that the Gregories failed to plead the disgorgement damages awarded by the jury. Rather, the Gregories pleaded compensatory and statutory damages for which there was no evidence. 

Happy Endings first claimed that the Gregories failed to plead disgorgement. The court of appeals noted that a judgment cannot be rendered on unpleaded claims or damages, unless “the parties clearly tried an unpleaded issue by consent.” The Gregories’ petition pleaded statutory damages under section 202.004 and vaguely alluded to “damages in an amount in excess of the minimum jurisdictional limits.” Happy Endings challenged this ambiguity with a special exception, but failed to secure a ruling on the issue. Nonetheless, the Thirteenth Court quoted the Texas Supreme Court for the rule that “[a] party is not required to specially except to a pleading defect if it lacks notice of the other party’s intent.” Typically, breach of a deed restriction results in injunctive relief rather than disgorgement. Thus, while the breach of covenant claim may have impliedly supported injunctive relief, it did not support unpleaded disgorgement damages. Happy Endings did not have notice of the Gregories’ theory of damages and was not required to specially except or obtain a ruling on such special exceptions. 

Furthermore, the theories of recovery actually stated in the Gregories’ petition—general and statutory damages—were not supported by legally sufficient evidence. The Gregories’ claim for statutory damages under section 202.004 was only “by analogy;” the Gregories did not claim to actually fall within the language of the statute. Yet, the Thirteenth Court noted that section 202.004 applies only to residential subdivisions and similar developments. The doctrine of expression unius est exclusion alterius holds that the legislature did not intend to make such damages available to unlisted deed restrictions. Thus, the Gregories’ reliance on section 202.004 for “analogous” damages was misplaced.

Moreover, the Gregories did not even attempt to prove lost profits as a result of the breach of the restrictive covenant. Instead, they relied upon evidence of Happy Endings’ unjust profits. Yet, disgorgement and general damages are fundamentally different. Disgorgement looks at the defendant’s gain, while compensatory damages looks at the plaintiff’s loss. The two remedies are distinct, and the Gregories pleaded compensatory damages rather than disgorgement.  Thus, the Gregories did not produce any evidence to sustain their claim for compensatory and statutory damages.

Finally, the Gregories’ award of attorney’s fees was dependent on their “prevailing” claims. As such claims were reversed by the Thirteenth Court, the attorney’s fees were reversed as well.

Read the Full Case Here

Wendland v. State, No. 13-14-00639-CR (Memorandum Opinion by Justice Perkes; Panel Members: Justices Benavides and Rodriguez)

In this appeal, the defendant challenged one of the three grounds used to justify revocation of his deferred adjudication.

Todd Wendland pleaded guilty to multiple counts of aggravated sexual assault with a child, sexual assault of a child, and indecency with a child, receiving ten years of deferred adjudication. Five years later, the State filed a motion to revoke Wendland’s deferred adjudication. The State claimed that Todd committed another count of indecency with a child, drank alcohol, and engaged in contact with a minor. Wendland pleaded “true” to the latter two allegations, and “not true” to the others. The trial court found all allegations to be true and revoked Wendland’s deferred adjudication, convicting him of the underlying counts and sentencing him to life imprisonment.

Wendland filed a motion for new trial, which the trial court denied. The defendant appealed, challenging the trial court’s finding that he violated his deferred adjudication by committing indecency with a child.

Held: Since Wendland did not challenge each of the trial court’s findings supporting revocation of his deferred adjudication—some of which Wendland even admitted—the trial court’s judgment is affirmed regardless.

Wendland’s appeal challenged the trial court’s findings only with respect to his violation of deferred by committing the offense of indecency with a child. Wendland did not challenge the trial court’s findings that Wendland consumed alcohol or that he engaged in contact with a minor.  Yet, any one violation of community supervision is sufficient to support a revocation. To reverse a trial court’s revocation of deferred adjudication then, the appellant must successfully challenge each and every basis for the trial court’s order.

Since Wendland challenged only one of the three grounds for revocation of his deferred adjudication, the trial court’s order must stand regardless of the sufficiency of the singular violation challenged on appeal. Thus, the trial court’s judgment is affirmed.

Read the Full Case Here