JPMorgan Chase Bank, N.A. v. Professional Pharmacy II

COURT OF APPEALS
SECOND DISTRICT OF TEXAS
FORT WORTH

NO. 02-11-00373-CV

JPMORGAN CHASE BANK, N.A. APPELLANT

V.

PROFESSIONAL PHARMACY II APPELLEE

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FROM THE 17TH DISTRICT COURT OF TARRANT COUNTY
TRIAL COURT NO. 17-231360-08
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OPINION

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I. Introduction

Appellee Professional Pharmacy II (Pharmacy II) sued Washington Mutual

Bank, F.A. (WaMu), alleging, among other things, breach of contract and

negligence in connection with the opening of a checking account and the

garnishment of funds from that account. At the conclusion of a five-day jury trial,

the jury found both parties negligent, apportioned eighty-five percent of the

negligence to WaMu and fifteen percent to Pharmacy II, and found that
Pharmacy II’s damages totaled $180,683. The trial court entered judgment on

the verdict against Appellant JP Morgan Chase Bank, N.A. (JP Morgan), as the

acquirer of certain assets and liabilities of WaMu from the Federal Deposit

Insurance Corporation acting as receiver,1 awarding Pharmacy II $153,580.55 in

damages, $22,681.12 in prejudgment interest, and postjudgment interest.

JP Morgan appealed. In thirteen issues, it contends that Pharmacy II

failed to obtain a finding that it is a partnership, which bars its recovery;

Pharmacy II lacks standing to raise a negligence claim; WaMu owed no legal

duty to Pharmacy II; the jury’s answer to the negligence question was immaterial

because there was no contractual relationship between WaMu and Pharmacy II;

the economic loss rule bars Pharmacy II’s recovery of economic damages on its

negligence claim; the evidence is legally and factually insufficient to support the

jury’s findings that WaMu failed to exercise ordinary care, that WaMu’s

negligence was a proximate cause of Pharmacy II’s injuries, and that Pharmacy

II suffered $180,683 in damages; Pharmacy II’s negligence claim is barred by

limitations, res judicata, and collateral estoppel; the evidence is legally and

factually insufficient to support the jury’s failure to find that Pharmacy II’s partners

were negligent; and the trial court erred by awarding prejudgment interest. For

the reasons that follow, we affirm the trial court’s judgment conditioned on a

1
Shortly after Pharmacy II filed suit against WaMu in July 2008, the United
States Office of Thrift Supervision closed WaMu and appointed the Federal
Deposit Insurance Corporation as receiver. It is undisputed that this suit was
among the assets and liabilities acquired by JP Morgan.

2
remittitur.

II. Background

In late 2001 and early 2002, Pamela Ashu, Fidelis Bisong, and Tusmo

Jama formed Professional Pharmacy Plus (Pharmacy Plus) for the purpose of

opening a retail pharmacy that delivered prescriptions to customers. Ashu,

Bisong, and Jama operated Pharmacy Plus as a partnership in which each of

them held an approximate one-third ownership interest. A year later, Ashu,

Bisong, and Jama formed Professional Pharmacy II (Pharmacy II) for the

purpose of opening a second pharmacy. Like Pharmacy Plus, Pharmacy II was

operated as a partnership, and Ashu, Bisong, and Jama each held an

approximate one-third ownership interest in the partnership. There was no

written partnership agreement for either Pharmacy Plus or Pharmacy II.

Ashu, Bisong, and Jama filed an assumed name certificate for Pharmacy

II. Ashu obtained a pharmacy license and Employer Identification Number (EIN)

in the name of Pharmacy II. When she applied for the EIN with the Internal

Revenue Service (IRS), Ashu stated that Pharmacy II was a partnership. Ashu

also registered Pharmacy II in the Texas Department of Public Safety’s

Controlled Substances Registration Program and with the Drug Enforcement

Administration and applied for a Medicaid identification number on Pharmacy II’s

behalf.

On January 14, 2003, Ashu and Bisong went to the WaMu branch where

Pharmacy Plus had a business checking account to set up a checking account

3
for Pharmacy II. Bisong testified that Pharmacy Plus’s checking account at

WaMu was a partnership account. Ashu and Bisong met with Naomi Moller, the

manager of the branch, to set up the account for Pharmacy II. Jama was not

present.2 Both Ashu and Bisong testified that it was their intent to set up a

partnership account for Pharmacy II similar to Pharmacy Plus’s account and that

they informed WaMu of their intent when opening the account for Pharmacy II.

Ashu and Bisong testified that they provided WaMu with the assumed name

certificate for Pharmacy II, Pharmacy II’s EIN, a completed Form W-9,3 a partially

completed Texas Medicaid Vendor Direct Deposit Authorization bearing

Pharmacy II’s EIN and identifying Pharmacy II as the payee, and personal

identification.

The assumed name certificate for Pharmacy II reflected that it was filed by

Ashu, Bisong, and Jama. Moller testified that she asked Ashu and Bisong if they

were married because the third person on the assumed name certificate was not

present and she could not open the account as a partnership account without a

written partnership agreement. Moller informed Ashu and Bisong that because

they were married to each other, they could open a joint sole proprietorship

2
Jama was also not present when Ashu and Bisong opened Pharmacy
Plus’s account.
3
Ashu testified that a Form W-9 is a form generated by the IRS that can be
completed by a business to certify to a third party that the business’s name,
address, and EIN are true and correct. Ashu stated that she indicated that
Pharmacy II was a partnership on the Form W-9 she provided to WaMu when
opening Pharmacy II’s checking account.

4
account for Pharmacy II. WaMu’s business banking account disclosures and

regulations in place in January 2003 describe a sole proprietorship account as

[a] business account opened by the owner(s) of a business which is
not a corporation, association, limited liability company or
partnership. Withdrawals are generally paid at the direction of the
owner(s) or their designated agents. Owners(s) must be an
individual depositor unless husband and wife in states permitting
such. If there is more than one owner, the owners may select a joint
ownership account.

Moller further testified that in January 2003, an account could be titled in either

an assumed name or a person’s name, followed by “d/b/a” and the assumed

name, and that as the branch manager, she was able to open a joint sole

proprietorship account titled in an assumed name.

Moller testified that she prepared the Master Account Agreement for the

account (the 3775 Account) using the information provided by Ashu and Bisong.

The Master Account Agreement provided that the title of the 3775 Account was

“Professional Pharmacy II,” listed Pharmacy II’s EIN as the tax ID number for the

account, and stated that

[t]he account and deposits opened under this Agreement shall be of
the following type:

JOINT SOLE PROPRIETORSHIP: THIS ACCOUNT IS HELD IN
JOINT TENANCY WITH RIGHT OF SURVIVORSHIP UNLESS
INDICATED OTHERWISE.

{ } WE SELECT JOINT TENANCY WITHOUT RIGHT OF
SURVIVORSHIP.

Moller testified that after she prepared the Master Account Agreement, she

printed out two copies, one for WaMu and one for the customer. Moller testified

5
that only WaMu’s copy is signed by the customer. She asked Ashu and Bisong

to review WaMu’s copy before signing it to make sure the account number, the

account name, the account ownership, the tax identification number, and their

names were correct. Ashu and Bisong were listed as owners at the bottom of the

Master Account Agreement, and their signatures were beneath their printed

names. Bisong testified that the signatures on the Master Account Agreement

belonged to him and Ashu, but he denied that it was a true and correct copy of

the document that he signed when he opened the 3775 Account.

Moller testified that when she opened the 3775 Account, she also

completed a “Business Account Opening Checklist,” which provided guidelines

for opening a business account at WaMu. The checklist for the 3775 Account

indicated that it was opened as a joint sole proprietorship account and that the

following required information and documentation was received by WaMu:

primary and secondary ID for business owners; assumed name certificate;

names of the business owners; physical address of the business; home address

of the business owners; and the driver’s license of the business owner or

personal ID number of the business issued by the Department of Public Safety.

Moller also completed the financial institution information on the Texas Medicaid

Vendor Direct Deposit Authorization, which identified Pharmacy II as the payee.

Moller testified that consistent with her normal and customary practice in

January 2003, she put the customer copy of the Master Account Agreement,

WaMu’s business banking account disclosures and fees, and a starter

6
checkbook into a new account folder. Bisong testified that he received the folder

but he did not read the documents inside the folder. Ashu also testified that she

did not review the documents. Subsequently, Ashu and Bisong, on behalf of

Pharmacy II, executed a durable power of attorney for the 3775 Account

appointing Jama as agent.

Bisong testified that the 3775 Account was used as Pharmacy II’s

operating account and that the funds Pharmacy II received from Medicaid were

deposited directly into the 3775 Account. Ashu testified that Medicaid payments,

payments from insurance companies, and retail revenue also were deposited into

the 3775 Account. She further testified that Pharmacy II used the funds in the

3775 Account for payroll, lease payments, and other business expenses, such as

the purchase of pharmaceuticals. Jama testified that she endorsed checks

payable to Pharmacy II and deposited those checks into the 3775 Account.

At some point prior to January 2008, Bisong and Juliet Eboh formed Excel

Pharmacy, Inc. (Excel). Bisong and Eboh each had a fifty percent ownership

interest in Excel. Excel had two retail locations, each of which it leased from

Cambridge Gorbutt MOB, L.P. (Cambridge). Bisong personally guaranteed the

two leases. Excel failed to make the required rental payments and defaulted on

both of the leases. As a result, Cambridge filed suit against Excel, Eboh, and

Bisong.

Cambridge non-suited Eboh, and the trial court granted Cambridge’s

motion for default judgment against Excel and Cambridge’s motion for summary

7
judgment against Bisong. On July 5, 2007, the trial court entered judgment

against Bisong for $190,903.74 in damages, plus $9,000 in attorney’s fees, $713

in court costs, postjudgment interest, and conditional appellate attorney’s fees.

Seeking to collect the judgment, Cambridge filed an application for writ of

garnishment against WaMu on November 13, 2007, pursuant to which the district

clerk issued a writ of garnishment. See Tex. R. Civ. P. 659. WaMu was served

with the writ on December 26, 2007. See Tex. R. Civ. P. 663.

Charles Farnsworth, the national production manager for WaMu’s levy

department in 2007 and 2008, testified that WaMu followed its policies and

procedures regarding Texas garnishment proceedings with respect to the writ of

garnishment. Upon receipt of the writ of garnishment, WaMu froze the accounts

that Farnsworth determined belonged to Bisong. Farnsworth examined the

Master Account Agreement to ensure that Bisong was the owner of the 3775

Account. Based upon his examination, Farnsworth concluded that the 3775

Account was a joint sole proprietorship account held in joint tenancy with right of

survivorship and that Ashu and Bisong were joint owners of the 3775 Account.

He also stated that he never looked at the account title for purposes of

garnishment.

Farnsworth testified that WaMu notified Bisong by letter dated December

28, 2007, that it had received the writ of garnishment and that as a result, the

funds in the 3775 Account were frozen. Bisong testified that he had no

knowledge of the writ because Ashu and he were in Africa visiting Bisong’s sick

8
mother in December 2007.4 Ashu learned in early January 2008 that the 3775

Account had been frozen and notified Jama. Jama went to several WaMu

branches and contacted WaMu’s attorney in an attempt to unfreeze the funds,

but she was unsuccessful because her name was not on the 3775 Account.

On January 22, 2008, WaMu filed a verified answer to the writ of

garnishment, stating that it was indebted to Bisong in the amount of $116,683.

See Tex. R. Civ. P. 665. WaMu identified three accounts in which these funds

were held—(1) an account ending in 0415, with a balance of $1,619.26, owned in

the names of Ashu and Bisong; (2) an account ending in 7860, with a balance of

$7,568.66, owned in the names of Bisong or Ashu; and (3) the 3775 Account,

with a balance of $107,495.08, owned in the name of Pharmacy II. According to

Farnsworth, WaMu’s answer was reviewed by WaMu’s levy department to

ensure that the information in the answer was correct, and Luis Westendorf, an

employee in the levy department, signed the verification. WaMu served a copy

of the answer on Bisong, Ashu, and Pharmacy II by mail. See Tex. R. Civ. P.

4
Service of the writ of garnishment on Bisong was required by rule 663a of
the rules of civil procedure. See Tex. R. Civ. P. 663a (“The defendant shall be
served in any manner prescribed for service of citation or as provided in Rule 21a
with a copy of the writ of garnishment, the application, accompanying affidavits
and orders of the court as soon as practicable following the service of the writ.”);
Zeecon Wireless Internet, LLC v. Am. Bank of Tex., N.A., 305 S.W.3d 813, 817
(Tex. App.—Austin 2010, no pet.) (stating that rule 663a requires that the
judgment debtor be served with certain garnishment documents); see also Lease
Fin. Grp., LLC v. Childers, 310 S.W.3d 120, 125 (Tex. App.—Fort Worth 2010,
no pet.) (“While a judgment debtor is not a necessary party to the garnishment
action, the rules require that he be served under rule 663a.”). It does not appear
from the record before us that Bisong was served as required by rule 663a.

9
21a.

In an attempt to settle the claim with Cambridge, Bisong’s counsel

provided to Cambridge a letter from an assistant financial center manager at

WaMu stating that the 3775 Account was a business account. These settlement

efforts were unsuccessful, and on February 4, 2008, the trial court entered an

agreed judgment between Cambridge and WaMu providing that Cambridge

recover $116,183 from Bisong’s accounts at WaMu to be credited against the

judgment and that WaMu recover $500 in attorney’s fees from Bisong’s

accounts. See Tex. R. Civ. P. 668. On or about February 12, 2008, WaMu

withdrew $116,683 from the 3775 Account. On February 14, 2008, Pharmacy II

filed a plea in intervention and application for temporary restraining order and

temporary injunction in an attempt to prevent the money withdrawn from the 3775

Account from being transferred from WaMu to Cambridge. See Tex. R. Civ. P.

60, 680. Ashu testified that the trial court denied Pharmacy II’s request for

injunctive relief. Ashu explained that it was her understanding that the request

was denied because it was untimely. On February 20, 2008, WaMu paid

$116,183 to Cambridge.

As a result of the garnishment, Pharmacy II filed this suit against WaMu

seeking to recover the garnished funds, asserting claims for breach of contract,

wrongful garnishment, negligence, conversion, and negligent misrepresentation

against WaMu. Pharmacy II also sought a declaratory judgment that (1)

Pharmacy II was at all times the account holder and creditor of the 3775 Account;

10
(2) WaMu was not indebted to Bisong in the amount of $116,683 as of January

18, 2008; (3) any transfer of funds from the 3775 Account to satisfy any debt

owed by Bisong was invalid; (4) the funds held in the 3775 Account were the

partnership property of Pharmacy II; and (5) Pharmacy II was a general

partnership. Pharmacy II also sought exemplary damages and attorney’s fees.

JP Morgan filed third-party claims against Cambridge, including a claim for

money had and received. See Tex. R. Civ. P. 38. JP Morgan also designated

Ashu, Bisong, Jama, and Cambridge as responsible third parties.

The trial court submitted Pharmacy II’s breach of contract and negligence

claims to the jury. In response to jury question number one, “Did [Pharmacy II]

and [WaMu] agree to a partnership account for the account ending in number

3775 on January 14, 2003?”, the jury answered “no.” Jury question number two

asked, “Did . . . Bisong and WaMu agree to a joint sole proprietorship account for

the account ending in number 3775 on January 14, 2003?” Because jury

question number two was conditioned on a “yes” answer to jury question number

one, the jury did not answer jury question number two. The jury found that the

negligence of both WaMu and Pharmacy II caused injury to Pharmacy II and that

Ashu, Bisong, Jama, and Cambridge were not negligent. The jury also found for

WaMu on its money had and received claim against Cambridge.5

5
JP Morgan moved to modify the judgment to include judgment against
Cambridge based upon this finding. The trial court denied the motion. On
appeal, JP Morgan raised a fourteenth issue, arguing that if this court affirmed
the judgment against JP Morgan, we should modify the judgment to award

11
 III. Discussion

A. Standing

In its second issue, JP Morgan argues that Pharmacy II lacks standing to

complain of any alleged negligence by WaMu in the opening of the 3775 Account

or in the payment of funds out of the 3775 Account. Because standing is a

component of subject matter jurisdiction, we review Pharmacy II’s standing de

novo. See Tex. Dep’t of Transp. v. City of Sunset Valley, 146 S.W.3d 637, 646

(Tex. 2004) (citing Tex. Ass’n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440,

445 (Tex. 1993)). In determining whether a plaintiff has standing, we construe

the petition in favor of the plaintiff and if necessary, review the entire record to

determine if any evidence supports standing. Tex. Ass’n of Bus., 852 S.W.2d at

446.

Standing consists of some interest peculiar to the person individually and

not as a member of the general public. Hunt v. Bass, 664 S.W.2d 323, 324 (Tex.

1984). Standing focuses on whether a party has a sufficient relationship with the

lawsuit so as to have a justiciable interest in its outcome. Austin Nursing Ctr.,

Inc. v. Lovato, 171 S.W.3d 845, 848 (Tex. 2005). It requires that there be (1) “‘a

real controversy between the parties’” that (2) “‘will be actually determined by the

judicial declaration sought.’” Nootsie, Ltd. v. Williamson Cnty. Appraisal Dist.,

$116,183 to JP Morgan from Cambridge. Upon JP Morgan’s motion, we
dismissed its appeal as to Cambridge only. See JP Morgan Chase Bank, N.A. v.
Prof’l Pharmacy II, No. 02-11-00373-CV, 2012 WL 1947511, at *1 (Tex. App.—
Fort Worth May 31, 2012, no pet.) (mem. op.). Thus, we do not address JP
Morgan’s fourteenth issue. See Tex. R. App. P. 47.1.

12
925 S.W.2d 659, 662 (Tex. 1996) (quoting Tex. Ass’n of Bus., 852 S.W.2d at

446). Implicit in these requirements is that litigants are properly situated to be

entitled to a judicial determination. Austin Nursing Ctr., 171 S.W.3d at 849.

Based upon the jury’s answer of “no” to jury question number one, which

asked, “Did [Pharmacy II] and [WaMu] agree to a partnership account for the

account ending in number 3775 on January 14, 2003?”, JP Morgan asserts that

Pharmacy II did not have a partnership account. JP Morgan argues that based

upon the terms of Master Account Agreement, Ashu and Bisong are owners of

the 3775 Account, and the Master Account Agreement cannot be rewritten to

make Pharmacy II the owner of the 3775 Account. Therefore, JP Morgan

argues, Pharmacy II has no justiciable interest in the payment of funds out of the

account.

When determining whether Pharmacy II has standing, we must determine

whether Pharmacy II has a “‘cause of action, which involves the combination of a

right on the part of the plaintiff and a violation of such right by defendant.’” See

Exxon Corp v. Pluff, 94 S.W.3d 22, 28 (Tex. App.—Tyler 2002, pet. denied)

(quoting Nobles v. Marcus, 533 S.W.2d 923, 927 (Tex. 1976)). A party has

standing when it is personally aggrieved. Nootsie, 925 S.W.2d at 661. “Standing

deals with whether a litigant is the proper person to bring a lawsuit, not whether

that party can ultimately prevail on the claims asserted.” Faulkner v. Bost, 137

S.W.3d 254, 259 (Tex. App.—Tyler 2004, no pet.); see also Hunt, 664 S.W.2d at

324 (holding “the question of standing is distinct from the question of proof and

13
once the plaintiffs alleged an interest peculiar to themselves and distinguishable

from the public generally, they were entitled to a factual hearing”). A partnership

has standing to file suit in its partnership, assumed, or common name. Tex. R.

Civ. P. 28; Allied Chem. Co. v. DeHaven, 824 S.W.2d 257, 264 (Tex. App.—

Houston [14th Dist.] 1992, no writ).

Pharmacy II’s failure to obtain a jury finding that Pharmacy II and WaMu

agreed to a partnership account does not preclude it from having a justiciable

interest in the funds in the 3775 Account. In its petition, Pharmacy II alleged it

opened the 3775 Account as a business account using its assumed name

certificate and EIN number, it used the 3775 Account as its operating account,

and all funds deposited into the 3775 Account were acquired in Pharmacy II’s

name in the regular course of business and were partnership property.

Pharmacy II presented evidence that Medicaid payments, payments from

insurance companies, retail revenue, and checks payable to Pharmacy II were

deposited into the 3775 Account and that Pharmacy II used it as its operating

account. Thus, the funds in the 3775 Account were partnership funds that

belonged to Pharmacy II. See Tex. Bus. Org. Code Ann. §§ 152.101

(“Partnership property is not property of the partners.”), 152.102(a)(1) (West

2012) (stating that property is partnership property if acquired in the name of the

partnership). Pharmacy II further pled that as a result of WaMu’s negligence,

WaMu paid funds out of the 3775 Account to satisfy a judgment against Bisong.

Thus, we conclude that Pharmacy II has a justiciable interest in funds paid out of

14
the 3775 Account and, therefore, has standing to complain of any alleged

negligence by WaMu in the opening of the 3775 Account and in the payment of

funds out of the 3775 Account. We overrule JP Morgan’s second issue.

B. Capacity and Judicial Estoppel

In its first issue, JP Morgan argues that Pharmacy II failed to prove that it

could recover in the capacity in which it sued. JP Morgan contends that

Pharmacy II is barred from any recovery in this case because it failed to prove

and obtain a jury finding that it is a partnership, and alternatively, Pharmacy II is

judicially estopped from claiming it is a partnership.

1. Capacity

Citing Damian v. Bell Helicopter Textron, Inc., 352 S.W.3d 124 (Tex.

App.—Fort Worth 2011, pet. dism’d), Pharmacy II argues that JP Morgan did not

preserve its challenge to Pharmacy II’s failure to obtain a partnership finding

because JP Morgan did not object to the jury charge on capacity grounds or

request that the trial court submit a question, definition, or instruction to the jury

concerning Pharmacy II’s status as a partnership. JP Morgan argues that not

only did it object at the charge conference, it preserved error by filing special

exceptions and a motion to dismiss Pharmacy II’s declaratory judgment claim, by

moving for a directed verdict on Pharmacy II’s declaratory judgment claim, and

by submitting a proposed jury instruction on the partnership factors. Thus, we

must determine whether any of these steps by JP Morgan were sufficient to

preserve its complaint on appeal.

15
 A challenge to a party’s capacity is waived if not properly challenged in the

trial court through a verified pleading. See Tex. R. Civ. P. 93(1), (2); Austin

Nursing Ctr., 171 S.W.3d at 849 (“[A] challenge to a party’s capacity must be

raised by a verified pleading in the trial court.”). After a defendant challenging a

plaintiff’s capacity files a verified denial,

[t]he issue of the plaintiff’s capacity to sue is controverted, and the
plaintiff bears the burden of proving at trial that he is entitled to
recover in the capacity in which he has filed suit. As the party with
the burden of proof then, it is incumbent upon the plaintiff to obtain a
jury finding on this particular issue.

If, however, the trial court submits a question assuming the
capacity originally pleaded . . . and the defendant does not object to
the question, then the defendant is bound by that charge on appeal.
Conversely, if the defendant does object, then the defendant will
either obtain the sought-after jury finding or have an adverse ruling
which can be reviewed on appeal.

Bossier Chrysler Dodge II, Inc. v. Rauschenberg, 201 S.W.3d 787, 798 (Tex.

App.—Waco 2006) (citations omitted), rev’d in part on other grounds, 238

S.W.3d 376 (Tex. 2007).

Pharmacy II alleged that it was a partnership and sought a declaratory

judgment that it was a general partnership. JP Morgan’s verified pleading

properly controverted the issue of whether Pharmacy II was a partnership and

whether it was entitled to recover in that capacity. See Tex. R. Civ. P. 93(1), (2),

(5); Austin Nursing Ctr., 171 S.W.3d at 849. Therefore, JP Morgan argues,

Pharmacy II was required to prove and obtain a jury finding that it was a

16
partnership.6

In Damian, Bell Helicopter contended that the representatives of the estate

of one of the plaintiffs lacked capacity to bring a survival claim on behalf of the

estate and argued that it preserved its complaint for appellate review through a

motion for judgment notwithstanding the verdict. 352 S.W.3d at 140. This court

stated that by not objecting to the absence of any questions, definitions, or

instructions on the issue of capacity when the jury charge included questions that

assumed the capacity of the representative of the estate, Bell Helicopter

“deprived the trial court of an opportunity to correct the alleged error relating to

capacity.” Id. at 142. “Had Bell [Helicopter] objected to the charge on capacity

grounds, the trial court might have chosen to submit a question, definition, or

instruction to the jury concerning capacity, thus permitting the jury to perform its

fact-finding role on the controverted issue of capacity.” Id. (citing Osterberg v.

Peca, 12 S.W.3d 31, 55 (Tex. 2000); Clark v. Trailways, Inc., 774 S.W.2d 644,

647 (Tex. 1989) (“By failing to object . . . parties . . . effectively deny a trial court

the opportunity to review and correct a prior finding.”)). Thus, we held that Bell

Helicopter did not preserve for appellate review its challenge to the estate

representative’s capacity to represent the estate. Id.

The charge in this case contained questions that assumed Pharmacy II’s

6
Although not addressed by either party, rule of civil procedure 28 permits
a partnership doing business under an assumed name to file suit in its
partnership or assumed name. Tex. R. Civ. P. 28.

17
capacity as a partnership, but it did not contain a question, definition, or

instruction concerning Pharmacy II’s capacity. Jury question number one asked,

“Did [Pharmacy II] and [WaMu] agree to a partnership account for the account

ending in number 3775 on January 14, 2003?” JP Morgan objected to this

question at the charge conference, stating, “Your Honor . . . objection to Question

No. 1 would be confusing to the jury as to – as to submitting a question regarding

[Pharmacy II] without any instructions as to [Pharmacy II] even being a

partnership.” JP Morgan argues that its objection to jury question number one,

which the trial court overruled, preserved its complaint on appeal.

To preserve a complaint for appellate review, a party must have presented

to the trial court a timely request, objection, or motion that states the specific

grounds for the desired ruling, if they are not apparent from the context of the

request, objection, or motion. Tex. R. App. P. 33.1(a). If a party fails to do this,

error is not preserved, and the complaint is waived. Bushell v. Dean, 803 S.W.2d

711, 712 (Tex. 1991) (op. on reh’g). Additionally, the complaint on appeal must

be the same as that presented in the trial court. See Banda v. Garcia, 955

S.W.2d 270, 272 (Tex. 1997). An appellate court cannot reverse based on a

complaint not raised in the trial court. Id. When objecting to a jury charge, the

complaining party must object and “must point out distinctly the objectionable

matter and the grounds of the objection.” See Tex. R. Civ. P. 274. The “purpose

of rule 274 is to afford trial courts an opportunity to correct errors in the charge by

18
requiring objections both to clearly designate the error and to explain the grounds

for complaint.” Wilgus v. Bond, 730 S.W.2d 670, 672 (Tex. 1987).

Although JP Morgan objected to jury question number one, its complaint

was that the question was confusing to the jury absent any instructions that

Pharmacy II was a partnership. While this objection did identify the lack of an

instruction related to Pharmacy II’s status as a partnership, it was insufficient to

apprise the trial court that JP Morgan was objecting to the lack of questions,

definitions, or instructions on the issue of Pharmacy II’s capacity. JP Morgan’s

complaint on appeal does not comport with the complaint it made in the trial

court. Therefore, JP Morgan failed to preserve error. See Tex. R. App. P.

33.1(a); Tex. R. Civ. P. 274; Banda, 955 S.W.2d at 272. But even assuming that

JP Morgan’s objection did comport with its argument on appeal, JP Morgan did

not reurge this objection in response to other questions in the charge that

assumed Pharmacy II’s capacity.7 Thus, JP Morgan’s objection was insufficient

to preserve its complaint for our review. See Tex. R. Civ. P. 274 (providing that

“[n]o objection to one part of the charge may be adopted and applied to any other

part of the charge by reference only”); Harris Cnty. v. Nagel, 349 S.W.3d 769,

790 (Tex. App.—Houston [14th Dist.] 2011, pet. denied) (concluding that an

objection to an instruction accompanying one question does not apply to

7
In jury question numbers nine and ten, the trial court asked the jury to
determine liability and proportionate responsibility for Pharmacy II, Ashu, Bisong,
and Jama. See Tex. Bus. Org. Code Ann. § 152.056 (West 2012) (“A
partnership is an entity distinct from its partners.”).

19
instruction accompanying another question and declining “to hold that silence

suffices where an overt reference would not” under rule 274), cert. denied, 134 S.

Ct. 117 (2003).

JP Morgan also contends that it preserved error by submitting a proposed

jury instruction on the partnership factors. Rule 276 provides in part, “When an

instruction, question, or definition is requested and the provisions of the law have

been complied with and the trial judge refuses the same, the judge shall endorse

thereon ‘Refused,’ and sign the same officially.” Tex. R. Civ. P. 276. JP

Morgan’s proposed charge does not contain any such endorsement. An

endorsement is not the only means of obtaining a ruling, but if there is no

endorsement, the record must establish that the trial court otherwise ruled on the

request, expressly or implicitly, for potential error to be preserved. See Tex. R.

App. P. 33.1(a); Marshall v. Harris Cnty. Mun. Util. Dist. No. 358, No. 01-07-

00910-CV, 2011 WL 286167, at *11–12 (Tex. App.—Houston [1st Dist.] Jan. 20,

2011, pet. denied) (mem. op.) (holding that although appellant filed a proposed

jury charge, appellant did not preserve error because trial court did not endorse

proposed charge, and appellant did not call trial court’s attention to the portions

of the proposed charge that were complained about on appeal); Coates v.

Coates, No. 05-08-00440-CV, 2009 WL 679592, at *2 (Tex. App.—Dallas Mar.

17, 2009, pet. denied) (mem. op.) (“Appellants do not refer us to any place in the

record where they drew the court’s attention to their pretrial jury charge in any

way, so the filing of that document preserved no error.”); Munoz v. Berne Grp.,

20
Inc., 919 S.W.2d 470, 472 (Tex. App.—San Antonio 1996, no writ) (“Tendering

this instruction to the court in the form of an entire proposed charge, with nothing

more, was insufficient to preserve error.”).

JP Morgan has not established that it called the trial court’s attention to its

proposed instruction on the partnership factors. Even though this proposed

instruction was filed with the trial court ten days before trial, JP Morgan did not

bring the requested instruction to the trial court’s attention during the charge

conference and did not object to its omission from the charge. Also, there is no

indication in the record that the trial court noticed or considered JP Morgan’s

proposed charge. Therefore, we conclude JP Morgan did not preserve its

capacity complaint by filing a proposed instruction on the partnership factors.

See Marshall, 2011 WL 286167, at *11–12; Coates, 2009 WL 679592, at *2;

Munoz, 919 S.W.2d at 472.

JP Morgan further contends that it preserved error by filing special

exceptions and a motion to dismiss Pharmacy II’s declaratory judgment claims in

which JP Morgan argued that (1) declaratory relief was not available to settle

Pharmacy II’s status as a partnership because Pharmacy II was required to

prove its status as a partnership as part of its claims for affirmative relief that

were already pending before the court; (2) a declaration regarding Pharmacy II’s

status as a partnership could not be resolved by a declaratory judgment action;

and (3) Pharmacy II was not entitled to declaratory relief because it had not

named as parties all persons or entities that had a claim or interest that would

21
have been affected by the declaration. See Tex. Civ. Prac. & Rem. Code Ann.

§§ 37.004(a) (limiting subject matter of relief available in a declaratory judgment

action), 37.006(a) (West 2008) (“When declaratory relief is sought, all persons

who have or claim any interest that would be affected by the declaration must be

made parties.”); BHP Petroleum Co., Inc. v. Millard, 800 S.W.2d 838, 841 (Tex.

1990) (orig. proceeding) (reciting the general rule that declaratory relief is not

available to settle a dispute that is currently pending before a court). By its

special exceptions and motion to dismiss, JP Morgan did not raise the issue of

Pharmacy II’s lack of capacity as a partnership. Assuming without deciding that

JP Morgan could preserve error through its special exceptions and motion to

dismiss, JP Morgan has waived its complaint on appeal because it differs from

the complaint presented to the trial court in its special exceptions and motion to

dismiss. See Tex. R. App. P. 33.1(a); Banda, 955 S.W.2d at 272.

Next, JP Morgan argues that it preserved error through its motion for

directed verdict on Pharmacy II’s declaratory judgment claim.8 JP Morgan

sought a directed verdict on Pharmacy II’s declaratory judgment action on the

grounds that declaratory relief was not available to settle Pharmacy II’s status as

a partnership because Pharmacy II was required to prove that it was a

partnership as part of its claims for affirmative relief that were already pending

before the court. See, e.g., BHP Petroleum, 800 S.W.2d at 841. Again, this was

8
Pharmacy II later nonsuited its declaratory judgment claims.

22
insufficient to preserve error because JP Morgan did not raise the issue of

Pharmacy II’s lack of capacity. Because JP Morgan’s complaint on appeal differs

from the complaint presented to the trial court in JP Morgan’s motion for directed

verdict, it is waived. See Tex. R. App. P. 33.1(a); Banda, 955 S.W.2d at 272.

We conclude and hold that JP Morgan did not preserve its challenge to

Pharmacy II’s failure to obtain a partnership finding. Accordingly, we overrule

this portion of JP Morgan’s first issue.

2. Judicial Estoppel

In the remaining portion of its first issue, JP Morgan argues that the

positions taken by Ashu, Bisong, and Jama in other lawsuits are contrary to

Pharmacy II’s allegation in this lawsuit that it is a general partnership. Thus, JP

Morgan argues, Pharmacy II is judicially estopped from claiming it is a general

partnership.

Judicial estoppel precludes a party who successfully maintained a position

in one proceeding from later adopting a clearly inconsistent position in another

proceeding to obtain an unfair advantage. Ferguson v. Bldg. Materials Corp. of

Am., 295 S.W.3d 642, 643 (Tex. 2009) (citing Pleasant Glade Assembly of God

v. Schubert, 264 S.W.3d 1, 6 (Tex. 2008), cert. denied, 555 U.S. 1137 (2009)). A

party cannot be judicially estopped if it did not prevail in the prior action. Id.

(citing Long v. Knox, 155 Tex. 581, 291 S.W.2d 292, 295 (1956)). The doctrine

is not intended to punish inadvertent omissions or inconsistencies but rather to

prevent parties from playing fast and loose with the judicial system for their own

23
benefit. Id. (citing Pleasant Glade Assembly of God, 264 S.W.3d at 7). Judicial

estoppel requires that (1) a sworn, inconsistent statement was made in a prior

judicial proceeding; (2) the party making the statement gained some advantage

by it; (3) the statement was not made inadvertently or because of mistake, fraud,

or duress; and (4) the statement was deliberate, clear, and unequivocal. Galley

v. Apollo Associated Servs., Ltd., 177 S.W.3d 523, 528–29 (Tex. App.—Houston

[1st Dist.] 2005, no pet.).

JP Morgan points to actions taken by the partners in two other proceedings

as inconsistent with Pharmacy II’s contention in this case that it is a general

partnership. First, in 2004, Belco Drug Corp. brought a suit on a sworn account

against “Pamela Ashu d/b/a Professional Pharmacy II” and “Tusmo Jama d/b/a

Professional Pharmacy II,” which resulted in an agreed judgment in favor of

Belco Drug Corp. against “Pamela Ashu d/b/a Professional Pharmacy II” and

“Tusmo Jama d/b/a Professional Pharmacy II.” JP Morgan claims Ashu and

Jama failed to file a verified denial alleging that they were not liable in the

capacity in which they were sued or that they were not individually liable because

Pharmacy II was a partnership. Second, shortly before the trial in this case,

Jama filed suit against Bisong, alleging that she and Bisong are owners of

several pharmacies and “were partners in a general partnership which owned

two more pharmacies, known as [Pharmacy Plus] . . . and Professional

Pharmacy Plus II” which “make up the entirety of the business interests shared

24
between [them].”9 Pharmacy II is not among the business interests listed by

Jama in her petition.

JP Morgan does not point to any sworn, inconsistent statements made by

Pharmacy II in either proceeding, and to the extent the positions taken by Ashu

and Jama in their pleadings in these prior lawsuits can be attributed to Pharmacy

II, their positions appear to be no more than inadvertent omissions or

inconsistencies. See Ferguson, 295 S.W.3d at 643. Moreover, Pharmacy II did

not prevail in either lawsuit. Id. Therefore, we conclude that the doctrine of

judicial estoppel does not bar Pharmacy II from asserting that it is a partnership

in this case. Accordingly, we overrule the remainder of JP Morgan’s first issue.

C. Limitations

In its tenth issue, JP Morgan argues that Pharmacy II’s negligence claim is

barred by limitations. JP Morgan contends that Pharmacy II’s negligence claim

accrued when the 3775 Account was opened in January 2003 and that because

Pharmacy II did not file suit against WaMu until July 2008, the claim was barred

by limitations. JP Morgan also argues that the evidence was legally and factually

insufficient to support the jury’s finding that Pharmacy II should, in the exercise of

reasonable diligence, have discovered WaMu’s negligence in January 2008.

A two-year statute of limitations applies to a cause of action for negligence.

See Tex. Civ. Prac. & Rem. Code § 16.003(a) (West Supp. 2014); Dunmore v.

9
It is not clear from the record whether “Professional Pharmacy Plus II”
was an error in Jama’s pleading or is a separate entity from Pharmacy II.

25
Chicago Title Ins. Co., 400 S.W.3d 635, 640 (Tex. App.—Dallas 2013, no pet.)

(applying two-year statute of limitations from section 16.003(a) to negligence

claim). The statute of limitations begins to run when a cause of action accrues.

Waxler v. Household Credit Servs., Inc., 106 S.W.3d 277, 279 (Tex. App.—

Dallas 2003, no pet.) The date of accrual is a question of law. Id. When the

elements of duty, breach, and resulting injury are present, a negligence action

accrues and the statute of limitations begins to run. Id. at 280; see also Black v.

Wills, 758 S.W.2d 809, 816 (Tex. App.—Dallas 1988, no pet.) (“Under the ‘legal

injury’ rule, a cause of action sounding in tort generally accrues when the tort is

completed, that is, the act is committed and damage suffered. This is the date of

legal injury and the statute of limitations begins to run at that time.” (citation

omitted)). While a cause of action in tort generally accrues when the tort is

committed, “[a] legal injury must be sustained, of course, before a cause of action

arises.” Atkins v. Crosland, 417 S.W.2d 150, 153 (Tex. 1967); see Deloitte &

Touche v. Weller, 976 S.W.2d 212, 215 (Tex. App.—Amarillo 1998, pet. denied)

(“Because actual injury is an element of a negligence claim, ‘[a]n action for

negligence cannot be maintained unless some damages result therefrom.’”

(quoting Johnson v. Sovereign Camp, W.O.W., 125 Tex. 329, 335, 83 S.W.2d

605, 608 (1935), overruled on other grounds, Doctors Hosp. Facilities v. Fifth

Court of Appeals, 750 S.W.2d 177 (Tex. 1988))), cert. denied, 526 U.S. 117

(1999).

26
 Here, Pharmacy II was not injured, and its claims did not accrue, until at

the earliest, WaMu froze the 3775 Account in December 2007, or at the latest,

WaMu withdrew $116,683 from the 3775 Account and paid $116,183 to

Cambridge in satisfaction of the agreed judgment in February 2008. Because

Pharmacy II first asserted its negligence claim in an amended pleading filed in

July 2009, we hold that Pharmacy II’s negligence claim was not barred by

limitations. Therefore, it is unnecessary for us to address the remaining portions

of JP Morgan’s tenth issue. See Tex. R. App. P. 47.1. Accordingly, we overrule

JP Morgan’s tenth issue.

D. Res Judicata and Collateral Estoppel

In its eleventh issue, JP Morgan claims that the doctrines of res judicata

and collateral estoppel bar Pharmacy II’s negligence claims because they were

or might have been litigated in the garnishment action. Res judicata and

collateral estoppel are affirmative defenses; thus, the party asserting them has

the burden of pleading and proving the elements of the defense. Welch v.

Hrabar, 110 S.W.3d 601, 606 (Tex. App.—Houston [14th Dist.] 2003, pet.

denied). JP Morgan argues that it conclusively established these defenses as a

matter of law. Because JP Morgan moved for directed verdict on both defenses,

we interpret this issue as a complaint that the trial court erred in denying JP

Morgan’s motion for directed verdict.

27
 1. Standard of Review

A directed verdict is proper only under limited circumstances: (1) when the

evidence is insufficient to raise a material fact issue, or (2) when the evidence

conclusively establishes the right of the movant to judgment or negates the right

of the opponent. See Prudential Ins. Co. of Am. v. Fin. Review Servs., Inc., 29

S.W.3d 74, 77 (Tex. 2000); Farlow v. Harris Methodist Fort Worth Hosp., 284

S.W.3d 903, 919 (Tex. App.—Fort Worth 2009, pet. denied). An appeal from the

denial of a motion for directed verdict is a challenge to the legal sufficiency of the

evidence. Solares v. Solares, 232 S.W.3d 873, 878–79 (Tex. App.—Dallas

2007, no pet.). A legal sufficiency challenge on an issue on which an appellant

bears the burden of proof requires that the appellant demonstrate the evidence

conclusively established all vital facts to support the issue. Id. at 878–79.

Evidence is conclusive “only if reasonable people could not differ in their

conclusions, a matter that depends on the facts of each case.” City of Keller v.

Wilson, 168 S.W.3d 802, 816 (Tex. 2005).

2. Garnishment Proceedings

Garnishment is a statutory proceeding whereby the property or money of a

debtor in the possession of another is applied to the payment of a debt that

arises from a final judgment against the debtor. See Bank One, Tex., N.A. v.

Sunbelt Sav., F.S.B., 824 S.W.2d 557, 558 (Tex. 1992); see also Tex. Civ. Prac.

& Rem. Code Ann. §§ 63.001–.008 (West 2008); Tex. R. Civ. P. 657–679.

“Funds placed with a bank ordinarily become general deposits which create a

28
debtor-creditor relationship between the bank and its depositor.” Bank One, 824

S.W.2d at 558. The only real issue in a garnishment action is whether the

garnishee was indebted to the defendant in the main suit or had in its possession

effects belonging to the defendant at the time of the service of the writ and the

filing of the answer. DeMello v. NBC Bank-Perrin Beitel, 762 S.W.2d 379, 381

(Tex. App.—San Antonio 1988, no writ). A garnishee bank is not indebted to a

judgment debtor unless some form of deposit agreement creates a debtor-

creditor relationship between the bank and the judgment debtor. Bank One, 824

S.W.2d at 558. A bank served with a writ of garnishment may rely on its deposit

agreements when determining to whom it is indebted. Id. at 557.

3. Res Judicata

“Res judicata, or claims preclusion, prevents the relitigation of a claim or

cause of action that has been finally adjudicated, as well as related matters that,

with the use of diligence, should have been litigated in the prior suit.” Barr v.

Resolution Trust Corp. ex rel. Sunbelt Fed. Sav., 837 S.W.2d 627, 628 (Tex.

1992). To prevail on a res judicata defense, a party must show that (1) in a

previous action, a court of competent jurisdiction rendered a final determination

on the merits of a claim; (2) the parties in the earlier action are identical to, or in

privity with, the present parties; and (3) the pending claim (a) is identical to the

prior claim or (b) arises out of the same subject matter as the prior claim and

could have been litigated in the previous action. Travelers Ins. Co. v. Joachim,

315 S.W.3d 860, 862 (Tex. 2010). For res judicata to apply to a claim, that claim

29
must have been in existence when the first suit was filed. In re D.W.G., 391

S.W.3d 154, 167 (Tex. App.—San Antonio 2012, no pet.); Hernandez v. Del Ray

Chem. Int’l, Inc., 56 S.W.3d 112, 116 (Tex. App.—Houston [14th Dist.] 2001, no

pet.).

Pharmacy II was not a party to the garnishment judgment, and it did not

attempt to intervene in the garnishment action until after the judgment was

entered. Generally, a person is not bound by a judgment to which he was not a

party. See Tex. Civ. Prac. & Rem. Code Ann. § 37.006(a). However, res

judicata applies when a party in the second action is in privity with a party to the

first action. Amstadt v. United States Brass Corp., 919 S.W.2d 644, 652–53

(Tex. 1996). No prevailing definition of privity exists that automatically applies to

all cases involving res judicata, and the determination of who are privies requires

careful examination of the circumstances of each case. Ayre v. J.D. Bucky

Allshouse, P.C., 942 S.W.2d 24, 27 (Tex. App.—Houston [14th Dist.] 1996, writ

denied). A person may be in privity with a party in at least three ways: (1) he

can control the action even though not a party to it; (2) his interests can be

represented by a party; or (3) he can be a successor in interest, deriving his

claim through a party to the prior action. Amstadt, 919 S.W.2d at 653.

Without elaboration, JP Morgan suggests that Pharmacy II was in privity

with Bisong because Bisong was a partner in Pharmacy II and because

Pharmacy II sought to intervene in the garnishment action. However, “[a]

partnership is an entity distinct from its partners.” Tex. Bus. Org. Code Ann.

30
§ 152.056. JP Morgan does not argue or point to any evidence establishing that

Pharmacy II controlled the garnishment action, that Bisong represented

Pharmacy II’s interests in the garnishment action, or that Pharmacy II was

Bisong’s successor in interest. Moreover, as discussed above, Pharmacy II’s

negligence claim did not arise until, at the earliest, WaMu froze the 3775 Account

in December 2007, or at the latest, WaMu withdrew $116,683 from the 3775

Account and paid $116,183 to Cambridge in satisfaction of the agreed judgment

in February 2008, both of which occurred after the garnishment action was filed.

Therefore, we hold that JP Morgan failed to conclusively establish that Pharmacy

II’s negligence claim was barred by res judicata.

4. Collateral Estoppel

Collateral estoppel, or issue preclusion, bars the relitigation of identical

issues of fact or law that were actually litigated and essential to the final

judgment in a prior suit. Barr, 837 S.W.2d at 628. A party seeking to assert the

bar of collateral estoppel must establish three elements: (1) the facts sought to

be litigated in the second action were fully and fairly litigated in the first action; (2)

those facts were essential to the judgment in the first action; and (3) the parties

were cast as adversaries in the first action. Sysco Food Servs., Inc. v. Trapnell,

890 S.W.2d 796, 801 (Tex. 1994). The facts related to WaMu’s negligence in

setting up the 3775 Account and withdrawing funds from the account were not

fully and fairly litigated in the garnishment action nor were WaMu and Pharmacy

II cast as adversaries in the garnishment action. Thus, we conclude that JP

31
Morgan failed to conclusively establish that Pharmacy II’s negligence claim was

barred by collateral estoppel.

Accordingly, we overrule JP Morgan’s eleventh issue.

E. Duty

In its third issue, JP Morgan argues that because Pharmacy II was not a

customer of WaMu or an entity with whom WaMu had a prior relationship, WaMu

owed no duty to Pharmacy II in the opening of the 3775 Account. JP Morgan

further argues that because Pharmacy II was not an account holder of or party to

the 3775 Account, JP Morgan owed no duty to Pharmacy II regarding the

payment of funds out of the 3775 Account in the garnishment action. JP Morgan

also argues that it owed no tort duty to Pharmacy II because Pharmacy II

asserted no independent duty owed to it by WaMu other than those arising under

the contractual relationship Pharmacy II alleged was created by the Master

Account Agreement.

Duty is the threshold inquiry in a negligence case, and the existence of a

duty is a question of law for the court to decide from the facts surrounding the

occurrence in question. Greater Houston Transp. Co. v. Phillips, 801 S.W.2d

523, 525 (Tex. 1990). To maintain a negligence cause of action, a plaintiff must

establish both the existence and the violation of a duty owed to the plaintiff by the

defendant to establish liability in tort. Id. To determine whether a duty exists, we

consider several interrelated factors, including the risk, foreseeability, and

likelihood of injury weighed against the social utility of the actor’s conduct, the

32
magnitude of the burden of guarding against the injury, and the consequences of

placing the burden on the defendants. Id. Of these factors, foreseeability is “‘the

foremost and dominant consideration.’” Id. (quoting El Chico Corp. v. Poole, 732

S.W.2d 306, 311 (Tex. 1987)).

The test for foreseeability is whether a person of ordinary intelligence

would have anticipated the danger his negligence creates. Sw. Key Program,

Inc. v. Gil-Perez, 81 S.W.3d 269, 274 (Tex. 2002). Foreseeability does not

require an actor to anticipate the precise manner in which the injury will occur;

instead, the injury need only be of a general character that the actor might

reasonably anticipate. Lee Lewis Constr., Inc. v. Harrison, 70 S.W.3d 778, 785

(Tex. 2001). Courts also consider the risk of injury compared to the burden on

the defendant, the social utility of the conduct involved, the nature of the

relationship between the plaintiff and defendant, whether one party has superior

knowledge of the risk, and the defendant’s right to control the actor whose

conduct precipitated the harm. New Tex. Auto Auction Servs., L.P. v. Gomez de

Hernandez, 249 S.W.3d 400, 406 (Tex. 2008); Golden Spread Council, Inc. No.

562 of Boy Scouts of Am. v. Akins, 926 S.W.2d 287, 292 (Tex. 1996).

1. Opening the 3775 Account and Responding to the Writ of
Garnishment

Generally, a bank owes no duty to a person who is not a customer and

with whom the bank does not have a relationship. See, e.g., Owens v. Comerica

Bank, 229 S.W.3d 544, 547 (Tex. App.—Dallas 2007, no pet.); Guerra v.

33
Regions Bank, 188 S.W.3d 744, 747 (Tex. App.—Tyler 2006, no pet.). And

when responding to a writ of garnishment, a bank may rely on its deposit

agreement when determining to whom it is indebted. Bank One, 824 S.W.2d at

557. Relying on these principles, JP Morgan argues it owed no duty to

Pharmacy II.

In Guerra, the first case relied upon by JP Morgan, Pedro Guerra brought

suit against Regions Bank for negligence, claiming that a bank customer used his

name to open a joint checking account at Regions Bank under the customer’s

name and Guerra’s name without Guerra’s permission. 188 S.W.3d at 745–46.

The customer used a check from the IRS payable to “Pedro Guerra” to open the

account and listed Guerra’s address as an apartment in Longview, Texas. Id. at

745. Guerra had never had an account with Regions Bank nor had he ever been

to Longview. Id. at 746. Numerous checks drawn on the account were returned

for insufficient funds, and eight Longview merchants filed worthless check

information sheets with the Gregg County District Attorney in Longview. Id. at

745–46. The Gregg County District Attorney’s Office issued a warrant for

Guerra. Id. at 746. Guerra was arrested in Bellaire, Texas, and spent three

weeks in jail. Id.

The trial court granted a summary judgment against Guerra on the basis

that Regions Bank owed no duty to him. Id. The appellate court affirmed the trial

court’s judgment, concluding that Regions Bank owed no duty to Guerra because

he was not a Regions Bank customer and had no other relationship with Regions

34
Bank. Id. at 747 (citing Miller-Rogaska, Inc. v. Bank One, Tex., N.A., 931 S.W.2d

655, 664 (Tex. App—Dallas 1996, no writ)). Guerra argued that Regions Bank

owed him a duty based on the Alabama Supreme Court’s decision in Patrick v.

Union State Bank, 681 So.2d 1364 (Ala. 1996). Guerra, 188 S.W.3d at 747. In

Patrick, the court found the “bank thought it had a relationship” with the plaintiff

when an account was opened by an imposter using the plaintiff’s social security

number and temporary driver’s license as identification and, therefore, a duty

may be imposed. 681 So.2d at 1369. Based upon the definition of foreseeability

in Texas, the Guerra court declined to follow Patrick because “[i]n opening the

joint account [with an IRS check as identification], the bank could not have

believed that it was establishing a relationship with [the plaintiff] because, unlike

the imposter in Patrick, [the wrongdoer] did not use [the plaintiff’s] name, social

security number, and driver’s license number to open the account.” Guerra, 188

S.W.3d at 748; see also Sw. Key Program, 81 S.W.3d at 274 (discussing the test

for foreseeability in Texas); Lee Lewis Constr., 70 S.W.3d at 785 (same). The

court also stated that “[i]t was not reasonable to expect Regions [Bank] to

foresee that an individual with the same first and last name living over 200 miles

away would be affected by the opening of this checking account.” Guerra, 188

S.W.3d at 748.

In Owens, the second case relied on by JP Morgan, the plaintiffs brought

suit against Comerica Bank for negligence, alleging that it negligently opened

and maintained bank accounts for Charles Dwain Davis, Jr. into which Davis

35
fraudulently deposited approximately $1.9 million of the plaintiffs’ money.

Owens, 229 S.W.3d at 546. The plaintiffs intended the money to be used for

investments and loan repayments, but Davis misappropriated the funds for his

own use. Id. Comerica Bank filed a motion for summary judgment contending it

owed no duty to the plaintiffs as a matter of law because the plaintiffs were not

Comerica Bank customers. Id.

As in Guerra, the plaintiffs were not bank customers, and there was no

evidence that the plaintiffs had individual relationships with the bank. Id. at 547.

The plaintiffs argued that Comerica Bank owed it a duty of care because it was

foreseeable that Davis would use his accounts to perpetuate fraud. Id. The

court conceded that it was possible that any bank account could be used for a

wrongful purpose, but there was nothing in the facts of the case that would lead

Comerica Bank to anticipate a danger of injury to another when it opened and

maintained the two accounts for Davis. Id. Because there was no foreseeable

danger, the court concluded that Comerica Bank owed no duty to the plaintiffs as

a matter of law. Id.

Owens and Guerra are distinguishable from the facts giving rise to this

case, and therefore, we find them unpersuasive. In both cases, the plaintiffs

were not bank customers and had no other relationship with the bank. Here,

Pharmacy II was a customer of and had a relationship with WaMu. Pharmacy II,

acting by and through Ashu and Bisong, went to a WaMu branch to set up a bank

account for Pharmacy II similar to Pharmacy Plus’s account, which was a

36
partnership account. See Tex. Bus. Org. Code Ann. § 152.301 (West 2012)

(“Each partner is an agent of the partnership for the purpose of its business.”);

see also Whitney Nat’l Bank v. Baker, 122 S.W.3d 204, 209 (Tex. App.—Houston

[1st Dist.] 2003, no pet.) (“A corporation or other legal entity can conduct

business only through natural persons.”). Ashu and Bisong informed WaMu of

their intent to open a partnership account for Pharmacy II and provided WaMu

with documents indicating Pharmacy II’s existence. WaMu listed the account title

for the 3775 Account as “Professional Pharmacy II” on the Master Account

Agreement, Pharmacy II’s checks, and bank statements and listed Pharmacy II’s

EIN number as the tax ID for the account. WaMu also stated in its verified

answer to the writ of garnishment that the 3775 Account was owned in the name

of Pharmacy II. Based on these facts, we conclude that Pharmacy II had a

sufficient relationship with WaMu that gave rise to a legal duty.

Moreover, the nature of the relationship between Pharmacy II and WaMu

was such that WaMu was in a better position to guard against the injury that

occurred. WaMu controlled the manner in which the account was opened, and it

knew that Pharmacy II was a partnership from the outset based upon the

documents provided by Ashu and Bisong. Moller recognized that Pharmacy II

was a partnership when she decided that she could not open the account as a

partnership account without a partnership agreement, even though Ashu and

Bisong provided to WaMu documentation indicating Pharmacy II’s status as a

partnership. Farnsworth testified that when responding to a writ of garnishment,

37
WaMu would look at the terms of the Master Account Agreement for an account

to ensure that the debtor named in the writ was the owner of that account. Given

WaMu’s reliance on the terms of the Master Account Agreement when

responding to a writ of garnishment, WaMu could have reasonably anticipated

that setting up an account incorrectly could result in wrongful garnishment. See

Bank One, 824 S.W.2d at 558 (holding that a bank is entitled to rely on its

deposit agreement when responding to a writ of garnishment.)

WaMu also had a duty to disclose any defense to the writ of garnishment

of which it was aware. See Sw. Bank & Trust Co. v. Calmark Asset Mgmt., Inc.,

694 S.W.2d 199, 200–01 (Tex. App.—Dallas 1985, writ ref’d n.r.e.). During the

garnishment proceeding, an assistant financial center manager at WaMu stated

in a letter—which Bisong’s counsel provided to Cambridge’s counsel in an

attempt to settle the garnishment action—that the 3775 Account was a business

account. Even though WaMu stated in its verified answer filed in the

garnishment action that the 3775 Account was owned in the name of Pharmacy

II, it did not allege that Bisong did not own the funds in the 3775 Account. See

Tex. Bus. Org. Code Ann. § 152.101 (“Partnership property is not property of the

partners.”); cf. Gottesman v. Toubin, 353 S.W.2d 294, 299 (Tex. Civ. App.—

Houston 1962, no writ) (stating that “the general rule [is] that a partnership fund is

not subject to garnishment for the individual debt of the firm”).

JP Morgan also argues there is “no compelling public policy reason to

create a duty between banks and non-account holders” and “the social utility of

38
[a] bank’s conduct in having and relying upon written account agreements is

unquestionable and enormous.” JP Morgan further opines that “the

consequences of disregarding . . . valid account agreements [are] severe—every

bank can be subjected to liability suits by third parties for any and every valid

transaction in any bank account.” But Pharmacy II was WaMu’s customer; Ashu

and Bisong were acting as Pharmacy II’s agents in opening its business account,

which should have been opened as a partnership account. WaMu titled the

account in Pharmacy II’s name, and it recognized that the 3775 Account was a

business account after it was served with the writ of garnishment. We

emphasize that we are not creating a general duty between a bank and a non-

account holder. However, we conclude under the unique facts presented in this

case, WaMu owed a duty to Pharmacy II.

2. Sufficiency of Pharmacy II’s Negligence Pleadings

As part of its third issue, JP Morgan claims that Pharmacy II did not plead

that WaMu was negligent in opening the account. JP Morgan asserts that

Pharmacy II only pled that WaMu negligently agreed and improperly transferred

funds from the 3775 Account to Cambridge. Therefore, JP Morgan argues that

the negligence issue was improperly submitted to the jury and the judgment was

not supported by the pleadings.

We review claimed error in the court’s charge under an abuse of discretion

standard. Crowson v. Bowen, 320 S.W.3d 486, 488 (Tex. App.—Fort Worth

2010, no pet.) (citing In re V.L.K., 24 S.W.3d 338, 341 (Tex. 2000)). A trial court

39
abuses its discretion when it submits a jury question that is neither supported by

the pleadings nor tried by consent. Id. (citing Stephanz v. Laird, 846 S.W.2d 895,

902 (Tex. App.—Houston [1st Dist.] 1993, writ denied)). Jury questions must be

supported by the pleadings. Gibbins v. Berlin, 162 S.W.3d 335, 341 (Tex. App.—

Fort Worth 2005, no pet.); McReynolds v. First Office Mgmt., 948 S.W.2d 342,

345 (Tex. App.—Dallas 1997, no writ); see also Tex. R. Civ. P. 278 (“The court

shall submit the questions, instructions, and definitions in the form provided by

Rule 277, which are raised by the written pleadings and the evidence.”).

Although issues may be tried by consent, “written pleadings, before the time of

submission, shall be necessary to the submission of questions.” Tex. R. Civ. P.

67; Gibbins, 162 S.W.3d at 342. Similarly, a trial court’s judgment must conform

to the pleadings. See Tex. R. Civ. P. 301. A trial court may not enter judgment

on a claim that was not sufficiently pled or otherwise tried by consent. See Tex.

R. Civ. P. 67, 301; Stoner v. Thompson, 578 S.W.2d 679, 682–83 (Tex. 1979);

Maswoswe v. Nelson, 327 S.W.3d 889, 894 (Tex. App.—Beaumont 2010, no

pet.).

“Texas follows a ‘fair notice’ standard for pleading, which looks to whether

the opposing party can ascertain from the pleading the nature and basic issues

of the controversy.” Horizon/CMS Healthcare Corp. v. Auld, 34 S.W.3d 887, 896

(Tex. 2000). A petition is sufficient if it gives fair and adequate notice of the facts

upon which the pleader bases his claim. Id. at 897. The purpose of this rule is to

give the opposing party sufficient information to enable that party to prepare a

40
defense. Id. “Generally, a pleading provides fair notice of a claim when an

opposing attorney of reasonable competence can examine the pleadings and

ascertain the nature and basic issues of the controversy and the relevant

testimony.” Taylor v. Taylor, 337 S.W.3d 398, 401 (Tex. App.—Fort Worth 2011,

no pet.) (op. on reh’g) (citing Horizon/CMS Healthcare Corp., 34 S.W.3d at 896).

Because JP Morgan’s special exceptions did not challenge Pharmacy II’s

negligence claim, we construe Pharmacy II’s pleadings liberally in its favor. See

Horizon/CMS Healthcare Corp., 34 S.W.3d at 897 (stating that a court should

liberally construe a petition in favor of the pleader if no special exceptions are

filed). Pharmacy II pled its negligence claim broadly, alleging that WaMu owed

Pharmacy II a duty to exercise reasonable care to avoid a foreseeable risk of

harm to Pharmacy II, WaMu breached its duty to Pharmacy II by not exercising

ordinary care, WaMu’s breach of the duty owed to Pharmacy II was the

proximate cause of the damages sustained by Pharmacy II, the damages

resulting from WaMu’s conduct or omissions were foreseeable, and Pharmacy II

incurred actual damages as a result of WaMu’s negligence. Pharmacy II also

incorporated its factual allegations into its negligence claim. Pharmacy II alleged,

among other things, that it opened the 3775 Account as a business account

using its assumed name certificate and EIN; Pharmacy II used the 3775 Account

as its operating account; all funds deposited into the 3775 Account were acquired

in the name of Pharmacy II in the regular course of business and were

partnership property; WaMu represented to Pharmacy II that the 3775 Account

41
was Pharmacy II’s business account; at no time prior to WaMu’s answer in the

garnishment action did WaMu represent to Pharmacy II that the 3775 Account

was a sole proprietorship or joint sole proprietorship account held in Bisong’s

name; and as a result of WaMu’s negligence, funds were taken from the 3775

Account to satisfy the agreed judgment in the garnishment action.

We conclude that Pharmacy II’s pleadings, as a whole, can be fairly read

to allege that WaMu was negligent in opening the 3775 Account, as well as in

withdrawing the funds from the account. Accordingly, Pharmacy II’s negligence

claim was properly submitted to the jury and the judgment was supported by the

pleadings.

3. No tort duty

JP Morgan also asserts that Pharmacy II cannot maintain its negligence

cause of action because it only pled a breach of a duty alleged to have been

created by the Master Account Agreement. “As a prerequisite to asserting a

claim of negligence, there must be a violation of a duty imposed by law

independent of any contract.” Carson Energy, Inc. v. Riverway Bank, 100

S.W.3d 591, 601 (Tex. App.—Texarkana 2003, pet. denied) (citing Sw. Bell Tel.

Co. v. DeLanney, 809 S.W.2d 493, 494 (Tex. 1991); Ortega v. City Nat’l Bank, 97

S.W.3d 765, 777 (Tex. App.—Corpus Christi 2003, no pet.)). If the only duty

between parties arises from a contract, a breach of this duty ordinarily sounds

only in contract, not in tort. DeLanney, 809 S.W.2d at 494.

42
 JP Morgan argues that because Pharmacy II has failed to plead a violation

of a duty imposed by law independent of the Master Account Agreement,

Pharmacy II’s claim sounds in contract, not tort. As we determined above,

Pharmacy II pled that WaMu was negligent in opening the 3775 Account and that

WaMu owed Pharmacy II a duty when opening the account and responding to

the writ of garnishment. Accordingly, we overrule JP Morgan’s third issue. See

Chapman Custom Homes, Inc. v. Dallas Plumbing Co., 445 S.W.3d 716, 718

(Tex. 2014) (“[A] party states a tort claim when the duty allegedly breached is

independent of the contractual undertaking and the harm suffered is not merely

the economic loss of a contractual benefit.”); cf. Sw. Bank & Trust Co., 694

S.W.2d at 200–01 (stating that a garnishee has a duty to disclose any defense to

writ of garnishment of which the garnishee is aware).

F. Immaterial Question

In its fourth issue, JP Morgan asserts that the trial court should have

disregarded the jury’s answer to the negligence question as immaterial. A jury

question is immaterial when it should not have been submitted or when it was

properly submitted but was rendered immaterial by other findings. Spencer v.

Eagle Star Ins. Co. of Am., 876 S.W.2d 154, 157 (Tex. 1994).

JP Morgan does not argue in its fourth issue that the negligence question

should not have been submitted. It only complains that the negligence question

was rendered immaterial by the jury’s answer of “no” to jury question number

one. Without a contractual relationship between WaMu and Pharmacy II, JP

43
Morgan argues that WaMu owed no duty to Pharmacy II regarding the payment

of funds out of the 3775 Account. Because we have determined that WaMu

owed Pharmacy II a legal duty independent of whether WaMu and Pharmacy II

agreed to a partnership account, jury question number nine was not rendered

immaterial by the jury’s answer to jury question number one. Accordingly, we

overrule JP Morgan’s fourth issue.

G. The Economic Loss Rule

In its fifth issue, JP Morgan asserts that the economic loss rule precludes

Pharmacy II from recovering damages under its negligence claim. JP Morgan

claims there is no negligence cause of action available to Pharmacy II because

Pharmacy II’s loss, if any, is a purely economic loss that is the subject of the

Master Account Agreement. Therefore, JP Morgan argues, any tort claim arising

from the opening of the 3775 Account or paying money out of the 3775 Account

is barred by the economic loss rule.

We disagree. The Texas Supreme Court has rejected a formulation of the

economic loss rule that “says you can never recover economic damages for a

tort claim.” Sharyland Water Supply Corp. v. City of Alton, 354 S.W.3d 407, 418

(Tex. 2011). In determining whether the plaintiff may recover on a tort theory, it

is instructive to examine the nature of the plaintiff’s loss. DeLanney, 809 S.W.2d

at 494. When the only loss or damage is to the subject matter of the contract,

the plaintiff’s claim will only sound in contract. Id. In operation, the rule restricts

contracting parties to contractual remedies for those economic losses associated

44
with the relationship, even when the breach might reasonably be viewed as a

consequence of a contracting party’s negligence. See Jim Walter Homes, Inc. v.

Reed, 711 S.W.2d 617, 618 (Tex. 1986) (“When the injury is only the economic

loss to the subject of a contract itself, the action sounds in contract alone.”). In

other words, the economic loss rule precludes recovery of economic losses in

negligence when the loss is the subject matter of a contract between the parties.

Coastal Conduit & Ditching, Inc. v. Noram Energy Corp., 29 S.W.3d 282, 285

(Tex. App.—Houston [14th Dist.] 2000, no pet.).

Here, there was no finding that there was a contract between Pharmacy II

and WaMu. The economic loss rule normally applies between parties to a

contract, but it does not apply to strangers to the contract. See Sharyland Water

Supply Corp., 354 S.W.3d at 418 (“[W]e have never held that [the economic loss

rule] precludes recovery completely between contractual strangers in a case not

involving a defective product—as the court of appeals did here.”). Thus, the

economic loss rule as asserted by JP Morgan does not bar Pharmacy II’s

negligence claim. See id. at 419 (“The economic loss rule does not swallow all

claims between contractual and commercial strangers.”); cf. Bank of Tex., N.A. v.

Glenny, 405 S.W.3d 310, 316 (Tex. App.—Dallas 2013, no pet.) (holding that the

economic loss rule did not bar bank’s claim against mortgagor’s attorney for

negligent misrepresentation where there was no contract between the bank and

the attorney); Matlock Place Apartments, L.P. v. Druce, 369 S.W.3d 355, 378

(Tex. App.—Fort Worth 2012, pet. denied) (holding economic loss rule did not

45
bar recovery of tort damages on statutory fraud claim based upon fraudulent

inducement). Therefore, we overrule JP Morgan’s fifth issue.

H. Sufficiency of the Evidence

In its sixth, seventh, eighth, and ninth issues, JP Morgan argues the

evidence is legally and factually insufficient to support the jury’s negligence

findings.

1. Standards of Review

We may sustain a legal sufficiency challenge only when (1) the record

discloses a complete absence of evidence of a vital fact; (2) the court is barred

by rules of law or of 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

mere scintilla; or (4) the evidence establishes conclusively the opposite of a vital

fact. Uniroyal Goodrich Tire Co. v. Martinez, 977 S.W.2d 328, 334 (Tex. 1998),

cert. denied, 526 U.S. 1040 (1999); Robert W. Calvert, “No Evidence” and

“Insufficient Evidence” Points of Error, 38 Tex. L. Rev. 361, 362–63 (1960). In

determining whether there is legally sufficient evidence to support the finding

under review, we must consider evidence favorable to the finding if a reasonable

factfinder could and disregard evidence contrary to the finding unless a

reasonable factfinder could not. Cent. Ready Mix Concrete Co. v. Islas, 228

S.W.3d 649, 651 (Tex. 2007); City of Keller, 168 S.W.3d at 807, 827.

When reviewing an assertion that the evidence is factually insufficient to

support a finding, we set aside the finding only if, after considering and weighing

46
all of the evidence in the record pertinent to that finding, we determine that the

credible evidence supporting the finding is so weak, or so contrary to the

overwhelming weight of all the evidence, that the answer should be set aside and

a new trial ordered. Pool v. Ford Motor Co., 715 S.W.2d 629, 635 (Tex. 1986)

(op. on reh’g); Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986); Garza v. Alviar,

395 S.W.2d 821, 823 (Tex. 1965). An opinion reversing for factual insufficiency

must detail the evidence relevant to the issue or point in consideration and

clearly state why the finding is factually insufficient (in other words, why the

evidence supporting the finding is so weak or is so against the great weight and

preponderance of the evidence as to be manifestly unjust, why it shocks the

conscience, or why it clearly demonstrates bias). Pool, 715 S.W.2d at 635.

When a party challenges the factual sufficiency of an adverse finding on an issue

on which it did not have the burden of proof, it must show that there is

“insufficient evidence” supporting the finding; that is, that the credible evidence

supporting the finding is too weak or that the finding is against the great weight

and preponderance of the credible evidence contrary to the finding. See Garza,

395 S.W.2d at 823; W. Wendall Hall, Hall’s Standards of Review in Texas, 42

St. Mary’s L.J. 3, 41–42 (2010).

2. Breach

In its sixth issue, JP Morgan argues that the evidence is insufficient to

support the jury’s finding that WaMu breached a duty of ordinary care to

Pharmacy II because Pharmacy II did not present expert testimony regarding the

47
applicable standard of care or the breach of such standard, and even if expert

testimony is not required, the evidence was insufficient to establish a breach of

ordinary care in connection with the opening of the 3775 Account and with the

payment of funds from the 3775 Account.

To establish breach of duty, a plaintiff must show either that the defendant

did something that an ordinarily prudent person exercising ordinary care would

not have done under those circumstances, or that the defendant failed to do that

which an ordinarily prudent person would have done in the exercise of ordinary

care. Lincoln Prop. Co. v. DeShazo, 4 S.W.3d 55, 61 (Tex. App.—Fort Worth

1999, pet. denied) (op. on reh’g). Whether a defendant breached a duty

ordinarily presents a question of fact. Caldwell v. Curioni, 125 S.W.3d 784, 793

(Tex. App.—Dallas 2004, pet. denied) (citing Rudolph v. ABC Pest Control, Inc.,

763 S.W.2d 930, 933 (Tex. App.—San Antonio 1989, writ denied)).

a. Need for Expert Testimony

JP Morgan contends that expert testimony was required to establish the

standard of care and breach of such standard because the standard of care for a

bank, including the standard of care in opening an account or responding to a

writ of garnishment, is not within the experience of a layperson. Whether expert

testimony is required is a question of law, which we review de novo. FFE

Transp. Servs., Inc. v. Fulgham, 154 S.W.3d 84, 89 (Tex. 2004). “Expert

testimony is required when an issue involves matters beyond jurors’ common

understanding.” Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572, 583 (Tex. 2006);

48
see Roark v. Allen, 633 S.W.2d 804, 809 (Tex. 1982) (“Expert testimony is

necessary when the alleged negligence is of such a nature as not to be within the

experience of the layman.”). In determining whether expert testimony is required

to establish negligence, we consider whether the conduct at issue involves the

use of specialized equipment and techniques unfamiliar to the ordinary person.

FFE Transp. Servs., 154 S.W.3d at 91. In such a case, the expert testimony

must establish both the standard of care and the violation of that standard.

Hager v. Romines, 913 S.W.2d 733, 734–35 (Tex. App.—Fort Worth 1995, no

writ).

Pharmacy II argues that expert testimony was not necessary because the

jurors could have determined the appropriate standard of care owed by WaMu

under these facts and the breach of that standard based on their common

knowledge and experience. We agree. Pharmacy II’s negligence cause of

action is based on its claim that it provided to WaMu documentation establishing

that it was a partnership and asked WaMu to set up the 3775 Account as a

partnership account, but WaMu set up a joint sole proprietorship account, which

resulted in WaMu paying sums out of the 3775 Account in response to the writ of

garnishment. We conclude that WaMu’s conduct at issue in this case does not

involve the use of specialized equipment or techniques unfamiliar to the ordinary

person. Pharmacy II was merely complaining that WaMu did not give them the

type of account Pharmacy II requested and was supported by the documentation

provided by Pharmacy II, which does not involve matters beyond jurors’ common

49
understanding. Had WaMu set up the 3775 Account as a partnership account,

Pharmacy II would have been listed as the owner of the account, not Ashu and

Bisong, and WaMu would not have paid sums out of that account in the

garnishment action. Thus, we conclude under the facts of this case, expert

testimony was not necessary to establish the standard of care owed to Pharmacy

II and WaMu’s breach of such standard.

b. Sufficiency of the Evidence

JP Morgan points to the testimony of Moller, the branch manager who

opened the 3775 Account, and Farnsworth, the national production manager for

the levy department at WaMu, as evidence establishing that WaMu did not

breach its duty to Pharmacy II. Moller testified that a husband and wife could

open a joint sole proprietorship account, which could be titled in an assumed

name. She further testified that she followed WaMu’s guidelines for opening a

joint sole proprietorship account and that she prepared the Master Account

Agreement and presented it to Ashu and Bisong for their review and signature.

Farnsworth testified that upon receiving the writ of garnishment, he also followed

WaMu’s guidelines. Based upon his examination of the Master Account

Agreement, he determined that Bisong was the owner of the 3775 Account, even

though the name on the account was Pharmacy II. Thus, in its answer to the writ

of garnishment, WaMu listed the 3775 Account as one the accounts owned by

Bisong.

50
 But “[a] Bank’s internal policies do not determine a standard of care or

duty.” Guerra, 188 S.W.3d at 747 (citing FFE Transp. Servs., 154 S.W.3d at 92).

Ashu and Bisong each testified that they informed WaMu that Pharmacy II

wanted to set up a partnership account similar to Pharmacy Plus’s partnership

account at WaMu. Ashu and Bisong further testified they provided to WaMu the

assumed name certificate for Pharmacy II, which reflected that it was filed by

Bisong, Ashu, and Jama; Pharmacy II’s EIN; a completed Form W-9 stating that

Pharmacy II was a partnership; and a partially completed Texas Medicaid Vendor

Direct Deposit Authorization bearing Pharmacy II’s EIN and identifying Pharmacy

II as the payee.

WaMu’s business account disclosures and regulations describe a sole

proprietorship as “a business account opened by the owner(s) of a business

which is not a corporation, association, limited liability company or partnership.”

[Emphasis added.] Moller testified that because the third person on the assumed

name certificate was not present, she could not open the account as a

partnership account without a written partnership agreement.10 Thus, she was

aware that Pharmacy II wanted to open the account as a partnership account, yet

she opened the account as a joint sole proprietorship account. Moller admitted

that under the account disclosures and regulations, a sole proprietorship account

10
Texas law does not require that a partnership agreement be in writing.
Tex. Bus. Org. Code Ann. § 151.001(5) (West 2012) (“‘Partnership agreement’
means any agreement, written or oral, of the partners concerning a
partnership.”).

51
could not be opened if the business was a partnership. Moreover, Karin Hart, an

operations analyst with WaMu familiar with WaMu’s policies and procedures in

January 2003 for opening bank accounts, testified that in her ten years of

experience with WaMu, she had never seen a sole proprietorship account set up

based upon an assumed name certificate with three names on it.

WaMu also stated in its verified answer filed in the garnishment action that

the 3775 Account was owned in the name of Pharmacy II, and an assistant

financial center manager at WaMu stated in a letter that the 3775 Account was a

business account. But WaMu failed to raise this defense in its garnishment

answer and released funds belonging to the partnership in the account to

Cambridge, as the judgment creditor of Bisong, not the partnership. See Sw.

Bank & Trust Co., 694 S.W.2d at 200–01 (holding garnishee bank liable for

releasing funds when garnishee knew that funds in garnished account were held

in trust for another and did not belong to debtor).

Thus, after applying the applicable standards of review, we conclude that

the evidence was legally and factually sufficient to show WaMu breached a duty

to Pharmacy II both in opening the account and responding to the writ of

garnishment. Accordingly, we overrule JP Morgan’s sixth issue.

3. Proximate Cause

JP Morgan asserts in its seventh issue that the evidence is legally and

factually insufficient to support the jury’s finding of proximate cause. Proximate

cause requires foreseeability and cause in fact. IHS Cedars Treatment Ctr. of

52
DeSoto, Tex., Inc. v. Mason, 143 S.W.3d 794, 798 (Tex. 2004). To establish

cause in fact, Pharmacy II must show that WaMu’s negligence was a substantial

factor in bringing about its injury and without which no harm would have

occurred. See Transcon. Ins. Co. v. Crump, 330 S.W.3d 211, 221–23 (Tex.

2010). “The test for foreseeability is whether a person of ordinary intelligence

would have anticipated the danger his or her negligence creates.” Sw. Key

Program, 81 S.W.3d at 274.

First, JP Morgan argues that “it is not foreseeable that two alleged partners

of a partnership will execute an account agreement and open a joint sole

proprietorship account as owners, and then later claim through the partnership

that they are not owners of the account.” This argument misses the point of

Pharmacy II’s claim that WaMu incorrectly opened the 3775 Account as a joint

sole proprietorship account instead of a partnership account. Farnsworth

testified that WaMu relied on the Master Account Agreement when responding to

the writ of garnishment. Therefore, Pharmacy II’s injury—payment of partnership

funds out of the 3775 Account in response to a writ of garnishment directed to

Bisong—might have been reasonably anticipated by WaMu when it set up the

3775 Account up as a joint sole proprietorship account instead of a partnership

account.

Next, JP Morgan argues that its payment of $116,683 out of the 3775

Account was not the proximate cause of Pharmacy II’s injuries because

Pharmacy II was not a party to the account. “The test for cause in fact, or ‘but for

53
causation,’ is whether the act or omission was a substantial factor in causing the

injury ‘without which the harm would not have occurred.’” Marathon Corp. v.

Pitzner, 106 S.W.3d 724, 727 (Tex. 2003) (citing Doe v. Boys Clubs of Greater

Dallas, Inc., 907 S.W.2d 472, 477 (Tex. 1995)). Pharmacy II was not a party to

the 3775 Account because WaMu set up the 3775 Account as a sole

proprietorship account instead of a partnership account. Again, had WaMu not

incorrectly set up the 3775 Account as a sole proprietorship account, funds from

the account would not have been paid to Cambridge in the garnishment action

against Bisong. Thus, WaMu’s failure to set up the account properly was a

substantial factor in causing Pharmacy II’s injuries without which Pharmacy II’s

injuries would not have occurred.

After applying the appropriate standards of review, we conclude that the

evidence was legally and factually sufficient to support the jury’s finding that

WaMu’s negligence was a substantial factor in bringing about Pharmacy II’s

injuries and without which no harm would have occurred. Accordingly, we

overrule JP Morgan’s seventh issue.

4. Damages

In its eighth issue, JP Morgan attacks the jury’s award of $180,683 in

damages on Pharmacy II’s negligence claim, arguing that the evidence was

legally and factually insufficient to support the jury’s finding. By its ninth issue,

JP Morgan asks us in the alternative to vacate, modify, or reform the damages

54
awarded in the judgment from $153,580.55 to $99,180.55, or suggest a remittitur

reducing the damages award by $54,400.

We will not disregard a jury’s damage award merely because its reasoning

in reaching its figures is unclear. Enright v. Goodman Distrib., Inc., 330 S.W.3d

392, 403 (Tex. App.—Houston [14th Dist.] 2010, no pet.). A jury generally has

discretion to award damages within the range of evidence presented at trial. Gulf

States Utils. Co. v. Low, 79 S.W.3d 561, 566 (Tex. 2002). It may not, however,

“arbitrarily assess an amount neither authorized nor supported by the evidence

presented at trial.” First State Bank v. Keilman, 851 S.W.2d 914, 930 (Tex.

App.—Austin 1993, writ denied).

The jury found that $180,683 in damages would “fairly and reasonably

compensate” Pharmacy II for any damages that “resulted from the injury in

question.” It is undisputed that WaMu withdrew $116,683 from the 3775 Account

pursuant to the agreed judgment in the garnishment action. Pharmacy II also

presented evidence that it incurred between $63,000 and $64,000 in attorney’s

fees in connection with the case. Attorney’s fees, however, are not recoverable

as actual damages in a negligence action. See Berry Prop. Mgmt., Inc. v.

Bliskey, 850 S.W.2d 644, 669 (Tex. App.—Corpus Christi 1993, writ dism’d by

agr.).

JP Morgan argues that Pharmacy II cannot claim damages for the

$116,683 paid out of the 3775 Account because Pharmacy II was not the owner

of the account. JP Morgan argues that even if Pharmacy II could claim the funds

55
withdrawn from the 3775 Account as damages, the evidence is factually

insufficient to support the jury’s finding of $180,683 in damages because only

$116,683 was paid out of the 3775 Account. The Bank further argues that the

jury’s award is manifestly unjust and excessive.

JP Morgan points out that ordinarily, funds deposited with a bank become

general deposits, which create a creditor-debtor relationship between the bank

and the depositor. Carson Energy, 100 S.W.3d at 598. Title to the money

passes to the bank, subject to the depositor’s demand for payment. Hodge v. N.

Trust Bank of Tex., N.A., 54 S.W.3d 518, 522 (Tex. App.—Eastland 2001, pet.

denied). A bank is not indebted to the depositor unless some form of deposit

agreement creates a debtor-creditor relationship between the bank and the

depositor, and a bank “may rely on its deposit agreements when determining to

whom it is indebted.” Bank One, 824 S.W.2d at 557, 558.

Based upon these principles, JP Morgan asserts that because the jury

found that Pharmacy II did not have a partnership account with WaMu, Pharmacy

II was not lawfully entitled to the money in the 3775 Account. JP Morgan further

claims that “the evidence conclusively established that Fidelis Bisong and

Pamela Ashu were the owners of the 3775 Account and therefore the only ones

legally entitled to such monies in the 3775 Account.” But the jury did not find that

Ashu and Bisong had a joint sole proprietorship account at WaMu, and JP

Morgan does not challenge this lack of a finding on appeal. Pharmacy II’s claim

is that WaMu incorrectly opened the 3775 Account as a joint sole proprietorship

56
account instead of a partnership account. And as a result of WaMu’s failure to

open the account as instructed, $116,683 was improperly withdrawn from the

3775 Account.

Property acquired in the name of the partnership is partnership property.

Tex. Bus. Org. Code Ann. § 152.102(a)(1). Bisong testified that the 3775

Account was used as the operating account for Pharmacy II’s business and that

the funds Pharmacy II received from Medicaid were directly deposited into the

3775 Account. Ashu testified that Medicaid payments, payments from insurance

companies, and retail revenue were deposited into the 3775 Account. Pharmacy

II used the funds in the 3775 Account for payroll, lease payments, and other

business expenses, such as the purchase of pharmaceuticals. This evidence

was sufficient to establish that the funds in the 3775 Account belonged to

Pharmacy II, not the partners. See id. § 152.101 (“Partnership property is not

property of the partners.”). Accordingly, we conclude that there was some

evidence that Pharmacy II suffered $116,683 in damages.

Pharmacy II argues on appeal that it in addition to the $116,683 withdrawn

from the 3775 Account, it suffered further damages as a result of the disruption of

its business caused by the freezing of the 3775 Account and the removal of the

funds from the account. In support of this contention, Pharmacy II points to

Bisong’s testimony that the amount withdrawn from the 3775 Account amounted

to “between four to five weeks to two months” of revenue, which would have

57
been used to purchase inventory and pay salaries and bills. Pharmacy II also

directs us to the following testimony elicited from Ashu by Pharmacy II’s counsel:

Q. Thank you. And -- and what was the eventual result of the
account being frozen?

A. Well, our suppliers -- my supplier, McKesson, stopped
shipping drugs to us, because we couldn’t pay.

Q. Okay. And did you have to make any special arrangements to
account for that?

A. One second. Um, I’m sorry. I came back [from Africa] and I
went to the bank and I could not unfreeze the account. So -- but the
main thing was to get our suppliers to ship us product. So we
started getting money from the other accounts, like from the other
stores. I mean, like $2,000 here, $3,000 here, put it together, and
then deposit to the bank, so we could get our suppliers a payment,
but then we could not get withdrawals out of the account, so we
stopped.

And then I talked to [Jama], that maybe I’ll order products for
my store and give it to them, because we -- we -- we needed to
continue work.

So I gave them some products, but then Palmer Pharmacy[11]
started going down. We cashed the -- we had to re-issue checks for
the employees, so we cashed the checks through the other
accounts, like we gave them money, because their checks could not
go through.

But in the meantime, I went to the bank to open up the
account. They could not open it up. When I came back, that’s when
I learned that it wasn’t just frozen, that it was some lawsuit against
the account.

Q. Thank you. Pam, we’re here in a lawsuit today, and there are
12 individuals who have been here for a long time that spent almost

11
Palmer Pharmacy was an independent retail pharmacy owned by Ashu.

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 four days now. What are you asking that the jury provide
Professional Pharmacy, II?

A. I just want -- I don’t -- I don’t really -- I mean, I went through a
lot, but I just want the moneys that were withdrawn from the account,
because the moneys that was withdrawn was about 116,000, but,
you know, it ballooned to 116,000, because Texas Medicaid kept
paying into the account. And we could not stop Medicaid from
paying into the account, because that’s the account they had.

So, in the meantime, we could not withdraw from the account,
but we kept getting our supply vendors, Texas Medicaid, pay[ing]
into the account. So the account kept growing and growing, and
we’re spending money trying to supply -- trying to run business and
do payroll, but they kept paying to the account.

So the account ballooned up to like 116,000. It wasn’t 116 to
begin with, because we didn’t have that much money, but because
we could not use money from the account, it kept growing and
growing and growing to about $116,000 when the account was -- the
money was taken away.

Q. So let me just ask you, specifically, what’s -- what’s the amount
of money that you’re asking the jury to award Professional
Pharmacy, II?

A. The money that was taken out of the account, which is the
$116,000.

Q. Thank you.

Damages for business interruption are measured by the amount of profits

lost due to the interruption. See Sawyer v. Fitts, 630 S.W.2d 872, 874 (Tex.

App.—Fort Worth 1982, no writ); Cmty. Pub. Serv. Co. v. Gray, 107 S.W.2d 495,

499 (Tex. Civ. App.—El Paso 1937, no writ). While recovery for lost profits does

not require that the loss be susceptible of exact calculation, the injured party

must do more than show they suffered some lost profits. Helena Chem. Co. v.

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Wilkins, 47 S.W.3d 486, 504 (Tex. 2001). The loss amount must be shown by

competent evidence with reasonable certainty. Id. At a minimum, opinions or

lost-profit estimates must be based on objective facts, figures, or data from which

the lost-profits amount may be ascertained. Id. Past profits, coupled with other

facts and circumstances, may establish a lost-profits amount with reasonable

certainty. Id. at 505. Our focus is on whether damages can be shown with

reasonable certainty. Id. This can be accomplished with a profit history or some

other objective data, such as future contracts, from which lost profits can be

calculated with reasonable certainty. Id.

Here, the evidence is undisputed that $116,683 was withdrawn from the

3775 Account, but the evidence was insufficient to establish that Pharmacy II

suffered any damages due the business disruption caused by the freezing of the

3775 Account and the removal of $116,683 from the account. Pharmacy II did

not present any facts, figures, or data from which lost profits could be determined

or any evidence of past profits. We therefore conclude the evidence is legally

and factually insufficient to support the jury’s finding of $180,683.

As pointed out by JP Morgan in its ninth issue, a court of appeals may

exercise its power to suggest a remittitur when there is insufficient evidence to

support the full amount of damages awarded but sufficient evidence to support a

lesser award. Akin, Gump, Strauss, Hauer & Feld, L.L.P. v. Nat’l Dev. &

Research Corp., 299 S.W.3d 106, 124 (Tex. 2009); Bechtel Corp. v. CITGO

Prods. Pipeline Co., 271 S.W.3d 898, 922 (Tex. App.—Austin 2008, no pet.); see

60
Tex. R. App. P. 46.3. “If part of a damage verdict lacks sufficient evidentiary

support, the proper course is to suggest a remitter of that part of the verdict. The

party prevailing in the trial court should be given the option of accepting the

remittitur or having the case remanded.” Larson v. Cactus Util. Co., 730 S.W.2d

640, 641 (Tex. 1987). In this case, the evidence is legally and factually sufficient

to support a lesser damages finding of $116,683. Accordingly, we sustain JP

Morgan’s eighth and ninth issues in part and suggest a remittitur of $64,000,

which is the difference between the jury’s award of $180,683 and $116,683, the

highest amount of actual damages supported by the evidence.

I. Other Negligence Findings

The trial court submitted the issue of liability and proportionate

responsibility for WaMu, Pharmacy II, Ashu, Bisong, Jama, and Cambridge to the

jury. The jury found JP Morgan and Pharmacy II negligent, but it found that

Ashu, Bisong, Jama, and Cambridge were not negligent. By its twelfth issue, JP

Morgan argues that the evidence is legally and factually insufficient to support

the jury’s finding that Ashu, Bisong, and Jama, all of whom were designated as

responsible third parties, were not negligent.

When, as here, a party is attacking the legal sufficiency of an adverse

finding on an issue on which it had the burden of proof, and there is no evidence

to support the finding, we review all the evidence to determine whether the

contrary proposition is established as a matter of law. Dow Chem. Co. v.

Francis, 46 S.W.3d 237, 241 (Tex. 2001); Sterner v. Marathon Oil Co., 767

61
S.W.2d 686, 690 (Tex. 1989). We consider evidence favorable to the finding if a

reasonable factfinder could and disregard evidence contrary to the finding unless

a reasonable factfinder could not. Cent. Ready Mix Concrete, 228 S.W.3d at

651; City of Keller, 168 S.W.3d at 807, 827.

When the party with the burden of proof appeals from a failure to find

based on factual sufficiency, the party must show that the failure to find is against

the great weight and preponderance of the credible evidence. Dow Chem. Co.,

46 S.W.3d at 242; Cropper v. Caterpillar Tractor Co., 754 S.W.2d 646, 651 (Tex.

1988); see Gonzalez v. McAllen Med. Ctr., Inc., 195 S.W.3d 680, 681–82 (Tex.

2006). We are required to consider and weigh all of the evidence, and we can

set aside a verdict only if the evidence is so weak or if the finding is so against

the great weight and preponderance of the evidence that it is clearly wrong and

unjust. Dow Chem. Co., 46 S.W.3d at 242; see Pool, 715 S.W.2d at 635.

JP Morgan contends that the evidence is insufficient to support the jury’s

findings that Ashu, Bisong, and Jama were not negligent because Ashu and

Bisong opened the 3775 Account as a joint sole proprietorship account instead of

a partnership account and none of the partners took any action to intervene in

the garnishment action to prevent the agreed judgment from being entered.

Ashu and Bisong testified that it was their intent to set up the 3775 Account as a

partnership account for Pharmacy II and that they informed WaMu of their intent

when they opened the account. They also testified that they provided WaMu with

Pharmacy II’s assumed name certificate, Pharmacy II’s EIN, a completed Form

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W-9 indicating that Pharmacy II was a partnership, and a partially completed

Texas Medicaid Vendor Direct Deposit Authorization bearing Pharmacy II’s EIN

and identifying Pharmacy II as the payee. Ashu, Bisong, and Jama testified that

they used the 3775 Account as Pharmacy II’s business account. After

discovering in January 2008 that the 3775 Account was frozen, Jama went to

several WaMu branches and contacted WaMu’s attorney in an attempt to

unfreeze the 3775 Account. Ashu returned from Africa early in an attempt to

unfreeze the 3775 Account, but she was unsuccessful. Counsel for Bisong

attempted to settle the claim with Cambridge and provided to Cambridge a letter

from an assistant financial center manager at WaMu stating that the 3775

Account was a business account. Pharmacy II also hired an attorney and

unsuccessfully attempted to intervene in the garnishment action.

After applying the applicable standards of review, we conclude that the

evidence is legally and factually sufficient to support the jury’s findings that Ashu,

Bisong, and Jama were not negligent. Accordingly, we overrule JP Morgan’s

twelfth issue.

J. Prejudgment Interest

In its thirteenth issue, JP Morgan asserts that the trial court’s award of

$22,681.12 in prejudgment interest was improper under finance code section

304.102. Section 304.102 provides that “[a] judgment in a wrongful death,

personal injury, or property damage case earns prejudgment interest.” Tex. Fin.

Code Ann. § 304.102 (West 2006). Relying on section 304.102, JP Morgan

63
argues that prejudgment interest is not available on a judgment in a negligence

case.

An award of prejudgment interest, however, is not limited to judgments

involving wrongful death, personal injury, or property damage; general principles

of equity also provide for an award of prejudgment interest. See Johnson &

Higgins of Tex., Inc. v. Kenneco Energy, Inc., 962 S.W.2d 507, 528 (Tex. 1998);

Citizens Nat’l Bank v. Allen Rae Invs., Inc., 142 S.W.3d 459, 486–87 (Tex.

App.—Fort Worth 2004, no pet.) (op. on reh’g). “Where no statute controls the

award of prejudgment interest, the decision to award prejudgment interest is left

to the sound discretion of the trial court, which should rely upon equitable

principles and public policy in making this decision.” Citizens Nat’l Bank, 142

S.W.3d at 487 (citing Miga v. Jensen, 25 S.W.3d 370, 381 (Tex. App.—Fort

Worth 2000, pet. granted), aff’d in part and rev’d in part, 96 S.W.3d 207 (Tex.

2002)). The Bank does not argue that the trial court’s award of prejudgment

interest was an abuse of discretion. Accordingly, we overrule JP Morgan’s

thirteenth issue.

IV. Conclusion

In summary, we overrule issues one, two, three, four, five, six, seven, ten,

eleven, twelve, and thirteen. Because we hold the evidence is insufficient to

support the jury’s finding of $180,683, but is sufficient to support a lesser award

of $116,683, we sustain issues eight and nine in part and suggest a remittitur of

$64,000. See Tex. R. App. P. 46.3. If Pharmacy II files in this court within twenty

64
days from the date of this opinion, a remittitur of $64,000, we will reform the

judgment to award Pharmacy II $99,180.55 (eighty-five percent of $116,683) in

actual damages and $14,677.20 in prejudgment interest12 and, as so reformed,

affirm the trial court’s judgment. Because liability is contested, if the suggested

remittitur is not timely filed, we will reverse the trial court’s judgment and remand

Pharmacy II’s negligence claim to the trial court for a new trial on both liability

and damages. See Tex. R. Civ. P. 43.2(d), 44.1(b).

/s/ Anne Gardner
ANNE GARDNER
JUSTICE

PANEL: GARDNER, MCCOY, and MEIER, JJ.

DELIVERED: December 31, 2014

12
The final judgment awarded Pharmacy II prejudgment interest on the
damages awarded ($180,683) at the rate of five percent simple interest from July
15, 2008, through June 29, 2011. $14,677.20 reflects a recalculated award of
prejudgment interest on damages in the amount of $99,180.55 at the rate of five
percent simple interest from July 15, 2008, through June 29, 2011. See Mahon
v. Caldwell, Haddad, Skaggs, Inc., 783 S.W.2d 769, 772 (Tex. Civ. App.—Fort
Worth 1990, no writ) (suggesting proportional reduction in prejudgment interest
as part of suggested remittitur).

65