Curtis R. Sellers, Harvey Development Company, Inc. and Tony Aguilar v. Marcelo Gomez, Individually and as Purported Trustee, Michael Ainsa, and Ainsa Hutson, L.L.P.

COURT OF APPEALS
EIGHTH DISTRICT OF TEXAS
EL PASO, TEXAS

CURTIS R. SELLERS, HARVEY §
DEVELOPMENT CO., INC., and TONY
AGUILAR, §
No. 08-05-00308-CV
Appellants, §
Appeal from the
v. §
120th Judicial District Court
§
MARCELO GOMEZ, Individually and as of El Paso County, Texas
Purported Trustee, MICHAEL AINSA, §
and AINSA HUTSON L.L.P., (TC# 2004-1373)
§
Appellees.
§

OPINION

Curtis Sellers and Harvey Development Co., both licensed real estate brokers, demanded

compensation from Marcelo Gomez for their services in the sale of the Park Cinema Theater in

El Paso. Mr. Gomez refused because there was no signed commission agreement. Mr. Sellers

and Harvey Development sued Mr. Gomez and his attorney, Michael Ainsa, for theft of services,

fraud, breach of fiduciary duty, and conspiracy. The trial court granted summary judgment in

favor of Mr. Gomez and Mr. Ainsa. The trial court also ordered Mr. Sellers, Harvey

Development, and their attorney, Tony Aguilar, to pay $80,000 in sanctions to Mr. Gomez and

Mr. Ainsa. Mr. Aguilar, Mr. Sellers, and Harvey Development present seven issues for review.

In Issues One through Five, they challenge the trial court’s grant of summary judgment. In Issues

Six and Seven, they challenge the trial court’s award of sanctions. We affirm the trial court’s

judgment.
 Appellants Mr. Sellers and Harvey Development are both licensed real estate brokers.

Appellee Mr. Gomez owned the Park Cinema in El Paso. In the mid-2002, Mr. Sellers and

Harvey Development submitted an unsolicited offer to Mr. Gomez on behalf of Currey Adkins,

an IT supply company, to purchase the Park Cinema for $1,200,000. The written offer listed

Harvey Development as the principal broker and Mr. Sellers as the cooperating broker. Under

the terms of the offer, Mr. Sellers and Harvey Development would each receive a three-percent

real estate commission. Mr. Gomez did not accept the offer.

In December 2002, Mr. Sellers and Harvey Development sent Mr. Gomez another

unsolicited offer on behalf of Currey Adkins, this time to purchase the Park Cinema for

$1,650,000. Mr. Gomez did not accept the second offer.

In April 2003, Mr. Gomez asked Miriam Lawrence, his cousin and an employee of

Harvey Development, to find out whether Currey Adkins would increase its second offer.

Ms. Lawrence contacted Currey Adkins and learned that it was unwilling to go higher than

$1,650,000 at that time. On April 9, 2003, Will Harvey, the president of Harvey Development,

sent Ms. Lawrence a memo saying that $1,650,000 was Currey Adkins’s top offer, and that

April 16, 2003 was the deadline for a response. According to Mr. Sellers’s deposition,

Ms. Lawrence indicated that Mr. Sellers and Harvey Development would be compensated for

their services. However, when asked whether Ms. Lawrence had verbally promised to pay them,

Mr. Sellers testified that he could not remember. Mr. Gomez did not accept the third offer.

On July 8, 2003, at Currey Adkins’s request, Mr. Harvey sent a memo to Mr. Gomez.

The memo stated that Currey Adkins was still interested in purchasing the Park Cinema, and that

Mr. Gomez should contact Mr. Harvey no later than July 21, 2003. Mr. Gomez did not respond

-2-
to this memo.

On July 11, 2003, Mr. Gomez engaged Michael Ainsa, a partner at the law firm of Ainsa

Hutson, L.L.P., to represent him in connection with the possible sale of the Park Cinema. Prior

to that date, Mr. Ainsa had not been involved in the sale of the Park Cinema, and he had not

spoken to Mr. Sellers or Harvey Development about the sale. Mr. Ainsa testified that he had not

done any active legal work for Harvey Development since 2001, although his firm handled some

document-preparation work for the company on a case-by-case basis between February 2001 and

February 2004. Mr. Ainsa never did any legal work for Mr. Sellers.

On July 14, 2003, Mr. Harvey called Mr. Ainsa. Mr. Ainsa explained that he was

representing Mr. Gomez and would negotiate a contract with Currey Adkins for the sale of the

Park Cinema. Mr. Ainsa also told Mr. Harvey that Mr. Gomez did not intend to pay a real estate

commission to Mr. Sellers or Harvey Development. Mr. Ainsa explained that absent a written

agreement signed by Mr. Gomez, Mr. Gomez was not obligated to pay the commission. During

the conversation, Mr. Ainsa indicated that he was not representing Harvey Development in the

matter. However, Mr. Sellers testified that at some point, Mr. Ainsa indicated to him that

Mr. Sellers and Harvey Development would be compensated for their services.

Mr. Gomez sold the Park Cinema to Currey Adkins in October 2003 for approximately

$1,900,000. No real estate commission was paid to any broker. On February 19, 2004, Harvey

Development’s attorney, Tony Aguilar, sent a letter to Mr. Gomez concerning the sale of the

Park Cinema. Mr. Aguilar wrote that funds were still owed to Harvey Development and that he

had “found a way to file a lawsuit if necessary.” At Mr. Gomez’s request, Mr. Ainsa contacted

Mr. Aguilar and asked how he intended to file a lawsuit, since the Real Estate License Act

-3-
requires a signed written agreement for a real estate commission. See TEX .OCC.CODE ANN .

§ 1101.806(c)(Vernon 2004). Mr. Aguilar replied that he had “found a way to get around the

Real Estate License Act.”

On March 26, 2004, Mr. Sellers and Harvey Development filed suit against Mr. Gomez

and Mr. Ainsa, alleging theft of services and fraud.1 On December 14, 2004, Harvey

Development filed its first amended petition, adding Ainsa Hutson as a defendant and alleging

theft of services, fraud, conspiracy, breach of fiduciary duty, and failure to inform. Harvey

Development sought actual damages of $120,000, statutory damages of $1,000 each, exemplary

damages, and attorney’s fees.

In their answer, Mr. Gomez and Mr. Ainsa generally denied these claims, raised special

exceptions, and asserted an affirmative defense under the Texas Real Estate License Act. They

also raised a counterclaim alleging that the lawsuit was frivolous.

On July 11, 2005, Mr. Gomez and Mr. Ainsa filed a motion for partial summary

judgment, requesting that the Court dispose of all of Harvey Development’s claims, but not their

own counterclaims. In the motion, Mr. Gomez and Mr. Ainsa characterized the case as an action

to recover a real estate commission, disguised as an action for civil theft. They argued that the

Texas Real Estate License Act precluded Mr. Sellers from recovering a commission, regardless

of how the damages were characterized. Mr. Gomez and Mr. Ainsa argued that Mr. Sellers could

not recover under the Theft Liability Act, because Mr. Sellers could not establish that Mr. Gomez

agreed to pay for the services. Mr. Gomez and Mr. Ainsa also argued that Mr. Ainsa and Ainsa

1
Appellants Mr. Sellers and Harvey Development Co. will subsequently be referred to as
“Harvey Development.”

-4-
Hutson could not be liable for breach of fiduciary duty or failure to inform because Mr. Ainsa

never represented Harvey Development in the Park Cinema sale.

In its response to the motion, Harvey Development argued that Mr. Gomez could not use

the Real Estate License Act as a defense, because the Act’s requirement of a writing applies only

to real estate commission, not all compensation. Compare TEX .OCC.CODE ANN . § 1101.806(b)

(prohibiting a person from collecting “compensation for an act as a broker or salesperson” unless

the person holds a license or is an attorney) with TEX .OCC.CODE ANN . § 1101.806(c)(prohibiting

the recovery of “a commission for the sale or purchase of real estate” in the absence of a signed

commission agreement). Harvey Development also argued that a written document is not

required under the Theft Liability Act, and that a jury could infer intent to avoid payment based

on Mr. Gomez’s and Mr. Ainsa’s actions. Finally, Harvey Development argued that Mr. Ainsa

and Ainsa Hutson owed a fiduciary duty to Harvey Development because Ainsa Hutson was

representing Harvey Development at the time of the sale. The trial court granted Mr. Gomez and

Mr. Ainsa’s summary judgment motion.

In August 2005, Mr. Gomez and Mr. Ainsa filed motions for sanctions against Harvey

Development, seeking attorney’s fees for Harvey Development’s frivolous lawsuit. Mr. Gomez

and Mr. Ainsa voluntarily dismissed their counterclaims without prejudice. At some point,

Harvey Development’s attorney, Mr. Aguilar, was added to the motion for sanctions. Then

Harvey Development and Mr. Aguilar filed their own motion for sanctions, arguing that

Mr. Gomez and Mr. Ainsa’s motions for sanctions were frivolous and seeking their own

attorney’s fees. After a hearing on the motions, the trial court awarded sanctions to Mr. Gomez

and Mr. Ainsa in the amount of $80,000.

-5-
 In the order granting the motion for sanctions, the trial court limited its conclusions of

law to the actions for fraud and theft of services, and did not address Harvey Development’s

other claims. In a nine-page order, the trial court made twenty-eight findings of fact and ten

conclusions of law. One findings of fact was that neither Mr. Gomez nor Mr. Ainsa made any

representations regarding compensation for the services provided by the plaintiffs. The trial

court also made findings of fact indicating that the plaintiffs knew prior to filing the lawsuit that

there were no actions by Mr. Gomez or Mr. Ainsa to intentionally and knowingly secure

performance of the brokerage services by deception, threat, or false token. In its conclusions of

law, the trial court concluded that none of the defendants violated the Theft Liability Act, and

that the plaintiffs had no basis in law or in fact to file a theft-of-services or fraud claim against

any of the defendants. The trial court found that Mr. Aguilar and Harvey Development violated

Chapter 10.001(3) of the Civil Practice & Remedies Code, because the theft and fraud claims in

the plaintiffs’ petition lacked any evidentiary support.

Summary Judgment Motion

In its first five issues, Harvey Development challenges the trial court’s grant of summary

judgment.

We review summary judgments de novo. Valence Operating Co. v. Dorsett, 164 S.W.3d

656, 661 (Tex. 2005). In this case, Mr. Gomez and Mr. Ainsa filed a “traditional” motion for

summary judgment under Rule 166a(c) of the Texas Rules of Civil Procedure. When reviewing

a traditional summary judgment, we view the evidence in the light most favorable to the

nonmovant and resolve any doubts against the motion. Wal-Mart Stores, Inc. v. Spates, 186

S.W.3d 566, 568 (Tex. 2006). We must consider whether reasonable and fair-minded jurors

-6-
could come to different conclusions considering all the evidence presented. See id. When, as in

this case, the trial court’s order does not specify the ground upon which it relied for its ruling, we

must affirm the judgment if any of the theories asserted in the motion is meritorious. Garcia v.

El Paso Ltd. P’ship, 203 S.W.3d 432, 435 (Tex.App.--El Paso 2006, no pet.).

In Issue One, Harvey Development argues that the trial court erred in holding that the

Texas Real Estate License Act is an affirmative defense to a theft-of-services action under the

Theft Liability Act.

The Real Estate License Act provides: “A person may not maintain an action in this state

to recover a commission for the sale or purchase of real estate unless the promise or agreement

on which the action is based, or a memorandum, is in writing and signed by the party against

whom the action is brought or by a person authorized by that party to sign the document.”

TEX .OCC.CODE ANN . § 1101.806(c).

In Trammell Crow Co. No. 60 v. Harkinson, 944 S.W.2d 631, 635 (Tex. 1997), the Texas

Supreme Court held that this section of the Real Estate License Act precluded a real estate

broker’s action for tortious interference to recover a commission. In that case, Hunt Products, a

prospective tenant, hired Patterson/McLaine Group, Inc. to locate rental space. Id. at 632. In

turn, Patterson/McLaine authorized William Harkinson, a real estate broker, to act as its

exclusive representative in locating the space. Id. Under his agreement with Patterson/McLaine,

Mr. Harkinson was supposed to obtain his commission from the owner of the rental space.

Trammell Crow, 944 S.W.2d at 632. Mr. Harkinson negotiated a lease under which Hunt

Products would lease property owned by Trammell Crow. Id. Trammell Crow sent Mr.

Harkinson an unsigned commission agreement. Id. Mr. Harkinson redrafted the agreement,

-7-
signed it, and returned it to Trammell Crow. Id. A Trammell Crow employee told

Mr. Harkinson that a supervisor would sign the agreement, but no one signed it. Id. Meanwhile,

without Mr. Harkinson’s knowledge, Patterson/McLaine entered into an agreement with

Trammell Crow, whereby Patterson/McLaine would pay Mr. Harkinson a vastly reduced

commission, and Trammell Crow would pay him nothing. Id. at 632-33. Harkinson sued

Trammell Crow and Patterson/McLaine for tortious interference with his oral commission

agreement, tortious interference with his exclusive-representation agreement, and civil

conspiracy. Id. at 633.

The Texas Supreme Court noted that Mr. Harkinson did not have a signed commission

agreement as required by the Real Estate License Act. Id. The Court held that this barred his

action for tortious interference with the oral commission agreement. Id. at 635. The Court noted

that “Harkinson’s claims, though couched in terms of a tort, are for the recovery of a real estate

commission.” Id. at 633. Significantly, the Court barred Mr. Harkinson’s tortious-interference

claim against Patterson/McLaine, a third party that never entered into any commission agreement

with Mr. Harkinson. Id. at 634. The Court also examined Mr. Harkinson’s use of promissory

estoppel to attempt to recover the commission and stated, “As a licensed real estate broker,

Harkinson cannot act or forbear from acting in reliance on anything less than a signed written

commission agreement. When a broker does so and relies on a promise to sign a written

agreement that would satisfy section [1101.806(c)],2 the broker inevitably does so at his or her

2
The Court in Trammell Crow cites the old version of the Real Estate License Act, before
the Act’s repeal and recodification in the Occupations Code. Although the current section has
undergone cosmetic changes, it is materially identical to the old version. See
TEX .REV .CIV .STAT .ANN . art. 6573a, § 20(b)(Vernon Supp. 1997)(repealed 2003)(current version
at TEX .OCC.CODE ANN . § 1101.806(c)(Vernon 2004).

-8-
own peril.” Trammell Crow, 944 S.W.2d at 636-37.

The Supreme Court applied the same reasoning to Mr. Harkinson’s claim of tortious

interference with his exclusive-representation agreement, and held that this claim was barred as

well. The Court noted: “As we read Harkinson’s claim, he asserts that had [Trammell Crow] not

interfered with his exclusive representation agreement, he would have been paid his commission

as the exclusive representative negotiating a lease for Hunt Products . . . . The loss of the

opportunity to negotiate exclusively on behalf of Hunt Products in this instance translates only

into the loss of the expectancy of receiving a commission at the end of the lease negotiations.”

Id. at 634. In other words, because Mr. Harkinson could not prove up damages apart from the

lost commission, he was barred from any cause of action that sought the commission as damages.

Even if Mr. Harkinson had proven a breach of his exclusive-representation agreement, his claim

would still have been barred as “illusory and wholly derivative of his unenforceable oral

commission agreement.” Id.

In this case, Harvey Development argues that the holding in Trammell Crow applies only

to common law causes of action, rather than statutory causes of action. Harvey Development

points to language in the opinion stating that Mr. Harkinson’s claims “are barred by section

[1101.806(c)] unless saved by some other law.” Trammell Crow, 944 S.W.2d at 634. However,

following this statement, the Court goes on to discuss the “other law” that, according to

Mr. Harkinson, preserves his claim. Trammell Crow, 944 S.W.2d at 634-35. In particular, the

Court discusses Clements v. Withers, 437 S.W.2d 818 (Tex. 1969), a case that interpreted the

same section of the Real Estate License Act at issue in Trammell Crow, 944 S.W.2d at 634-35.

This indicates that the “other law” that can save this kind of action is case law interpreting the

-9-
Real Estate License Act itself. Nowhere in the Trammell Crow opinion does the Court

distinguish between statutory and common law causes of action. What is clear from the opinion,

however, is that “a broker may not recover a commission unless the commission agreement is in

writing and signed by the party to be charged.” Id. at 635.

Much like Mr. Harkinson, Harvey Development has attempted to couch a claim for

recovery of a commission in terms of tort law. The $120,000 that Harvey Development seeks is

nearly equal to the $114,000 it would have received if the property had been sold at $1,900,000

and Harvey Development had received a six-percent commission. The following excerpt from

Mr. Harvey’s deposition reveals how Harvey Development calculated this figure:

Q: Well, what basis do you have for picking 120, then?

A: We felt it was a reasonable figure.

Q: So it was pulled out of the air?

A: It approximates a real estate commission, or what a real estate commission
would have been, had one been charged.

Q: So, in fact, that is basically what you’re using as a frame of reference, a
real estate commission?

A: You’ve got to start someplace.

Q: Well, is that what you’re using? I’m asking you the question.

A: Yes.

Although Harvey Development tries to frame its action as one for compensation rather than

commission, it does not define the scope of the term “compensation” or explain how it was

calculated, apart from substituting what the commission would have been. Nor does Harvey

Development explain how its actions against Mr. Ainsa and Ainsa Hutson for breach of fiduciary

-10-
duty, failure to inform, fraud, and conspiracy relate to any damages other than the lost

commission.

This Court has noted that the purpose underlying the Real Estate License Act’s

requirement of a signed commission agreement is “to prevent fraud arising from parol testimony

as to the terms and conditions of such contracts.” American Garment Props., Inc. v. CB Richard

Ellis–El Paso, L.L.C., 155 S.W.3d 431, 436 (Tex.App.--El Paso 2004, no pet.), quoting Denman

v. Hall, 144 Tex. 633, 636, 193 S.W.2d 515, 516 (1946). In the instant case, Harvey

Development relies strictly on the alleged statements of Ms. Lawrence and Mr. Ainsa indicating

that Appellants would be compensated for their services. Significantly, they do not rely on the

unsigned commission agreements from 2002, as this would undermine their argument that they

are seeking compensation other than commission. Allowing them to proceed would essentially

allow them to construct an enforceable commission agreement out of an alleged oral agreement,

directly contrary to the purpose underlying the requirement of a signed commission agreement.

Under the facts of this case, where Harvey Development has admitted that the damages it

seeks approximate a real estate commission, we hold that Harvey Development’s actions are

barred by the Real Estate License Act’s requirement of a signed commission agreement. This

includes not only the actions seeking compensation for services performed, but also the claims of

breach of fiduciary duty, failure to inform, fraud, and conspiracy. Issue One is overruled, and we

decline to address Issues Two through Five.

Sanctions

In their final two issues, Mr. Aguilar and Harvey Development challenge the trial court’s

award of sanctions, arguing that the sanctions are excessive and that there was insufficient

-11-
evidence to support the award.

We review a trial court’s award of sanctions under an abuse-of-discretion standard.

Finlay v. Olive, 77 S.W.3d 520, 524 (Tex.App.--Houston [1st Dist.] 2002, no pet.). A trial court

abuses its discretion in imposing sanctions if the order is based on an erroneous view of the law

or a clearly erroneous view of the evidence. Monroe v. Grider, 884 S.W.2d 811, 816 (Tex.App.-

-Dallas 1994, writ denied). As such, an appellate court will view the conflicting evidence in the

light most favorable to the trial court’s ruling and will draw all reasonable inferences in favor of

the trial court’s judgment. Herring v. Welborn, 27 S.W.3d 132, 143 (Tex.App.--San Antonio

2000, pet. denied).

The Civil Practice and Remedies Code permits a trial court to grant sanctions against an

attorney and the attorney’s client if the attorney signs a pleading that makes allegations without

evidentiary support. TEX .CIV .PRAC.&REM .CODE ANN . §§ 10.001(3), 10.004(a)(Vernon 2002).

The sanctions “must be limited to what is sufficient to deter repetition of the conduct or

comparable conduct by others similarly situated.” TEX .CIV .PRAC.&REM .CODE ANN .

§ 10.004(b).

In this case, the trial court offered five pages of findings of fact, indicating that

Mr. Gomez did not intentionally or knowingly secure Harvey Development’s services by deceit,

and that Mr. Aguilar filed suit knowing that there was no evidence of this necessary element of

theft of services and fraud. The trial court correctly applied the Theft Liability Act, which

incorporates the definition of “theft” from the Texas Penal Code. See

TEX .CIV .PRAC.&REM .CODE ANN . § 134.002(2)(Vernon 2005). A person commits theft of

service under Section 31.04 of the Penal Code if, with intent to avoid payment for service he

-12-
knows is provided only for compensation, he intentionally and knowingly secures performance of

the service by deception, threat, or false token; or he intentionally and knowingly secures the

performance of the service by agreeing to provide compensation and, after the service is

rendered, fails to make payment after receiving notice demanding payment. TEX .PENAL CODE

ANN . § 31.04(a)(1), (4)(Vernon Supp. 2007). The trial court correctly applied this definition in

concluding that Harvey Development had no basis in law or fact for filing suit against

Mr. Gomez and Mr. Ainsa for theft or fraud. Therefore, we hold that the trial court did not abuse

its discretion in awarding sanctions to Mr. Gomez and Mr. Ainsa.

Mr. Aguilar and Harvey Development also argue that the sanctions were excessive and

that the trial court failed to consider lesser sanctions. However, the three cases that Harvey

Development cites for the proposition that lesser sanctions must be considered deal with

discovery sanctions, unlike the instant case. See Cire v. Cummings, 134 S.W.3d 835, 839 (Tex.

2004); Spohn Hosp. v. Mayer, 104 S.W.3d 878, 882 (Tex. 2003); TransAmerican Natural Gas

Corp. v. Powell, 811 S.W.2d 913, 917 (Tex. 1991). Mr. Ainsa testified that he and Mr. Gomez

were charged approximately $92,000 in attorney’s fees for the case, but he stipulated that

$10,000 to $11,000 could be deducted from that amount, since Appellees dropped the part of

their motion for sanctions that applied to Appellants’ claim for breach of fiduciary duty. Because

there were no lesser sanctions the trial court could have considered, we hold that the trial court

did not abuse its discretion by awarding sanctions in the amount of $80,000.

In their final issue, Mr. Aguilar and Harvey Development argue that the trial court’s

award of sanctions was not supported by evidence, because there was no proof that the attorney’s

fees were reasonable and necessary. But proof of the necessity or reasonableness or attorney’s

-13-
fees is not required when the fees are assessed as sanctions. Gorman v. Gorman, 966 S.W.2d

858, 868-69 (Tex.App.--Houston [1st Dist.] 1998, pet. denied). Rather, the amount of attorney’s

fees awarded as sanctions is within the sound discretion of the trial court. Id. at 869. Issues Six

and Seven are overruled.

We affirm the trial court’s judgment.

July 31, 2008
DAVID WELLINGTON CHEW, Chief Justice

Before Chew, C.J., McClure, J., and Barajas, C.J. (Ret.)
Barajas, C.J. (Ret.)(Sitting by Assignment)

-14-