Margarita Rodriguez and Fernando Rodriguez, D/B/A America Bail Bonds v. USS of Texas, Inc.

MARY'S OPINION HEADING NO. 12-06-00398-CV IN THE COURT OF APPEALS TWELFTH COURT OF APPEALS DISTRICT TYLER, TEXAS MARGARITA RODRIGUEZ AND § APPEAL FROM THE FERNANDO RODRIGUEZ d/b/a AMERICA BAIL BONDS, APPELLANTS V. § COUNTY COURT AT LAW #2 USS OF TEXAS, INC., APPELLEE § SMITH COUNTY, TEXAS MEMORANDUM OPINION This is a restricted appeal from a postanswer default judgment entered against Appellants Margarita Rodriguez and Fernando Rodriguez d/b/a America Bail Bonds in a contract case. In two issues, each appellant contends that the evidence is legally and factually insufficient to support the judgment. In a third issue, each appellant claims the judgment is erroneous because it does not conform to the pleadings and the evidence. We affirm the judgment against Fernando Rodriguez d/b/a America Bail Bonds, reverse the judgment against Margarita Rodriguez, and render judgment that USS of Texas, Inc., Appellee, take nothing by its suit against Margarita Rodriguez. Background In August 2001, USS of Texas, Inc. and Fernando Rodriguez executed a bail bond underwriting agreement authorizing Fernando to write bail bonds on behalf of an insurance company in the state of Texas. Under the terms of the contract, Fernando Rodriguez agreed to “solicit, collect, protect, insure, return, and deliver to USS collateral from criminal defendants in the event that a criminal defendant fails to appear in court.” “Agent” (Fernando Rodriguez) also agreed to be “solely responsible for the satisfaction of bond forfeitures . . . and responsible for the payment of any or all judgments entered on bonds supplied by USS.” He further agreed to indemnify USS for all costs associated with a bond forfeiture and judgment. The agreement was signed by Ken Good as president of USS and Fernando Rodriguez as “Agent.” The penultimate page of the document contained a line for the signature of “Agent’s Spouse.” This line was also signed by Fernando Rodriguez. In August 2005, USS filed suit against Fernando and Margarita Rodriguez for breach of the bail bond underwriting agreement and for attorney’s fees. USS alleged in its petition that it had lost in excess of $300,000.00 in payment of bond forfeitures on bonds written by Fernando Rodriguez. Fernando and Margarita Rodriguez filed an answer to the suit; however, neither appeared on May 8, 2006, the scheduled trial date. At trial, the only witness was Ken Good, who testified, as follows: MR. GOOD: Your Honor, my name is Ken Good. I am the President and sole shareholder of U.S.S. of Texas, Inc. I entered into a contract with Fernando Rodriguez and his wife for the – to act as an intermediator between an insurance company and him for the sell [sic] of insurance to back bail bonds. In that contract he agreed to indemnify me for any losses resulting from bonds that he wrote. As a result of this contract and his breach of that contract, I have suffered losses in the amount of a total of $343,113.90 of which $316,870.91 is for payment of bond forfeitures. $1467.75 is for premiums that have not been paid. I have also incurred expenses in the amount of $10,000 in doing the run off of this liability which is ongoing. Mr. Good further testified that USS had incurred $7,500 in reasonable and necessary attorney’s fees calculated at a rate of $150 an hour. USS also offered in evidence the bail bond underwriting agreement, copies of the checks USS had paid for bond forfeitures on bonds written by Fernando Rodriguez, and copies of unpaid invoices showing premiums owed by Fernando Rodriguez. The court granted a postanswer default judgment against Fernando and Margarita Rodriguez. On September 5, 2006, Margarita Rodriguez filed her motion for new trial. The trial court denied the motion on October 18, 2006. On October 31, 2006, Margarita Rodriguez filed her notice of appeal. This court dismissed her appeal for want of jurisdiction. Both Fernando and Margarita filed a notice of restricted appeal. Sufficiency of the Evidence In their first two issues, Margarita and Fernando challenge the legal and factual sufficiency of the evidence to support the judgment. Standard of Review If a party is attacking the legal sufficiency of an adverse finding on an issue on which it did not have the burden of proof, it must demonstrate on appeal that there is no evidence to support the adverse finding. See Croucher v. Croucher, 660 S.W.2d 55, 58 (Tex. 1983). In reviewing no evidence issues, the reviewing court views the evidence in the light most favorable to the verdict, indulging every reasonable inference that would support it. City of Keller v. Wilson, 168 S.W.3d 802, 822 (Tex. 2005). The reviewing court must credit evidence that supports the verdict if a reasonable fact finder could and disregard contrary evidence unless a reasonable fact finder could not. Id. at 827. The question to be determined is whether the evidence at trial would enable reasonable and fair minded people to find the facts at issue. Id. The fact finder is the sole judge of the credibility of the witnesses and the weight to give their testimony. See id. at 819. A no evidence issue will be sustained only when (1) there is 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 scintilla, or (4) the evidence conclusively establishes the opposite of the vital fact. City of Keller, 168 S.W.3d at 810. If a party is attacking the factual sufficiency of an adverse finding on an issue on which the other party had the burden of proof, the attacking party must demonstrate that there is insufficient evidence to support the adverse finding. See Croucher, 660 S.W.2d at 58. In addressing a factual sufficiency of the evidence challenge, the reviewing court must consider and weigh all of the evidence and set aside the verdict only if it is so contrary to the overwhelming weight of the evidence as to be clearly wrong and unjust. Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986). The reviewing court is not a fact finder, and therefore may not pass on the credibility of the witnesses or substitute its judgment for that of the trier of fact, even if a different answer could be reached on the evidence. Clancy v. Zale Corp., 705 S.W.2d 820, 826 (Tex. App.–Dallas 1986, writ ref’d n.r.e.). Findings of fact are the exclusive province of the fact finder. Bellefonte Underwriters Ins. Co. v. Brown, 704 S.W.2d 742, 744 (Tex. 1986). Accordingly, if there is sufficient competent evidence of probative force to support the finding, it must be sustained. Beall v. Ditmore, 867 S.W.2d 791, 795-96 (Tex. App.–El Paso 1993, writ denied). Where there is conflicting evidence, the fact finder’s decision on such matters is generally regarded as conclusive. Id. at 796. Applicable Law In a case where the defendant answered but failed to appear for trial, a trial court may not render judgment on the pleadings, and the plaintiff is required to offer evidence and prove all aspects of his case. Bradley Motors, Inc. v. Mackey, 878 S.W.2d 140, 141 (Tex. 1994); Stoner v. Thompson, 578 S.W.2d 679, 682 (Tex. 1979). Under these circumstances, the defendant’s failure to appear at trial is neither an abandonment of its answer nor an implied confession of any issues. Frymire Eng’g Co. v. Grantham, 524 S.W.2d 680, 681 (Tex. 1975). Discussion The evidence shows that Fernando Rodriguez, “Agent,” entered into a contract with USS as managing general agent in which he agreed to indemnify USS for forfeitures on bail bonds that he wrote and to remit to USS a certain percentage of the bond premium. USS checks introduced in evidence demonstrate that USS paid $316,870.91 in forfeitures on forty-one bonds written by Fernando Rodriguez. Although there was no direct testimony that Fernando Rodriguez had not reimbursed USS for the bond forfeitures paid by USS, a reasonable fact finder could infer from the testimony that USS suffered losses in that amount that USS had not been indemnified by Fernando Rodriguez for the forfeitures as required by the agreement. The testimony of Ken Good also reflects that USS had incurred $10,000.00 in expenses related to the forfeitures, and that Fernando Rodriguez had failed to remit to USS premiums due in the amount of $1,467.75. The evidence is both legally and factually sufficient to support the judgment against Fernando Rodriguez. We overrule Fernando’s first and second issues. Although there is a page affixed to the contract with a signature line for “Agent’s Spouse,” the contract does not purport to be an agreement between USS and the agent’s spouse. The agent’s spouse is nowhere mentioned in the body of the contract. The signature line for “Agent’s Spouse” is signed by Fernando Rodriguez. There is no showing that Fernando Rodriguez signed for his spouse in a representative capacity. No evidence was adduced at trial that Margarita Rodriguez was the spouse of Fernando Rodriguez, and there was, of course, no testimony or other evidence that Margarita Rodriguez breached the contract. USS contends that since Margarita Rodriguez did not file a verified denial alleging that she was sued in the wrong capacity, she cannot complain of the judgment entered against her. See Tex. R. Civ. P. 93(2). However, Rule 93(2) does not require a party who is sued for breach of contract to file a verified pleading that she is not a party to the contract. Miles v. Plumbing Servs. of Houston, Inc., 668 S.W.2d 509, 512-13 (Tex. App.–Houston [14th Dist.] 1984, writ ref’d n.r.e.). The burden remains on the plaintiff to prove that the defendant has obligated herself under the contract. There is no more than a scintilla of proof that Margarita Rodriguez was a party to the contract. The evidence is legally insufficient to support the judgment against Margarita Rodriguez. We sustain Margarita’s first issue. Because we have sustained Margarita’s first issue, we need not address her second issue challenging factual sufficiency. See Tex. R. App. P. 47.1. The Judgment In his third issue, Fernando Rodriguez maintains that the trial court’s judgment does not conform to the pleadings and the nature of the case proved as required by Texas Rule of Civil Procedure 301. Fernando’s apparent complaint is that although USS was party to the contract and the plaintiff in the action for its breach, Ken Good testified that “I entered into a contract with Fernando Rodriguez,” “he agreed to indemnify me,” “I have suffered losses,” “I have incurred expenses,” and I have incurred attorney’s fees.” Ken Good was not a party to the contract nor the plaintiff in the lawsuit. He testified, however, that he was the president and sole shareholder of USS, and it is reasonable to infer that he was testifying in that capacity. Fernando’s third issue is without merit and is overruled. Disposition The judgment against Fernando Rodriguez is affirmed. The judgment against Margarita Rodriguez is reversed and judgment rendered that USS take nothing by its suit against Margarita Rodriguez. BILL BASS Justice Opinion delivered October 11, 2007. Panel consisted of Worthen, C.J., Griffith, J., and Bass, Retired Justice, Twelfth Court of Appeals, Tyler, sitting by assignment. 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