Appeals court tosses $2.6 million award against auto dealer

A Fort Worth appeals court has tossed out a $2.6 million defamation award against Weatherford auto dealer Jerry Durant and others, saying there is insufficient evidence that they spread damaging rumors that a former employee had allegedly accepted kickbacks.

The 2nd Court of Appeals in Fort Worth wiped out the 2014 jury award given to Andrew Anderson, a former manager of a Durant dealership in Granbury, saying that the “record is devoid of evidence” that they were the source of the rumor.

In reversing and remanding the verdict in February, the court also wrote that while the story that Anderson took money from a wholesale car dealer to buy vehicles may have circulated, Anderson could not prove he was harmed because he was able to get another job.

The opinion, written by Justice Lee Gabriel, also said that the only one telling people he had been fired because of the allegations was Anderson himself. The opinion states that employment records at the Durant companies show that Anderson actually resigned.

“He did not identify any position that he was not offered because of his allegedly tarnished reputation,” Gabriel wrote. “To put it another way, there was insufficient evidence that any damage to Anderson’s reputation has been caused by the rumors or would be caused in the future.”

Gabriel was joined in her opinion by justices Anne Gardner and Sue Walker.

“The Durant parties are pleased with and gratified by the thorough and well-reasoned decision of the Court of Appeals,” said Andy Sims, an attorney at Harris, Finley & Bogle.

Anderson’s attorney has filed for a rehearing before the Fort Worth appeals court and is already planning to take the case to the Texas Supreme Court if necessary.

“We’ve come too far,” said Hugh Connor, an attorney at Kelly Hart & Hallman. “There is evidence in the record to support the verdict. I would respectfully disagree” with the court.

Anderson started working for Durant in 2001 as a used car manager in Weatherford before working his way up to become a general manager in 2006.

In February 2011, Anderson claims, Durant offered him the chance to be a dealer/operator of two Granbury dealerships, along with ownership in the associated real estate. There was no written agreement outlining that arrangement, and Durant denied making that kind of deal with Anderson, court records state.

By the end of that year, Durant announced he was selling the two dealerships to a third party. Durant gave Anderson a $75,000 check, one that the car salesman said was a Christmas bonus but Durant said was in lieu of the promised 10 percent ownership in the dealerships.

Over the next two weeks, Durant allegedly yelled at Anderson for buying cars from a certain wholesale dealer and accused him of taking kickbacks on the cars he purchased. By one account, Durant’s company lost $30,000 on the cars, the appeals court wrote.

In January 2012, but only after taking an inconclusive polygraph, Anderson met with Durant and others over the phone and they argued about the $30,000. Durant allegedly told Anderson if he disagreed with him, you can “hit the dirt.” Anderson thought he was being fired and never returned to work. One of Durant’s associates thought Anderson was being transferred to Weatherford.

Anderson had secretly taped some of his conversations with Durant and others.

After he stopped working for Durant, Anderson says he heard rumors he was fired for taking kickbacks, leading to his lawsuit against Durant and his associates for defamation, breach of contract and fraud. After an eight-week trial in 2014, a jury awarded Anderson $2.6 million for defamation, breach of contract, mental anguish and loss of income. Durant and his companies were to pay most of the money.

But in the appeals court ruling, the panel found that Anderson failed to secure a jury finding that there was an enforceable contract between him and the Durant entities over the ownership of the dealerships.

The justices also found that Anderson had offers for employment and landed a permanent job by October 2012, albiet for a smaller salary. The ruling also quoted testimony that Anderson had a good reputation within the industry and came “highly recommended.”

Based on that, the court found that there was “no evidence that anyone believed the rumors that Anderson took kickbacks or that anyone’s perception of Anderson had changed because of the rumors.”

In his request for a rehearing, Connor states in court records that the appeals court ruling contains “errors of law and fact that beggar explanation.” He said that their reversal “ignores much of the evidence supporting the jury’s findings against Durant.”

“There is certainly more than a scintilla of evidence that others believed the kickback rumor and Anderson’s reputation was damaged as a result,” according to court records.

But in their response to the rehearing request, Sims writes that the court correctly applied the law in a “succinct and well-written opinion,” and claims that Connor’s brief is “insulting” in “its tone and mischaracterization of the facts ...”

Sims filed the brief with Albon Head, an attorney with Jackson Walker who is representing the other individuals named in the lawsuit.

This story was originally published May 27, 2016 at 9:29 AM with the headline "Appeals court tosses $2.6 million award against auto dealer."