Sadovsky v. Hassler

UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT

_____________________

No. 95-50885
_____________________

MARK SADOVSKY,
Plaintiff-Third Party
Defendant-Appellant,

ELLEN SADOVSKY,

Appellant,
versus

HOWARD HASSLER; JOANNE HASSLER,

Defendants-Third Party
Plaintiffs-Appellees.

_____________________________________________________

Appeal from the United States District Court
for the Western District of Texas
(94-CV-166)
_____________________________________________________
December 16, 1996
Before GARWOOD, BARKSDALE, and DENNIS, Circuit Judges.

PER CURIAM:*

Mark and Ellen Sadovsky challenge, inter alia, liability under

the Texas Deceptive Trade Practices-Consumer Protection Act for the

sale of a necklace. We AFFIRM.

I.

*
Pursuant to Local Rule 47.5, the court has determined
that this opinion should not be published and is not precedent
except under the limited circumstances set forth in Local Rule
47.5.4.
 For almost 20 years, Howard and Joanne Hassler of New York,

New York, purchased items of expensive jewelry from Mark and Ellen

Sadovsky of San Antonio, Texas. The Sadovskys, who owned several

jewelry stores in Texas, would send pieces of jewelry on approval

to the Hasslers in New York. Typically, the items would be sent via

armored courier to the Hasslers’ son, Matthew Trachtenberg, who

would deliver them to his parents. The Hasslers would then decide

whether to purchase the items. According to the Hasslers, the

Sadovskys always had a “return policy”: any item could be returned

and its “meltdown value” (cost of its individual components if sold

separately) would be refunded to the Hasslers.

In August 1988, the Sadovskys telephoned the Hasslers and told

them about an emerald and diamond necklace they had recently

received, featuring a 97.8 carat Colombian emerald. Both Mark and

Ellen Sadovsky encouraged the Hasslers to purchase the necklace.

In addition, the Sadovskys telephoned Trachtenberg about the

necklace and told him that he should persuade his parents to buy

it.

That August 31, Mark Sadovsky met the Hasslers in New York so

they could view the necklace. After examining it and discussing

the purchase, the Hasslers paid him $240,000 for it that day. The

next day, Mark Sadovsky sent them three “certificates of appraisal”

indicating that the necklace had a wholesale value of $298,000, a

retail value of $450,000, and that he had heard of a similar

necklace being advertised in a magazine for $750,000.

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 Uncomfortable with the size of the necklace, Joanne Hassler

wore it only once and, approximately two years after purchase,

returned it to Mark Sadovsky in October 1990 so he could sell it.

By the fall of 1991, the Hasslers became concerned that the

necklace had not yet been sold. That September and October, Mark

Sadovsky had two appraisals sent to the Hasslers, indicating the

necklace had a wholesale value of $490,000 to $525,000. One

appraiser was the manufacturer of the necklace; both were business

partners of Ellen Sadovsky.

Despite the problems with selling the necklace, the Sadovskys

sent the Hasslers another shipment of jewelry in December 1992.

Included in this package was a “ring-dant”, a ring with a removable

face that could be worn as a pendant. When the package arrived,

Joanne Hassler took out the ring, put it on her finger, and left

with her husband for a party. Within minutes of arriving at the

party, Joanne Hassler discovered that the ring face was missing.

The Hasslers searched for it, but never found it.

When Ellen Sadovsky learned that the ring had been lost, she

backdated an invoice for it and billed the Hasslers $43,000.

Because of this dispute, the Hasslers asked the Sadovskys to return

the necklace, which they eventually did in September 1993. The

Hasslers had it appraised and discovered that it was worth much

less than any of the appraisals given to them; and that the emerald

was “highly included” (full of foreign material entrapped in the

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stone during the growth process), slightly misshapen, and had been

oiled, indicating a possible attempt to conceal cracks.

In October 1993, Mark Sadovsky filed this action in state

court against the Hasslers to recover for the loss of the ring-

dant. That December 17, he filed for bankruptcy under Chapter 7,

and on the same day, filed an amended complaint in state court

naming Ellen Sadovsky as plaintiff, although the style of the case

still listed him as plaintiff. The Hasslers removed this action to

federal court in March 1994 and counterclaimed, inter alia, for

fraud and violations of the Texas Deceptive Trade Practices-

Consumer Protection Act, TEX. (BUS. & COM.) CODE ANN. §§ 17.41-17.50

(DTPA). Both parties consented to trial before a magistrate judge.

Mark Sadovsky did not list the Hasslers as creditors on his

bankruptcy schedules until April 4, 1994, only two days before his

April 6 discharge and 14 days after the March 21 deadline for

objecting to discharge and for filing complaints to determine

dischargeability of debts. Sadovsky’s subsequent motion for

summary judgment in this action, based on the ground that the

Hasslers’ counterclaim was discharged in bankruptcy, was denied.

In response to interrogatories, the jury found both Sadovskys

violated the DTPA and committed those acts “knowingly”. In

response to a separate interrogatory, it also found Mark, but not

Ellen, Sadovsky committed fraud. The jury awarded $230,000 on the

DTPA claim, $37,000 on the fraud claim, and $75 in punitive

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damages. It also found no negligence on the part of Joanne Hassler

concerning the ring-dant and awarded no damages to the Sadovskys.

The Hasslers requested that judgment be entered only on the

DTPA claims, and the Sadovskys filed motions for judgment as a

matter of law and for new trial. The magistrate judge denied the

Sadovskys’ motions and entered judgment on the DTPA claims,

including awarding attorneys’ fees.

II.

The Sadovskys present a number of issues. As always, our

standard of review first comes into play.

Mark Sadovsky contends that the Hasslers’ counterclaim was

discharged in his Chapter 7 bankruptcy proceeding; and that there

was insufficient evidence for the jury findings of a knowing DTPA

violation and of fraud. Ellen Sadovsky maintains that no pleadings

properly presented a claim against her; and that there was

insufficient evidence to support the jury finding a knowing DTPA

violation. Both maintain, in the alternative, that the verdict was

against the great weight of the evidence. And, both assert that

the counterclaim was barred by the statute of limitations.

Prior to listing the final issues raised by the Sadovskys, we

examine our standard of review for those listed above. They

concede that a motion for judgment as a matter of law was not made

at the close of all the evidence with regard to any of these

issues. Accordingly, we look to whether their objections to the

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submission of several of the special jury interrogatories serve in

its stead.

Such objections that present sufficiency of the evidence

issues to the district court can have the “effect of a [Rule 50]

motion”. Texoma AG-Products, Inc. v. Hartford Accident and Indem.

Co., 755 F.2d 445, 448 (5th Cir. 1985); see also Hinojosa v. City

of Terrell, 834 F.2d 1223, 1228 (5th Cir. 1988), cert. denied, 493

U.S. 822 (1989); Jones v. Benefit Trust Life Ins. Co., 800 F.2d

1397, 1401 (5th Cir. 1986). Because we liberally construe Rule 50,

we excuse “technical noncompliance” when “the purposes of the rule

are satisfied”. Scottish Heritable Trust, PLC v. Peat Marwick Main

& Co., 81 F.3d 606, 610 (5th Cir. 1996), cert. denied, 65 U.S.L.W.

3220 (U.S. Oct. 7, 1996) (No. 96-153); see also, MacArthur v.

University of Tex. Health Ctr., 45 F.3d 890, 897 (5th Cir. 1996).

Thus, if an objection to jury instructions allows the district

court to re-examine the question of evidentiary insufficiency post-

verdict, if necessary, and puts the other side on notice of the

insufficiency before the case goes to the jury, then Rule 50 is

satisfied. Scottish Heritable Trust, 81 F.3d at 610-11.

These two purposes were satisfied. The Sadovskys objected to

several interrogatories on the grounds that the evidence did not

support their submission to the jury and was factually

insufficient. Consequently, the Sadovskys have not completely

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forfeited their right to challenge the sufficiency of the evidence

on appeal. Id. at 611.

Therefore, on the issues to which such objections were made --

the claim that the DTPA issue was not raised against Ellen

Sadovsky, the sufficiency challenge to the finding of an underlying

DTPA violation against Ellen Sadovsky, and the “knowing” DTPA

findings against both Sadovskys -- we review the evidence in the

light most favorable to the Hasslers. Only if the facts and

inferences so overwhelmingly favor the Sadovskys that no reasonable

juror could have arrived at this verdict are they entitled to

judgment on these issues. E.g., Guilbeau v. W.W. Henry Co., 85

F.3d 1149, 1161 (5th Cir. 1994) (quoting Boeing Co. v. Shipman, 411

F.2d 365, 374-75 (5th Cir. 1969) (en banc)).

However, for the issues for which no such objections were made

-- the sufficiency challenges to the finding of an underlying DTPA

violation against Mark Sadovsky, and to the finding that the

Hasslers should have discovered the deceptive act on September 24,

1993 -- we examine the record to determine if there is any evidence

to support the verdict, irrespective of its sufficiency. If there

is, we uphold the verdict on these issues. Polanco v. City of

Austin, Texas, 78 F.3d 968, 974 (5th Cir. 1996).

Returning to the final issues presented by the Sadovskys, they

contend that the magistrate judge erred in the amount of damages

awarded and in awarding attorneys fees. And, Ellen Sadovsky

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challenges the take nothing judgment on her ring-dant claim. The

standards of review for these final issues are discussed with them

infra.

A.

As discussed supra and infra, in addition to finding that both

Sadovskys violated the DTPA and awarding $230,000 on that claim,

the jury, in response to a separate interrogatory, found that Mark,

but not Ellen, Sadovsky committed fraud and awarded $37,000 on that

claim. But, both awards concerned the same item -- the necklace.

Accordingly, Mark Sadovsky’s sufficiency challenge to this

fraud finding can be rejected quickly. As noted, the Hasslers

elected entry of judgment only on the DTPA claim; because judgment

was not entered on the fraud claim, this issue is moot.

B.

Mark Sadovsky maintains that the Hasslers’ counterclaim

against him was discharged by the bankruptcy court, 11 U.S.C. §

524. The Hasslers rely on 11 U.S.C. § 523(a)(2)(A) -- excepting

from discharge all claims for money obtained by “false pretenses,

false representations, or actual fraud” -- and assert as well that

their claims were not scheduled in time “to permit ... timely

request for a determination of dischargeability of such debt”. Id.

§ 523(a)(3)(B). Sadovsky raised this issue in his earlier noted

summary judgment motion and in a post-verdict motion for judgment.

Needless to say, this summary judgment denial is not

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reviewable. As reaffirmed in Black v. J.I. Case Co., 22 F.3d 568

(5th Cir.), cert. denied, 115 S. Ct. 579 (1994), “an interlocutory

order denying summary judgment is not to be reviewed where final

judgment adverse to the movant is rendered on the basis of a

subsequent full trial on the merits.” Id. at 570.

Of course, the denial of the post-verdict motion can be

reviewed if, at the close of all the evidence, Sadovsky moved under

Rule 50(a) for such judgment. E.g., Hinojosa, 834 F.2d at 1228;

FED. R. CIV. P. 50. Rule 50(a) motions should include all possible

grounds for judgment, including arguably “legal” grounds that might

not present jury-triable issues. Black, 22 F.3d at 571 n.5. Black

rejected a “dual system” for reviewing denied summary judgment

motions -- where orders based on “legal” grounds would be

reviewable, but those based on “factual” grounds would not --

precisely because “[i]f [Rule 50] motions are properly made ... the

‘legal’ issues determined by the district court are freely

reviewable”. Id.

As discussed supra, although the Sadovskys’ jury interrogatory

objections arguably satisfied Rule 50(a) on sufficiency of the

evidence grounds, he did not so present this discharge-in-

bankruptcy issue, an affirmative defense to the Hasslers’

counterclaim, as a ground for judgment. Consequently, we review

only for plain error, and find none. See, e.g., Highlands Ins. Co.

v. National Union Fire Ins. Co., 27 F.3d 1027, 1031-32 (5th Cir.

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1994) (applying plain error rule in civil cases), cert. denied, 115

S. Ct. 903 (1995).

C.

The Sadovskys challenge the DTPA findings. They do so on

sufficiency and other grounds.

1.

First, Ellen Sadovsky contends that there were no pleadings

against her on the Hasslers’ counterclaim; therefore, she was never

put on notice of her potential liability for a DTPA violation. The

Hasslers counter, correctly, that the pleadings were sufficient,

that Ellen Sadovsky received additional notice prior to the trial,

and that she tried the issue by consent.

The counterclaim identifies Ellen Sadovsky as a defendant;

and, it requests damages from her and Mark Sadovsky, jointly and

severally. She was given additional notice with the joint

submission of the proposed jury instructions, a week before trial.

See Ah Moo v. A.G. Becker Paribas, Inc., 857 F.2d 615, 619 (9th

Cir. 1988). Moreover, she did not move for a more definite

statement, Rule 12(e), or for judgment on the pleadings, Rule

12(c). See Ah Moo, 857 F.2d at 619.

Assuming arguendo that the counterclaim was insufficient, the

Sadovskys tried the issue by consent. In such an instance, the

issue “shall be treated in all respects as if [it] had been raised

in the pleadings”. FED. R. CIV. P. 15(b). Failure to amend the

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pleadings to conform to the evidence “does not affect the result of

the trial of these issues”. Id.

An issue is tried by consent if each side recognizes that it

entered the case at trial, if evidence supporting the unpled issue

was introduced at trial without objection, and if a finding of

trial by consent would not prejudice the opposing party’s

opportunity to respond. See United States v. Shanbaum, 10 F.3d

305, 312-13 (5th Cir. 1994). A cursory glance at the record

reveals that each side must have been well aware that Ellen

Sadovsky’s potential liability under the DTPA for the sale of the

necklace was being litigated. Also, she did not object, at trial,

to testimony about her involvement with its sale, implicitly trying

the issue by consent. In an in limine motion, she did object to

testimony about her involvement; but, this denied motion is

insufficient to preserve error for appeal. E.g., Marcel v. Placid

Oil Co., 11 F.3d 563, 566-67 (5th Cir. 1994). And she has neither

claimed nor shown prejudice.

2.

We next address the sufficiency of the DTPA findings. The

DTPA provides, in part:

A consumer may maintain an action where
any of the following constitute a producing
cause of actual damages:
(1) the use or employment by any person
of a false, misleading, or deceptive act or
practice ...;
...

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 (3) any unconscionable action or course
of action by any person ....

TEX. (BUS. & COM.) CODE ANN. § 17.50(a)(1),(3).

For subpart (1), “false, misleading, or deceptive act or

practice” is not defined but includes a “laundry list”, Cravens v.

Skinner, 626 S.W.2d 173, 175 (Tex. Ct. App. 1981), of enumerated

actions, TEX. (BUS. & COM.) CODE ANN. § 17.46(b). Four of these were

listed in the jury charge: (1) representing that goods or services

had characteristics that they did not have; (2) representing that

goods or services were of a particular quality if they were of

another; (3) representing that an agreement confers rights that it

did not confer; and (4) failing to disclose information about goods

or services that was known at the time of the transaction with the

intent to induce another into a transaction.

For subpart (2), on the other hand, an “unconscionable action”

is one which takes “grossly unfair” advantage of a person’s “lack

of knowledge, ability, experience, or capacity” or results in a

“gross disparity between the value received and consideration

paid”. TEX. (BUS. & COM.) CODE ANN. § 17.45(5). The jury found in

response to separate interrogatories that both a “laundry list”

violation and an “unconscionable” act had been proven against both

Sadovskys.

a.

Mark Sadovsky contends that his statements were merely

opinions of worth and replacement cost, not of the characteristics

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of the necklace and, therefore, inter alia, are not actionable as

“laundry list” violations. The Hasslers respond that his

statements are, among other things, actionable on this basis

because they misrepresented the characteristics and quality of the

necklace and the details of the return policy and failed to

disclose known information at the time the necklace was sold. Id.

§ 17.46(b)(5),(7),(12),(23).

For our purposes, however, we need not decide whether

representations of value are actionable as laundry list violations;

there was evidence that Mark Sadovsky made other representations

that support DTPA “laundry list” liability. As discussed supra,

because this issue was not properly preserved, our review is

limited to whether any evidence supports the verdict. But, because

this issue overlaps with others, especially the DTPA finding as to

Ellen Sadovsky, we go into greater detail than necessary for the

narrow standard of review on this point.

Under Texas law, a misrepresentation of material fact is

actionable under the DTPA as long as it is not mere “puffery” on

the part of the salesman. Pennington v. Singleton, 606 S.W.2d 682,

687 (Tex. 1980). Along this line, Texas courts consider the levels

of knowledge of the buyer and seller as well as the buyer’s

knowledge compared to the seller’s. Autohaus, Inc. v. Aguilar, 794

S.W.2d 459, 463 (Tex. Ct. App. 1990), error denied, 800 S.W.2d 853

(Tex. 1991). Where a seller has special knowledge about a product

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that is superior to a buyer’s, a representation is much less likely

to be treated as mere puffery. Id. In addition, a statement need

not be very specific to be actionable; it need only “convey

definite implications” about the product or its attributes.

Pennington, 606 S.W.2d at 687.

Joanne Hassler testified that Mark Sadovsky told her the

emerald in the necklace was “the finest” and the necklace was “the

finest workmanship”. Mark Sadovsky had been a jeweler in the trade

for 30 years. The Hasslers had purchased jewelry from him for

approximately 20 of those years but had no knowledge of, or

experience in, the jewelry business. In fact, Mark Sadovsky

admitted that the Hasslers relied on and trusted him on “matters

pertaining to the value, condition, and quality” of jewelry they

purchased from him.

Therefore, although the Hasslers were certainly not first-time

purchasers of jewelry, they relied on Sadovsky’s experience and

knowledge as a professional jeweler when purchasing items from him,

including the necklace, taking his statements beyond the ambit of

mere puffery. In addition, his statements conveyed the definite

impression that the necklace was of extremely high quality. In

Pennington, 606 S.W.2d at 687, the Texas Supreme Court found that

words like “excellent” and “perfect” used by the seller of a boat

to describe its condition indicated a high degree of quality.

Accordingly, Mark Sadovsky’s descriptions of the emerald and the

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workmanship of the necklace were sufficiently specific to be

actionable under the DTPA as misrepresentations of material fact.

The Hasslers presented expert testimony that the emerald was

only of average quality. On the clarity scale, the stone was

classified as “highly included”; the cutting grade of the stone was

“good-fair”; the finish grade was “good”. In addition, there was

moderate to strong evidence of clarity enhancement through the use

of oil, a technique often used to improve the appearance of a

cracked and fractured stone. Finally, Mark Sadovsky testified that

the emerald was only of “medium” quality.

In short, because Mark Sadovsky misrepresented the quality and

grade of the necklace, there was evidence to support the jury

finding a DTPA violation. TEX. (BUS. & COM.) CODE ANN. §

17.46(b)(7). Accordingly, our narrow standard of review for this

issue is satisfied.

b.

Ellen Sadovsky attacks, on a number of grounds, the jury

finding an underlying DTPA violation against her. We need address

only one contention: that there was no evidence that she made any

statements regarding the quality or characteristics of the necklace

to the Hasslers. As discussed supra, because she objected to the

pertinent jury interrogatory on grounds of factual insufficiency,

we review under our usual “reasonable juror” standard.

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 The Hasslers’ son, Trachtenberg, testified that both Sadovskys

telephoned him prior to the sale and described the emerald in the

necklace as “an investment grade emerald of the very highest

quality, very unusual in its size. That it was spectacular”. As

noted, they also told him he should persuade his parents to buy the

necklace. According to Trachtenberg, this conversation probably

took place while he was at his parents’ home. According to him,

the Sadovskys also told him, among other things, that the necklace

was “an extraordinary opportunity for my parents”, and “a

phenomenal value”, they “encouraged me to tell my parents that this

was the opportunity of a lifetime.” As discussed supra,

Trachtenberg was involved in a number of the shipments of jewelry

to them. An armored courier would deliver the items to his office,

and he had to coordinate these deliveries with his parents and the

Sadovskys.

Neither side asked Trachtenberg whether he relayed the

Sadovskys’ statements about the necklace to his parents. Either

they did not want to do so and were content to “lie behind the

log”, or forgot to do so. In any event, our review of the record,

especially Trachtenberg’s testimony, in the requisite light most

favorable to the Hasslers, suggests strongly that he did;

certainly, a reasonable juror could have found that he did. For

example, he testified that the Sadovskys told him in the telephone

conversation that the necklace had originally been prepared for a

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customer who intended to give it to the wife of the President of

Mexico. In earlier testimony, Howard Hassler related the same

information without stating his source for it. And, prior to

relating this information about the earlier intent for a gift for

the wife of the President of Mexico, Trachtenberg made the

following statement, upon which a reasonable juror could have found

that he relayed the information from the Sadovskys to his parents:

“They told me a little bit about the history of the [necklace], I

guess to increase my enthusiasm, so I would tell it to my folks.”

Alternatively, the testimony by the parties could not have

conflicted more sharply. The Sadovskys denied even having a

conversation with Trachtenberg about the necklace; yet he described

it in great detail. In short, this was a call for the jury to

make, and it was instructed about the inferences it could draw.

Based on our review of the record, again in the light most

favorable to the Hasslers, we conclude that, although the necklace

was not sent through Trachtenberg, a reasonable inference is that

he would have relayed to his parents, as a matter of course, any

information the Sadovskys gave him about the items they were

sending. Moreover, as noted, they asked him to persuade his

parents to purchase the necklace. Specifically, a reasonable juror

could have inferred that he relayed to his parents what the

Sadovskys told him about the necklace. This is especially true in

light of his very responsible work experience, his extremely close

relationship with his parents, and his understanding of the close

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and long standing relationship between them and the Sadovskys. As

noted, he received the telephone call at their home. Consequently,

based upon either such a direct finding or such an inference, there

was sufficient evidence for a reasonable juror to conclude that

Ellen Sadovsky committed a DTPA violation.

In the futher alternative, we conclude that, pursuant to the

earlier discussed law for finding a DTPA violation, that finding

against Ellen Sadovsky is supported by the information she provided

the Hasslers about the necklace prior to its purchase. According

to Joanne Hassler, Ellen Sadovsky told her the necklace was a “good

value”, “incredible”, and “something she shouldn’t pass up”. Texas

courts have held that opinion and “puffing” are not actionable.

See Autohaus, Inc., 794 S.W.2d at 462. Determining whether a

statement is an opinion or a representation of fact is the key.

One court explained: “Imprecise or vague representations constitute

mere opinions.” Id. Yet, as discussed supra, even general

statements about a good may be actionable if they “convey definite

implications” about the product or its attributes. See Pennington,

606 S.W.2d at 687.

As also noted, in Pennington, a boat’s condition was described

as “excellent” and “perfect”; those statements were sufficiently

specific to support DTPA liability. On the other hand, in

Autohaus, Inc., 794 S.W.2d at 460-61, a salesman described a

Mercedes Benz as the “best engineered car in the world” and assured

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a buyer that he “probably would not find that [he] would ever

encounter any mechanical difficulties”. The court found these

statements to be not specific enough to be actionable. Based upon

our review of the record, Ellen Sadovsky’s statements are more akin

to the statements in Pennington than to those in Autohaus, Inc.

In conjunction with this, the Hasslers contend that Ellen

Sadovsky’s statements are actionable because she claimed to, or

did, have special knowledge about the necklace. As also discussed

supra, Texas courts do recognize that “superior knowledge” on the

part of a seller coupled with a buyer’s “relative ignorance” can

turn an opinion into a representation of fact. See Autohaus, Inc.,

794 S.W.2d at 463. As discussed below, concerning a “knowing”

violation of the DTPA, the record supports the jury finding such

contrasting positions between the Hasslers and Ellen Sadovsky. In

sum, based on our review of the record, this is one additional

reason for our concluding, pursuant to our reasonable juror

standard of review, that sufficient evidence supported this part of

the verdict.

3.

The Sadovskys next attack the sufficiency of the jury’s

finding that each committed their DTPA violations “knowingly”. As

discussed supra, because they preserved their sufficiency challenge

on this issue, we review under our usual “reasonable juror”

standard.

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 The DTPA defines “knowingly” as “actual awareness of the

falsity, deception, or unfairness of the act or practice giving

rise to the consumer’s claim”. TEX. (BUS. & COM.) CODE ANN. §

17.50(b)(1). The jury may infer “actual awareness” if there are

“objective manifestations that a person acted with actual

awareness”. Haynes & Boone v. Bowser Bouldin, Ltd., 864 S.W.2d

662, 673 (Tex. Ct. App. 1993), rev’d on other grounds, 896 S.W.2d

179 (Tex. 1995). And, the DTPA permits a jury to award up to three

times the amount of actual damages if such a finding is made. Tex.

(Bus. & Com.) Code Ann. § 17.50(b)(1). The jury awarded $15,000

for such additional damages.

a.

Mark Sadovsky contends that there was no evidence that he knew

the necklace was not worth the amount he said it was worth or what

he estimated it would cost to construct (i.e., his estimate of the

“meltdown” value). But, Joanne Hassler testified that he told her,

at the time of the sale, that the emerald was “the finest”, that

the necklace was “the most incredible thing [Mark Sadovsky] had

ever seen”, and that it would be a good investment. In contrast,

Mark Sadovsky testified that the emerald was “nice”, that it was of

“medium” quality -- “not an extremely high quality emerald” -- and

that he would never tell anybody to invest in jewelry.

In addition, the emerald had an uneven cut, a defect that was

partially hidden from view by the way the stone was set in the gold

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backing. The Hasslers’ expert testified that the cut of the

emerald would affect its value. And, Sadovsky testified that he

was aware of the uneven cut, but did not tell the Hasslers about

this defect because he did not think it affected the price of the

necklace.

Needless to say, the jury was free to credit one witness’

testimony over another. A reasonable juror could have concluded

that Mark Sadovsky was aware that the value of the necklace was far

lower than his asking price.

b.

Ellen Sadovsky maintains that there was no evidence indicating

she was actually aware of any false representations to the

Hasslers. But, as noted above, in addition to her statements to

Joanne Hassler, there was sufficient evidence for the jury to

conclude that her statements to Trachtenberg were relayed to the

Hasslers. In addition, there was evidence that she had experience

with the sale of jewelry.

The Hasslers dealt with both Sadovskys when purchasing items

and receiving shipments to examine, and both Hasslers testified

that they would discuss jewelry pieces with both Sadovskys,

strengthening the inference that Ellen Sadovsky was knowledgeable

about the items of jewelry sent to the Hasslers, including the

necklace. Moreover, the October 10, 1991, appraisal from John

Marques to the Hasslers, estimating the necklace’s “current market

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value” at $490,000, was sent four days before Marques signed an

assumed name certificate with Ellen Sadovsky, forming American

Jewel-Tech, Ellen Sadovsky’s new jewelry business. A reasonable

juror could conclude that Ellen Sadovsky was aware that the

necklace was not as she had represented it.

D.

Contending that the verdict was against the great weight of

the evidence, the Sadovskys maintain that the magistrate judge

erred in denying their new trial motion. The denial is reviewed

only for abuse of discretion. See Burroughs v. FFP Operating

Partners, L.P., 28 F.3d 543, 550 (5th Cir. 1994). And, a “district

court abuses its discretion only where ‘there is an “absolute

absence” of evidence to support the jury’s verdict.’” Id. (quoting

Pagan v. Shoney’s, Inc., 931 F.2d 334, 337 (5th Cir. 1991)).

As discussed, the record is replete with evidence that the

Sadovskys sold an item of jewelry to the Hasslers for as much as

four times its actual value, representing to them that it was a

high quality item, when expert testimony established that statement

to be, at the least, very questionable. In addition, as also

discussed, there was evidence to support an inference of actual

awareness of the deception on the part of the Sadovskys. In sum,

there was no abuse of discretion.

E.

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 In answer to two interrogatories, the jury found “the

Hasslers, in the exercise of reasonable diligence,” should “have

discovered all the false, misleading, or deceptive acts or

practices” and “the misrepresentations” by September 24, 1993. The

Sadovskys challenge this finding, and in conjunction, contend that

the counterclaim was barred by the statute of limitations. As

discussed supra, because they did not object to the jury

interrogatory on this issue, we review the record to determine if

there is any evidence to support the verdict.

Under the DTPA, a consumer must bring an action within two

years from the date the deceptive act occurred or within two years

from the date he discovers, or “in the exercise of reasonable

diligence” should have discovered, the occurrence of the deceptive

act. TEX. (BUS. & COM.) CODE ANN. § 17.565. As noted, the jury found

that the Hasslers should have discovered the misrepresentations on

September 24, 1993. Therefore, based on this finding, the March

1994 counterclaim was filed within the limitations period.

The Sadovskys base their challenge on the fact that five years

elapsed between when the Hasslers purchased the necklace (August

31, 1988) and when they first had it independently appraised

(September 24, 1993), and because Howard Hassler questioned the

value of the necklace as early as October 1991.

Mark Sadovsky had the necklace in his possession from mid-

October 1990 until late September 1993. He conceded that, during

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this time, it was impossible for the Hasslers to obtain an

independent appraisal. Therefore, the fact that Howard Hassler may

have questioned the necklace’s value in October 1991 is irrelevant;

there was no way the Hasslers could have learned of a deceptive act

in that time period. In addition, while Mark Sadovsky was in

possession of the necklace, the Hasslers received two appraisals

procured by Mark Sadovsky and one appraisal from Sadovsky himself,

all indicating that the necklace was worth substantially more than

the $240,000 paid by the Hasslers. Moreover, the Hasslers had the

necklace appraised within two days of its return by Mark Sadovsky,

indicating a diligent attempt to determine its true value.

Consequently, there is evidence in the record to support this

finding.

F.

The Sadovskys next assert that the jury award of $215,000 in

actual damages was excessive and unsupported by the evidence. An

award of damages is reviewed under a deferential standard; it is

disturbed only where it is “clearly erroneous”. Ham Marine, Inc.

v. Dresser Indus., Inc., 72 F.3d 454, 462 (5th Cir. 1995).

In W.O. Bankston Nissan, Inc. v. Walters, 754 S.W.2d 127 (Tex.

1988), the Texas Supreme Court stated the two possible measures of

actual damages for a DTPA violation: the “out of pocket” measure

(“difference in value of that which was parted with and the value

of that which was received”) and the “benefit of the bargain”

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measure (“difference between the value as represented and the value

actually received”). Id. at 128 (emphasis added). A prevailing

DTPA plaintiff is entitled to recover under the measure that

provides the greater damages. Id. The jury was instructed on both

measures.

As noted, the Sadovskys represented at the time of sale that

the wholesale value of the necklace was $298,000, that its retail

value was $450,000, and that it had been advertised for $750,000 in

a magazine. One expert for the Hasslers appraised its wholesale

value at $60,000 and retail value at $120,000. Using the “benefit

of the bargain” measure, and either the wholesale or retail

figures, the award could have been greater than the $215,000

awarded. In short, the award was not clearly erroneous.

G.

In conjunction with their claim that the Hasslers cannot

recover under the DTPA, the Sadovskys assert that the Hasslers

cannot recover attorneys’ fees. Under the DTPA, a prevailing party

“shall be awarded court costs and reasonable and necessary

attorneys’ fees”. TEX. (BUS. & COM.) CODE ANN. § 17.50(d) (emphasis

added). Because, as discussed supra, we affirm judgment for the

Hasslers on their DTPA claim, they were entitled to the fees-award.

H.

Finally, Ellen Sadovsky contests the adverse jury finding on

her negligence claim against Joanne Hassler for the value of the

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ring-dant, and contends, in the alternative, that the magistrate

judge erred in denying her new trial motion because the finding is

against the great weight of the evidence. We review the

sufficiency claim under our reasonable juror standard and the new-

trial-denial for abuse of discretion.

It goes without saying that, to prove negligence, a party must

show breach of a legal duty proximately resulting in damages.

E.g., Doe v. Boys Clubs of Greater Dallas, Inc., 907 S.W.2d 472,

477 (Tex. 1995). Joanne Hassler’s legal duty was to use ordinary

care in handling the items sent to her -- to “act as a reasonable

prudent person under the same or similar circumstances”. See

Atchison, T. & S.Fe. Ry. v. Standard, 696 S.W.2d 476, 478 (Tex. Ct.

App. 1985).

Ellen Sadovsky testified that she enclosed a letter in the box

containing the ring-dant, which warned Joanne Hassler that it had

a removable face; but, both Hasslers testified that this letter was

not in the box. If the jurors credited Joanne Hassler’s testimony

over Ellen Sadovsky’s, as they were free to do, then Joanne Hassler

had no warning about the removable face. And, there was evidence

that Mark Sadovsky wanted Joanne Hassler to wear in public the

pieces he sent to her on approval. Finally, the jury was given the

opportunity to examine similar ring-dants to see how the mechanism

worked. In sum, it had ample evidence on which to conclude that

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Joanne Hassler was not negligent. Consequently, the sufficiency

and new trial issues are without merit.

III.

For the foregoing reasons, the judgment is

AFFIRMED.

Garwood, Circuit Judge, concurring in part and dissenting in part:

I concur in all the well-considered majority opinion except

Part II. C. 2. b. rejecting Ellen Sadovsky’s challenge to the

sufficiency of the evidence that she made any DPTA actionable

statements to the Hasslers in connection with their purchase of the

necklace. More specifically, I am unable to agree that the jury

could infer that Ellen’s statements about the necklace made to the

Hasslers’ son, Trachtenberg, were in any way relayed to either

Hassler before they purchased the necklace. This was a matter on

which the Hasslers had the burden of proof. The Hasslers and

Trachtenberg would know (and would likely be the only persons who

would know) whether such statements were thus relayed; although

they all testified as witnesses on the Hassler side of the case,

none of them testified that Ellen’s statments to Trachtenberg about

the necklace were relayed to either Hassler at any time. Nor is

there any other evidence so indicating. The inference thus must be

that the statements were not so relayed, the long established rule

being that the failure of a party to introduce evidence peculiarly

available to him on an issue as to which he has the burden of proof
gives rise to the inference that the evidence would be unfavorable

to him. See, e.g., Friedrich v. Com’r, 925 F.2d 180, 185 (7th Cir.

1991); McCormick on Evidence 3d ed. § 272. The fact that Howard

Hassler recited at trial——seven years after the sale——the same

history of the necklace that Trachtenberg testified Ellen had

related to him proves nothing. Hassler did not testify when or

from whom he learned that information, and he obviously could have

learned it from Ellen or Trachtenberg or otherwise years after the

sale. Moreover, the above mentioned inference is applicable here

also.

Ellen’s statements to Joanne Hassler a week before the

sale——statements made in a context lacking any reference to any

monetary figure or range of figures and a week before any price or

price range was first mentioned when Mark alone brought the

necklace to the Hasslers——that the necklace was a “good value,”

“incredible,” and “something she shouldn’t pass up,” do not

suffice. Certainly as applied to a necklace having no previously

listed price and with a conceded retail value of over $100,000,

these statements amount to no more than mere puffing or statements

of opinion, particularly by one, such as Ellen, who, though

sometimes in the jewelry business, was not and did not purport to

be a jeweler or appraiser. See, e.g., Cravens v. Skinner, 626

S.W.2d 171 (Tex. App.——Ft. Worth 1981, no writ).

I dissent from the affirmance of the DPTA judgment against

Ellen Sadovsky. Otherwise, I concur.

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