NUMBER 13-12-00359-CV
COURT OF APPEALS
THIRTEENTH DISTRICT OF TEXAS
CORPUS CHRISTI - EDINBURG
MIRTA ZORRILLA, Appellant,
v.
AYPCO CONSTRUCTION II, LLC
AND JOSE LUIS MUNOZ, Appellees.
On appeal from the 370th District Court
of Hidalgo County, Texas.
OPINION
Before Justices Rodriguez, Garza, and Perkes
Opinion by Justice Rodriguez
This is an appeal from a jury's verdict in favor of appellees AYPCO Construction II,
LLC and Jorge Luis Munoz (collectively, AYPCO) on their breach of contract and fraud
claims against appellant Mirta Zorrilla. By seven issues, Zorrilla challenges: the
sufficiency of the evidence supporting the jury's breach of contract and fraud findings; the
trial court's refusal to submit a prior material breach jury instruction requested by Zorrilla;
the prejudgment interest awarded in the judgment; the foreclosure of two mechanic's
liens in favor of AYPCO; the awarding of both attorney's fees and exemplary damages,
which Zorrilla contends is a double recovery in light of AYPCO's fraud election; and the
amount of exemplary damages. We affirm as modified.
I. Background
Zorrilla contracted with AYPCO to complete construction of her home at 15555 N.
23rd Street in Edinburg, Texas.1 The contract contained a clause that required any
changes to the original plans to be in writing and agreed to by both parties.
AYPCO began work in December 2006. AYPCO billed Zorrilla through weekly
invoice-type documents it titled "weekly advances," which would list the expenses
incurred by AYPCO during that week. Zorrilla paid the invoices through the end of April
2007. Substantial additional work that was not explicitly included in the original contract
was done on the N. 23rd Street home (the construction of a large guest house and
structure connecting the guest house to the main house) and on another home owned by
Zorrilla at 3518 Plaza del Lago (repairs to the sprinkler system and painting and other
work to remediate water damage). The parties dispute the extent to which Zorrilla
approved this additional work and whether it was authorized under the contract. Zorrilla
contends that she never authorized the construction of a guest house at the N. 23rd
Street property, which was the bulk of the additional work not covered by the contract; that
1
Another contractor had begun but not finished the construction project.
2
she repeatedly requested that AYPCO cease work when she realized that the additional
work was being performed; and that the "weekly advances" given to her by AYPCO were
confusing, vague, and did not give her the written notice required under the contract.
AYPCO contends that Zorrilla requested all of the additional work that was performed;
that AYPCO detailed all of the additional work in the "weekly advances"; and that Zorrilla
was repeatedly late in making payments on the weekly invoices and then completely
ceased making payments in May 2007.
After Zorrilla refused to make further payments, AYPCO sued Zorrilla for breach of
contract and fraud.2 The breach of contract and fraud actions were based on Zorrilla's
alleged failure to pay the costs for the work done in May 2007 at N. 23rd Street and Plaza
del Lago. AYPCO also sought foreclosure of mechanics' liens it had attached to those
properties. The case was tried to a jury.
At the charge conference, Zorrilla asked for a jury question on prior material
breach by AYPCO for its failure to execute written change orders before performing the
additional work. The trial court denied Zorrilla's request. The jury then found that
Zorrilla breached her contract with AYPCO and awarded $54,264.15 in damages for the
N. 23rd Street project and $2,390 in damages for the Plaza del Lago project. The jury
awarded $150,000 in attorney's fees based on the contract action. The jury also found
that Zorrilla committed fraud and awarded the same damages for fraud as it awarded for
2
AYPCO also sued Zorrilla for quantum meruit, violation of the Texas Construction Fund Act,
negligent misrepresentation, defamation, and violation of the Prompt Payment Act. The defamation,
Construction Funds Act, and Prompt Payment Act claims were dismissed on directed verdict. The jury
rendered no verdict on the quantum meruit claim because the jury question on that claim was predicated on
a "no" answer to the breach of contract jury question. The negligent misrepresentation claim was not
submitted to the jury.
3
the contract verdict, a total of $56,654.15. In connection with the fraud verdict, the jury
additionally awarded $250,000 in exemplary damages.
In its motion for entry of judgment, AYPCO elected to recover under its fraud
claim. 3 In its judgment, the trial court awarded $56,654.15 in actual damages,
$45,877.48 in pre-judgment interest, $250,000 in exemplary damages, and $150,000 in
attorney's fees. The trial court also ordered that both properties be foreclosed and sold
to satisfy the judgment. Zorrilla filed a motion for new trial, arguing that the trial court
erred in failing to require AYPCO to elect remedies, that the evidence was insufficient to
support the verdict, that the exemplary damages should be reduced in accordance with
the statutory cap, that the liens were invalid, and that the trial court used an incorrect
pre-judgment interest calculation. The motion was overruled by operation of law, see
TEX. R. CIV. P. 329b(c), and this appeal followed.
II. Evidence of Fraud
Because AYPCO elected to recover on the jury's fraud verdict, we first address
Zorrilla's fifth issue, in which she argues that the evidence was legally and factually
insufficient to support the jury's finding that she committed fraud. See TEX. R. APP. P.
47.1. Specifically, Zorrilla argues that the evidence was insufficient to prove she never
intended to perform her part of the contract as promised.
A. Standard of Review
We will sustain a legal-sufficiency or no-evidence challenge if the record
shows: (1) the complete absence of evidence of a vital fact; (2) the court is barred by the
3
Counsel for AYPCO orally confirmed its fraud election at the hearing on its motion for entry of
judgment.
4
rules of law or 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 scintilla; or (4) the
evidence establishes conclusively the opposite of a vital fact. City of Keller v. Wilson,
168 S.W.3d 802, 810 (Tex. 2005). When reviewing a no-evidence challenge, we view
the evidence in the light most favorable to the finding, crediting favorable evidence if a
reasonable fact-finder could and disregarding contrary evidence unless a reasonable
fact-finder could not. Id. at 807. The ultimate test for legal sufficiency is whether the
evidence would enable reasonable and fair-minded people to make the finding under
review. Id. at 827. In reviewing a no-evidence issue, the court indulges every
reasonable inference in support of that finding. Id. at 822.
"Jurors are the sole judges of the credibility of the witnesses and the weight to give
their testimony. They may choose to believe one witness and disbelieve another.
Reviewing courts cannot impose their own opinions to the contrary." Id. at 819. "Most
credibility questions are implicit rather than explicit in a jury's verdict." Id. Therefore,
reviewing courts must assume that the jurors decided all credibility questions in favor of
the verdict if reasonable persons could do so. Id. "Courts reviewing all the evidence in
a light favorable to the verdict thus assume that jurors credited testimony favorable to the
verdict and disbelieved testimony contrary to it." Id.
In reviewing a factual-sufficiency challenge to a jury finding on an issue on which
the appellant did not have the burden of proof, as is the case here, we consider and weigh
all of the evidence and set aside the verdict only if the evidence that supports the jury
finding is so weak as to make the verdict clearly wrong and manifestly unjust. See Cain
5
v. Bain, 709 S.W.2d 175, 176 (Tex. 1986) (per curiam); Ins. Network of Tex. v. Kloesel,
266 S.W.3d 456, 469–70 (Tex. App.—Corpus Christi 2008, pet. denied). In our
factual-sufficiency review, we consider and weigh all the evidence, but like in our
legal-sufficiency review, we defer to the jury as the sole judge of the witnesses' credibility.
Dow Chem. Co. v. Francis, 46 S.W.3d 237, 242 (Tex. 2001); see Golden Eagle Archery,
Inc. v. Jackson, 116 S.W.3d 757, 761 (Tex. 2003). The jury may choose to believe one
witness over another, and a reviewing court may not impose its own opinion to the
contrary. Golden Eagle Archery, 116 S.W.3d at 761.
B. Applicable Law
In the context of a civil jury trial, the sufficiency of the evidence is reviewed in light
of the charge submitted if no objection is made to the charge. Romero v. KPH
Consolidation, Inc., 166 S.W.3d 212, 221 (Tex. 2005); Wal-Mart Stores, Inc. v. Sturges,
52 S.W.3d 711, 715 (Tex. 2001). Here, Zorrilla made no objections to the fraud
question, so we will review the evidence in light of the law included in the charge
submitted to the jury in this case. The fraud question in this case provided as follows:
Did MIRTA ZORRILLA commit fraud against AYPCO CONSTRUCTION II,
LLC?
Fraud occurs when:
a. a party makes a material misrepresentation, and
b. the misrepresentation is made with knowledge of its falsity or made
recklessly without any knowledge of the truth and as a positive
assertion, and
c. the misrepresentation is made with the intention that it should be
acted on by the other party, and
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d. the other party relies on the misrepresentation and thereby suffers
injury.
"Misrepresentation" means:
A false statement of fact, or
A promise of future performance made with an intent, at the time the
promise was made, not to perform as promised.
Zorrilla's fifth issue focuses on whether there was sufficient evidence of the
requisite fraudulent intent—i.e., under the law in the charge here, whether there was
evidence that, at the time Zorrilla made her promise under the contract, she did not intend
to perform.
"A promise of future performance constitutes an actionable
misrepresentation if the promise was made with no intention of performing
at the time it was made." [Formosa Plastics Corp. v. Presidio Eng'rs &
Contractors, Inc., 960 S.W.2d 41, 48 (Tex. 1998)]. "Proving that a party
had no intention of performing at the time a contract was made is not easy,
as intent to defraud is not usually susceptible to direct proof." Tony Gullo
Motors I, L.P. v. Chapa, 212 S.W.3d 299, 305 (Tex. 2006) (citing Spoljaric v.
Percival Tours, Inc., 708 S.W.2d 432, 435 (Tex. 1986)). While breach of
the contract alone is not evidence that a party did not intend to perform,
"breach combined with 'slight circumstantial evidence' of fraud" is some
evidence of fraudulent intent, enough to support a verdict. Id. "[A] party's
intent is determined at the time the party made the representation, [but] it
may be inferred from the party's subsequent acts after the representation is
made." Spoljaric, 708 S.W.2d at 434 (citing Chicago, T. & M.C. Ry. Co. v.
Titterington, 84 Tex. 218, 19 S.W. 472, 474 (1892)).
Aquaplex, Inc. v. Rancho La Valencia, Inc., 297 S.W.3d 768, 774–75 (Tex. 2009) (per
curiam). Although circumstantial evidence may be used to establish any material fact, it
must transcend mere suspicion; there must be a logical bridge between the proffered
evidence and the fact. IKON Office Solutions, Inc. v. Eifert, 125 S.W.3d 113, 124 (Tex.
App.—Houston [14th Dist.] 2003, pet. denied) (citation omitted). Regardless, intent is a
7
fact question uniquely within the realm of the trier of fact because it depends so heavily on
the credibility of witnesses and the weight given to their testimony. Spoljaric, 708
S.W.2d at 434.
C. The Evidence
At trial, AYPCO's owner, Munoz, testified that he and Zorrilla signed a contract in
early December 2006 for Munoz to complete the construction of Zorrilla's new home on N.
23rd Street. The written contract, signed by both parties, was admitted into evidence.
The estimate for the work detailed in the contract was $212,973. The contract provided
that any variations in the "prices, measurements and configuration of this estimate" may
result in extra charges at Zorrilla's expense.
Munoz testified that, during the entire project, he would speak to Zorrilla two to four
times a day and that she was at the construction site nearly every day before and after
she went to work. Munoz testified that Zorrilla requested numerous modifications to the
main house construction throughout the project. Munoz explained to Zorrilla that each of
the modifications would cost more and increase the construction time.
Munoz then testified that Zorrilla requested that he construct a guest house on the
N. 23rd Street property. Munoz designed the guest house per Zorrilla's specifications
and gave her an estimate of $149,460 for its construction. Zorrilla also requested that
AYPCO construct a roof-like structure connecting the guest house to the main house.
When they were discussing this additional structure, Zorrilla told Munoz that she did not
have enough money to pay for the finished project. Munoz testified that Zorrilla
nonetheless ordered him to complete construction of the guest house and connecting
8
structure. Munoz testified that Zorrilla was onsite on the day construction began on the
guest house. An invoice was admitted into evidence that expressly detailed work on the
guest house; Munoz testified that Zorrilla had been given a copy of that invoice and had
written a check for payment of that invoice. Munoz testified that the revised total
estimate, which included the original contract work, the guest house, and the other
requested modifications, was approximately $540,000.
Munoz testified that, from the beginning, Zorrilla was repeatedly late in making her
payments. He testified that when he would question Zorrilla about the late payments,
she would become angry. In May 2007, Zorrilla stopped making payments. Munoz
testified that he was not asked to stop work on the project until June 4, 2007, at which
point Zorrilla and her attorney asked Munoz to hand over his key, to not return to the
construction site, and to send any future communications to Zorrilla through her attorney.
Munoz testified that when he stopped work, approximately seventy percent of the guest
house project had been completed.
Mario Arevalo, one of Munoz's subcontractors, testified that he has done cabinet,
framing, and other workworking since 1985 and has worked with AYPCO since 2002.
Arevalo testified that Zorrilla was at the N. 23rd Street construction site regularly.
Throughout the project, Zorrilla asked Arevalo to make numerous changes to the original
specifications; when she asked Arevalo for a modification, she told him to pass that
information along to Munoz.
There was also testimony from an electrician who worked on the N. 23rd Street
house before AYPCO took over the project. Gaston Palma testified that he contracted
9
directly with Zorrilla for the work. Palma testified that he completed the electrical work,
but because of a dispute between Zorrilla and the then-carpenter on the project, the walls
were never built over the wiring. Zorrilla had requested the carpenter to move a wall,
which was a deviation from the original plan. The carpenter informed Zorrilla that it
would cost more to move the wall, but Zorrilla did not want to pay the additional cost.
Zorrilla and the carpenter never came to an agreement and, in the time they were
disputing the issue, the exposed wires were stolen from the construction site. Zorrilla
then refused to pay Palma. Palma testified that he later learned that Zorrilla had
collected an insurance settlement for the stolen wires. After learning that, he "didn't want
to deal with" Zorrilla any longer. He filed a lien on the N. 23rd Street house for the
amount Zorrilla failed to pay him.
Finally, Zorrilla testified as to her version of the events surrounding the
construction project. She testified that she hired Munoz at her accountant's
recommendation to finish the construction of the house at N. 23rd Street. With regard to
the first contractor who worked on the house, Zorrilla testified that he was a friend and that
she did not end up paying him because he did not charge her. However, counsel for
AYPCO then attempted to impeach Zorrilla by admitting her deposition testimony, in
which she stated that she did not pay the original contractor because he did not supervise
the project to her satisfaction. In her deposition, Zorrilla also referred to the original
contractor as a friend, stated that he was supervising the construction of the N. 23rd
Street house as a favor, and stated that they ended their business relationship on friendly
terms when it became apparent that the contractor did not have time to supervise
10
Zorrilla's project.
Zorrilla testified that she was at the construction site as much as possible, but was
very busy at work during this time period. She testified that she did not go to the site to
supervise, but merely to check on the progress of the house. She continued to pay the
charges invoiced by Munoz but did not pay attention to the details because she was so
busy. In the end, Zorrilla had paid AYPCO approximately $366,000.
Zorrilla denied that she requested any modifications to the main house project.
She confirmed that she paid several invoices that referenced "modifications" to the
project. But, in general, she was unsatisfied with the amount of detail in the invoices
Munoz gave her. She testified that she repeatedly asked Munoz for a more specific
breakdown of the project costs, but the most he ever brought her was a binder of invoices
and other paperwork, which, Zorrilla testified, contained only Munoz's name and not
Zorrilla's address, account number, or any other information to identify Zorrilla's project.
Zorrilla also denied that she asked Munoz to build a guest house. She confirmed
that she saw the 2,300 square foot guest house being built, but "trusted" Munoz and
continued paying because her accountant advised her to do so. She testified that
Munoz built the guest house "against her wishes."
Finally, Zorrilla denied that she requested that AYPCO perform any work at her
Plaza del Lago house. She denied that any of Munoz's subcontractors had done work at
the Plaza del Lago house.
Zorilla testified that she told Munoz to stop work on the project at the end of April
2007 and that she did not understand why he continued to work through May. She
11
testified that she did not observe any substantive work being done on her property during
May 2007—no painting, no tape-and-float work, no electrical work. She testified that she
hired a lawyer to force Munoz to stop work and leave the work site.
D. Analysis
Zorrilla argues that there is no evidence showing she never intended to perform
her obligations under the contract and that the evidence showed no acts inconsistent with
an intent to perform. See Aquaplex, Inc., 297 S.W.3d at 774 (citing Formosa Plastics
Corp., 960 S.W.2d at 48). We disagree. Although there is no direct evidence of
fraudulent intent, such evidence is rarely available. See Tony Gullo Motors I, L.P., 212
S.W.3d at 305. And the circumstantial evidence before the jury here, combined with
Zorrilla's failure to fully pay for the work performed, was sufficient to prove the requisite
intent. See Spoljaric, 708 S.W.2d at 435.
The most compelling circumstantial evidence of Zorrilla's fraudulent intent was her
denial that she requested the construction of a guest house coupled with her failure to pay
the full cost of the contract. The subsequent denial of a promise to perform coupled with
nonperformance is sufficient to prove fraudulent intent at the time of making the promise
to perform. See Finch v. McVea, 543 S.W.2d 449, 452 (Tex. Civ. App.—Corpus Christi
1976, writ ref'd n.r.e.) (citing Stone v. Williams, 358 S.W.2d 151, 155 (Tex. Civ.
App.—Houston 1962, no writ)). Here, Munoz testified that Zorrilla specifically ordered
him to construct a guest house and a structure connecting the guest house to the main
house. Despite evidence that she was at the construction site daily, Zorrilla denied any
knowledge of the guest house project. This denial of her earlier promise, coupled with
12
her ultimate refusal to pay the full contract price, were circumstances from which the jury
could infer she never intended to perform.
In addition to the above, there was evidence that Zorrilla was repeatedly late in
making payments to AYPCO. Munoz testified that Zorrilla would become angry when he
questioned her about the late payments. There was also evidence from which the jury
could conclude that Zorrilla had a habit or pattern of manufacturing reasons not to pay the
contractors working on this project. As noted above, she adamantly denied any
knowledge of the guest house project yet admitted paying invoices that specifically
included costs for the guest house construction. She testified that she was rarely at the
construction site, but the testimony of Munoz and others involved with the project placed
her at the site on a daily basis. She claimed that she did not pay her first contractor
because he did not charge her but was then confronted with her deposition in which she
testified that she did not pay him because she was unsatisfied with his work. She
refused to pay Palma, the first electrician on the project, because the wiring had been
stolen while the reason for the stolen wiring was Zorrilla's dispute with the carpenter.
There was even evidence that Zorrilla collected an insurance settlement for the stolen
wiring, but still refused to pay Palma.4 Finally, Munoz testified that Zorrilla told him she
4
Although the testimony regarding the first contractor and electrician was evidence of misconduct
prior to Zorrilla's contract with AYPCO, the evidence of the prior acts involved the same construction project
and involved acts occurring less than two months prior to Zorrilla's contract with AYPCO. The Texas
Supreme Court has held that
Evidence of other wrongs or acts is not admissible to prove character in order to show
"action in conformity therewith." TEX. R. EVID. 404. But it is admissible to show a party's
intent, if material, provided the prior acts are "so connected with the transaction at issue
that they may all be parts of a system, scheme or plan." Oakwood Mobile Homes, Inc. v.
Cabler, 73 S.W.3d 363, 375 (Tex. App.—El Paso 2002, pet. denied); see TEX. R. EVID. 404.
This can be shown through evidence of similar acts temporally relevant and of the same
substantive basis. See Durbin v. Dal-Briar Corp., 871 S.W. 2d 263, 268–69 (Tex.
13
did not have enough money to pay for the finished project, which was testimony from
which the jury could infer that Zorrilla would pay as long as she had the money to pay, but
that if she ran out of money, she may not pay anything further. In short, in light of the
inconsistencies in Zorrilla's testimony, her refusal to pay earlier contractors, and her
apparent disregard for maintaining adequate funding to finish out the project, it would not
have been unreasonable for the jury to find a pattern of misconduct by Zorrilla, namely
that she would routinely manufacture reasons to not pay for the work performed on this
construction project. See Serv. Corp. Int'l v. Guerra, 348 S.W.3d 221, 235 (Tex. 2011)
(holding that evidence of prior acts of misconduct are admissible if they are so connected
to the transaction at issue that they show a system, scheme, or plan); see also Haggar
Clothing Co. v. Hernandez, 164 S.W.3d 407, 424 (Tex. App.—Corpus Christi 2003), rev'd
on other grounds, 164 S.W.3d 386 (Tex. 2005) (same). And the foregoing were all acts
and circumstances from which the jury could have inferred that Zorrilla never intended to
fully perform her obligation to fully pay AYPCO.5
Zorrilla also argues that her substantial performance on the contract—her
payment of $366,000, which was significantly more than the $212,973 included in the
original estimate—was an overriding fact that no reasonable juror could have ignored,
App.—El Paso 1994, writ denied), overruled, in part, on other grounds by Golden Eagle
Archery, Inc. v. Jackson, 24 S.W.3d 362 (Tex.2000).
Serv. Corp. Int'l v. Guerra, 348 S.W.3d 221, 235 (Tex. 2011); see also Haggar Clothing Co. v. Hernandez,
164 S.W.3d 407, 424 (Tex. App.—Corpus Christi 2003), rev'd on other grounds, 164 S.W.3d 386 (Tex.
2005). Here, as described above, we conclude that AYPCO adduced sufficient facts at trial connecting
Zorrilla's prior acts to the transaction at issue such that a pattern of misconduct was shown.
5
The foregoing could be considered circumstantial evidence of Zorrilla's intent at the time of the
original contract's formation in November 2006 and her intent at the time of the requested modifications.
Thus, whether Munoz complied with the terms of the contract—which required modifications to be in
writing—is irrelevant to our conclusion.
14
and in light of that fact, any circumstantial evidence of fraud should have been
disregarded. See City of Keller, 168 S.W.3d at 807. Again, we disagree. As
discussed above, there was evidence that, if the circumstances were such that Zorrilla
could not pay, she might not. It matters not that she paid part of the price. An essential
element of the contract was full payment, and there was circumstantial evidence from
which the jury could have inferred that she never intended to fulfill her entire obligation
under the contract. The jury did not act unreasonably in crediting this circumstantial
evidence over the evidence that Zorilla made partial payment; the law did not require
jurors to entirely disregard the circumstantial evidence in light of Zorrilla's partial payment.
Cf. E.P. Towne Ctr. Partners, L.P. v. Chopsticks, Inc., 242 S.W.3d 117, 124–25 (Tex.
App.—El Paso 2007, no pet.) ("[T]he doctrine of substantial performance is not available
to a party whose breach involves the omission of essential performance."); Smith v.
Smith, 112 S.W.3d 275, 279 (Tex. App.—Corpus Christi 2003, pet. denied) (holding that
while substantial performance can be used as a defense in a breach of contract case, in
determining substantial performance, there must be no willful departure from the terms of
the contract and no omission of essential elements of the contract).
We conclude there was both legally and factually sufficient evidence to support the
jury's fraud verdict. Zorrilla's acts prior and subsequent to her promise to AYPCO were
circumstantial evidence of her fraudulent intent, and we will not disturb the jury's
determination in this regard. See Aquaplex, Inc., 297 S.W.3d at 774–75; Spoljaric, 708
S.W.2d at 434–35 (holding that intent is a fact question uniquely within the realm of the
trier of fact because it depends so heavily on the credibility of witnesses and the weight
15
given to their testimony); see also Serv. Corp. Int'l, 348 S.W.3d at 235. In other words,
the circumstantial evidence detailed above, even if only slight, was sufficient to create
more than a mere suspicion and supported a reasonable fact finder's conclusion that
Zorrilla never intended to fully pay AYPCO. See City of Keller, 168 S.W.3d at 807, 827;
see also Aquaplex, Inc., 297 S.W.3d at 774–75; IKON Office Solutions, Inc., 125 S.W.3d
at 124. For the same reasons, we also cannot conclude that the evidence was so weak
as to make the verdict clearly wrong and manifestly unjust. See Cain, 709 S.W.2d at
176. Zorrilla's fifth issue is overruled.6
III. Whether the Judgment Gave AYPCO a Double Recovery
By her sixth issue, Zorrilla argues that the trial court's award to AYPCO of both
exemplary damages and attorney's fees violated the "one satisfaction rule" and allowed
AYPCO to recover on both its fraud and breach of contract causes of action even though
both theories involved a single injury.
When a defendant commits the same, or even differing, acts resulting in a single
injury, a plaintiff is permitted to allege alternative theories of recovery. See Waite Hill
Servs., Inc. v. World Class Metal Works, Inc., 959 S.W.2d 182, 184–85 (Tex. 1998); see
also Crown Life Ins. v. Casteel, 22 S.W.3d 378, 390 (Tex. 2000). However, under these
circumstances, the plaintiff may not recover damages on both theories. Waite Hill
Servs., Inc., 959 S.W.2d at 184 (citing Stewart Title Guar. Co. v. Sterling, 822 S.W.2d 1, 7
(Tex. 1991)). This would amount to a "double recovery" for a single injury, which is
6
Having concluded that the fraud verdict was supported by legally and factually sufficient
evidence, the jury's breach of contract verdict is not before us in this appeal. See TEX. R. APP. P. 47.1.
Therefore, we do not reach Zorrilla's first and second issues that involve the breach of contract finding.
See id.
16
clearly prohibited under the law. See id.
Here, AYPCO does not dispute that its breach of contract and fraud causes of
action concerned the same conduct by Zorrilla and the same injury—Zorrilla's failure to
pay the costs for the work done in May 2007 at the N. 23rd Street and Plaza del Lago
properties and the costs incurred by AYPCO as a result. And the dispute in this case
does not concern the double recovery of economic damages. Neither party disputes that
AYPCO was entitled to recover either its breach of contract damages or its fraud
damages, but not both. Because AYPCO elected to recover under its fraud theory, it
was entitled only to its fraud damages.
Rather, Zorrilla's argument is that by allowing AYPCO to recover both attorney's
fees—which are typically permitted only in breach of contract cases or other cases
authorized by statute—and exemplary damages—which are typically permitted only for
tortious conduct, such as fraud—the trial court allowed AYPCO to recover under both
theories when it was required to pick only one. In response, AYPCO contends that
attorney's fees were recoverable for its fraud claim because the fraud arose from a
breach of contract. See Schindler v. Austwell Farmers Co-op, 829 S.W.2d 283, 288
(Tex. App.—Corpus Christi 1992) (holding that attorney's fees are recoverable for fraud
claims when the fraud arises from breach of contract), aff'd as modified on other grounds,
841 S.W.2d 853 (Tex. 1992).
Contrary to AYPCO's contention, in general, attorney's fees are not recoverable in
a fraud claim, even when the fraud arose from a breach of contract. See MBM Fin. Corp.
17
v. Woodlands Operating Co., 292 S.W.3d 660, 667–68 (Tex. 2009)7; Bus. Staffing, Inc. v.
Jackson Hot Oil Serv., No. 08–11–00092–CV, 2012 WL 2627533, at *16 (Tex. App.—El
Paso July 5, 2012, pet. denied) ("For fraud, a party could recover economic damages,
mental anguish, and exemplary damages, but not attorney's fees."). As such, under its
fraud election, AYPCO was entitled to recover its economic damages and exemplary
damages, but not attorney's fees. In also awarding AYPCO attorney's fees, the trial
court allowed AYPCO to recover something it would only have been permitted to recover
under its breach of contract theory. See MBM Fin. Corp., 292 S.W.3d at 667–68; Tony
Gullo Motors I, L.P., 212 S.W.3d at 310–11 (holding that Texas follows the American
Rule, which provides that there can be no recovery of attorney's fees unless authorized
by contract or statute); see also TEX. CIV. PRAC. & REM. CODE ANN. § 38.001 (West 2008).
This was an impermissible double recovery, and the trial court's judgment in this regard is
erroneous. See Waite Hill Servs., Inc., 959 S.W.2d at 184–85. We sustain Zorrilla's
sixth issue.
IV. Amount of Exemplary Damages
By her seventh issue, Zorrilla challenges the amount of exemplary damages
awarded by the jury. Specifically, Zorrilla argues that the amount of exemplary
damages: (1) exceeds the statutory cap and should be reduced accordingly; (2) violates
both the United States and Texas constitutions; and (3) was not supported by the
evidence.
7
The Texas Supreme Court's holding in MBM Financial, that attorney's fees are generally not
recoverable for a fraud action even when the fraud arises from a contract, overrules this Court's broad
holding in Schindler to the contrary. See MBM Fin. Corp. v. Woodlands Operating Co., 292 S.W.3d 660,
667–68 (Tex. 2009); Schindler v. Austwell Farmers Co-op, 829 S.W.2d 283, 288 (Tex. App.—Corpus
Christi 1993), aff'd as modified on other grounds, 841 S.W.2d 853 (Tex. 1992).
18
A. The Statutory Cap
Under civil practice and remedies code section 41.008,
[e]xemplary damages awarded against a defendant may not exceed an
amount equal to the greater of:
(1) (A) two times the amount of economic damages; plus
(B) an amount equal to any noneconomic damages found by the
jury, not to exceed $750,000; or
(2) $200,000.
TEX. CIV. PRAC. & REM. CODE ANN. § 41.008(b) (West Supp. 2011). The cap does not
apply when a plaintiff seeks recovery of exemplary damages based on certain felony
criminal conduct enumerated in subsection 41.008(c), i.e., "cap-busting" conduct. See
id. § 41.008(c)(1)–(17). Here, under the statute, AYPCO's exemplary damages would
have been capped at $200,000.
Citing Texas Rule of Civil Procedure 94, this Court has held that the statutory cap
on exemplary damages is an affirmative defense and the defendant must specifically
plead it or else it is waived. Wackenhut Corrections Corp. v. De La Rosa, 305 S.W.3d
594, 651, 653 (Tex. App.—Corpus Christi 2009, no pet.); see TEX. R. CIV. P. 94 ("In
pleading to a preceding pleading, a party shall set forth affirmatively . . . any other matter
constituting an avoidance or affirmative defense."). In so holding, we reasoned that "a
defendant's pleading of an affirmative defense puts the plaintiff on notice that the
affirmative defense needs to be defeated, and it allows the plaintiff to structure his or her
case in order to defeat the affirmative defense, if possible"; in other words, with regard to
the statutory cap in particular, a plaintiff is "entitled to notice that [the defendant] intend[s]
19
to assert the cap so that its case [can] be structured to present a 'cap-busting' theory."
Wackenhut Corrections Corp., 305 S.W.3d at 652–53.
Zorrilla concedes that she did not specifically plead the statutory cap as an
affirmative defense, instead raising it for the first time in her motion for new trial. She
asserts that under In re Columbia Medical Center of Las Colinas, her motion for new trial
was sufficient to raise the issue of the cap. See 306 S.W.3d 246, 247–48 (Tex. 2010)
(per curiam). In In re Columbia, the supreme court addressed an issue raised by its
mandate in a prior proceeding in the same case. Id. at 247. The supreme court's
mandate in the prior case reduced the plaintiff's economic damages award. Id. After
issuance of the mandate, the defendant attempted to make payment to the plaintiff of the
amount of economic and punitive damages affirmed by the supreme court, but the plaintiff
refused payment. Id. The defendant filed a motion in the trial court "requesting [a
judgment] that would effectuate [the supreme court's] mandate by reducing the economic
damages award appropriately, as well as by reducing the punitive damages award to
twice the amount of the economic damages award [the supreme court] affirmed, plus
interest." Id.; see also TEX. CIV. PRAC. & REM. CODE ANN. § 41.008(b)(1). The trial court
denied the defendant's motion, and the defendant then filed a petition for mandamus with
the supreme court. In re Columbia, 306 S.W.3d at 247. Noting that "[p]unitive damages
awards that are statutorily capped are required to be recalculated when the actual
damages against which they are measured are reduced on appeal," the supreme court
held that
regardless of whether an appellate court judgment expressly commands it,
trial courts must give effect to statutory caps on damages when the parties
20
raise the issue. Accordingly, to give full effect to our judgment vacating a
portion of economic damages, the trial court was required to reduce the
punitive damages award in compliance with the statutory cap.
Id. at 248 (emphasis added).
Because the supreme court applied the statutory cap "as a matter of law" when the
defendant had raised the issue "in a post-trial motion," Zorrilla argues that the implicit
holding of In re Columbia is that the statutory cap is not an affirmative defense and can be
raised by the defendant at any point. See id.; see also THI of Tex. at Lubbock I, LLC v.
Pena, 329 S.W.3d 548, 588 (Tex. App.—Amarillo 2010, pet. denied) (citing In re
Columbia in holding that the statutory cap is not an affirmative defense). In short, Zorrilla
argues that In re Columbia overruled our holding in Wackenhut. We disagree—In re
Columbia takes no such position on the procedural requirements of the statutory cap.
While it is true that the supreme court was addressing the statutory cap pursuant to
a motion filed by the defendant after the supreme court issued its mandate in the
underlying case, the time and manner by which the cap was raised by the defendant are
not entirely clear. From the facts set forth in In re Columbia, we cannot eliminate the
possibility that the statutory cap was raised before trial. Indeed, in its description of the
underlying proceeding, the supreme court actually implied that the cap had been raised
earlier. In re Columbia, 306 S.W.3d at 247 (citing the statutory cap in its discussion of
the original economic and punitive damages awards). Regardless, without more
certainty regarding the procedural history of the underlying case, we are not persuaded
by this portion of Zorrilla's reasoning.
Neither are we persuaded that the phrase "applies as a matter of law" overrules
21
the opinions of our court and other courts of appeal holding that the statutory cap must be
affirmatively pled. See Wackenhut, 305 S.W.3d at 651–53; Horrizon/CMS Healthcare
Corp. v. Auld, 985 S.W.2d 216, 233 (Tex. App.—Fort Worth 1999), rev'd in part on other
grounds, 34 S.W.3d 887 (Tex. 2000). Rather, as mentioned above, the supreme court
made no clear pronouncement on the issue. In short, our justification in Wackenhut
remains—the purpose of requiring the statutory cap to be affirmatively pled is allowing the
plaintiff opportunity to structure its case in response.
Finally, Zorrilla argues that the procedural facts of this case do not support the
application of Wackenhut's reasoning because AYPCO had no potential cap-busting
theories. Even if AYPCO did not initially allege cap-busting conduct, given the
ever-evolving nature of litigation, it was not outside the realm of possibility that discovery
would uncover cap-busting conduct—for example, securing execution of documents by
deception, forgery, fraudulent destruction, removal or concealment of a writing, or theft,
see TEX. CIV. PRAC. & REM. CODE ANN. § 41.008(c)(8), (11), (12), (13)—connected with
the alleged fraud. Because Zorrilla did not plead the statutory cap, AYPCO had no
reason to seek evidence of cap-busting conduct. As such, the rationale of Wackenhut
certainly applies; AYPCO was entitled to notice that Zorrilla was asserting the statutory
cap so that it could structure its strategy and proof at trial accordingly.
In sum, we are not persuaded that In re Columbia conflicts with our holding in
Wackenhut, and we therefore decline to overrule our precedent in that case. Thus,
following Wackenhut, we conclude that Zorrilla waived application of the statutory cap on
exemplary damages by failing to expressly plead it as an affirmative defense. See 305
22
S.W.3d at 652–53. Zorrilla's seventh issue is overruled insofar as it depends on this
argument.
B. Constitutionality of the Amount
Having concluded that AYPCO's exemplary damages award was not subject to the
statutory cap, we next address Zorrilla's argument that the $250,000 awarded by the jury
as exemplary damages was unconstitutional.
"The Due Process Clause 'prohibits a [s]tate from imposing a grossly excessive
punishment on a tortfeasor.'" Owens-Corning Fiberglas Corp. v. Malone, 972 S.W.2d
35, 45 (Tex. 1998) (quoting BMW of N. Am. v. Gore, 517 U.S. 559, 562 (1996)). In
reviewing exemplary damages, we consider three guideposts: (1) the degree of
reprehensibility of the defendant's misconduct; (2) the disparity between the actual or
potential harm suffered by the plaintiff and the exemplary damages award; and (3) the
difference between the exemplary damages awarded by the jury and the civil or criminal
penalties authorized or imposed in comparable cases. State Farm Mut. Auto. Ins. Co. v.
Campbell, 538 U.S. 408, 418 (2003); Malone, 972 S.W.2d at 45; Tony Gullo Motors, 212
S.W.3d at 308–09.
1. Reprehensibility
The reprehensibility of the defendant's conduct is the "most important indicium of
the reasonableness of a punitive damages award." Campbell, 538 U.S. at 419. In
assessing reprehensibility, we consider whether the following factors are present: (1)
the plaintiff's health or safety, as opposed to its economic well-being, was endangered;
(2) the tortious conduct evidenced a reckless disregard for or indifference to the health or
23
safety of others; (3) the plaintiff was financially vulnerable; (4) the conduct was repeated;
and (5) the injury was the result of malice, trickery, or deceit. Id. Further, "a
reprehensibility analysis can . . . consider, to some extent, surrounding circumstances
beyond the underlying tort," particularly if those surrounding circumstances "go to motive,
underscore the parties' animosity, shed light on provocation, demonstrate deliberateness
and culpability, and otherwise show heightened reprehensibility." Bennett v. Reynolds,
315 S.W.3d 867, 875 (Tex. 2010). Although "a jury cannot use exemplary damages to
punish a defendant for harming nonparties," "related conduct 'may be probative when it
demonstrates the deliberateness and culpability of the defendant's action,' provided that
the conduct bears 'a nexus to the specific harm suffered by the plaintiff.'" Id. at 875–76
(quoting Philip Morris USA v. Williams, 549 U.S. 346, 353, 355 (2007); Campbell, 538
U.S. at 422).
Here, although it is true that the harm to AYPCO was purely economic, there was
evidence of conduct by Zorrilla bearing on two of the other reprehensibility factors. First,
having upheld the jury's fraud finding in which it was determined that Zorrilla made an
intentional material misrepresentation, it is clear that her conduct rose to the level of
trickery or deceit contemplated by the fifth factor.8 Second, there was evidence that
Munoz and AYPCO were financially vulnerable. Munoz testified that Zorrilla's late
payments put a strain on his finances because he had to pay his workers whether or not
Zorrilla made her payments. Munoz testified that he essentially bankrolled the project as
a result of the late payments, which eventually ruined his personal and commercial credit.
8
Zorrilla concedes in her brief that if we were to find the evidence sufficient to support AYPCO's
fraud claim, the trickery and deceit factor "would apply because AYPCO's fraud claim predicated exemplary
damages on Zorrilla intentionally deceiving AYPCO."
24
Because of the financial burden of Zorrilla's project, Munoz lost his cars and his home in
foreclosure proceedings. Finally, there was evidence that Zorrilla was aware of Munoz
and AYPCO's financial vulnerability; Munoz testified that he explained to Zorrilla that he
had to have payment from her to ensure that his workers were paid at the end of each
week. As a result, Zorrilla arguably had knowledge that Munoz did not have a large
reserve of capital from which to pay his workers if Zorrilla did not make her payments.
In addition to the reprehensibility factors, there was evidence of surrounding
circumstances that further demonstrated Zorrilla's deliberateness and culpability. As
described above, Zorrilla failed to pay the contractor who worked on the project before
AYPCO and gave conflicting explanations for the failure to pay, one of which that she was
merely unsatisfied with the manner in which the project was being supervised. There
was also evidence that Zorrilla refused to pay Palma, the electrician who worked on the
house before AYPCO took over the project, because the wiring was stolen as a result of
her dispute with the then-carpenter. In other words, Zorrilla refused to pay Palma for
reasons beyond Palma's control. What's more, there was evidence that Zorrilla had
collected an insurance settlement for the stolen wires and still refused to pay Palma.
Although the foregoing is evidence of misconduct against non-parties, we believe
it has a sufficient nexus to the harm suffered by Munoz and AYPCO. The earlier conduct
concerned the same construction project. It was circumstantial evidence of a pattern of
deceit by Zorrilla in her interactions with the parties performing the work on her homes.
In short, it evinced a heightened level of reprehensibility above that shown by the
evidence related to Munoz and AYPCO alone. Thus, it was proper for the jury to
25
consider these surrounding circumstances in their determination of the amount of
exemplary damages.
2. The Ratio Between the Exemplary and Compensatory Damages
As to the second guidepost, we note that courts have held that a single-digit ratio
between the exemplary and actual damages would "more likely" comport with due
process, with the upper limit of that single-digit ratio generally considered to be four times
the amount of compensatory damages. See id. at 877; see also Campbell, 538 U.S. at
425; see, e.g., Malone, 972 S.W.2d at 46–47 (affirming an exemplary damages award of
"slightly more than" two times the compensatory damages). However, we also
recognize that there is no "bright-line ratio" between the actual damages suffered and
punitive damages awarded that will mandate the affirming or reversal of an award. See
Campbell, 538 U.S. at 424–25; see also Bennett, 315 S.W.3d at 879 ("[R]igid application
of a 4:1 ratio is not universally required.").
Here, the exemplary damages award ($250,000) was 4.41 times the amount of
compensatory damages ($56,654.15). Given the reprehensibility of Zorrilla's conduct,
as described above, we do not believe that a ratio 0.41 points greater than the 4 to 1 ratio
suggested by the supreme court runs afoul of the due process clause in this case.9 In
other words, the disparity between the actual harm suffered by AYPCO and the
exemplary damages awarded was not so great as to violate Zorrilla's due process rights.
9
Zorrilla contends that the 4.41 to 1 ratio in this case is akin to the 4.33 to 1 ratio held by the
supreme court to be unconstitutionally excessive in Tony Gullo Motors I, Inc. v. Chapa. See 212 S.W.3d
299, 308–10 (Tex. 2006). But in that case, the supreme court concluded that the 4.33 to 1 ratio was
impermissible because only one of the reprehensibility factors was present. Id. Here, there was evidence
of two reprehensibility factors and additional evidence of surrounding circumstances such that we cannot
conclude that a ratio of 4.41 to 1 is excessive.
26
3. The Penalty Comparison
The third and final guidepost requires the Court to examine the civil and criminal
penalties authorized or imposed in comparable cases. See Campbell, 538 U.S. at 428;
Malone, 972 S.W.2d at 45. Here, the most comparable civil penalty we found is the
$20,000 penalty in the Deceptive Trade Practices Act for fraud connected with a
consumer transaction. See TEX. BUS. & COM. CODE ANN. § 17.47(c) (West 2011). If
there were no comparable civil penalty, we could also consider the statutory damages
cap, which as discussed above, would have been $200,000 in this case. See TEX. CIV.
PRAC. & REM. CODE. ANN. § 41.008(b). The jury's $250,000 exemplary damages award
exceeded both of these comparators. However, the fraud of deceptive business
practices is also a crime, and the criminal punishment for this offense includes a possible
prison sentence. See TEX. PENAL CODE ANN. § 32.42(b)(12) (West 2011) (criminalizing a
material misrepresentations made in connection with the purchase of services as a class
A misdemeanor); see also id. § 12.21 (West 2011) (prescribing the punishment for a class
A misdemeanor as a fine up to $4,000 and a jail term of up to one year). The loss of
one's liberty and a criminal conviction are greater consequences than any monetary
penalty. See Pac. Mut. Life Ins. Co. v. Haslip, 499 U.S. 1, 23 (1991) (suggesting that
although the punitive damages in the case were twenty times greater than the
comparable civil fine, the possibility of imprisonment for the comparable criminal violation
was a greater concern).
4. Summary
Our analysis of the three guideposts weighs in favor of the exemplary damages
27
awarded by the jury. First, with regard to the reprehensibility guidepost, Zorrilla's
conduct amounted to trickery and deceit, there was evidence that Munoz was financially
vulnerable, and there was evidence of surrounding circumstances demonstrating a
pattern of deceit by Zorrilla. Second, the 4.41 to 1 ratio of exemplary to compensatory
damages was not per se unacceptable. Third, the potential imprisonment in connection
with a criminal fraud conviction is of greater consequence than the monetary penalty
imposed by the exemplary damages award, so the final guidepost weighs in favor of the
exemplary damages awarded. We therefore conclude that the exemplary damages in
this case did not violate Zorrilla's due process rights. See Campbell, 538 U.S. at 418;
Malone, 972 S.W.2d at 45; Tony Gullo Motors, 212 S.W.3d at 308–09. Zorrilla's seventh
issue is overruled in this regard.
C. Evidence Supporting the Amount
Zorrilla's final argument in her seventh issue is that the amount of exemplary
damages awarded by the jury was not supported by factually sufficient evidence.
We must review an award of exemplary damages with careful
scrutiny to ensure it is supported by the evidence, and we may vacate the
award or suggest a remittitur only if the award is "so factually insufficient or
so against the great weight and preponderance of the evidence as to be
manifestly unjust." Signal Peak Enters. of Tex., Inc. v. Bettina Invs., Inc.,
138 S.W.3d 915, 928 (Tex. App.—Dallas 2004, pet. struck) (citing Transp.
Ins. Co. v. Moriel, 879 S.W.2d 10, 30 (Tex. 1994)). In order to determine if
the exemplary damages awarded were reasonable, we consider the factors
set forth in Alamo National Bank v. Kraus, 616 S.W.2d 908, 910 (Tex.
1981), which include the nature of the wrong, the character of the conduct
involved, the degree of culpability of the wrongdoer, the situation and
sensibilities of the parties concerned, and the extent to which such conduct
offends a public sense of justice and propriety. Signal Peak, 138 S.W.3d
at 928; see also [SAS & Assocs., Inc. v. Home Mktg. Servicing, Inc., 168
S.W.3d 296, 305 (Tex. App.—Dallas 2005, pet. denied)].
28
Khorshid, Inc. v. Christian, 257 S.W.3d 748, 767 (Tex. App.—Dallas 2008, no pet.).
For primarily the same reasons we found them to be constitutional, we also believe
the exemplary damages awarded were supported by the evidence. Here, although the
harm to Munoz and AYPCO was economic, the evidence showed intentional acts of
deception by Zorrilla in both her dealings with AYPCO and her dealings with other parties
involved in the construction of her homes. The evidence showed that Munoz and
AYPCO were financially vulnerable, that Zorrilla was aware of this vulnerability, and that
Zorrilla's actions ruined Munoz's personal and commercial credit. Zorrilla's pattern of
deceptive dealings with the various parties involved was offensive to public notions of
fairness and propriety. In short, the evidence showed a degree of culpability on the part
of Zorrilla that rendered the exemplary damages awarded by the jury reasonable, and we
cannot conclude that the award was so against the great weight and preponderance of
the evidence as to be manifestly unjust. Zorrilla's seventh issue is overruled in this final
regard.
V. Pre-judgment Interest
By her third issue, Zorrilla argues that the trial court erred in awarding AYPCO
prejudgment interest under the Prompt Payment to Contractors Act (the Prompt Payment
Act) because AYPCO failed to prove it was contractually entitled to any payment for the
work performed in May 2007. See TEX. PROP. CODE ANN. § 28.002 (West 2000)
(providing for 1.5% prejudgment interest in a case where a property owner fails to pay a
contractor the agreed-upon amount within thirty-five days of payment request). Zorrilla
predicates this issue on her first issue, in which she argued that the evidence was
29
insufficient to support the jury's breach of contract finding. However, because AYPCO
elected its fraud damages and because we have found the evidence sufficient to support
the jury's fraud verdict, the jury's breach of contract finding is not before us in this appeal.
See TEX. R. APP. P. 47.1. Regardless, because the measure for breach of contract and
fraud damages submitted to the jury were identical, as discussed supra in Part III, we
conclude that the jury's answer to the fraud damages question established that AYPCO
was entitled, under an agreement between it and Zorrilla, to payment for the work in May
2007. Accordingly, when it proved that Zorrilla did not make timely payment on that
agreement under the fraud charge, AYPCO became entitled to the prejudgment interest
available in the Prompt Payment Act. See TEX. PROP. CODE ANN. § 28.002(a). The trial
court therefore did not err in including prejudgment interest under the Act in the judgment.
Zorrilla's third issue is overruled.
VI. Mechanic's Liens
By her fourth issue, Zorrilla argues that the trial court erred in foreclosing on a
constitutional lien on the Plaza del Lago property and a statutory lien on the N. 23rd Street
property. Zorrilla argues that both liens "require at least proof of a contractor's
performance and the existence of a debt." See AMX Enters., L.L.P. v. Master Realty
Corp., 283 S.W.3d 506, 522 (Tex. App.—Fort Worth 2009, no pet.) (constitutional lien);
MG Bldg. Materials, Ltd. v. Moses Lopez Custom Homes, Inc., 179 S.W.3d 51, 59 (Tex.
App.—San Antonio 2005, pet. denied) (statutory lien). As in her prejudgment interest
issue, Zorrilla predicates this argument on her first issue, in which she argued that the
evidence was insufficient to support the jury's breach of contract finding. However, we
30
note, again, that because AYPCO elected its fraud damages and because we have found
the evidence sufficient to support the jury's fraud verdict, the jury's breach of contract
finding is not before us in this appeal. See TEX. R. APP. P. 47.1. Regardless, for the
same reasons we upheld the trial court's inclusion of prejudgment interest under the
Prompt Payment Act, we likewise conclude that the jury's fraud finding, which was
supported by the evidence, was sufficient to satisfy the requirement that there was proof
of AYPCO's performance and the existence of a debt from Zorrilla's failure to pay.
With regard to the constitutional lien, in particular, Zorrilla asserts that the Plaza del
Lago home was her homestead and argues that AYPCO failed to provide the trial court
with proof that the requirements for filing a constitutional lien against a homestead were
complied with. See TEX. CONST. art. XVI, § 50(a)(5)(A)–(D) (providing that a
constitutional lien may not be enforced against a homestead unless the homeowner,
among other requirements, signs a written contract for labor that includes an express
three-day rescission period and the contract is recorded). The plea of homestead is an
affirmative defense and the burden of pleading and proving such a defense rests upon
the party asserting it. Watson v. Tipton, 274 S.W.3d 791, 800 (Tex. App.—Fort Worth
2008, pet. denied); Bennett v. State Nat'l Bank, Odessa, Tex., 623 S.W.2d 719, 722 (Tex.
Civ. App.—Houston [1st Dist.] 1981, writ ref'd n.r.e.). Here, Zorrilla never pleaded that
the Plaza del Lago property was her homestead. In fact, we note that in her motion for
new trial, Zorrilla argued that the statutory lien on the N. 23rd Street property was not
properly executed under the requirements for liens on homesteads, which suggests that
at the time of that motion, Zorrilla claimed the N. 23rd Street property as her homestead.
31
See McKee v. Wilson, 174 S.W.3d 842, 844 (Tex. App.—Waco 2005, no pet.) (citations
omitted) (holding that once a homestead is established, it is presumed to continue until it
is abandoned, which requires proof of an intent not to return to the previous homestead
and overt acts consistent with that intent). The only evidence in the record relevant to
this argument is Zorrilla's testimony at trial that she lived in the Plaza del Lago home while
the N. 23rd Street home was being constructed. This testimony was not sufficient to
show a "concurrence of usage and intent on the part" of Zorrilla to "claim the land as a
homestead," especially in light of her motion for new trial. See Salomon v. Lesay, 369
S.W.3d 540, 554 (Tex. App.—Houston [1st Dist.] 2012, no pet.) (internal quotations
omitted); see also McKee, 174 S.W.3d at 844. Because Zorrilla did not plead and prove
that the Plaza del Lago property was her homestead, she cannot complain on appeal,
with regard to that property, of AYPCO's failure to comply with constitutional requirements
for liens against homesteads.
In sum, we conclude that the trial court did not err in ordering foreclosure on
AYPCO's constitutional and statutory liens. Zorrilla's fourth issue is overruled.
VII. Conclusion
We modify the judgment to delete the award of attorney's fees and affirm the
judgment as modified.
NELDA V. RODRIGUEZ
Justice
Delivered and filed the 3rd
day of October, 2013.
32
Mirta Zorrilla v. Aypco Construction II, LLC and Jose Luis Munoz
Combined Opinion