Argus Security Systems, Inc. v. Patrick Owen, D/B/A Korner Market

Argus Security v. Owen NUMBER 13-02-00219-CV COURT OF APPEALS THIRTEENTH DISTRICT OF TEXAS CORPUS CHRISTI – EDINBURG ARGUS SECURITY SYSTEMS, INC., Appellant, v. PATRICK OWEN D/B/A KORNER MARKET, Appellee. On appeal from the 404th District Court of Cameron County, Texas. MEMORANDUM OPINION Before Justices Hinojosa, Yañez, and Castillo Memorandum Opinion by Justice Hinojosa Appellee, Patrick Owen d/b/a Korner Market (“Owen”), sued appellant, Argus Security Systems, Inc. (“Argus”), for breach of contract, deceptive trade practices, breach of warranty, fraud, and negligence. In four issues, Argus contends: (1) Owen’s breach of contract and negligence claims are barred by limitations; (2) there is no evidence that Argus breached the contract; (3) there is no evidence that Argus was negligent in installing the security system; and (4) the trial court erred in allowing Owen’s experts to testify. In a cross-appeal, Owen contends the trial court erred in granting Argus’s motion for directed verdict. We affirm the trial court’s order granting a directed verdict for Argus on Owen’s fraud claim. We reverse the trial court’s judgment and render judgment that Owen take nothing from Argus. A. Factual Background Owen owns the Korner Market, a convenience store in Brownsville. On November 29, 1994, Owen entered into a contract with Argus for the purchase and installation of a closed circuit television security system with VSI technology. VSI technology is an electronic interface that records data flowing from a video camera to the cash register and allows cash register transactions to be displayed across the screen of a remote monitor. The contract included a lease agreement. Argus agreed to sell the security system to Oriks, a leasing company, and Owen agreed to lease the system from Oriks. The system was installed on December 1, 1994. Owen said he began experiencing problems with the system soon, and often, after installation. However, Owen did not remember when the calls to Argus were made, and he made no record of the calls. He did not dispute the dates indicated on the service tickets introduced into evidence by Argus and admitted that Argus came out to service the system every time he called. Owen first complained of the appearance of a black line on the system monitor. Argus’s service ticket reflects that this complaint was made on January 26, 1995, and the system was serviced on January 30 and 31, 1995. Argus determined that the black line was caused by ground loop interference. On February 6, 1995, Argus installed a ground isolation transformer which eliminated the black line and reprogrammed the VSI for color. The system then tested “ok.” On February 8, 1995, Owen called Argus and requested that a camera be relocated. The camera was relocated on February 10, 1995, and everything tested “ok.” Owen next called Argus on March 8, 1995. Owen complained that the video playback was being displayed on the monitor in the store, as well as on the monitor in his office. Because he wanted the playback to be displayed only on the office monitor, the system was serviced on March 10, 1995, and the problem was eliminated. Everything tested “ok.” On June 8, 1995, Owen complained that the monitor black line had reoccurred. On June 9, 1995, Argus went to the Korner Market to service the system. Argus found that the cameras were working, but the multiplexer and the VSI were not working. Both the multiplexer and the VSI were under manufacturer’s warranty. Argus replaced the multiplexer and sent the VSI to the manufacturer for repair. On August 4, 1995, Argus returned to the Korner Market with the VSI that had been repaired by the manufacturer. Owen refused to allow Argus to install the repaired VSI and demanded that it remove the entire system. Because Owen ceased making payments on the security system, he was sued by Oriks for the balance owed on the lease. After Oriks obtained a judgment against him, Owen sued Argus. At trial, Argus moved for a directed verdict on the issue of fraud, and the trial court granted the motion. The issues of breach of contract, breach of warranty, and negligence were submitted to the jury. The jury found that Argus had breached the contract, breached its warranty, and was negligent. The jury found actual damages in the amount of $9,773.29 and attorney’s fees in the amount of $19,500. After the trial court signed the judgment, both parties appealed. B. Statute of Limitations In its first issue, Argus complains that Owen’s breach of contract and negligence claims are barred by limitations. To rely on the affirmative defense of limitations, a defendant must plead, prove, and secure findings to sustain the affirmative defense. Woods v. William M. Mercer, Inc., 769 S.W.2d 515, 517 (Tex. 1988). The record shows that at the charge conference, Argus requested that the trial court submit a question to the jury regarding its affirmative defense of limitations on Owen’s breach of warranty claim. However, Argus did not request that the trial court submit similar questions to the jury regarding its affirmative defense of limitations on Owen’s breach of contract and negligence claims. By failing to request and secure a jury finding on its affirmative defense of limitations, Argus has not preserved these complaints for our review. See Rivas v. Cantu, 37 S.W.3d 101, 116-17 (Tex. App.–Corpus Christi 2000, pet. denied); Abraxas Petroleum Corp. v. Hornburg, 20 S.W.3d 741, 763 (Tex. App.–El Paso 2000, no pet.). Accordingly, we overrule appellant’s first issue. C. Expert testimony In its fourth issue, Argus complains that the trial court erred in allowing Owen’s experts to testify that Argus used the wrong type of coaxial cable. Specifically, Argus contends Owen’s experts were not qualified to testify. Admissibility of expert testimony rests largely within the discretion of the trial court. E.I. du Pont de Nemours and Co., Inc. v. Robinson, 923 S.W.2d 549, 558 (Tex. 1995). The test for abuse of discretion is whether the trial court acted without reference to any guiding rules or principles. Id.; Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241-42 (Tex. 1985). “The test is not whether, ‘in the opinion of the reviewing court, the facts present an appropriate case for the trial court's action.’” Robinson, 923 S.W.2d at 558 (quoting Downer, 701 S.W.2d at 241-42). Determining that the appellate court would have ruled differently or that the trial court made an error in judgment does not amount to an abuse of discretion. Id. However, a clear failure by the trial court to analyze or apply the law correctly will constitute an abuse of discretion. Walker v. Packer, 827 S.W.2d 833, 840 (Tex. 1992). Whether an expert is qualified is a preliminary question to be decided by the trial court. Gammill v. Jack Williams Chevrolet, Inc., 972 S.W.2d 713, 718 (Tex. 1998); Broders v. Heise, 924 S.W.2d 148, 151 (Tex. 1996). The party offering the expert's testimony bears the burden to prove that the witness is qualified under rule 702 of the Texas Rules of Evidence. Gammill, 972 S.W.2d at 718; see Tex. R. Evid. 702. “The offering party must demonstrate that the witness possesses special knowledge as to the very matter on which he proposes to give an opinion.” Id. Rule 702 requires that expert testimony be limited to testimony from experts who are qualified by virtue of their scientific, technical, or other specialized knowledge to assist the trier of fact to understand the evidence or to determine a fact in issue. Tex. R. Evid. 702. A trial court must consider two components in determining whether an expert is “qualified” under rule 702. Gammill, 972 S.W.2d at 719-20. The first component requires that the court determine whether the expert is truly qualified to testify because of his specialized knowledge, skills, background or training. Id. This analysis inquires into the expert’s specific qualifications to render the precise opinions and testimony he seeks to offer in the case. Id. This determination also inquires into whether the expert truly has knowledge superior to that of the common knowledge of the ordinary juror. K-Mart Corp. v. Honeycutt, 24 S.W.3d 357, 360 (Tex. 2000) (per curiam). The second component requires that the court determine whether the expert's testimony is relevant and reliable. Gammill, 972 S.W.2d at 719-20; Robinson, 923 S.W.2d at 556-57. It is not enough to show merely that the expert has greater knowledge in the general topic of the prospective testimony. Gammill, 972 S.W.2d at 719. Rather, the expert must be shown to have specialized knowledge regarding the precise subject about which he is offering his opinion. Id. If the expert is not qualified to render the particular opinion rendered in a particular case, his testimony is not admissible because it does not rise above mere speculation and, thus, does not offer genuine assistance to the jury. Broders, 924 S.W.2d at 150-54. Harold J. Barnard testified on Owen’s behalf. Barnard is a master electrician, licensed for thirteen years. He is not licensed to install security systems and is not familiar with the process used to install security systems. He has worked with coaxial cables and satellite antennas in the installation of radio, television, and telephone services. Barnard testified that he: (1) never inspected any of Owen’s equipment; (2) never conducted any tests on Owen’s equipment; (3) is not familiar with any of the manufacturer specifications for the security camera, multiplexer, or VSI; (4) does not know the specifications of Owen’s equipment; (5) does not know the type of coaxial cable required for Owen’s equipment; (6) does not know what Owen’s equipment required; (7) cannot program a security system; and (8) cannot wire a security system without using a schematic. Barnard admitted that (1) because he did not test the equipment, he had no basis for his opinion; and (2) he could not say that any problems Owen had with the equipment were caused by Argus. Juan Delgadillo also testified for Owen. Delgadillo is a master electrician, licensed for eight years. Delgadillo opined that Argus incorrectly used RG59U cable, instead of RG6 cable. It is Delgadillo’s opinion that RG6 cable should be used for distances over one hundred feet. On cross-examination, Delgadillo admitted that he did not test Owen’s cable and had nothing to support his opinions. Delgadillo also admitted that he: (1) has never installed a security system with a multiplexer or VSI equipment; (2) is not familiar with the specifications for Owen’s equipment; and (3) does not know the amount of signal needed for the type of cable used in Owen’s equipment. In view of the foregoing, we conclude that Barnard and Delgadillo were not qualified to testify as experts that Argus used the wrong coaxial cable in installing Owen’s security system. Although both witnesses were licensed master electricians, neither witness tested Owen’s equipment and neither witness had any knowledge or experience with the particular type of security system equipment that Argus installed in the Korner Market. Because neither witness had specialized knowledge regarding the subject of their testimony, we conclude that their testimony did not rise above mere speculation. Accordingly, we hold the trial court abused its discretion in allowing Barnard and Delgadillo to testify that Argus used the wrong type of coaxial cable. We sustain appellant’s fourth issue. D. Sufficiency of the evidence When we review a “no evidence” or legal sufficiency of the evidence issue, we must view the evidence in a light that tends to support the finding of the disputed fact and disregard all evidence and inferences to the contrary. Bradford v. Vento, 48 S.W.3d 749, 754 (Tex. 2001). A no evidence issue will be sustained when the record discloses that: (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 mere scintilla; or (4) the evidence conclusively establishes the opposite of the vital fact. Merrell Dow Pharms. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997). If there is more than a scintilla of evidence to support the finding, the no evidence challenge fails. Stafford v. Stafford, 726 S.W.2d 14, 16 (Tex. 1987). When the evidence offered to prove a vital fact is so weak as to do no more than create a mere surmise or suspicion of its existence, the evidence is not more than a scintilla and, in legal effect, is no evidence. Kindred v. Con-Chem, Inc., 650 S.W.2d 61, 63 (Tex. 1983). More than a scintilla of evidence exists where the evidence supporting the finding, as a whole, rises to a level that would enable reasonable and fair-minded people to differ in their conclusions. Havner, 953 S.W.2d at 711. 1. Breach of Contract In its second issue, Argus contends the evidence is legally insufficient to establish that it breached its contract with Owen. The elements of a breach of contract claim are: (1) the existence of a valid contract; (2) performance or tendered performance by the plaintiff; (3) breach of the contract by the defendant; and (4) damages to the plaintiff resulting from that breach. See Adams v. H & H Meat Prods., Inc., 41 S.W.3d 762, 771 (Tex. App.–Corpus Christi 2001, no pet.). The requisites for a valid contract are: (1) an offer; (2) an acceptance in strict compliance with the terms of the offer; (3) a meeting of the minds; (4) each party's consent to the terms; and (5) execution and delivery of the contract with the intent that it be mutual and binding. Copeland v. Alsobrook, 3 S.W.3d 598, 604 (Tex. App.–San Antonio 1999, pet. denied). The determination of whether there was a meeting of the minds of the parties is based on the objective standard of what the parties actually said and did, rather than on their subjective state of mind. Id. The record shows that on November 29, 1994, Owen and Argus entered into a written contract. By the terms of the contract, Argus was to provide and install a security system with a VSI and a multiplexer. Owen testified that he began experiencing problems with the equipment soon after it was installed. The monitor displayed a black line, the multiplexer failed to operate and the VSI failed to work properly. This evidence, however, goes to Owen’s warranty action, which the jury found was barred by limitations. Because it is undisputed that Argus furnished the equipment required by the contract, and Owen admitted that Argus always sent someone out to work on the system in response to his complaints and never stopped trying to correct the problems, we conclude that Argus complied with the terms of the contract. Accordingly, we hold the evidence is legally insufficient to support the jury’s finding that Argus breached the contract. We sustain appellant’s second issue. 2. Negligence In its third issue, Argus contends the evidence is legally insufficient to establish that it negligently installed the security system. The elements of negligence are: (1) a duty; (2) a breach of that duty; and (3) damages proximately caused by the breach of the duty. Doe v. Boys Clubs of Greater Dallas, Inc., 907 S.W.2d 472, 477 (Tex. 1995). The components of proximate cause are cause-in-fact and foreseeability. Id. These elements cannot be established by mere conjecture, guess, or speculation. Id. Owen alleged that Argus negligently installed the security system because the security system did not function properly. When asked what his complaint against Argus was, Owen stated: I purchased the system that’s laid out to be, you know, the newest and the best in the business. It was installed, it never operated properly . . . . That’s my complaint. Owen offered the expert testimony of Barnard and Delgadillo to establish that the security system did not function properly because Argus used the wrong type of coaxial cable. However, because we have held that Barnard and Delgadillo were not qualified to testify as expert witnesses, we cannot consider their testimony in our review. The only other evidence that Owen presented was the testimony of Rogelio “Roy” Cerda, a former Argus employee. Regarding this issue, Cerda testified only that Argus installers did not have a special license or certification to install security systems. This evidence is no more than a scintilla that Argus breached its duty to properly install the security system. We hold the evidence is legally insufficient to support the jury’s finding that Argus negligently installed the security system. We sustain appellant’s third issue. E. Appellee’s Cross-Appeal In a cross-appeal, Owen contends the trial court erred in granting Argus’s motion for directed verdict on his fraud claim. 1. Directed Verdict A court may direct a verdict when a plaintiff fails to present evidence raising a fact issue essential to the plaintiff's right of recovery. See Alejandro v. Robstown Indep. Sch. Dist., 131 S.W.3d 663, 666-67 (Tex. App.–Corpus Christi 2004, no pet.); see also Prudential Ins. Co. of Am. v. Fin. Review Servs., Inc., 29 S.W.3d 74, 77 (Tex. 2000). A trial court may also direct a verdict for a defendant if the plaintiff admits or the evidence conclusively establishes a defense to the plaintiff's cause of action. Reyna v. First Nat'l Bank, 55 S.W.3d 58, 69 (Tex. App.–Corpus Christi 2001, no pet.). On review, we examine the evidence in the light most favorable to the party against whom the verdict was rendered and disregard all contrary evidence and inferences. Qantel Bus. Sys. v. Custom Controls, 761 S.W.2d 302, 303-04 (Tex. 1988). When reasonable minds may differ as to the truth of controlling facts, the issue must go to the jury. Collora v. Navarro, 574 S.W.2d 65, 68 (Tex. 1978); Villegas v. Griffin Indus., 975 S.W.2d 745, 749 (Tex. App.–Corpus Christi 1998, pet. denied). When no evidence of probative force on an ultimate fact element exists, or when the probative force of testimony is so weak that only a mere surmise or suspicion is raised as to the existence of essential facts, the trial court has a duty to instruct the verdict. Villarreal v. Art Inst. of Houston, Inc., 20 S.W.3d 792, 796 (Tex. App.–Corpus Christi 2000, no pet.). The reviewing court may affirm a directed verdict even if the trial court's rationale for granting the directed verdict is erroneous, provided it can be supported on any other basis. Id. 2. Owen’s Claim for Fraud The elements of fraud are: (1) that a material representation was made; (2) the representation was false; (3) when the representation was made, the speaker knew it was false or made it recklessly without any knowledge of the truth and as a positive assertion; (4) the speaker made the representation with the intent that the other party should act upon it; (5) the party acted in reliance on the representation; and (6) the party thereby suffered injury. See In re Firstmerit Bank, N.A., 52 S.W.3d 749, 758 (Tex. 2001). Owen alleged that Argus had made a material misrepresentation to him because Argus failed to provide him with a functioning security system with VSI technology. Owen testified that he purchased the security system with VSI technology to meet his specific needs. He said he needed VSI technology because it allowed him to match the items purchased at the cash register, which were viewed on the video, with those items actually rung up at the cash register. Owen argues that because Argus did not deliver a properly functioning security system with VSI technology, Argus committed fraud. However, the record contains no evidence that Argus made a material misrepresentation. After hearing the evidence, the trial court stated: On the fraud . . . the Court did not hear, not a little bit, nothing really as far as the fraud. And I was of course watching for that because that’s a cause of action and it’s just not there. After viewing the evidence in the light most favorable to Owen and disregarding all contrary evidence and inferences, we hold the trial court did not err in granting a directed verdict for Argus on Owen’s fraud claim. Owen’s cross-appeal is overruled. We affirm the trial court’s order granting a directed verdict for Argus on Owen’s fraud claim. We reverse the trial court’s judgment and render judgment that Owen take nothing from Argus. FEDERICO G. HINOJOSA Justice Memorandum Opinion delivered and filed this the 31st day of March, 2005.