Fix It Today, LLC and Banatex, LLC v. Santander Consumer USA, Inc.

COURT OF APPEALS
SECOND DISTRICT OF TEXAS
FORT WORTH

NO. 02-14-00191-CV

FIX IT TODAY, LLC AND BANATEX, APPELLANTS
LLC

V.

SANTANDER CONSUMER USA, APPELLEE
INC.

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FROM THE 67TH DISTRICT COURT OF TARRANT COUNTY
TRIAL COURT NO. 67-260046-12

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MEMORANDUM OPINION1

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I. Introduction

In four issues,2 appellants Fix It Today, LLC and Banatex, LLC appeal the

trial court’s judgment for appellee Santander Consumer USA, Inc. (SCUSA). We

reverse and remand.

1
See Tex. R. App. P. 47.4.
 II. Factual and Procedural Background

As set out in the trial court’s findings of fact, appellants engaged in

business as FIT Finance to make loans for emergency auto repair that they

attempted to secure through an assignment of worker’s liens3 on the repaired

vehicles.4 As the purported assignee of the mechanic’s liens, FIT Finance

claimed its liens were superior to those of SCUSA, which held perfected

purchase money security interests on several vehicles whose owners used FIT

Finance’s services to pay for vehicle repairs. When SCUSA learned that FIT

Finance had repossessed some of the vehicles, it sued appellants for conversion

of its secured interest in the vehicles, for tortious interference with contract, for

damages under the Texas Theft Liability Act, and for conspiracy, and it sought a

2
Although appellants’ brief originally contained five issues, appellants filed
a notice of intent to abandon their first issue before the case’s submission to this
court. Appellants informed the court that they would proceed exclusively on their
remaining four issues.
3
Tex. Prop. Code Ann. § 70.001(a) (West 2014) (stating that “[a] worker in
this state who by labor repairs . . . a vehicle,” may retain possession of the
vehicle until the amount due under the contract for the repairs, or a reasonable
and usual compensation if no amount is specified, is paid).
4
To market its scheme, FIT Finance placed materials in approximately 600
participating repair shops advertising its financial services. During a FIT Finance
transaction, customers were advised that they were “putting their vehicle up for
collateral.” FIT Finance described this process as a debt purchase agreement
whereby repair shops acted as agents “to maintain possession of the vehicle”
and then to “assign the lien that secured that debt” created by the repair of the
vehicle to FIT Finance.

2
declaratory judgment “to determine the nature, extent[,] and priority of conflicting

rights asserted” in the vehicles.

After a bench trial, the trial court entered a final judgment for SCUSA. In

its findings of fact, the trial court found that after repossessing the vehicles, FIT

Finance sold two of the vehicles (identified as the Lamay and Maiden vehicles);

returned five of the vehicles to their owners (identified as the Resendiz,

Salas/Hosey, Holden/George, Mitchell, and Monk vehicles); still possessed four

of the vehicles (identified as the Anasco, Davidson, Shelton, and Jones vehicles);

and attempted to foreclose on liens on several of the vehicles. The trial court

concluded as a matter of law that SCUSA was entitled to a declaratory judgment

in its favor as to the priority of liens,5 and that appellants, doing business as FIT

Finance, were liable to SCUSA for damages for the conversion of SCUSA’s

security interests, for tortious interference with SCUSA’s contracts involving the

vehicles, for theft under the Texas Theft Liability Act with regard to the unlawful

appropriation of SCUSA’s security interests, and for conspiracy for “not less than

the value of the Vehicles or the balance due under the Contracts and Notes in

the amount of $86,800.”

5
Although appellants abandoned their challenge to the trial court’s
conclusion that the Texas worker’s lien statute does not allow for assignment of
the possessory lien, we note that their theory would violate the statute’s express
language, which permits possessory liens for workers who make repairs. See
Tex. Prop. Code Ann. § 70.001(a)–(e).

3
 The trial court awarded to SCUSA a declaratory judgment, $86,800 in

damages, $65,000 in attorney’s fees for preparation and trial with additional

attorney’s fees made conditional on appeal, costs, and post-judgment interest.

This appeal followed.

III. Sufficiency of the Evidence

In their second and fifth issues, appellants challenge the sufficiency of the

evidence to support the trial court’s damages calculations and SCUSA’s

conspiracy claim.

A. Legal Sufficiency

The essence of appellants’ argument in their fifth issue is that there is no

evidence of conspiratorial intent or that Fix It Today was involved in any sort of

conspiracy with Banatex. When a party presents multiple grounds for reversal of

a judgment on appeal, the appellate court should first address those grounds that

would afford the party the greatest relief. CMH Homes, Inc. v. Daenen, 15

S.W.3d 97, 99 (Tex. 2000); Bradleys’ Elec., Inc. v. Cigna Lloyds Ins. Co., 995

S.W.2d 675, 677 (Tex. 1999). Therefore, we will address appellants’ fifth issue

first.

1. Standard of Review and Applicable Law

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

4
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 v. Wilson, 168 S.W.3d 802, 807, 827

(Tex. 2005). A trial court’s findings of fact have the same force and dignity as a

jury’s answers to jury questions. Catalina v. Blasdel, 881 S.W.2d 295, 297 (Tex.

1994); Anderson v. City of Seven Points, 806 S.W.2d 791, 794 (Tex. 1991); see

also MBM Fin. Corp. v. Woodlands Operating Co., 292 S.W.3d 660, 663 n.3

(Tex. 2009).

The essential elements of a civil conspiracy claim are (1) two or more

persons; (2) an object to be accomplished; (3) a meeting of the minds on the

object or course of action; (4) one or more unlawful, overt acts; and (5) damages

as the proximate result. Bilbrey v. Williams, No. 02-13-00332-CV, 2015 WL

1120921, at *14 (Tex. App.—Fort Worth Mar. 12, 2015, no pet. h.) (mem. op.)

(citing In re Lipsky, 411 S.W.3d 530, 549 (Tex. App.—Fort Worth 2013, orig.

proceeding), mand. denied, No. 13-0928, 2015 WL 1870073 (Tex. Apr. 24,

2015)). A defendant’s liability for conspiracy depends on participation in some

5
underlying tort for which the plaintiff seeks to hold at least one of the named

defendants liable; merely proving a joint intent to engage in the conduct that

resulted in the injury is not sufficient to establish a cause of action for civil

conspiracy. Id. Instead, civil conspiracy requires the specific intent to agree to

accomplish an unlawful purpose or to accomplish a lawful purpose by unlawful

means. Id. In this case, the underlying torts are conversion and tortious

interference. See Chrysler Credit Corp. v. Malone, 502 S.W.2d 910, 915 (Tex.

Civ. App.—Fort Worth 1973, no writ) (stating that to prevail on a conversion claim

on a security interest, a plaintiff has to prove that it owned a valid and perfected

security interest in each secured item and that the defendant, who was not a

buyer-in-the-ordinary-course-of-business, converted the security interest; the

plaintiff also has to show the item’s reasonable cash market value at the time and

place of the conversion); All Am. Tel., Inc. v. USLD Commc’ns, Inc., 291 S.W.3d

518, 531 (Tex. App.—Fort Worth 2009, pet. denied) (stating that the elements of

a cause of action for tortious interference are the existence of a contract subject

to interference, willful and intentional interference that proximately causes

damage, and actual damage or loss).

2. Evidence

During SCUSA’s case, Carl Clements, the owner of CMC Auto Tech,

testified that some people came in and asked him if they could leave some

brochures for FIT Finance. He stated that his understanding was that “they come

in and if someone doesn’t have the money to make their repairs, then they call

6
them and they finance [the repairs] for them.” FIT Finance called Clements to tell

him that Wendell Davidson had been approved for a loan, and Clements

authorized Banatex to make electronic fund transfers to him to cover Davidson’s

repair bill. Clements filled out the vehicle condition report that FIT Finance faxed

to him for Davidson’s vehicle, and he began the repairs when FIT Finance

approved Davidson’s application. FIT Finance paid CMC in full for the repairs to

Davidson’s vehicle.6 Clements agreed that what he signed with Banatex stated

that he was entering into an agreement for Banatex to acquire customer debt

from him.

Davidson testified that Clements pointed out FIT Finance’s brochure to him

and that he applied for a loan despite the 259.2863% annual interest rate listed in

the application. Davidson’s November 16, 2012 final invoice from Banatex

sought $3,081.35—$1,391.89 for “partial of invoice unpaid,” plus fees for

insufficient funds, processing, and removal. Banatex, listing itself as “Attorney in

fact for CMC Auto Tech Inc[.],” issued a notice of foreclosure of worker’s lien on

April 5, 2012. Russell Pickens, SCUSA’s assistant vice president of asset

remarketing and designated corporate representative, testified that he called FIT

Finance when Davidson brought the repossession of Davidson’s vehicle to his

attention.

6
The owners of three other automobile repairs shops also testified about
being visited by sales representatives from FIT Finance and FIT Finance’s
paying for repairs.

7
 Loai Sarabi testified by deposition that he was the founder of Banatex and

Fix It Today but that he was not the sole owner of either company, both of which

used the assumed name FIT Finance. Loai said that he and his brother Adam

Sarabi owned, managed, controlled, and operated Fix It Today and Banatex.

Loai explained that “Fix It Today partners with auto repair centers in

helping them eliminate the debt that’s been incurred by . . . consumers fixing their

auto repair, fixing their vehicle” by facilitating and helping the shop find a lender

that will purchase the debt. Loai said that Fix It Today had been partnering with

repair facilities for around three years and that it was currently partnered with

over 500 repair facilities. To partner with the repair facilities, Fix It Today

presented a “merchant agreement,” drafted by a law firm hired by Banatex, that

Banatex and the repair center would execute. Loai stated, “Fix It Today doesn’t

offer a lending solution. It just offers the platform for Banatex to offer a lending

solution.”

Loai testified that Fix It Today also performed the front-end work to help

the customer and repair shop get their documents prepared for debt purchase by

Banatex, including handling the underwriting criteria such as pulling motor

vehicle records. Banatex paid Fix It Today for front end processing or packaging

at $200 to $300 per loan plus an additional monthly stipend for advertising and

marketing depending on Banatex’s needs as to the number of transactions and

how much additional servicing Fix It Today had to do.

8
 Loai stated that, as of the time of his deposition, Fix It Today did not have

any contractual relationships with any entity other than Banatex for the

advertising or marketing of any product, service, extension of service, loan, or

financing arrangement related to the repair of motor vehicles. Fix It Today

employed two employees as front-end customer service representatives, and

Banatex employed five employees plus Loai. Banatex handled the back-end

work, which included collections, serving, repossession, and liquidation of

collateral. Loai stated that with regard to the debt associated with the vehicle

transactions, Banatex held the debt, not Fix It Today.

Ahmad “Adam” Sarabi, corporate representative for both Fix It Today and

Banatex, was the only witness to testify during appellants’ case. Adam testified

that he was chief operating officer for both Banatex and Fix It Today. He stated

that Fix It Today was a marketing and advertising company and that Banatex

was a Utah-based debt-purchasing company. Adam further stated that the

companies did not operate as a joint enterprise and were not a partnership;

rather, Fix It Today advertised Banatex’s services for a fee but had no role in

extending financing to customers or any right to proceeds from Banatex’s

financing agreements.7 Adam said that the repair shops had contractual

relationships with Banatex but not Fix It Today. Fix It Today had also been

providing advertising and marketing services to “a couple of check guarantee

7
Appellants’ discovery responses included an admission that both Fix It
Today and Banatex “do business under the assumed name ‘Fit Finance.’”

9
companies” when the transactions at issue occurred but Banatex was its biggest

client.

3. Analysis

The trial court found that Banatex and Fix It Today operated in concert as

FIT Finance and engaged in acts designed to deprive SCUSA of its perfected

security interest in the vehicles at issue by “falsely and fraudulently claiming to

hold a valid possessory worker’s lien that is superior to SCUSA’s perfected

security interest.” The trial court further found that Fix It Today knew, agreed to,

and intended this common objective or course of action that resulted in damages

to SCUSA. Appellants argue that there is no evidence of conspiratorial intent

when the only evidence at trial was that Fix It Today did not operate a joint

enterprise with Banatex in extending financing and had no right to any of the

proceeds from any financing agreements reached by Banatex.

We have reviewed the record, and there is no evidence to show that Fix It

Today was involved in repossessing the vehicles, that Fix It Today performed

any unlawful, overt acts in advertising and marketing Banatex’s financial scheme,

or that Fix It Today acted with the specific intent to agree to accomplish any

unlawful purpose or to accomplish a lawful purpose by unlawful means. See

Bilbrey, 2015 WL 1120921, at *14; see also All Am. Tel., Inc., 291 S.W.3d at 532

(“General claims of interference with a business relationship are insufficient to

establish a tortious interference with contract claim.”). To the contrary, the record

reflects that Fix It Today’s intent was to market Banatex’s services in repair

10
shops in exchange for payment by Banatex. Therefore, we sustain appellants’

fifth issue.

B. Factual Sufficiency

In their second issue, appellants argue that the evidence is insufficient to

support the trial court’s damages calculation when a fair market value calculation

at the time of the conversion requires evidence of the vehicles’ location and

condition.8 See United Mobile Networks v. Deaton, 939 S.W.2d 146, 147–48

(Tex. 1997) (“Generally, the measure of damages for conversion is the fair

market value of the property at the time and place of the conversion.”).

1. Standard of Review

When, as here, the party without the burden of proof on a fact issue

complains of an adverse fact finding, that party 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

v. Alviar, 395 S.W.2d 821, 823 (Tex. 1965); W. Wendell Hall, Hall’s Standards of

Review in Texas, 42 St. Mary’s L.J. 3, 41–42 (2010).

8
Appellants further complain that Pickens, SCUSA’s damages expert and
corporate representative, did not “have any knowledge of the condition,
location[,] or suitability of the actual Vehicles at issue.”

11
 2. Fair Market Value Calculation

To prevail on its conversion claim, in addition to the other elements of

conversion, SCUSA had to show the reasonable cash market value of the car at

the time and place of the conversion. See United Mobile Networks, 939 S.W.2d

at 147–48; Chrysler, 502 S.W.2d at 915. The market value of property is

determined at the location where the damage occurred. Am. Hat Co. v. Wise

Elec. Coop., No. 02-09-00368-CV, 2010 WL 4028098, at *7 (Tex. App.—Fort

Worth Oct. 14, 2010, pet. denied) (mem. op.). The mere taking and recording of

a security interest upon personal property, even though from someone who is not

the true owner, does not constitute conversion when the party taking the security

interest never exercises ownership or control other than the filing of the security

interest. Prewitt v. Branham, 643 S.W.2d 122, 123 (Tex. 1982). Therefore, no

conversion occurred until appellants repossessed the vehicles.9 See id.

3. Analysis

Pickens testified that he had previously been SCUSA’s assistant vice

president over impounds and product cancellation in addition to “numerous

manager positions in the collection environment” over his six and a half years

9
At the conclusion of trial, SCUSA’s counsel informed the trial court that
SCUSA was only asking for damages “as to each vehicle that was repossessed
by FIT Finance and either still in their possession, which means not sold, or sold,
there’s six of these, . . . we are asking for damages in the lesser of the payoff or
the NADA value.” Counsel further clarified that SCUSA was not seeking
damages for vehicles that SCUSA had repossessed and sold but rather for the
remaining vehicles in appellants’ possession and for a declaration that appellants
have and had no lien.

12
with SCUSA. He stated that his current responsibilities were to oversee

SCUSA’s internal operations with regard to vehicle repossession and to move

the vehicles to auction, including pricing them before auction sale. Pickens also

stated that when he was assistant vice president over impounds, his job was to

oversee notices that came in from impound facilities for mechanic’s liens.

Plaintiff’s Exhibit 86, a summary of Pickens’s testimony, was admitted into

evidence with appellants’ caveat that they did not admit to the accuracy of any of

the numbers.10 Pickens stated that automotive guidebook pricing from the

National Auto Dealers Association (NADA) was customarily used “in the industry”

to place values on vehicles and supplied the value testimony as of June 2012;

NADA excerpts were separately entered into the record in Plaintiff’s Exhibits 46

through 60. Pickens testified that SCUSA’s legal department had selected June

2012 as the date to report the NADA values but said, “I can’t answer that,” when

asked whether the date somehow related to the contracts between SCUSA’s

customers and Banatex. Pickens agreed that he could not personally testify as

to the factors that went into reaching the June 2012 NADA value determinations,

including whether they accounted for vehicle condition or mileage, and he stated

that he had not inspected any of the vehicles and that the value estimates did not

10
The trial court also admitted Defendant’s Exhibit 50, a vehicle report
summary, with the same caveat by SCUSA about not admitting to the accuracy
of any of the numbers.

13
account for the repairs financed by appellants.11 Additional evidence for some of

the vehicles included FIT Finance’s “wholesale value” of the vehicle at the time of

the repairs12 and SCUSA’s payoff amounts as of December 2013 or January

2014.13

The record reflects that, as found by the trial court, FIT Finance

repossessed and sold the Lamay and Maiden vehicles and repossessed and

retained the Davidson, Anasco, Shelton, and Jones vehicles. Having reviewed

the record, we conclude that the evidence is factually insufficient to support the

dollar amount of the trial court’s $86,800 damages judgment because, as set out

below, none of the evidence shows the reasonable cash market value of the car

at the time and place of the conversion. See United Mobile Networks, 939

S.W.2d at 147–48; Chrysler, 502 S.W.2d at 915.

The Lamay vehicle was repossessed on February 1, 2012—several

months before the June 2012 NADA valuation of $18,750, which the trial court

11
There is no testimony in the record to explain whether repairs should
factor into valuation.
12
When asked in discovery about the fair market value of the vehicles
when repossessed by Banatex, appellants responded that they were unaware of
the vehicles’ fair market values but referred SCUSA to “the underwriting file for
[each] vehicle which states a projected value at the time of its repairs.”
13
Although Pickens testified that the payoff information had been pulled
two days before his testimony at the end of January 2014, the payoff letters were
all dated December 2013.

14
relied upon in making its $18,750 value finding.14 Likewise, the Anasco vehicle

was repossessed on March 16, 2012—around a month after the Lamay vehicle

but still a few months before the June 2012 NADA valuation of $18,025, which

the trial court relied upon in making its $18,025 value finding.15 The Maiden

vehicle was repossessed on September 13, 2011, almost a year before the

NADA June 2012 valuation of $16,225 relied upon by the trial court. 16 And while

the trial court found that the Shelton vehicle’s fair market value was $11,375,

based on the June 2012 NADA valuation of $11,375, Bertha Shelton testified in

her deposition that the vehicle was worth $9,000 or $10,000 when it was

repossessed on December 4, 2012, six months after the NADA valuation date.17

The trial court found that the Jones vehicle’s fair market value was

$14,400, based on the June 2012 NADA valuation of $14,400. However, while

14
The record also contains FIT Finance’s “wholesale value” determination
at the time of the August 2011 repairs, $13,875, and the auction sales price,
$5,400. The vehicle had 53,433 in mileage when purchased in 2010 and had
approximately 71,739 in mileage in August 2011.
15
The record also contains FIT Finance’s “wholesale value” of $14,000,
determined at the time of the October 2011 repairs. The vehicle had 43,758 in
mileage when purchased in 2009 and had approximately 88,081 in mileage in
October 2011.
16
The record also contains FIT Finance’s “wholesale value” of $11,650,
determined at the time of the June 2011 repairs. In their discovery responses,
appellants stated that Banatex sold the vehicle for $4,460.
17
The record reflects that Shelton acquired the vehicle in 2009, when it had
mileage of 33,421. The repair shop indicated that Shelton’s vehicle was in “very
good” condition, with 108,231 in mileage on December 7, 2011. FIT Finance’s
“wholesale value” estimate for the vehicle in December 2011 was $4,450.

15
the notice of foreclosure of worker’s lien was issued June 26, 2012, nothing in

the record indicates when the vehicle was actually repossessed.18

The Davidson vehicle’s value finding is the only value finding directly

supported by some evidence in the record. Davidson testified that at the time of

the repossession, the vehicle was worth $8,000 or $9,000, and the trial court

found that it was worth $8,025 based on the 2012 NADA valuation of $8,025.19

Although this amount is supported by some evidence in the record, $8,025

exceeds the amount necessary to pay off the SCUSA lien, which the record

reflects was $7,535.54. See Chrysler Credit Corp., 502 S.W.2d at 915 (stating

that the case was tried on the theory that if the reasonable cash market value of

the vehicle at issue equaled or exceeded the amount of the plaintiff’s security

interest in it, then the plaintiff was entitled to recover on the theory that its

18
Jones acquired the used vehicle in 2008. In January 2012, when Jones
entered the agreement with FIT Finance, the vehicle had mileage of 72,481.
Unlike the other vehicles at issue, the record does not contain a “wholesale
value” estimate by FIT Finance at the time of the repairs.
19
Additional evidence showed that FIT Finance’s “wholesale value” in
November 2011 was $5,675. Davidson acquired the used vehicle in 2006 with
13,596 in mileage, and he entered the repair agreement on November 18, 2011.
Appellants’ documents indicate that the Black Book value for a 2005 Chrysler
Town & Country LX Wagon with mileage of 93,000 as of November 7, 2011 was
between $5,725 and $9,950 for retail and between $4,100 and $7,225 for
wholesale.

Davidson was unclear as to when the vehicle was repossessed—he said
he thought it occurred around January or February 2013. Banatex issued the
notice of foreclosure on worker’s lien on April 5, 2012. The invoice by the
recovery company was dated April 26, 2012.

16
security interest had been converted and its measure of recovery would be the

amount of the security interest; if the vehicle’s value did not equal or exceed the

amount of the plaintiff’s security interest, then its recovery would be limited to and

could not exceed the reasonable cash market value of the car at the time and

place of the conversion).

Based on the foregoing, we sustain appellants’ second issue with regard to

the factual sufficiency of the evidence to support the trial court’s damages award

and do not reach appellants’ third issue, which also challenges the trial court’s

damages award. See Tex. R. App. P. 47.1.

IV. Attorney’s Fees

In their fourth issue,20 appellants complain that the trial court erred by

awarding to SCUSA 100% of its attorney’s fees when those fees were not

available for three of its five prevailing claims and SCUSA failed to segregate any

of its time for those three claims. SCUSA points out that it was entitled to

attorney’s fees under the declaratory judgments act, the Theft Liability Act, and

under property code section 70.008 and contends that no segregation was

required because the underlying facts were the same for all of its claims.

20
We reach this issue because appellants abandoned their first issue,
challenging the trial court’s declaratory judgment and because we must reverse
and remand the case for a new trial on attorney’s fees when we cannot tell
whether an erroneous damages award affected the trial court’s determination of
attorney’s fees. See Young v. Qualls, 223 S.W.3d 312, 313 (Tex. 2007).

17
 Texas law prohibits recovery of attorney’s fees unless authorized by

statute or contract. Tony Gullo Motors, LP v. Chapa, 212 S.W.3d 299, 310 (Tex.

2006). If any attorney’s fees relate solely to claims for which fees are not

recoverable, a claimant must segregate recoverable from unrecoverable fees.

Id. at 313. “Intertwined facts do not make tort fees recoverable; it is only when

discrete legal services advance both a recoverable and unrecoverable claim that

they are so intertwined that they need not be segregated.” Id. at 313–14. We

must examine the facts alleged in support of the claims to determine whether

they are inextricably intertwined, and if the prosecution or defense does not entail

proof or denial of essentially the same facts, the exception does not apply. In re

W.M.R., No. 02-11-00283-CV, 2012 WL 5356275, at *15 (Tex. App.—Fort Worth

Nov. 1, 2012, no pet.) (mem. op.).

In its first of six petitions, filed January 29, 2012, SCUSA brought causes

of action for declaratory judgment, conversion, and tortious interference with

contract, alleging that it owned notes secured by security interests in motor

vehicles and that FIT Finance had “engaged in acts designed to deprive

[SCUSA] of its perfected security interest[s] . . . by falsely and fraudulently

claiming to hold a valid possessory worker’s lien that is superior to [SCUSA’s]

perfected security interest.” It sought a declaration of the nature, extent, and

priority of conflicting rights asserted in the motor vehicles at issue, in addition to

damages for conversion based on repossession and for tortious interference with

contract based on interference with SCUSA’s contracts and notes on the

18
vehicles. SCUSA did not add conspiracy as a cause of action until its third

amended petition, filed on February 13, 2013. It added the Texas Theft Liability

Act, based on the repossessions as the wrongful appropriation of property, to its

fourth amended petition, filed on March 4, 2013.

In his affidavit in support of attorney’s fees, SCUSA’s counsel stated,

Although attorneys’ fees are not generally recoverable in conversion
claims, the legal services rendered to SCUSA in the prosecution of
its claims under the Texas Uniform Declaratory Judgments Act, the
Texas Theft Liability Act[,] and Chapter 70 of the Texas Property
Code are indistinguishable from prosecution of the conversion
claims in that all claims relate to the enforcement of SCUSA’s
perfected purchase money security interest in the motor vehicles
subject of the Defendants’ alleged statutory possessory worker’s
liens, and recovery of damages resulting from the assertion of those
liens. In my opinion, the legal services are so intertwined that they
need not be segregated. [Emphasis added.]

Counsel did not address SCUSA’s claims for conspiracy or tortious interference

but attached twenty-one pages of fee records, beginning with June 20, 2012,

around a month before SCUSA filed its first amended original petition on July 16,

2012.

We have reviewed the elements of conversion, tortious interference, and

conspiracy as set out above. Because some of the elements of these tort claims,

for which attorney’s fees are not recoverable, differ from the declarations sought

and because of the additional work involved in researching and adding the

conspiracy claim, SCUSA could have and should have segregated its attorney’s

fees. Therefore, we sustain appellants’ fourth issue. See Farmers Grp. Ins., Inc.

v. Poteet, 434 S.W.3d 316, 333 (Tex. App.—Fort Worth 2014, pet. denied)

19
(stating that unsegregated attorney’s fees for the entire case are some evidence

of what the segregated amount should be on remand).

V. Conclusion

Because appellants abandoned their first issue, we affirm the declaratory

portion of the trial court’s judgment,21 but having sustained appellants’ fifth issue,

we reverse the portion of the trial court’s judgment that pertains to SCUSA’s

conspiracy claim and render a take-nothing judgment on that claim. See Tex. R.

App. P. 44.1(b) (stating, in pertinent part, that if the error affects part, but not all,

of the matter in controversy, and that part is separable without unfairness to the

parties, the judgment must be reversed and a new trial ordered only as to the

part affected by the error); cf. Downing v. Burns, 348 S.W.3d 415, 428–29 (Tex.

App.—Houston [14th Dist.] 2011, no pet.).22 And having sustained appellants’

21
Specifically, the trial court declared that SCUSA held a perfected, first-
priority purchase money security interest that was valid, enforceable, and
superior to appellants’ interest in fifteen vehicles identified by year, name, and
vehicle identification number; that the statutory, possessory worker’s lien under
the property code cannot be assigned to a third party; that appellants’ vehicle
repossessions were in violation of Texas law and were void ab initio; and that
appellants had no valid and enforceable interest in the vehicles.
22
In Downing, our sister court reversed the trial court’s judgment and
remanded all of the claims to the trial court when the tortious-interference,
defamation, and theft claims were so interwoven that they were not separable
without unfairness. 348 S.W.3d at 429 (“In sum, evidence of defamation was
used to support Downing’s tortious-interference claim and rebut the Burnses’
affirmative defenses; evidence of theft was used to support the Burnses’
affirmative defense to the tortious-interference claim.”). In contrast, here, while
SCUSA presented evidence pertaining to appellants’ liability for conversion, theft,
and tortious interference, no evidence in the record supported SCUSA’s
conspiracy claim.

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second issue on the trial court’s damages award and their fourth issue with

regard to segregation of attorney’s fees, we reverse the trial court’s judgment as

to SCUSA’s conversion, tortious interference, and Texas Theft Liability Act

claims and the attorney’s fee award and remand these claims for a new trial.

See Glover v. Tex. Gen. Indem. Co., 619 S.W.2d 400, 401–02 (Tex. 1981).

/s/ Bonnie Sudderth
BONNIE SUDDERTH
JUSTICE

PANEL: DAUPHINOT, GABRIEL, and SUDDERTH, JJ.

DELIVERED: May 7, 2015

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