In Home Comfortable Supplies, Inc. v. Cooper, the defendant induced others to start a new limited partnership with his corporation. No. 14-16-00906-CV, 2018 Tex. App. LEXIS 1381 (Tex. App.—Houston [14th Dist.] February 22, 2018, no pet. history). Among other things, he then seized the new business’s tangible assets and gave the use of the assets to a new company formed by his wife. The plaintiffs sued for fraudulent inducement, breach of fiduciary duty, conversion, and breach of contract, and trial court awarded actual damages, punitive damages, and attorney’s fees. On appeal, the defendant argued that the only actual damages proven and awarded were for breach of contract, which did not support an award of punitive damages. The defendant did not ask the trial court to identify the actual damages awarded or link them to a specific cause of action.

The court of appeals first described an appealing party’s duty to request findings:

Unchallenged findings of fact bind the appellate court unless the contrary is established as a matter of law or no evidence supports the finding. McGalliard v. Kuhlmann, 722 S.W.2d 694, 696 (Tex. 1986). If the factual findings include at least one element of a given ground of recovery or defense, any omitted unrequested elements that are supported by the evidence are supplied by a presumption in support of the judgment. Tex. R. Civ. P. 299. Although a party can avoid a presumed finding by requesting additional or amended findings that include the omitted element, see Tex. R. Civ. P. 298, no such request was made here.

The court then held that there was evidence to support a finding of breach of fiduciary duty, which would support the award of punitive damages:

Punitive damages also are available for breach of fiduciary duty. See Manges v. Guerra, 673 S.W.2d 180, 184 (Tex. 1984) (op. on reh’g). Partners share “the obligation of loyalty to the joint concern and of the utmost good faith, fairness, and honesty in their dealings with each other with respect to matters pertaining to the enterprise.” Bohatch v. Butler & Binion, 977 S.W.2d 543, 545 (Tex. 1998). Zhao and Home Comfortable Supplies do not challenge the trial court’s findings that clear and convincing evidence establishes that Zhao, individually and as president of Home Comfortable Supplies, wrongfully took possession and control of Paragon’s business assets and transferred them with the intention of destroying Paragon’s business, harming Paragon’s partners, and enriching himself. Thus, damages may have been awarded for breach of fiduciary duty. These damages may have included the value of Cooper’s and Bonner’s interest in Paragon’s assets, if the assets had been liquidated as required, as well as the money Cooper invested to obtain a larger membership interest in the General Partner.

Id. Thus, the court of appeals affirmed the trial court’s award of punitive damages.

Interesting Note: Many attorneys and clients that lose in a trial court via a bench trial are reluctant to want the trial court to explain its ruling and awards. They may feel that the findings will make them look worse than the actual judgment. That may be true, but any good appellate attorney will recommend that a losing party request findings of fact and conclusions of law. A trial court will usually not rule for the wining party on every element of every claim, and may focus the findings on just one claim or a few claims. Moreover, there is nothing to lose because if a losing party does not request findings, all findings will be presumed found to support the judgment. Worford v. Stamper, 801 S.W.2d 108, 109 (Tex. 1990). So, generally, express findings cannot be worse than the presumption, and there is no harm in obtaining adverse express findings whereas there can be more harm in having adverse presumed findings.

Parties should be aware that in Texas there are strict requirements to preserve a request for findings. The party must file a request for findings of fact and conclusions of law within twenty days of the signing of the judgment. Tex. R. Civ. P. 296. The court is supposed to file its findings of fact and conclusions of law within twenty days of the request. Tex. R. Civ. P. 297. If the court fails to do so, then the requesting party must file a notice of past due findings of fact and conclusions of law within thirty days of the filing of the original request. See id. Thereafter, the court should file findings of fact and conclusions of law within forty days from the filing of the original request. See id. If a party fails to file a notice of past due findings of fact and conclusions of law, he has waived any error in the court failing to file such, and all facts will  be presumed in  favor of the judgment. Curtis v. Commission for Lawyer Discipline, 20 S.W.3d 227, 232 (Tex. App.—Houston [14th Dist.] 2000, no pet.). Once the court files findings, a party can file a request for additional findings of fact within ten days after the original findings are filed. Tex. R. Civ. P. 298. This request for additional findings must be specific and must contain proposed findings, otherwise any error in refusing the request is waived. Alvarez v. Espinoza, 844 S.W.2d 238, 241‑42 (Tex. App.—San Antonio 1992, writ dism’d).

Just as a losing party should want express findings, a winning party should generally not want the court to issue express findings because of the presumption. Because it is difficult to preserve error on a trial court’s failure to issue findings, a winning party should be reluctant to prepare proposed findings for a trial court just because a judgment is entered or just because the losing party initially requests findings.

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Photo of David Fowler Johnson David Fowler Johnson

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David maintains an active trial and appellate practice and has consistently worked on financial institution litigation matters throughout his career. David is the primary author of the The Fiduciary Litigator blog, which reports on legal cases and issues impacting the fiduciary…

[email protected]

David maintains an active trial and appellate practice and has consistently worked on financial institution litigation matters throughout his career. David is the primary author of the The Fiduciary Litigator blog, which reports on legal cases and issues impacting the fiduciary field in Texas. Read More

David’s financial institution experience includes (but is not limited to): breach of contract, foreclosure litigation, lender liability, receivership and injunction remedies upon default, non-recourse and other real estate lending, class action, RICO actions, usury, various tort causes of action, breach of fiduciary duty claims, and preference and other related claims raised by receivers.

David also has experience in estate and trust disputes including will contests, mental competency issues, undue influence, trust modification/clarification, breach of fiduciary duty and related claims, and accountings. David’s recent trial experience includes:

  • Representing a bank in federal class action suit where trust beneficiaries challenged whether the bank was the authorized trustee of over 220 trusts;
  • Representing a bank in state court regarding claims that it mismanaged oil and gas assets;
  • Representing a bank who filed suit in probate court to modify three trusts to remove a charitable beneficiary that had substantially changed operations;
  • Represented an individual executor of an estate against claims raised by a beneficiary for breach of fiduciary duty and an accounting; and
  • Represented an individual trustee against claims raised by a beneficiary for breach of fiduciary duty, mental competence of the settlor, and undue influence.

David is one of twenty attorneys in the state (of the 84,000 licensed) that has the triple Board Certification in Civil Trial Law, Civil Appellate and Personal Injury Trial Law by the Texas Board of Legal Specialization.

Additionally, David is a member of the Civil Trial Law Commission of the Texas Board of Legal Specialization. This commission writes and grades the exam for new applicants for civil trial law certification.

David maintains an active appellate practice, which includes:

  • Appeals from final judgments after pre-trial orders such as summary judgments or after jury trials;
  • Interlocutory appeals dealing with temporary injunctions, arbitration, special appearances, sealing the record, and receiverships;
  • Original proceedings such as seeking and defending against mandamus relief; and
  • Seeking emergency relief staying trial court’s orders pending appeal or mandamus.

For example, David was the lead appellate lawyer in the Texas Supreme Court in In re Weekley Homes, LP, 295 S.W.3d 309 (Tex. 2009). The Court issued a ground-breaking opinion in favor of David’s client regarding the standards that a trial court should follow in ordering the production of computers in discovery.

David previously taught Appellate Advocacy at Texas Wesleyan University School of Law located in Fort Worth. David is licensed and has practiced in the U.S. Supreme Court; the Fifth, Seventh, and Eleventh Federal Circuits; the Federal District Courts for the Northern, Eastern, and Western Districts of Texas; the Texas Supreme Court and various Texas intermediate appellate courts. David also served as an adjunct professor at Baylor University Law School, where he taught products liability and portions of health law. He has authored many legal articles and spoken at numerous legal education courses on both trial and appellate issues. His articles have been cited as authority by the Texas Supreme Court (twice) and the Texas Courts of Appeals located in Waco, Texarkana, Beaumont, Tyler and Houston (Fourteenth District), and a federal district court in Pennsylvania. David’s articles also have been cited by McDonald and Carlson in their Texas Civil Practice treatise, William v. Dorsaneo in the Texas Litigation Guide, and various authors in the Baylor Law ReviewSt. Mary’s Law JournalSouth Texas Law Review and Tennessee Law Review.

Representative Experience

  • Civil Litigation and Appellate Law