This morning, the Third Court of Appeals issued an opinion in a fascinating case, from a procedural perspective. Jeffrey Kendziorski obtained a judgment for fraud from a Comal County justice court against a Robert Marshall. The $2,760.50 judgment was for compensatory damages and court costs, but not for exemplary damages.
Mr. Marshall appealed the judgment de novo to the Comal County Court at Law and posted a $5,521.00 surety bond (Rule 571 requires that an appellate bond of twice the judgment be posted in justice court appeals). One of the sureties was a Don Saunders.
On appeal, the Country Court at Law awarded Kendziorski $1,334 in compensatory damages, $1,399.44 in court costs, and $5,000.00 in exemplary damages. In other words, more than the justice court had ordered. After the judge announced the judgment in open court, but before it was actually reduced to judgment, Mr. Marshall, the defendant, passed away.
Unable to collect from Mr. Marshall’s widow, Kendziorski came after the surety. Mr. Marshall resisted, and Kendziorski sued Marshall on the bond. Marshall answered and assorted a whole host of legal defenses. The Court, on motion for summary judgment, ordered that Mr. Saunders was liable for the compensatory damages, but not the exemplary damages, and Kendziorski appealed.
The Court’s opinion is actually quite an interesting discussion of the interpretation of surety bonds and the various legal defenses that can be made against any breach of contract claim, such as unconscionability, unilateral mistake and ambiguity.
The Court also examines the law pertaining to collateral attacks on judgments. Saunders, the surety, argued that the Court at Law impermissibly issued a punitive damages award against an estate, and so he, the surety, cannot be liable for it. The Court of Appeals found this to be an impermissible collateral attack on the judgment against the Estate of Mr. Marshall. The Court did, however, allow Mr. Saunders to attack the underlying judgment on the basis that it exceeded the limits of a justice court’s jurisdiction.
All in all, it’s quite an interesting opinion, from a procedural perspective, despite the fact that only $5000 was at stake, and the Court never tells us anything about the underlying facts, that is, what Mr. Marshall did to defraud Mr. Kendziorski in the first place.
Jeffrey A. Kendziorski v. Don Saunders, Cause No. 03-04-00334-CV
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