IN THE SUPREME COURT OF TEXAS

IN THE SUPREME COURT OF TEXAS

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No. 04-0961

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Tony Gullo Motors = I, L.P. and=20 Brien Garcia , Petitioners,

Nury Chapa,=20 Respondent

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On Petition for Review from = the

Court of Appeals for the Ninth = District of=20 Texas

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Argued = October 19,=20 2005

Justice Brister delivered the = opinion=20 of the Court, in which Chief = Justice=20 Jefferson, Justice = Hecht,=20 Justice Wainwright, = Justice Green, and Justice Willett joined.

Justice Johnson filed a = concurring=20 opinion.

Justice O=92Neill filed a = dissenting=20 opinion.

Justice Medina did not = participate in=20 the decision.

Nury Chapa=20 bought a Toyota Highlander from Tony Gullo Motors for $30,207.38; they = disagree=20 what model of the car was involved. After a two-day trial, the six = jurors=20 answered 15 questions concerning breach of contract, fraud, and the = DTPA[1] in Chapa=92s favor. They = also found a=20 difference in value of the two models of $7,213, mental anguish damages = of=20 $21,639, exemplary damages of $250,000, and attorney=92s fees of = $20,000.

The = trial=20 court disregarded the mental anguish and exemplary awards on the ground = that=20 Chapa=92s only claim was for breach of contract, and the fee award = because Chapa=20 had not segregated fees attributable to that claim alone. In a per = curiam=20 memorandum opinion, the Ninth Court of Appeals disagreed with both=20 conclusions, reinstating all the awards but reducing exemplary damages = to=20 $125,000.

We = agree that=20 Chapa could assert her claim in several forms, but disagree that she = could=20 recover in all of them. Further, the court of appeals=92 judgment = included=20 exemplary damages exceeding the bounds of constitutional law and = attorney=92s fees=20 exceeding the bounds of Texas law. Accordingly, we reverse and remand = for=20 further proceedings.

I. Election of Remedies

In = entering=20 judgment for Chapa on all her contract, fraud, and DTPA claims, the = court of=20 appeals violated the one-satisfaction rule. =93There can be but one = recovery for=20 one injury, and the fact that . . . there may be more than one theory of = liability[] does not modify this rule.=94 [2]

Chapa alleged=20 only one injury =97 delivery of a base-model Highlander rather than a = Highlander=20 Limited. While she could certainly plead more than one theory of = liability, she=20 could not recover on more than one.[3]

For = breach of=20 contract, Chapa could recover economic damages and attorney=92s fees, = but not=20 mental anguish or exemplary damages.[4] For fraud, she could recover = economic=20 damages, mental anguish, and exemplary damages, but not attorney=92s = fees.[5] For a DTPA violation, she = could=20 recover economic damages, mental anguish, and attorney=92s fees, but not = additional damages beyond $21,639 (three times her economic damages).[6] The court of appeals erred = by simply=20 awarding them all.

But = as Chapa=20 was the prevailing party, she is still entitled to judgment on the most=20 favorable theory supported by the pleadings, evidence, and verdict.[7] Gullo Motors does not = challenge the=20 jury=92s breach of contract or economic damages findings in this Court.=20 Accordingly, the only question before us is whether Chapa is entitled to = anything more.

II. Mere Breach of Contract

Gullo Motors=20 argues that Chapa=92s only claim is in contract, as the parties=92 only = dispute is=20 whether she contracted for a base-model Highlander or Highlander = Limited. =93An=20 allegation of a mere breach of contract, without more, does not = constitute a=20 =91false, misleading or deceptive act=92 in violation of the DTPA.=94[8] Similarly, =93the usual view = is that=20 mere breach of contract is not fraud and that it may not be evidence of=20 fraud.=94 [9]

But = Chapa=20 alleged more than a mere breach of contract; her complaint was not just = that=20 Gullo Motors failed to deliver a Highlander Limited, but that it never = intended=20 to do so. A contractual promise made with no intention of performing may = give=20 rise to an action for fraudulent inducement.[10] The duty not to = fraudulently procure=20 a contract arises from the general obligations of law rather than the = contract=20 itself, and may be asserted in tort even if the only damages are = economic.[11]

Gullo Motors=20 argues that Chapa cannot bring a fraudulent inducement claim because she = was not=20 promised a car she did not want, but one that she did. But a party may = bring a=20 fraudulent inducement claim even if the terms of the promise are later = subsumed=20 into a contract.[12] In all such cases, the = liability of=20 the defendant on the contract does not absolve it from liability in tort = damages=20 too.[13]

Similarly,=20 while the failure to deliver a Highlander Limited would not alone = violate the=20 DTPA,[14] Chapa=92s claim was that = Gullo Motors=20 represented she would get one model when in fact she was going to get = another.=20 While failure to comply would violate only the contract, the initial=20 misrepresentation violates the DTPA.[15]

Of = course,=20 Chapa was required not just to plead but to prove her claims. Proving = that a=20 party had no intention of performing at the time a contract was made is = not=20 easy, as intent to defraud is not usually susceptible to direct proof.[16] Breach alone is no evidence = that=20 breach was intended when the contract was originally made.[17] Similarly, denying that an = alleged=20 promise was ever made is not legally sufficient evidence of fraudulent=20 inducement.[18] Usually, successful claims = of=20 fraudulent inducement have involved confessions by the defendant or its = agents=20 of the requisite intent.[19]

But = while=20 breach alone is no evidence of fraudulent intent, breach combined with = =93slight=20 circumstantial evidence=94 of fraud is enough to support a verdict for = fraudulent=20 inducement.[20] We believe Chapa met that = standard=20 here.

At = trial,=20 Chapa testified that she signed a contract listing a Highlander Limited, = but=20 that Gullo Motors personnel =93snatched=94 the contract from her after = she signed=20 it, and must have destroyed it later. She also testified that the = signatures on=20 at least four documents were forged, and that some were forgeries of her = deceased husband=92s signature rather than her own. In light of the = favorable=20 verdict, we must assume the jury credited this testimony.[21]

Spoliation of=20 evidence normally supports an inference only that the evidence was=20 unfavorable,[22] not that it was created = ab initio=20 with fraudulent intent. But as the evidence here was part of the = original=20 contracting process, it provides some circumstantial evidence of fraud = in that=20 process.

Further, the=20 only contract introduced at trial listed the car sold as a =932002 = Toyota=94;=20 although Gullo Motors prepared the contract, it offered no explanation = why the=20 box for indicating the model was left blank. Although the contract = listed a=20 vehicle identification number that matched the base-model Chapa = ultimately=20 received, there was evidence that Gullo Motors did not contract for that = car=20 until several days after Chapa signed the contract, and thus must have = added it=20 later.[23] And when Chapa=92s first = attorney=20 offered to return the car for a refund, Gullo Motors refused on the = ground that=20 it had already been titled, although evidence at trial suggested that = did not=20 occur until several days later.

We = recognize=20 the need to keep tort law from overwhelming contract law, so that = private=20 agreements are not subject to readjustment by judges and juries.[24] But we long ago abandoned = the=20 position that procuring a contract by fraud was simply another contract=20 dispute.[25] Because Chapa proved more = than mere=20 breach of contract here, we hold she was entitled to assert fraud and = DTPA=20 claims as well.

III. Exemplary Damages

The = jury=20 found Gullo Motors had committed deceptive acts knowingly and found = clear and=20 convincing evidence that it had committed fraud. Beyond arguing that = Chapa can=20 only sue in contract, Gullo Motors does not challenge either finding. As = we have=20 rejected that argument, Chapa is entitled under the verdict to exemplary = damages=20 for either fraud or violation of the DTPA.[26]

But = both=20 parties challenge the court of appeals=92 judgment reinstating exemplary = damages=20 but reducing them to $125,000 =97 Gullo Motors because the reinstatement = went too=20 far, and Chapa because it did not go far enough. Although the jury = assessed=20 exemplary damages for both fraud and deceptive acts at $250,000, the = DTPA caps=20 those damages at $21,639 (three times Chapa=92s economic loss of = $7,213),[27] while the fraud award is = capped at=20 $200,000.[28] Accordingly, the court of = appeals=92=20 opinion and the parties=92 briefs address only whether the exemplary = damages were=20 properly awarded based on fraud.

As = an initial=20 matter, Chapa asserts that three grounds preclude our constitutional = review of=20 the exemplary damages award. First, she argues this Court lacks = jurisdiction to=20 consider whether exemplary damages are constitutionally excessive. While = the=20 excessiveness of damages as a factual matter is final in the Texas = courts of=20 appeals,[29] the constitutionality of = exemplary=20 damages is a legal question for the court.[30] We have conducted such = analyses=20 before.[31] Moreover, the Supreme Court = of the=20 United States has found unconstitutional a state constitutional = provision=20 limiting appellate scrutiny of exemplary damages to no-evidence = review.[32] Only by adhering to our = practice of=20 reviewing exemplary damages for constitutional (rather than factual)=20 excessiveness can we avoid a similar constitutional conflict.

Second, Chapa=20 claims that by authorizing up to $200,000 in exemplary damages, the = Legislature=20 necessarily rendered that amount constitutionally permissible. But while = =93state=20 law governs the amount properly awarded as punitive damages,=94 that = amount is=20 still =93subject to an ultimate federal constitutional check for = exorbitancy.=94[33]

Third, Chapa=20 argues that she is entitled to the jury=92s entire exemplary damage = award because=20 the trial court complied with the procedural protections required by the = Due=20 Process Clause. But the constitutional limitations on such awards are=20 substantive as well as procedural.[34] Even if the procedural = processes were=20 perfect, =93[t]o the extent an award is grossly excessive, it furthers = no=20 legitimate purpose and constitutes an arbitrary deprivation of = property.=94[35]

We = review not=20 whether the exemplary damage award is exorbitant (as the dissent says), = but=20 whether it is constitutional. In reviewing the amount of an exemplary = damage=20 award for constitutionality, we have been directed to consider three=20 =93guideposts=94: (1) the nature of the defendant=92s conduct, (2) the = ratio between=20 exemplary and compensatory damages, and (3) the size of civil penalties = in=20 comparable cases.[36]

The = reprehensibility of Gullo Motors=92 conduct (the most important of the=20 guideposts)[37] depends in turn on five = more factors,=20 all but one of which weigh against exemplary damages here.[38] Gullo Motors=92 actions did = not cause=20 physical rather than economic harm, did not threaten the health or = safety of=20 others, and did not involve repeated acts rather than an isolated = incident.=20 Chapa claims she was financially vulnerable, but the only harm she = alleged (that=20 her SUV did not have Michelin tires and lumbar-support seats) did not = threaten=20 financial ruin.[39] Only the last factor, that = the=20 conduct at issue was deceitful rather than accidental, points in = Chapa=92s favor.=20 The existence of a single factor =93may not be sufficient to sustain a = punitive=20 damages award.=94 [40]

Touching the=20 second guidepost, the Supreme Court has declined to adopt a bright-line = ratio=20 between actual and exemplary damages, but has stated that =93few awards = exceeding=20 a single‑digit ratio . . . will satisfy due process.=94[41] Further, the Court has = pointed to=20 early statutes authorizing awards of double, treble, or quadruple = damages as=20 support for the conclusion that =93four times the amount of compensatory = damages=20 might be close to the line of constitutional impropriety.=94[42] Here, the court of = appeals=92 award=20 exceeds four times Chapa=92s total compensatory award, and is more than = 17 times=20 her economic damages. Further, the jury=92s award of precisely $21,639 = for mental=20 anguish =97 exactly three times her economic damages of $7,213 =97 = supports the=20 Supreme Court=92s observation that emotional damages themselves often = include a=20 punitive element.[43] The court of appeals=92 = judgment at=20 least pushes against, if not exceeds, the constitutional limits.

Finally, we=20 must compare the exemplary damages awarded here to civil penalties = authorized in=20 comparable cases. The Texas Occupations Code provides for a maximum = civil=20 penalty of $10,000 for statutory or regulatory violations by motor = vehicle=20 dealers.[44] Similarly, the attorney = general could=20 collect not more than $20,000 as a civil penalty under the DTPA in a = case like=20 this.[45] These are precisely the = kinds of=20 penalties for comparable misconduct the Supreme Court has used =97 and = says we=20 must use =97 in our constitutional analysis.[46]

Chapa argues=20 we should consider the possibility that Gullo Motors might be found = criminally=20 liable or lose its license for what happened here. But she provides no = proof=20 that such a sanction has ever been awarded in a case like this. =93[T]he = remote=20 possibility of a criminal sanction does not automatically sustain a = punitive=20 damages award.=94 [47]

The = dissent=20 reaches a different conclusion only by changing the constitutional = standards.=20 The Supreme Court says =93repeated conduct=94 refers to recidivism;[48] the dissent says it means = reiterating=20 a single misrepresentation to a single consumer.[49] The Supreme Court says = $1,000,000 in=20 emotional anguish does not mean there are =93physical injuries=94;[50] the dissent says $21,000 in = emotional=20 anguish is enough to conclude otherwise.[51] The Supreme Court says = multiplying=20 damages by a factor of 4 is =93close to the line of constitutional = impropriety=94;[52] the dissent says using a = factor of=20 4.33 is unworthy of our review.[53] The Supreme Court says we = must look=20 to the civil penalties =93imposed in comparable cases=94;[54] the dissent says we should = look to=20 the general $200,000 cap applicable to all exemplary cases = regardless of=20 their nature.[55] The Supreme Court says = exemplary=20 damages =93pose an acute danger of arbitrary deprivation of = property=94;[56] the dissent perceives no = danger in=20 pushing against the constitutional limits in all fraud cases, as the = only factor=20 present here (deceitful conduct) is present in every one.

While finding=20 the jury verdict of $250,000 constitutionally excessive, the court of = appeals=20 gave no explanation for its award of half that amount. Exemplary damages = are not=20 susceptible to precise calculation, but this is still five to ten times = more=20 than comparable civil penalties, or what Chapa could recover under the=20 consumer-friendly DTPA.[57] Pushing exemplary damages = to the=20 absolute constitutional limit in a case like this leaves no room for = greater=20 punishment in cases involving death, grievous physical injury, financial = ruin,=20 or actions that endanger a large segment of the public.[58] On this record, Gullo = Motors=92 conduct=20 merited exemplary damages, but the amount assessed by the court of = appeals=20 exceeds constitutional limits.

The = Texas=20 Rules of Appellate Procedure provide for remittitur orders by the courts = of=20 appeals,[59] but make no similar = provision for=20 this Court. While this Court may review the constitutionality of an = exemplary=20 damages award, the amount of a suggested remittitur is in the first = instance a=20 matter for the courts of appeals.

Thus, for=20 example, when our constitutional review in Bentley v. Bunton = found=20 evidentiary support for some amount of mental anguish damages but not = for the $7=20 million awarded, we remanded to the court of appeals to determine an = appropriate=20 remittitur.[60] When the case returned to = us after=20 remittitur but without any reassessment of exemplary damages, we = returned it=20 again to the court of appeals to conduct a constitutional analysis of = those=20 damages in the first instance.[61]

Accordingly,=20 having found that the amount awarded by the court of appeals exceeds the = constitutional limitations on exemplary damages, we remand to that court = for=20 determining a constitutionally permissible remittitur.

IV. Attorney=92s Fees

The = jury=20 found a reasonable and necessary attorney=92s fee =93in this case=94 was = $20,000.[62] During and after trial, = Gullo Motors=20 objected that fees were not recoverable for Chapa=92s fraud claim, and = thus had to=20 be excluded. We agree, and thus reverse and remand the fee issue for a = new=20 trial.

For = more than=20 a century, Texas law has not allowed recovery of attorney=92s fees = unless=20 authorized by statute or contract.[63] This rule is so venerable = and=20 ubiquitous in American courts it is known as =93the American Rule.=94[64] Absent a contract or = statute, trial=20 courts do not have inherent authority to require a losing party to pay = the=20 prevailing party=92s fees.[65] As a result, fee claimants = have=20 always been required to segregate fees between claims for which they are = recoverable and claims for which they are not.[66]

We = recognized=20 an exception to this historical practice in 1991 that has since = threatened to=20 swallow the rule. In Stewart Title Guaranty Co. v. Sterling, we = affirmed=20 the general rule: =93the plaintiff is required to show that = [attorney=92s] fees were=20 incurred while suing the defendant sought to be charged with the fees on = a claim=20 which allows recovery of such fees.=94 [67] But we then added:

A=20 recognized exception to this duty to segregate arises when the = attorney=92s fees=20 rendered are in connection with claims arising out of the same = transaction and=20 are so interrelated that their =93prosecution or defense entails proof = or denial=20 of essentially the same facts.=94 Flint & Assoc. v. = Intercontinental Pipe=20 & Steel, Inc., 739 S.W.2d 622, 624‑25 (Tex. App.=96Dallas = 1987, writ=20 denied). Therefore, when the causes of action involved in the suit are = dependent=20 upon the same set of facts or circumstances and thus are =93interwined = to the=20 point of being inseparable,=94 the party suing for attorney=92s fees may = recover the=20 entire amount covering all claims. Gill Sav. Ass=92n v. Chair King, = Inc.,=20 783 S.W.2d 674, 680 (Tex. App.‑Houston [14th Dist.] 1989), = modified, 797=20 S.W.2d 31 (Tex. 1990) (remanded to the trial court for reexamination of=20 attorney=92s fee award).[68]

As = the only=20 two authorities cited in this passage suggest, this exception had not = been=20 recognized by this Court before, but only by a few courts of appeals = beginning=20 about ten years earlier.[69] In fact, we did not even = apply the=20 exception in Sterling (as the fees there could be segregated),[70] and appear to have applied = it only=20 once since.[71]

But = the=20 courts of appeals have been flooded with claims that recoverable and=20 unrecoverable fees are inextricably intertwined.[72] As the exception can make = all fees=20 recoverable (even if Texas law has long said they are not), it is no = surprise=20 that more and more claimants have sought to invoke it. Moreover, as the = details=20 of an attorney=92s work are shrouded in the attorney-client privilege, = it may be=20 hard for anyone else to tell whether the work on several claims truly = was=20 inextricably intertwined.

The = exception=20 has also been hard to apply consistently. The courts of appeals have = disagreed=20 about what makes two claims inextricably intertwined =97 some focusing = on the=20 underlying facts,[73] others on the elements that = must be=20 proved,[74] and others on some = combination of the=20 two.[75] Some do not require = testimony that=20 claims are intertwined,[76] while others do.[77] When faced with fraud and = breach of=20 contract claims like those here, some have held the claims inextricably=20 intertwined,[78] and others just the = opposite.[79]

As=20 Sterling suggests the need to segregate fees is a question of = law,[80] the courts of appeals have = generally=20 (though not always) applied a de novo standard of review.[81] That standard, of course, = gives no=20 deference to the factual determinations of the trial judge or the jury. = But the=20 fees necessary to prove particular claims often turn on such facts =97 = how hard=20 something was to discover and prove, how strongly it supported = particular=20 inferences or conclusions, how much difference it might make to the = verdict, and=20 a host of other details that include judgment and credibility questions = about=20 who had to do what and what it was worth. Given all these details, it = may often=20 be impossible to state as a matter of law the extent to which certain = claims can=20 or cannot be segregated; the issue is more a mixed question of law and = fact for=20 the jury.

This case=20 illustrates several of these difficulties. The court of appeals held = that Chapa=20 was not required to segregate fees (and thus could recover 100 percent = of them)=20 because she =93was required to prove essentially the same facts in = pursuing each=20 of her three causes of action.=94 But when Chapa=92s attorneys were = drafting her=20 pleadings or the jury charge relating to fraud, there is no question = those fees=20 were not recoverable. Nor does Texas law permit them to be compensated = for=20 preparing and presenting evidence regarding the defendant=92s net = worth.

Further, the=20 effort to recover 100 percent of their fees has required Chapa=92s = attorneys to=20 take a position inconsistent with her underlying claims. As noted above, = Chapa=20 has insisted (and we have agreed) that her claims were more than a mere = breach=20 of contract =97 they could be asserted in fraud. But when it came time = to=20 segregate fees, her attorneys testified that their work on the fraud = claim could=20 not possibly be distinguished from that on the contract and DTPA claims. = Having=20 prevailed in her argument that the claims are distinct, it is hard to = see how=20 she can also claim they are inextricably intertwined.

It = is=20 certainly true that Chapa=92s fraud, contract, and DTPA claims were all = =93dependent=20 upon the same set of facts or circumstances,=94 [82] but that does not mean they = all=20 required the same research, discovery, proof, or legal expertise. Nor = are=20 unrecoverable fees rendered recoverable merely because they are nominal; = there=20 is no such exception in any contract, statute, or =93the American = Rule.=94 To the=20 extent Sterling suggested that a common set of underlying facts=20 necessarily made all claims arising therefrom =93inseparable=94 and all = legal fees=20 recoverable, it went too far.

But = Sterling was certainly correct that many if not most legal fees = in such=20 cases cannot and need not be precisely allocated to one claim or the = other. Many=20 of the services involved in preparing a contract or DTPA claim for trial = must=20 still be incurred if tort claims are appended to it; adding the latter = claims=20 does not render the former services unrecoverable. Requests for standard = disclosures, proof of background facts, depositions of the primary = actors,=20 discovery motions and hearings, voir dire of the jury, and a host = of=20 other services may be necessary whether a claim is filed alone or with = others.=20 To the extent such services would have been incurred on a recoverable = claim=20 alone, they are not disallowed simply because they do double = service.

Accordingly,=20 we reaffirm the rule that if any attorney=92s fees relate solely to a = claim for=20 which such fees are unrecoverable, a claimant must segregate recoverable = from=20 unrecoverable fees. Intertwined facts do not make tort fees recoverable; = it is=20 only when discrete legal services advance both a recoverable and = unrecoverable=20 claim that they are so intertwined that they need not be segregated. We = modify=20 Sterling to that extent.

This standard=20 does not require more precise proof for attorney=92s fees than for any = other=20 claims or expenses. Here, Chapa=92s attorneys did not have to keep = separate time=20 records when they drafted the fraud, contract, or DTPA paragraphs of her = petition; an opinion would have sufficed stating that, for example, 95 = percent=20 of their drafting time would have been necessary even if there had been = no fraud=20 claim.[83] The court of appeals could = then have=20 applied standard factual and legal sufficiency review to the jury=92s = verdict=20 based on that evidence.

There may, of=20 course, be some disputes about fees that a trial or appellate court = should=20 decide as a matter of law. For example, to prevail on a contract claim a = party=20 must overcome any and all affirmative defenses (such as limitations, = res=20 judicata, or prior material breach), and the opposing party who = raises them=20 should not be allowed to suggest to the jury that overcoming those = defenses was=20 unnecessary. But when, as here, it cannot be denied that at least some = of the=20 attorney=92s fees are attributable only to claims for which fees are not = recoverable, segregation of fees ought to be required and the jury ought = to=20 decide the rest.

Chapa=92s=20 failure to segregate her attorney=92s fees does not mean she cannot = recover any.=20 Unsegregated attorney=92s fees for the entire case are some evidence of = what the=20 segregated amount should be.[84] We have applied this same = rule for=20 lost profits, medical expenses, and attorney=92s fees =97 an = unsegregated damages=20 award requires a remand.[85] Accordingly, remand is = required.

V. Conclusion

Because the=20 jury found in Chapa=92s favor on all her claims, she is entitled to = recover on the=20 most favorable theory the verdict would support. But she is not required = to make=20 that election until she knows her choices.[86]

Under either=20 fraud or the DTPA, Chapa is entitled to $7,213 in economic damages and = $21,639,=20 in mental anguish. The court of appeals must reassess her exemplary = damages, and=20 a jury must reassess her attorney=92s fees. There is no rule = establishing which=20 should go first, but for practical reasons we remand first to the court = of=20 appeals. At the trial level, the most Chapa could recover under the DTPA = would=20 be additional damages of $21,639 (three times her economic damages) plus = attorney=92s fees of something less than $20,000 (depending on the new = verdict).=20 If the court of appeals=92 reassessment of exemplary damages for fraud = exceeds=20 this amount, Chapa would obviously be better off electing that recovery; = if not,=20 then the court of appeals should thereafter remand to the trial court = for a new=20 trial on attorney=92s fees. Accordingly, we remand to the court of = appeals for=20 further proceedings consistent with this opinion.

_____________________________

Scott=20 Brister

Justice

OPINION=20 DELIVERED: December 22, 2006

^[1] See Texas Deceptive Trade = Practices‑Consumer=20 Protection Act, Tex. Bus. = & Com.=20 Code =A7=A7 17.41-.63 (ADTPA=94).

^[2] Stewart Title Guar. Co. v. Sterling, = 822 S.W.2d=20 1, 8 (Tex. 1991).

^[3] See Boyce Iron Works, Inc. v. Sw. Bell = Tel. Co.,=20 747 S.W.2d 785, 787 (Tex. 1988) (AWhen a party tries a case on alternative = theories of=20 recovery and a jury returns favorable findings on two or more theories, = the=20 party has a right to a judgment on the theory entitling him to the = greatest or=20 most favorable relief.=94); see also Tex. Bus. & Com. Code =A7 = 17.43=20 (providing that Ano recovery shall be permitted under both this = subchapter and another law of both damages and penalties for the same = act or=20 practice=94); Gunn Infiniti, Inc. v. O=92Byrne, 996 S.W.2d 854, = 862 (Tex.=20 1999) (holding plaintiff must elect recovery under either DTPA or fraud = after=20 remand).

^[4] See Stewart Title Guar. Co. v. Aiello, = 941=20 S.W.2d 68, 72 (Tex. 1997) (holding mental anguish and exemplary damages=20 unavailable for breach of contract).

^[5] See New Amsterdam Cas. Co. v. Texas = Indus., 414=20 S.W.2d 914, 915 (Tex. 1967) (stating that Aattorney=92s fees are not recoverable either = in an action=20 in tort or a suit upon a contract unless provided by statute or by = contract=20 between the parties=94); see also Neeley v. Bankers Trust Co. of = Texas, 757=20 F.2d 621, 633 (5th Cir. 1985).

^[6] See Tex.=20 Bus. & Com. Code =A7 17.50(b)(1). For acts committed = intentionally, a=20 consumer may recover additional damages up to three times the amount of = economic=20 and mental anguish damages combined, see id.; with regard to the = DTPA,=20 Chapa only requested and obtained a jury finding that Gullo Motor=92s = violations=20 were committed knowingly.

^[7] See Gulf States Utils. Co. v. Low, 79 = S.W.3d=20 561, 566 (Tex. 2002); Boyce Iron Works, 747 S.W.2d at 787 (Tex.=20 1988).

^[8] Ashford Dev., Inc. v. USLife Real Estate = Serv.=20 Corp., 661 S.W.2d 933, 935 (Tex. 1983) (citations = omitted).

^[9] Thigpen v. Locke, 363 S.W.2d 247, 252 = (Tex.=20 1962).

^[10] See Formosa Plastics Corp. USA v. Presidio = Eng=92rs=20 and Contractors, Inc., 960 S.W.2d 41, 46 (Tex. 1998) (quoting = Crim Truck=20 & Tractor Co. v. Navistar Int=92l Transp. Corp., 823 S.W.2d 591, = 597 (Tex.=20 1992)).

^[11] See id. at 46-47.

^[12] See id. at 47 (citing Graham v. = Roder, 5=20 Tex. 141, 149 (1849)).

^[13] See id.; Spoljaric v. Percival = Tours,=20 Inc., 708 S.W.2d 432, 436 (Tex. 1986).

^[14] See Crawford v. Ace Sign, Inc., 917 = S.W.2d 12,=20 14 (Tex. 1996).

^[15] See Tex.=20 Bus. & Com. Code =A7=A7 17.46(b)(7) (defining deceptive acts = to include=20 Arepresenting that . . . goods are of a = particular style=20 or model, if they are of another=94), 17.46(b)(24) (defining deceptive = acts to=20 include Afailing to disclose information concerning = goods or=20 services which was known at the time of the transaction if such failure = to=20 disclose such information was intended to induce the consumer into a = transaction=20 into which the consumer would not have entered had the information been=20 disclosed=94).

^[16] See Spoljaric, 708 S.W.2d at 435.=20

^[17] See id. (AFailure to perform, standing alone, is no = evidence of=20 the promisor=92s intent not to perform when the promise was made.=94); = Formosa=20 Plastics, 960 S.W.2d at 48; Schindler v. Austwell Farmers = Co‑op., 841=20 S.W.2d 853, 854 (Tex. 1992) (per curiam) (finding failure to pay amount = due was=20 not fraud); Crim Truck, 823 S.W.2d at 597.

^[18] See Miga v. Jensen, 96 S.W.3d 207, = 210-11 (Tex.=20 2002); T.O. Stanley Boot Co., Inc. v. Bank of El Paso, 847 S.W.2d = 218,=20 222 (Tex. 1992) (stating that denial of making promise was Aa factor=94 but Adoes not constitute evidence that the Bank = never=20 intended to perform its promise=94); Spoljaric, 708 S.W.2d at 435 = (AFailure to perform . . . is a circumstance to = be=20 considered with other facts to establish intent.=94). But see Thigpen = v.=20 Locke, 363 S.W.2d 247, 252 (Tex. 1962) (A[S]ubsequent breach is not evidence that may = be=20 considered in determining whether or not there was fraud in the original = transaction.=94).

^[19] See, e.g., Formosa Plastics, 960 = S.W.2d at 48=20 (noting that defendant=92s civil department director admitted that = defendant had=20 acted deceptively and had no intention of performing a key contractual = promise=20 at the time it was made); Spoljaric, 708 S.W.2d at 434-35 (noting = that=20 defendant denied he ever approved a bonus contract, but corporate = secretary=20 testified that he did).

^[20] Spoljaric, 708 S.W.2d at 435. =

^[21] See City of Keller v. Wilson, 168 = S.W.3d 802,=20 819-20 (Tex. 2005).

^[22] See Trevino v. Ortega, 969 S.W.2d 950, = 953 (Tex.=20 1998) (holding spoliation best addressed not by independent cause of = action but=20 by inference that evidence was unfavorable).

^[23] Chapa also argues that Gullo Motors=92 = agreement after=20 the dispute arose to install certain features of a Highlander Limited in = her=20 base-model is some evidence of its earlier fraudulent intent. We = disagree; if=20 efforts to satisfy a consumer after a dispute arises are some evidence = of fraud,=20 sellers will be loathe to make any. Cf. PPG Indus., Inc. v. = JMB/Houston Ctrs.=20 Partners Ltd. P=92ship, 146 S.W.3d 79, 95 (Tex. 2004) (AWe should encourage sellers to attempt = repairs; tolling=20 limitations every time they do might discourage them from doing so at = all.=94).=20

^[24] See, e.g., William Powers, Jr., The = Availability of Tort Remedies for Breach of Contract: Border Wars, = 72 Tex. L. Rev. 1209=20 (1994).

^[25] See Formosa Plastics, 960 S.W.2d at=20 46-47.

^[26] See Tex.=20 Civ. Prac. & Rem. Code =A7 41.003(a) (providing for recovery = of=20 exemplary damages if claimant proves by clear and convincing evidence = that harm=20 resulted from fraud); Tex. = Bus. &=20 Com. Code =A7 17.50(b)(1) (providing for recovery of up to three = times=20 economic damages if conduct violating DTPA was committed=20 knowingly).

^[27] Tex. Bus. &=20 Com. Code =A7 17.50(b)(1). The same statutory provision limits = additional=20 damages to three times economic and mental anguish damages if conduct is = committed intentionally, id., but Chapa only requested a = jury=20 finding whether Gullo Motors=92 committed deceptive acts=20 knowingly.

^[28] Tex. Civ. Prac.=20 & Rem. Code =A7 41.008(b) (capping exemplary damages at the = greater of=20 (1) noneconomic damages plus two times economic damages, or (2)=20 $200,000).

^[29] See Alamo Nat=92l. Bank v. Kraus, 616 = S.W.2d 908,=20 910 (Tex. 1981).

^[30] See Owens‑Corning Fiberglas Corp. v. = Malone, 972=20 S.W.2d 35, 43, 45 (Tex. 1998); see also Cooper Indus., Inc. v. = Leatherman=20 Tool Group, Inc., 532 U.S. 424, 436-37 (2001) (requiring de novo = appellate=20 review of exemplary damages because Athe level of punitive damages is not really a = =91fact=92=20 =91tried=92 by the jury=94) (citation omitted).

^[31] See Bentley v. Bunton, 94 S.W.3d 561, = 607 (Tex.=20 2002) (finding exemplary damages were not constitutionally excessive, = but=20 remanding for reassessment in light of reduced mental anguish award);=20 Malone, 972 S.W.2d at 45-48 (finding exemplary damages were not=20 constitutionally excessive).

^[32] Honda Motor Co., Ltd. v. Oberg, 512 = U.S. 415,=20 418, 426-27 (1994) (AAn amendment to the Oregon Constitution = prohibits=20 judicial review of the amount of punitive damages awarded by a jury = =91unless the=20 court can affirmatively say there is no evidence to support the = verdict.=92 The=20 question presented is whether that prohibition is consistent with the = Due=20 Process Clause of the Fourteenth Amendment. We hold that it is=20 not.=94).

^[33] Gasperini v. Ctr. for Humanities, = Inc., 518 U.S.=20 415, 431 n.12 (1996); Malone, 972 S.W.2d at 45 (A[E]ven if an assessment of punitive damages is = not=20 deemed excessive under governing state law, it may violate a party=92s = substantive=20 due process right to protection from =91grossly excessive=92 punitive = damages=20 awards.=94).

^[34] State Farm Mut. Auto. Ins. Co. v. = Campbell, 538=20 U.S. 408, 418 (2003); Cooper Indus., 532 U.S. at 433; = Oberg, 512=20 U.S. at 420 (AOur recent cases have recognized that the = Constitution=20 imposes a substantive limit on the size of punitive damages awards.=94); = TXO=20 Prod. Corp. v. Alliance Res. Corp., 509 U.S. 443, 453-54 (1993).=20

^[35] Campbell, 538 U.S. at = 417.

^[36] Id. at 418 (citing BMW of N. Am. v. = Gore,=20 517 U.S. 559, 575 (1996)).

^[37] Id. at 419 (quoting Gore, 517 = U.S. at=20 575).

^[38] See id.

^[39] Cf. Transp. Ins. Co. v. Moriel, 879 = S.W.2d 10,=20 24 (Tex. 1994) (A[A]n insurance carrier=92s refusal to pay a = claim cannot=20 justify punishment unless the insurer was actually aware that its action = would=20 probably result in extraordinary harm not ordinarily associated with = breach of=20 contract or bad faith denial of a claimBsuch as death, grievous physical injury, or = financial=20 ruin.=94).

^[40] Campbell, 538 U.S. at = 419.

^[41] Id. at 425; Gore, 517 U.S. at=20 581-82.

^[42] Campbell, 538 U.S. at = 425.

^[43] See id. at 426; see also Restatement (Second) of Torts = =A7 908,=20 cmt. c, at 466 (1977) (AIn many cases in which compensatory damages = include an=20 amount for emotional distress, such as humiliation or indignation = aroused by the=20 defendant=92s act, there is no clear line of demarcation between = punishment and=20 compensation and a verdict for a specified amount frequently includes = elements=20 of both.=94).

^[44] Tex. Occ. Code=20 =A7 2301.801.

^[45] See Tex.=20 Bus. & Com. Code =A7 17.47(c).

^[46] See Campbell, 538 U.S. at 428 = (comparing award=20 in bad-faith insurance case to civil penalty of $10,000 available under = Utah=20 law); Cooper Indus., Inc. v. Leatherman Tool Group, Inc., 532 = U.S. 424,=20 442-43 (2001) (comparing award in misappropriation case to civil penalty = of=20 $25,000 available under Oregon=92s Unlawful Trade Practices = Act).

^[47] Campbell, 538 U.S. at 428 = (AGreat care must be taken to avoid use of the = civil=20 process to assess criminal penalties that can be imposed only after the=20 heightened protections of a criminal trial have been observed, = including, of=20 course, its higher standards of proof. Punitive damages are not a = substitute for=20 the criminal process. . .=94).

^[48] See, e.g., BMW of N. Am. v. Gore, 517 = U.S. 559,=20 577 (1996) (AOur holdings that a recidivist may be punished = more=20 severely than a first offender recognize that repeated misconduct is = more=20 reprehensible than an individual instance of = malfeasance.=94).

^[49] See ___ S.W.3d at = ___.

^[50] Campbell, 538 U.S. at 426. =

^[51] See ___ S.W.3d at = ___.

^[52] Campbell, 538 U.S. at = 425.

^[53] ___ S.W.3d at ___.

^[54] Gore, 517 U.S. at 575 (emphasis = added);=20 Campbell, 538 U.S. at 428; Cooper Indus., Inc. v. Leatherman Tool = Group,=20 Inc., 532 U.S. 424, 442-43 (2001).

^[55] See ___ S.W.3d at ___. The case = cited by=20 the dissent does not support its analysis. See Gore, 517 U.S. at = 583-84=20 (comparing award in fraud case to maximum civil penalty of $2,000 = available=20 under Alabama=92s Deceptive Trade Practices Act).

^[56] Honda Motor Co., Ltd. v. Oberg, 512 = U.S. 415,=20 432 (1994).

^[57] Cf. PPG Indus., Inc. v. JMB/Houston Ctrs. = Partners=20 Ltd. P=92ship, 146 S.W.3d 79, 89 (Tex. 2004) (AFrequently, the DTPA is pleaded not because it = is the=20 only remedy, but because it is the most favorable = remedy.=94)=20 (italics in original).

^[58] See Transp. Ins. Co. v. Moriel, 879 = S.W.2d 10,=20 24 (Tex. 1994).

^[59] Tex. R. App.=20 P. 46.

^[60] 94 S.W.3d 561, 605-08 (Tex. = 2002).

^[61] See Bunton v. Bentley, 153 S.W.3d 50, = 53-54=20 (Tex. 2004) (per curiam).

^[62] The figure represented fees only through the = trial=20 level; Chapa tendered no evidence or jury question on appellate=20 fees.

^[63] See, e.g., Gulf States Utils. Co. v. = Low, 79=20 S.W.3d 561, 567 (Tex. 2002); Dallas Cent. Appraisal Dist. v. Seven = Inv.=20 Co., 835 S.W.2d 75, 77 (Tex. 1992); New Amsterdam Cas. Co. v. = Texas=20 Indus., Inc., 414 S.W.2d 914, 915 (Tex. 1967); Mundy v. Knutson = Constr.=20 Co., 294 S.W.2d 371, 373 (Tex. 1956).

^[64] See, e.g., Buckhannon Bd. and Care Home, = Inc. v.=20 West Virginia Dept. of Health and Human Res., 532 U.S. 598, 602 = (2001)=20 (AIn the United States, parties are ordinarily = required to=20 bear their own attorney=92s fees‑the prevailing party is not = entitled to collect=20 from the loser. Under this =91American Rule,=92=93 we follow = Aa general practice of not awarding fees to a = prevailing=20 party absent explicit statutory authority.=94) (internal citations=20 omitted).

^[65] Travelers Indem. Co. of Connecticut v. = Mayfield,=20 923 S.W.2d 590, 594 (Tex. 1996).

^[66] See Stewart Title Guar. Co. v. Aiello, = 941=20 S.W.2d 68, 73 (Tex. 1997); Stewart Title Guar. Co. v. Sterling, = 822=20 S.W.2d 1, 10 (Tex. 1991); Matthews v. Candlewood Builders, Inc., = 685=20 S.W.2d 649, 650 (Tex. 1985); Int=92l Sec. Life Ins. Co. v. Finck, = 496=20 S.W.2d 544, 547 (Tex. 1973).

^[67] 822 S.W.2d at 10.

^[68] Id. at 11-12.

^[69] See, e.g., Village Mobile Homes, Inc. v. = Porter,=20 716 S.W.2d 543, 552 (Tex. App.‑Austin 1986, writ ref=92d n.r.e.); = De La Fuente=20 v. Home Sav. Ass=92n, 669 S.W.2d 137, 146 (Tex. App.BCorpus Christi 1984, no writ); First = Wichita Nat=92l=20 Bank v. Wood, 632 S.W.2d 210, 215(Tex. App.-Fort Worth 1982, no = writ);=20 Wilkins v. Bain, 615 S.W.2d 314, 316 (Tex. Civ. App.‑Dallas = 1981, no=20 writ).

^[70] See Sterling, 822 S.W.2d at = 12.

^[71] See Aiello, 941 S.W.2d at 73. In = Am. Nat=92l=20 Petroleum Co. v. Transcon. Gas Pipe Line Corp., this Court held that = the=20 court of appeals erred in requiring segregation of fees between a valid = contract=20 and an invalid tortious interference claim, holding instead that both = claims=20 were valid. 798 S.W.2d 274, 280 (Tex. 1990). We did not address the = alternative=20 basis for the court of appeals=92 ruling =97 that attorney=92s fees are = not=20 recoverable in a tort action. See 763 S.W.2d 809, 823 (Tex.=20 App.BTexarkana 1988).

^[72] A Westlaw search shows more than one hundred = published=20 and unpublished opinions addressing the Sterling exception since = 1991.=20 See, e.g., Ski River Dev., Inc. v. McCalla, 167 S.W.3d 121, 143 = (Tex.=20 App.BWaco 2005, pet. denied); Marrs and Smith = P=92ship v.=20 D.K. Boyd Oil and Gas Co., 2005 WL 3073794, *15 (Tex. = App.BEl Paso 2005, pet. denied); Shadow Dance = Ranch=20 P=92ship, Ltd. v. Weiner, 2005 WL 3295664, *9 (Tex. App.BSan Antonio 2005, no pet. h.); Royal = Maccabees Life=20 Ins. Co. v. James,146 S.W.3d 340, 353 (Tex. App.BDallas 2004, pet. denied); Aetna Cas. & = Sur. v.=20 Wild, 944 S.W.2d 37, 40 (Tex. App.BAmarillo 1997, writ denied); Panizo v. = Young Men=92s=20 Christian Ass=92n 938 S.W.2d 163, 170 (Tex. App.BHouston [1st Dist.] 1996, no writ); Kenneth = H. Hughes=20 Interests, Inc. v. Westrup, 879 S.W.2d 229, 233 (Tex. = App.BHouston [1st Dist.] 1994, writ denied).=20

^[73] See, e.g., Rio Grande Valley Gas Co. v. = City of=20 Edinburg, 59 S.W.3d 199, 224 (Tex. App.‑Corpus Christi 2000) = aff=92d in=20 part, rev=92d in part sub nom. Southern Union Co. v. City of = Edinburg,=20 129 S.W.3d 74 (Tex. 2003); Great Am. Ins. Co. v. N. Austin Mun. = Util.=20 Dist. No. 1, 902 S.W.2d 488, 505 (Tex. App.BAustin 1993) aff=92d in part, rev=92d in = part, 908=20 S.W.2d 415 (Tex. 1995).

^[74] See, e.g., Z.A.O., Inc. v. Yarbrough Drive = Ctr.=20 Joint Venture, 50 S.W.3d 531, 550‑51 (Tex. App.BEl Paso 2001, no pet.); AU Pharm., Inc. v.=20 Boston, 986 S.W.2d 331, 337 (Tex. App.BTexarkana 1999, no pet.).

^[75] See, e.g., Air Routing Int=92l. Corp. = (Canada) v.=20 Britannia Airways, Ltd., 150 S.W.3d 682, 693 (Tex. App.BHouston [14th Dist.] 2004, no = pet.).

^[76] See id.

^[77] See Royal Maccabees,146 S.W.3d = at=20 353.

^[78] See, e.g., Nat=92l Gas Clearinghouse v. = Midgard Energy=20 Co., 113 S.W.3d 400, 417 (Tex. App.‑Amarillo 2003, pet. = denied); W. Beach=20 Marina, Ltd. v. Erdeljac, 94 S.W.3d 248, 268 (Tex. App.‑Austin = 2002, no=20 pet.); Pegasus Energy Group, Inc. v. Cheyenne Petroleum Co., 3 = S.W.3d=20 112, 131 (Tex. App.‑Corpus Christi 1999, pet. = denied).

^[79] See, e.g., Young v. Neatherlin, 102 = S.W.3d 415,=20 421 (Tex. App.-Houston [14th Dist.] 2003, no pet.); Panizo v. Young = Men=92s=20 Christian Ass=92n, 938 S.W.2d 163, 171 (Tex. App.‑Houston [1st = Dist.] 1996, no=20 writ); S. Concrete Co. v. Metrotec Fin., 775 S.W.2d 446, = 450‑51=20 (Tex.App.BDallas 1989, no writ).

^[80] See Stewart Title Guar. Co. v. = Sterling, 822=20 S.W.2d 1, 12 (Tex. 1991) (AFollowing a review of the record, we conclude = that the=20 attorney=92s fees are capable of segregation.=94).

^[81] See, e.g., Air Routing Int=92l. Corp., = 150 S.W.3d=20 at 688; Flagship Hotel, Ltd. v. City of Galveston, 117 S.W.3d = 552, 565=20 (Tex. App.BTexarkana 2003, pet. denied); Pacesetter = Pools, Inc.=20 v. Pierce Homes, Inc., 86 S.W.3d 827, 833 (Tex. App.BAustin 2002, no pet.); Aetna Cas. & = Sur. v.=20 Wild, 944 S.W.2d 37, 41 (Tex. App.BAmarillo 1997, writ denied). But see AU = Pharm., Inc.=20 v. Boston, 986 S.W.2d 331, 337 (Tex. App.BTexarkana 1999, no pet.) (applying abuse of = discretion=20 review).

^[82] Sterling, 822 S.W.2d at = 11.

^[83] See, e.g., Stewart Title Guar. Co. = v.=20 Aiello, 941 S.W.2d 68, 73 (Tex. 1997) (noting that claimant=92s = attorney=20 Atestified that approximately = twenty‑percent of his time=20 and fifteen‑percent of his paralegal=92s time concerned issues = predating the=20 agreed judgment=94); Med. Specialist Group, P.A. v. Radiology = Assocs.,=20 L.L.P., 171 S.W.3d 727, 738 (Tex. App.‑Corpus Christi 2005, = pet. denied)=20 (AIn his affidavit, Radiology Associates=92 = counsel. . .=20 testified that his fees for the defense of the case totaled $460,087.00, = and=20 approximately forty percent of these fees were directly related to = Saratoga=92s=20 antitrust claims.=94); Flagship Hotel, 117 S.W.3d at 566 n.7 = (AFlagship argues that the segregation standard = is=20 difficult to meet. We disagree and note that segregated attorney=92s = fees can be=20 established with evidence of unsegregated attorney=92s fees and a rough = percent of=20 the amount attributable to the breach of contract claim. Schenck v. = Ebby=20 Halliday Real Estate, Inc., 803 S.W.2d 361, 369 (Tex. = App.BFort Worth 1990, no writ); accord, Bradbury = v.=20 Scott, 788 S.W.2d 31, 40 (Tex. App.‑Houston [1st Dist.] 1989, = writ=20 denied).=94).

^[84] See Sterling, 822 S.W.2d at = 12.

^[85] See Minnesota Mining and Mfg. Co. v. = Nishika=20 Ltd., 953 S.W.2d 733, 739 (Tex. 1997) (lost profits); Texarkana = Mem=92l=20 Hosp., Inc. v. Murdock, 946 S.W.2d 836, 840-41 (Tex. 1997) (medical=20 expenses); Sterling, 822 S.W.2d at 11-12 (attorney=92s=20 fees).

^[86] The dissent suggests Chapa must elect between = her=20 fraud, contract, and DTPA claims before knowing what amount of = attorney=92s=20 fees she might recover. This would defeat the principle that she is = entitled to=20 recover on the most favorable theory the verdict supports. See = n.7,=20 supra.