## Facts

- John and Susan Isaacs sold Hallsville Dragway to Charles Bishop and Hallsville Dragway, Inc., providing purchase-money financing documented by a promissory note drafted by Isaacs’s attorney.
- At Isaacs’s direction, the attorney inserted an automatic, “hair-trigger” default provision into the note; the jury found the provision was fraudulently added.
- Bishop had an opportunity to read the note before signing but did not; the jury assigned Bishop 30% responsibility for negligence in failing to read the note and assigned Isaacs 70% responsibility for the fraud.
- Several months after the sale, a physical altercation occurred at the track; Bishop intervened and called police, resulting in John Isaacs’s arrest.
- After release, John Isaacs contacted Bishop with threats of physical violence and financial harm; the jury found threats occurred.
- Evidence indicated Isaacs attempted to engineer or exploit defaults and pursued foreclosure using the altered default clause, contributing to Bishop’s financial distress and eventual bankruptcy.
- Consolidated litigation followed, with Bishop asserting claims including fraud, wrongful foreclosure-related conduct, threats, and intentional infliction of emotional distress; Isaacs appealed adverse rulings, and Bishop cross-appealed seeking rescission and challenging the use of comparative responsibility.

## Issues

1. Whether Texas proportionate responsibility principles (Tex. Civ. Prac. & Rem. Code ch. 33) apply to common-law fraud and permit allocating responsibility to a plaintiff based on negligent conduct.
2. Whether Bishop’s failure to read the promissory note could reduce his recovery for fraud and affect available remedies.
3. Whether rescission was required or appropriate after a fraud finding where the jury assigned the plaintiff a percentage of responsibility.
4. Whether the evidence was sufficient to support findings and damages relating to Isaacs’s threats, foreclosure-related conduct, and other tort theories.

## Decision

- The court held that Chapter 33 applies to common-law fraud and permits allocation of responsibility to the plaintiff based on negligent conduct, resulting in reduction of recoverable damages.
- The court affirmed the jury’s allocation of responsibility (70% Isaacs; 30% Bishop) and upheld using that allocation to adjust damages.
- The court upheld the trial court’s refusal to grant rescission, treating rescission as an equitable remedy dependent on the circumstances, including the parties’ conduct and the fault allocation.
- The court largely affirmed liability findings and the judgment, with limited modifications consistent with proportionate responsibility and the court’s review of the record.

## Legal Principles

- Texas proportionate responsibility under Chapter 33 applies broadly to tort causes of action, including intentional torts such as common-law fraud.
- A plaintiff’s negligence is not a traditional substantive defense that defeats fraud liability, but the plaintiff’s negligent conduct may be assigned a percentage of responsibility under Chapter 33 and used to reduce damages.
- Rescission for fraud is an equitable, discretionary remedy; a fraud finding does not compel rescission where circumstances—including comparative responsibility and post-transaction developments—support denial.
- Appellate review of fraud and related tort findings turns on legally and factually sufficient evidence supporting causation, responsibility allocation, and damages.

## Conclusion

The court sustained fraud liability based on a fraudulently inserted default clause, applied Chapter 33 to reduce damages according to the plaintiff’s negligence, and affirmed denial of rescission as an equitable determination informed by comparative responsibility and the case’s overall circumstances.


Isaacs v. Bishop, 249 S.W.3d 100 (Tex. App.—Texarkana 2008)