By Matthew Guarnaccia
Law360, New York (November 17, 2016, 7:13 PM EST) — Texas’ Fourth Court of Appeals on Wednesday said the owner of a local automotive servicing chain is still on the hook for more than $250,000 awarded by a jury in a breach of contract lawsuit involving a brake pad supplier, finding the panel possessed sufficient evidence to make its decision.
The ruling stems from a dispute between Peveto Companies Ltd., doing business as Brake Check, and Canadian brake pad supplier Fasa Friction Laboratories Inc. over Brake Check’s alleged failure to return more than $110,000 worth of no-longer-needed brake pads. The ruling upheld a trial court jury verdict that awarded Fasa damages, attorneys’ fees and interest after finding that Brake Check failed to comply with the terms of an agreement between the parties by not arranging a return of the inventory.
Brake Check appealed, arguing the jury didn’t have sufficient basis to reach its decision. But the appellate court said it is possible the jury could have found the testimony of Brake Check’s support center director Robert Garis and others not believable in relation to Brake Check’s attempt to locate the inventory and send it back because the testimony did not always match up with evidence presented by the parties.
“Having reviewed all of the evidence relating to the efforts to facilitate the return of the Fasa inventory, we hold the evidence is legally and factually sufficient to support the jury’s finding that Fasa did not breach the agreement by failing to facilitate the return,” the court said. “Therefore, we overrule Brake Check’s challenges to the sufficiency of the evidence supporting the jury’s liability findings.”
The lawsuit dates to 2011, when Brake Check, a well-known brakes and service company in Texas, sued Fasa seeking a declaratory judgment it did not owe Fasa for the allegedly missing brake pads. Fasa filed a counterclaim against Brake Check for breach of contract, saying it was the auto service company’s responsibility to arrange for the return of the inventory.
The jury found in favor of Fasa in June 2015, saying that Brake Check inexcusably failed to comply with the agreement, but that Fasa met its end of the bargain. The jury awarded Fasa $253,550.61, and the judge later denied Brake Check’s motion for new trial.
Upon appeal, Brake Check argued against the jury’s finding that it failed to pay for the unreturned inventory, saying that the credit it would have received from the inventory’s return would be equivalent to the amount Brake Check owed to Fasa. It also argued that the jury should not have concluded that Fasa was not at least partly to blame for failing to facilitate the return of the inventory.
But in its ruling on Wednesday, the appeals court found that discrepancies and factual errors could have easily swayed the jury. For example, a discrepancy arose regarding promises by Garis to ship the remaining inventory back, and his subsequent refusal to answer emails from Fasa representatives.
Additionally, the court said it is possible that the jury could have chosen not to believe testimony by Garis relating to a list of items needed to be shipped, which he said had been submitted to Fasa. The court said the jury could have disbelieved Garis’ assertion that the list had been submitted because Fasa continued to ask for it.
In a statement to Law360 on Thursday, Fasa lawyer Jennifer Espronceda said she was “gratified” by the court’s ruling.
“Our client is a small Canadian company that simply wanted to be paid what it was owed by a prominent Texas-based business,” Espronceda said. “We are proud that a Texas jury did what was right. It is a message to the world that the rule of law applies in the United States.”
Counsel for Brake Check did not respond Thursday to a request for comment.
Fasa is represented by Jennifer Espronceda of Espronceda Law PLLC and Orlando R. Lopez.
Brake Check is represented by Leslie Sara Hyman, Matthew McGowan and Ryan Christopher Reed of Pulman Cappuccio Pullen Benson & Jones LLP and by Barry A. McClenahan of The McClenahan Law Firm.
The case is Peveto Companies Ltd. d/b/a Brake Check v. FASA Friction Laboratories Inc., case number 04-15-00570-CV in the Fourth Court of Appeals of Texas.
–Editing by Jill Coffey.