Gladney Darroh v. Kevin Spearman

Case Background

On September 24, 2021, Gladney and Deborah Darroh filed a lawsuit (Case No.: 2021-62037) in the Texas State, District Court of Harris County. This case was presided over by Judge Ursula A. Hall. The case centered on allegations of Deceptive Trade Practices Act violations related to interior design services.

Cause

In January 2020, Gladney and Deborah Darroh sought interior design services for their home renovation in Houston, Texas. They engaged Kevin Spearman and his company, Spearman Design, on February 6, 2020, after Spearman pitched a "one-stop shop" concept. Spearman promised cost transparency, specific markup rates, and the ability to verify all costs and expenses during their initial meeting. The Darrohs chose Spearman's services despite higher rates, relying on these promises and his claimed purchasing power. After project completion, the Darrohs requested vendor invoices in December 2020 to verify costs. Spearman delayed for months, finally providing incomplete information in April 2021. During this time, the Darrohs discovered some furniture items were used, not new, including lamp tables over nine years old. Spearman refused to provide full transparency on costs, especially for art and accessories, and denied access to many vendor invoices, breaching his initial promises and raising suspicions of potential interior design fraud.

Injuries

The Darrohs suffered multiple injuries due to the Spearman Defendants' actions. They calculated actual damages of $45,340.68 for items not marked as Art & Accessories, representing charges exceeding the agreed-upon 40% markup. An additional $35,083.20 in damages was identified for items marked as Art & Accessories, also exceeding the agreed markup. The Darrohs also experienced property injury. They received used, worn, and damaged furniture instead of new items, which diminished the value and quality of their home renovation. Emotionally, they suffered due to the lack of transparency and the refusal to provide complete financial information. The discovery of misrepresentations caused significant mental anguish and frustration. The breach of trust severely damaged their confidence in professional services, as their reliance on Spearman's promises of transparency and quality was betrayed. Their dream home renovation turned into a distressing experience, falling far short of their expectations and the promised results. Additionally, the Darrohs spent considerable time and energy attempting to verify costs and resolve issues with Spearman, causing additional stress and inconvenience throughout the process.

Damages

The Darrohs incurred substantial financial and non-financial damages due to their engagement with the Spearman Defendants, which they alleged constituted interior design fraud. Under the Deceptive Trade Practices Act, the Darrohs sought treble damages totaling $249,945.39. They also claimed unspecified damages for mental anguish and frustration caused by the project's mismanagement and subsequent disputes. The potential decrease in home value due to the installation of used and damaged furniture instead of new items was another component of their damages claim. Legal costs, including attorney fees and court costs associated with pursuing legal action, added to their financial burden. The Darrohs also sought pre-judgment and post-judgment interest at a rate of 5% per annum on the damages incurred. Furthermore, they requested exemplary damages to deter similar behavior in the future and to punish the defendants for their alleged willful and malicious conduct.

Key Arguments and Proceedings

Legal representation

• Plaintiff(s): Deborah Darroh, | Gladney Darroh
  • Counsel for Plaintiff: Fred Wahrlich| Elizabeth Eof

 

• Defendant(s): Bellacasa Design Associates Inc dba Kevin Spearman Design Group Inc | Kevin Spearman Design Group Inc | Spearman, Kevin
  • Counsel for Defendants: Matt Mussalli| Kelsey Ratz

Claims

The Darrohs brought forth several claims against the Spearman Defendants, centering on alleged interior design fraud. They alleged common law fraud, asserting that Spearman knowingly made false material representations about cost transparency, markup rates, and the condition of furniture. The Darrohs relied upon these misrepresentations to their detriment. The negligent misrepresentation claim alleged that Spearman negligently provided false information about costs, markups, and the nature of goods provided. He failed to use reasonable care in obtaining or communicating this information. The Darrohs also claimed negligence. They argued that Spearman breached his duty of care in handling and inspecting furniture. As a result, damaged and worn items were delivered and installed in their home. Multiple violations of the Texas Deceptive Trade Practices Act were asserted, including conducting false, misleading, or deceptive acts in trade or commerce, misrepresenting the characteristics and quality of goods or services, and engaging in unconscionable conduct by taking advantage of the Darrohs' lack of knowledge or experience. Through these claims, the Darrohs sought to address the alleged misconduct, seeking actual damages, treble damages under the DTPA, interest, costs, attorneys' fees, and exemplary damages to compensate for their losses.

Defense

The defendants, Kevin Spearman and Bellacasa Design Associates, Inc., filed their answer on October 18, 2021, in response to the plaintiffs' petition. They issued a general denial and raised several affirmative defenses. These defenses included failure to mitigate damages, contributory negligence, consent, failure of consideration, and statute of frauds. The defendants also invoked legal doctrines such as res judicata and estoppel to potentially bar the plaintiffs' claims. They challenged the plaintiffs' right to attorneys' fees and treble damages, citing lack of presentment.

Jury Verdict

The jury found that while there was an Agreement for Interior Design Services, specific terms like markup percentages and audit rights were not agreed upon. The jury determined that both parties failed to comply with the agreement, with the Darrohs breaching first. Despite this, they awarded Gladney and Deborah Darroh $2,500.15 each for KSD's non-compliance, while allowing KSD a $5,000 setoff. The jury found KSD guilty of knowingly engaging in false, misleading, or deceptive acts, awarding the Darrohs $1,848.33 each in "Out of Pocket" damages. They also held Kevin Spearman personally liable for deceptive acts, awarding the Darrohs $3,676.87 each. However, the jury found no evidence of unconscionable actions or fraud by either defendant and awarded no "Benefit of the Bargain" damages. In terms of legal fees, the jury granted the Plaintiffs $5,000 for trial court proceedings but did not award any fees for potential appeals. Court Documents: Available Upon Request