When Leland Dykes proposed to his girlfriend, Pepper Lee, he did so with a $26,000 diamond engagement ring in tow. He also bought a house for Pepper and put it in Pepper’s name. Leland protected his interest in the house through a Property Agreement with Pepper, but did not get a pre-nup covering that pricey ring. So, when the couple split and Pepper kept the ring, Leland sued…. and won.
The jury awarded Leland $110,000 for the real property and $13,000 as conversion damages for the ring. But Pepper appealed, asserting that Leland’s testimony that he paid $26,000 for the ring was legally and factually insufficient to support the jury’s finding that the reasonable cash value of the ring at the time of conversion was $13,000. The Fourteenth Court of Appeals agreed with Pepper, holding that evidence of purchase price constituted no evidence of fair market value at the time of conversion and rendering a take nothing judgment against Leland on the conversion claim.
To reach this conclusion, the court rejected contrary rulings from other intermediate appellate courts, construed the Texas Supreme Court’s opinion in Redman Homes, Inc. v. Ivy as authority for their holding, and determined that Pepper’s failure to object to the evidence of purchase price did not convert otherwise inadmissible evidence into sufficient evidence to support the verdict. The court also opined that Leland could have presented sufficient evidence if he had simply testified to what he considered to be the value of the ring at the time of conversion.
So, what’s the bottom line? Take some time on the front end to decide what evidence you need to present to a jury to support your damages. Although Leland won the case, he didn’t give the jury the evidence it needed to support all of its answers. By spending time on the front end figuring out what the value truly was at the time of the conversion, he could have won it all. Instead, Leland is out the money he paid for the ring, and Pepper walks away a partial winner with a sparkly diamond as proof. The court’s opinion can be found at this link.