                                     NO. 07-03-0485-CV

                               IN THE COURT OF APPEALS

                        FOR THE SEVENTH DISTRICT OF TEXAS

                                        AT AMARILLO

                                          PANEL E

                                        MAY 25, 2005

                            ______________________________


      DENNIS WATTS, INDIVIDUALLY AND D/B/A SENIOR BENEFIT PLANS
       AND D/B/A PROFESSIONAL FINANCIAL SERVICES OF LUBBOCK;
              AND NATHAN GRIMES, INDIVIDUALLY AND D/B/A
      PROFESSIONAL FINANCIAL SERVICES OF LUBBOCK, APPELLANTS

                                              V.

                           QUEEN ANNIE LAWSON, APPELLEE


                          _________________________________

                FROM THE 110TH DISTRICT COURT OF FLOYD COUNTY;

                   NO. 9424; HONORABLE JOHN R. HOLLUMS, JUDGE

                           _______________________________

Before REAVIS and CAMPBELL, JJ. and BOYD, S.J.1


                                 MEMORANDUM OPINION


          Appellant Dennis Watts challenges the trial court’s judgment following a bench trial

that appellee Queen Annie Lawson recover damages in the amount of $143,556, plus



      1
      John T. Boyd, Chief Justice (Ret.), Seventh Court of Appeals, sitting by
assignment.
prejudgment interest and attorney’s fees from Watts, individually and d/b/a Senior Benefit

Plans and d/b/a Professional Financial Services of Lubbock and Nathan Grimes,

individually and d/b/a Professional Financial Services of Lubbock, jointly and severally. 2

Presenting nine points of error, Watts contends the trial court erred in entering judgment

against him because the findings of fact are not supported by legally sufficient evidence

or alternatively the evidence is factually insufficient to support Lawson’s claims of (1)

negligence, (2) fraudulent conduct, (3) negligent misrepresentation, (4) Deceptive Trade

Practices Act violations, and (5) breach of fiduciary duty or grounds of vicarious liability for

the acts of Nathan Grimes on the theory of (6) joint enterprise or joint venture, (7)

conspiracy, (8) agency or authorized conduct, and (9) the trial court erred in calculating the

appropriate postjudgment interest.


       Grimes, who had training in the insurance industry and financial planning, moved

to Lubbock in 1979, and commenced working as a licensed insurance salesman for Watts

in 1996. Grimes met Lawson in April 1998 when he contacted her regarding the purchase

of an annuity which involved changing an existing annuity to another annuity.                 In

connection with that matter, she also met Watts, who accompanied Grimes on one

occasion. Lawson’s meeting with Watts in 1999 was the only time she ever met him

involving any business. Before 1999, Watts did business as an independent insurance

agency under the assumed name Senior Benefit Plans, which concentrated on the sale of

insurance policies and products. As a general agent, Watts recruited Grimes and other

       2
       Nathan Grimes did not file a notice of appeal, individually or d/b/a Professional
Financial Services of Lubbock and seeks no relief herein.

                                               2
licenced insurance agents to associate with his agency as independent contractors.

During the year of 2000, Watts had one secretary as an employee who was paid a salary

and worked under his control. Also, at that time, Grimes, who was licensed and had

contracts with insurance companies, worked out of Watts’s office but Watts did not

supervise or control Grimes or fix his compensation or hours of work. Grimes paid Watts

$150 per month as rent but did not share commissions on sales except for a joint case.


      After Watts was contacted by Jerry Neal and referred to a marketing firm known as

TSI, Nino Cimini, a TSI representative, met Watts at his office and introduced Watts and

Grimes to an investment program. The investment opportunity contemplated that pay

telephones would be offered for sale with an agreement under which they would be leased

by the purchaser for a fixed monthly rental payment thereby providing the investor a fixed

14% annual return on the investment. According to the plan, pay telephones would be

operated and serviced by an organization known as Phoenix Telecom Rental. After

considering the investment opportunity, on November 3, 1999, Watts signed a written

agreement as a distributor for TSI, and Nathan Grimes signed a separate and independent

associate agreement with TSI on November 2, 1999. Watts’s arrangements with the

individual salesmen who worked in his office was similar to the sale of insurance. In

marketing the pay telephone investments, the salesmen used data provided by people with

whom they had contacts. Watts received 16% commissions on the sales he personally

made and 6% override from the company on sales by agents who worked out of his office.




                                            3
       In June 2000, Grimes met with Lawson about the investment opportunity in pay

telephone leases and told her the return would be 14.1%. As a result of the meeting on

June 13, 2000, Lawson withdrew $147,000 from other funds and invested in the pay

telephone lease back opportunity. After one of the principal firms was declared bankrupt,

Lawson filed suit to recover her losses. By the suit, she sought to recover damages on

grounds of negligence, fraud, violations of the Deceptive Trade Practices Act, breach of

fiduciary duty, and negligent misrepresentation.       Also, she alleged that Watts was

vicariously liable for the conduct of Grimes on grounds of joint enterprise or joint venture,

conspiracy, and principal and agent or authorized conduct. After the trial court signed its

judgment, findings of fact and conclusions of law were made.


       We must first consider the appropriate standard of review. Findings of fact in a

bench trial have the same force as a jury’s verdict upon jury questions. City of Clute v. City

of Lake Jackson, 559 S.W.2d 391, 395 (Tex.Civ.App.--Houston [14th Dist.] 1977, writ ref’d

n.r.e.). However, findings of fact are not conclusive when a complete statement of facts

appears in the record, if the contrary is established as a matter of law, or if there is no

evidence to support the findings. Middleton v. Kawasaki Steel Corp., 687 S.W.2d 42, 44

(Tex.App.--Houston [14th Dist.] 1985), writ ref’d n.r.e., 699 S.W.2d 199 (Tex. 1985) (per

curiam). When the trial court acts primarily as a fact finder, the findings of fact are

reviewable for factual and legal sufficiency under the same standards that are applied in

reviewing evidence supporting a jury’s answer. Zieben v. Platt, 786 S.W.2d 797, 799




                                              4
(Tex.App.--Houston [14th Dist.] 1990, no writ). See also W. Wendell Hall, Standards of

Review in Texas, 34 ST . MARY’S L.J. 1, 183 (2002).


         When an appellant challenges both the legal and factual sufficiency of the evidence,

the appellate court should first review the legal sufficiency challenge. Glover v. Texas

Gen. Indem. Co., 619 S.W.2d 400, 401 (Tex. 1981); Koch Oil Co. v. Wilber, 895 S.W.2d

854, 862 (Tex.App.--Beaumont 1995, writ denied). An appellant attacking the legal

sufficiency of an adverse finding on which he had the burden of proof must show on appeal

that a contrary finding was established as a matter of law. Croucher v. Croucher, 660

S.W.2d 55, 58 (Tex. 1983). The appellate court reviews the entire record for any evidence

that supports the adverse finding, while disregarding all evidence and inferences to the

contrary. Raw Hide Oil & Gas, Inc. v. Maxus Exploration Co., 766 S.W.2d 264, 276

(Tex.App.–Amarillo 1988, writ denied). If there is no evidence to support the finding, the

reviewing court must review the entire record to determine if the contrary proposition was

established as a matter of law. McGalliard v. Kuhlmann, 722 S.W.2d 694, 696-97 (Tex.

1986).


         An appellant challenging the factual sufficiency of an adverse finding where he had

the burden of proof must show on appeal that the finding was against the great weight and

preponderance of the evidence.         Gooch v. Am. Sling Co., 902 S.W.2d 181, 184

(Tex.App.–Fort Worth 1995, no writ). If there is some probative evidence to support the

finding, it must be upheld. ACS Investors, Inc. v. McLaughlin, 943 S.W.2d 426, 430 (Tex.

1997). The court should only set aside an adverse finding if, in light of all the evidence, the


                                              5
evidence which supports the finding is so weak as to be clearly wrong and manifestly

unjust. Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986).


       In addition, although findings of fact are reviewable for legal and factual sufficiency,

an attack on the sufficiency of the evidence must be directed at specific findings of fact

rather than at the judgment as a whole. In re M.W., 959 S.W.2d 661, 664 (Tex.App.--Tyler

1997, no pet.). The rule has often been otherwise stated that if the trial court’s findings of

fact are not challenged by a point of error on appeal, they are binding upon the appellate

court. Northwest Park Homeowners Ass’n, Inc., v. Brundrett, 970 S.W.2d 700, 704

(Tex.App.--Amarillo 1998, pet. denied); Carter v. Carter, 736 S.W.2d 775, 777 (Tex.App.--

Houston [14th Dist.] 1987, no writ). However, a challenge to an unidentified finding of fact

may be sufficient for review if it is included in the argument of the issue or point, or if after

giving consideration to the nature of the case, the underlying applicable legal theories, and

the findings of fact provided, the specific finding(s) of fact which the appellant challenges

can be fairly determined from the argument. See Holley v. Watts, 629 S.W.2d 694, 696

(Tex. 1982) (citing Calvert, “No Evidence” and “Insufficient Evidence” Points of Error, 38

Tex. L. Rev. 361 (1960)).


       Addressing the points of error in logical rather than sequential order, we first

consider Watts’s fourth point of error by which he contends the trial court erred in entering

judgment against him on the basis of the Texas Deceptive Trade Practices Act because

the findings of the court related to this theory of recovery were not supported by legally




                                               6
sufficient evidence, or alternatively, the evidence was factually insufficient to support such

findings. We disagree.


       By unchallenged findings one, two, and four, the court found that Watts and Grimes

(1) convinced Lawson to withdraw $147,000 from annuity contracts and induced her to

place the money into a pay telephone leasing scheme through Phoenix Telecom, Inc., (2)

they knew for several months before Lawson made her investment that the leasing

company was sustaining substantial financial losses and/or was not in a good financial

condition, and (4) they did not inform Lawson of the financial condition of the leasing

company. Then, also as material to Watts’s vicarious liability for Grimes’s actions, the

court found:


       (8) Dennis Watts and Nathan Grimes acted together and conspired together
       to engage in the sale of pay telephone leases and shared commissions on
       consummation of any sales.
       (13) Dennis Watts and Nathan Grimes jointly and severally and by way of
       their joint venture or conspiracy, engaged in false, misleading, or deceptive
       acts or practices by making representations to Queen Annie Lawson . . . .


Watts partially challenges the finding regarding “joint and several” determination; however,

the remaining findings of joint venture and false, misleading, or deceptive acts are not

challenged.


       Grimes argues we are not bound by finding 13 because the trial court did not make

findings of supporting elements of joint venture. However, the trial court was not required

to make findings of mere evidentiary matters with respect to the ultimate issue. T-Anchor


                                              7
Corp. v. Travarillo Associates, 529 S.W.2d 622, 628 (Tex.Civ.App.--Amarillo, 1975, no

writ). Indeed, a trial court should not make findings on every disputed fact, but only those

having some legal significance to an ultimate issue in the case. Stucky Diamonds v. Harris

County Appraisal, 93 S.W.3d 212, 213 (Tex.App.--Houston [14th Dist.] 2002, no pet.).


       In addition, the findings of fact and conclusions of law contained the following

instruction:


       [i]f any of the items labeled Conclusions of Law are Findings of Fact, they
       should be so considered.


By items 10 and 11, the trial court concluded that Watts and Grimes engaged in false,

misleading, or deceptive acts or practices that were a producing cause of damages to

Lawson. Then, by conclusion 16, it found that Watts and Grimes engaged in a joint

enterprise.3 Accordingly, following T-Anchor and Stucky, we conclude the items identified

as conclusions 10, 11, and 16 constitute unchallenged findings of fact for purposes of our

review.


       In Shoemaker v. Estate of Whistler, 513 S.W.2d 10, 14 (Tex. 1974), the Court

adopted the formulation of joint enterprise. Upon a finding of joint enterprise, each party

thereto is the agent of the other and holds each liable for a tortious act of the other. Id.




       3
         See Comm. on Pattern Jury Charges, State Bar of Texas, Texas Pattern Jury
Charges--General Negligence and Intentional Personal Torts, PJC 7.11 (2002)
recommending the submission of only one question for joint enterprise with accompanying
definitions.

                                             8
See also Texas Department of Transportation v. Able, 35 S.W.3d 608, 613 (Tex. 2000).

As stated in section 491 of the Restatement (Second) of Torts, vicarious liability under joint

enterprise for the acts of others is consistent with the fundamental purposes of our tort

system to deter wrongful conduct, shift losses to responsible parties, and fairly compensate

deserving victims. See Roberts v. Williamson, 111 S.W.3d 113, 118 (Tex. 2003).


        In addition to the events and evidence summarized above, documentary evidence

included a promotional leaflet provided to Lawson by Senior Benefit Plans of Lubbock

describing the investment opportunity as providing a great return, cash flow, liquidity,

safety, guaranteed, no market risk, no interest fluctuation, and competitive income. The

leaflet concluded:


       WE have looked closely at the alternatives that are available to our clients in
       this period of low interest earnings and volatile market place. Fortunately, our
       diligence has paid off. We now have such an opportunity!


       Similarly, a copy from the web site page named Watts, Grimes, and three others as

consultants affiliated with Senior Benefit Plans. The use of plural pronouns is some

evidence of joint enterprise. Further, the events within 90 days following the investment by

Lawson demonstrate the unreliability of the leaflet and promotional material. Because the

findings of joint venture are supported by some evidence and being unchallenged, the

findings are binding on the appellate court. See Brundrett, 970 S.W.2d at 777. Watts’s

fourth point of error is overruled.




                                              9
       By his ninth point of error, Watts contends the trial court erred in calculating the rate

of postjudgment interest on the judgment awarded to Lawson. The trial court awarded

postjudgment interest at a rate of ten percent per annum beginning September 8, 2003, the

date the judgment was rendered. Watts maintains the appropriate interest rate under

section 304.003(c)(2) of the Texas Finance Code at the time of the judgment was five

percent. We agree. The postjudgment interest rate is determined each month and begins

accruing on the date the judgment is rendered. Tex. Fin. Code. Ann. §§ 304.003(b),

304.005(a) (Vernon Supp. 2004-05).          The applicable postjudgment interest rate for

September 2003 was five percent (5%). 28 Tex. Reg. 7473 (2003) (filed Aug. 19, 2003)

(Tex. Consumer Credit Comm’r). Accordingly, Lawson’s ninth point of error is sustained.


       Because our disposition of Watts’s fourth point of error will require that the judgment

be affirmed, our consideration of his remaining issues is pretermitted. Having sustained

Watts’s ninth point, we modify the judgment to bear five per cent interest, and as modified,

the trial court’s judgment is affirmed.



                                                   Don H. Reavis
                                                     Justice


Campbell, J., concurring.




                                              10
                                  NO. 07-03-0485-CV

                             IN THE COURT OF APPEALS

                      FOR THE SEVENTH DISTRICT OF TEXAS

                                     AT AMARILLO

                                        PANEL E

                                     MAY 25, 2005

                         ______________________________

       DENNIS WATTS, INDIVIDUALLY AND D/B/A SENIOR BENEFIT PLANS
        AND D/B/A PROFESSIONAL FINANCIAL SERVICES OF LUBBOCK;
               AND NATHAN GRIMES, INDIVIDUALLY AND D/B/A
       PROFESSIONAL FINANCIAL SERVICES OF LUBBOCK, APPELLANTS

                                            V.

                        QUEEN ANNIE LAWSON, APPELLEE
                       _________________________________

             FROM THE 110TH DISTRICT COURT OF FLOYD COUNTY;

                NO. 9424; HONORABLE JOHN R. HOLLUMS, JUDGE
                       _______________________________


Before REAVIS and CAMPBELL, JJ. and BOYD, S.J.4


                               CONCURRING OPINION


      I concur in the Court’s judgment, though I cannot join in its opinion finding that the

judgment of the trial court can be sustained on the theory that Watts and Grimes were



       4
      John T. Boyd, Chief Justice (Ret.), Seventh Court of Appeals, sitting by
assignment.
engaged in a joint enterprise. Like the relationships among the participants in St. Joseph

Hosp. v. Wolff, 94 S.W.3d 513 (Tex. 2002), the evidence here shows that Watts and Grimes

had different agreements and understandings, encompassing their ongoing insurance

business as well as their business of marketing telephone investments. There may be more

than one way in which the “enterprise” involved here could be defined. See id. at 529.

Regardless how it is defined, though, I believe that the element of a “community of

pecuniary interest” is missing. See id. at 531-34.


      The trial court’s judgment can be sustained, though, on a civil conspiracy theory.

Watts argues on appeal that the trial court’s findings of fact contain none of the elements

required to establish a civil conspiracy, and all the elements cannot be presumed, under

Rule of Civil Procedure 299. The elements of a civil conspiracy are (1) a combination of 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. Operation Rescue-National v. Planned Parenthood of Houston and Southeast Tex.,

Inc., 975 S.W.2d 546, 553 (Tex. 1998).


       By finding of fact 8, the court found that Watts and Grimes “acted together and

conspired together to engage in the sale of pay telephone leases and shared the

commissions on consummation of any sales.”5 That finding includes at least the elements

of a combination and an object to be accomplished. Too, the court’s conclusion of law 17

states, “On the occasion in question, Dennis Watts and Nathan Grimes were part of a

       5
       As the Court’s opinion notes, Watts received a commission on sales of the
telephones made by Grimes.

                                            12
conspiracy that damaged Queen Annie Lawson.” That conclusion, which perhaps could as

well be denominated a finding of fact, tracks the Pattern Jury Charge question on civil

conspiracy.6 Rule 299 does not render the judgment insupportable on a civil conspiracy

theory.


      The object of a civil conspiracy may be a lawful act that is to be accomplished by

unlawful means. Triplex Communications, Inc. v. Riley, 900 S.W.2d 716, 719 (Tex. 1995).

For a civil conspiracy to arise, the parties must be aware of the harm or wrongful conduct

at the inception of the combination or agreement. Id. See Schlumberger Well-Surveying

Corp. v. Nortex Oil & Gas Corp., 435 S.W.2d 854, 856-57 (Tex. 1968). I agree with the

Court’s holding that the trial court’s conclusion that Watts and Grimes violated the

Deceptive Trade Practices Act is supported by legally and factually sufficient evidence. The

evidence further shows that the means Grimes employed in marketing the telephones to

Mrs. Lawson were the means that he and Watts agreed they would employ in their

marketing efforts. It is undisputed that Grimes told Lawson the telephone investment would

return 14.1% per annum. That statement appears in the promotional leaflet referred to in

the Court’s opinion, which carried the name of Watts’s company Senior Benefit Plans of

Lubbock, as well as in other literature provided by Phoenix Telecom and used by Watts and

Grimes. The trial court’s findings support a judgment holding Watts vicariously liable for



          6
       Comm. on Pattern Jury Charges, State Bar of Texas, Texas Pattern Jury
Charges–Business, Consumer, Insurance & Employment, PJC 109.1 (2003). See
Gutierrez v. Gutierrez, 791 S.W.2d 659, 667 (Tex.App.–San Antonio 1990, no writ) (noting
analogy between findings of fact and jury questions, and that it “would be strange indeed
to require judges to make findings in minute detail while requiring jury questions to be
framed broadly”).

                                            13
Grimes’s actions with respect to Lawson, based on a civil conspiracy, and the evidence is

legally and factually sufficient to sustain those findings.




                                           James T. Campbell
                                               Justice




                                              14
