## Facts

- Andrew Anderson worked for about a decade for an auto-dealership group owned by Jerry V. Durant and related entities.
- Anderson alleged the employer offered an oral “buy-in” arrangement if he would manage two underperforming dealerships.
- Anderson claimed the deal promised a 10% ownership interest in two dealerships and a 10% interest in associated real estate; defendants contended any offer was contingent, limited, and excluded real estate.
- Anderson relocated and undertook management duties in reliance on the alleged buy-in.
- Anderson was later accused within the organization of receiving illegal kickbacks in connection with used-car acquisitions, and he lost his job.
- Anderson alleged the kickback accusation spread within the closely connected auto industry, harming his reputation, causing emotional distress, and impairing his ability to obtain comparable employment.
- Anderson sued for defamation (kickback accusations), breach of contract (buy-in deal), and fraudulent inducement (false promises to induce reliance).
- A jury found for Anderson on defamation and fraudulent inducement, but did not find an agreement matching the contract question submitted (which combined dealership interests and real-estate interests); it awarded defamation damages of $2.2 million and fraud damages of $383,150 based on a 10% ownership interest in the dealerships, awarding zero for any real-estate interest.

## Issues

1. Whether an adverse jury finding on a separately submitted breach-of-contract question precludes benefit-of-the-bargain damages for fraudulent inducement when the fraud submission incorporates an enforceable promise.
2. Whether the evidence was legally sufficient to support defamation damages for (a) past loss of reputation and past mental anguish, (b) future loss of reputation and future mental anguish, and (c) lost income allegedly caused by the defamatory statements.

## Decision

- The Supreme Court of Texas affirmed in part and reversed in part the court of appeals’ take-nothing judgment.
- The court held Anderson was not barred from recovering benefit-of-the-bargain fraudulent-inducement damages because the fraud findings could establish an enforceable promise for a 10% interest in the dealerships even though the broader contract question was answered “no.”
- The court reinstated fraudulent-inducement damages limited to the dealership ownership interests (consistent with the jury’s valuation and its zero award for real estate).
- The court held there was legally sufficient evidence supporting defamation damages for past loss of reputation and past mental anguish.
- The court held there was no evidence supporting defamation damages for future loss of reputation or future mental anguish.
- The court held there was no evidence that the alleged defamatory statements proximately caused Anderson’s claimed lost-income damages, and it disallowed that component.

## Legal Principles

- Fraudulent inducement presupposes an underlying contractual promise, and benefit-of-the-bargain damages require proof of an enforceable promise.
- A fraud verdict can supply the necessary proof of an enforceable promise for benefit-of-the-bargain damages even if a separately submitted contract question is answered adversely, when the jury’s answers can be reasonably harmonized and the fraud submission contains the essential contract elements.
- Courts should reconcile jury findings if reasonably possible rather than treat them as irreconcilably inconsistent.
- In defamation involving accusations of criminal or unethical conduct, evidence can support general damages for past reputational harm and past mental anguish through testimony describing the extent and effect of the publication and resulting injury.
- Future defamation damages require non-speculative evidence that compensable injury will probably persist.
- Lost-income damages in defamation require legally sufficient evidence of causation linking the loss to the defamatory statements, not merely evidence of unemployment or reduced earnings.

## Conclusion

The court allowed benefit-of-the-bargain recovery on fraudulent inducement based on the fraud findings despite an adverse contract finding framed more broadly, and it reinstated defamation damages for past reputational harm and past mental anguish while rejecting future-damages and lost-income components for lack of legally sufficient proof.


Anderson v. Durant, 550 S.W.3d 605 (Tex. 2018)