RC Management, Inc. v. Texas Waste Systems, Inc.--Appeal from County Court at Law No 5 of Bexar County

MEMORANDUM OPINION
No. 04-02-00488-CV
RC MANAGEMENT, INC.,
Appellant
v.
TEXAS WASTE SYSTEMS, INC.,
Appellee
From the County Court at Law No. 5, Bexar County, Texas
Trial Court No. 255,420
Honorable Shay Gebhardt, Judge Presiding

Opinion by: Catherine Stone, Justice

Sitting: Alma L. L pez, Chief Justice

Catherine Stone, Justice

Sarah B. Duncan, Justice (concurring in the judgment)

Delivered and Filed: April 2, 2003

AFFIRMED

RC Management, Inc. ("RCM") appeals the trial court's judgment entered pursuant to a unanimous jury verdict in favor of Texas Waste Systems, Inc., ("TWS") on its claim for quantum meruit. In one issue on appeal, RCM contends that the evidence is legally and factually insufficient to support TWS's claim for quantum meruit. We affirm.

Factual and Procedural Background

TWS is a waste service provider that provided garbage removal services to Springhill Apartments in San Antonio, Texas. Springhill is owned by the San Antonio Housing Authority ("SAHA"). TWS's service contract with SAHA expired by its own terms on November 30, 1998. Prior to that contract terminating, on September 1, 1998, SAHA transferred management of Springhill to RCM. Under the management agreement between RCM and SAHA, RCM assumed various duties, including garbage removal. Also, under the agreement, RCM was given a limited authority to enter into contracts on SAHA's behalf.

According to Sharon Kemp, office manager for TWS, RCM contacted TWS and informed it of the management change in 1998. RCM also requested that all subsequent billing for TWS's services be mailed directly to it. According to Kemp, RCM specifically requested an increase in garbage container size at Springhill. Mel Kemp, general manager for TWS, testified that pursuant to RCM's request, TWS dispatched a salesperson to Springhill. According to Kemp, it was company procedure to respond to a request for increased containers by dispatching a salesperson. Additionally, it was company procedure to obtain a signed sales agreement when a customer requested an increase in garbage container size. On October 1, 1998, Terry Degrood, sales manager for TWS, met with Mike Nava, chief maintenance supervisor for Springhill. At trial, Degrood testified that the meeting was a result of RCM's request for an increase in garbage container size. Nava, on the other hand, testified that he and Degrood met to discuss the possibility of moving some containers to other areas of the complex to compensate for overflowing containers. Two form service agreements resulted from this meeting. Each agreement identified Springhill as the customer for service and RCM as the customer for billing purposes. Each agreement specified that TWS would provide eight containers, each with a capacity of eight cubic yards. These containers were larger in volume than those already located on the property. The agreements also provided that TWS would provide waste removal services on Mondays, Wednesdays, and Fridays. The agreements further provided that TWS would charge $1,645.00 per month for its materials and services. Both sales agreements were signed by both Degrood and Nava. According to RCM, Nava was not authorized to contract on behalf of RCM.

The evidence reflects that soon after October 1, 1998, TWS provided larger garbage containers and pick up service as outlined under the service agreements. The containers and waste services were provided from October 1998 through March 1999. RCM tendered payment to TWS in October, November, and December 1998. RCM's payments coincided with the amounts owed to TWS under the service agreements. After December 1998, however, RCM ceased all payments to TWS.

On July 14, 2000, TWS brought suit on a sworn account against RCM. TWS subsequently amended its petition and added a claim for quantum meruit. The case proceeded to a jury trial in April 2002. The jury found that there was no agreement between the parties to provide garbage removal services and containers. However, the jury found that TWS had performed compensable work for RCM and that the value of that work was $9,720.00. The trial court entered a judgment pursuant to the jury's findings. RCM subsequently filed a motion for new trial. That motion was overruled by the court after a hearing on the matter. RCM appeals the judgment.

Standard of Review

In reviewing no evidence issues, we consider only the evidence and inferences that tend to support the jury's finding and disregard all evidence and inferences to the contrary. See Lenz v. Lenz, 79 S.W.3d 10, 19 (Tex. 2002). Where more than a scintilla of evidence exists to support the jury's finding, the no evidence challenge fails. See Formosa Plastics Corp., USA v. Presidio Eng'rs, 960 S.W.2d 41, 48 (Tex. 1998). When reviewing a challenge to the factual sufficiency of the evidence, we must consider all of the evidence in the record. See Plas-Tex, Inc. v. U.S. Steel Corp., 772 S.W.2d 442, 445 (Tex. 1989). If a party is attacking the factual sufficiency of an adverse finding on an issue to which the other party has the burden of proof, the attacking party must demonstrate that there is insufficient evidence to support the adverse finding. See Hickey v. Couchman, 797 S.W.2d 103, 109 (Tex. App.--Corpus Christi 1990, writ denied). Under this standard, we must first consider, weigh, and examine all of the evidence which supports and which is contrary to the jury's determination. See Plas-Tex, 772 S.W.2d at 445. We should set aside the verdict only if it is so contrary to the overwhelming weight of the evidence as to be clearly wrong and unjust. See Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986).

Analysis

Quantum meruit is an equitable remedy that does not arise out of a contract, but is independent of it. This remedy is based upon a promise implied by law to pay for beneficial services rendered and knowingly accepted. See Black Lake Pipe Line Co. v. Union Constr. Co., 538 S.W.2d 80, 86 (Tex. 1976). Generally, a party may recover under quantum meruit only when there is no express contract covering the services or materials furnished. See Truly v. Austin, 744 S.W.2d 934, 936 (Tex. 1988). To recover on this claim, a plaintiff must prove that:

(1) valuable services were rendered or materials furnished;

(2) for the person sought to be charged;

(3) which services or materials were accepted by the person sought to be charged, used, and enjoyed by him; and

(4) under such circumstances as reasonably notified the person sought to be charged that the plaintiff in performing such services was expecting to be paid by the person sought to be charged.

Bashara v. Baptist Mem'l Hosp. Sys., 685 S.W.2d 307, 310 (Tex. 1985). RCM specifically contends that there is no evidence establishing that garbage services were rendered directly to it, that such services were for its use and enjoyment, and that it had reasonable notice that it would be expected to pay TWS for its services.

RCM initially contends that TWS cannot recover on its claim for quantum meruit under the general rule that a party cannot recover in quantum meruit if a valid, express contract covers the same subject matter. As we understand its argument, RCM contends the SAHA contract governed the conduct of the parties in this case and that it is the SAHA contract on which TWS has an actionable claim for breach of contract against SAHA. Alternatively, RCM contends TWC has a breach of implied warranty claim as against Nava. Simply, it is RCM's contention that TWS has alleged the wrong claim against the wrong party. We disagree.

RCM correctly states the general rule that where a valid, enforceable contract exists between two parties, the aggrieved party cannot recover in quantum meruit. The alleged contract at issue would have been the sales agreements between RCM and TWS, not the SAHA contract. A jury issue on whether a valid, enforceable contract existed between RCM and TWS was specifically submitted. The jury determined a valid, enforceable contract did not exist. Accordingly, TWS can seek recovery on its claim for quantum meruit against RCM.

We next determine whether there is sufficient evidence to show that TWS rendered services and provided materials to RCM's benefit. To support a claim for quantum meruit, a plaintiff must show that his efforts were undertaken for the person sought to be charged. See Bashara, 685 S.W.2d at 310; McFarland v. Sanders, 932 S.W.2d 640, 643 (Tex. App.--Tyler 1996, no writ). It is not enough for the plaintiff to merely show that the defendant benefitted from the plaintiff's actions. See Bashara, 685 S.W.2d at 310. RCM contends TWS's services were directly provided to the owner of Springhill, SAHA, and that, at most, it received a tangential benefit from the services provided by TWS. We disagree in the light of evidence to the contrary. The jury was able to consider the management agreement between SAHA and RCM. Under that agreement, as property manager for Springhill, RCM assumed the following duties:

To enter into all necessary or desirable service contracts with respect to the repair and operation of the Property, including, without limitation[,] contracts for electricity, gas, air conditioning, equipment maintenance, water treatment, telephone, janitorial, landscaping, window cleaning, rubbish removal, snow removal, fuel oil . . . .

To enter into contracts for various utilities and services such as electricity, gas, water, telephone, extermination, garbage disposal and other services on the Property; provided that, contracts for such services other than utilities shall be approved by the Owner.

(Emphasis in original and added). In order to perform its duties under the SAHA management agreement, RCM had to ensure that garbage removal occurred at Springhill. Donald Reneau, president of RCM, testified at trial that RCM had undertaken the responsibility to secure garbage removal under the management agreement. Reneau also testified that the placement of larger garbage containers and garbage removal services provided by TWS benefitted RCM. There was also uncontroverted evidence that RCM specifically requested that it be billed for the services provided by TWS. We believe this evidence established that RCM needed the waste removal services provided by TWS in order for RCM to fulfill its contractual obligations to SAHA under the management agreement. Accordingly, we hold there is more than a scintilla of evidence that TWS undertook its services for RCM and that RCM was the entity expected to be charged.

We next consider whether there is sufficient evidence to support the finding that TWS's services were accepted by RCM for its use and enjoyment. RCM contends its status as manager established that it only accepted TWS's services for the use and enjoyment of SAHA, and not for itself. We disagree. RCM acknowledges that it accepted the containers and services provided by TWS. Notwithstanding RCM's contentions at trial that it merely wanted TWS to move containers, the evidence reflects that RCM did not refuse delivery of the larger containers or contact TWS to, at the very least, complain of the larger containers. Reneau acknowledged that a higher cost would be associated with the containers and admitted that RCM received a benefit from the larger containers. Moreover, there was the uncontroverted evidence of RCM's payments for the larger containers and garbage services in October, November, and December. These payments comported within the increased price under the sales agreements. The fact that SAHA was the owner of the property is immaterial. See McFarland, 932 S.W.2d at 646 (reflecting a person can enter into agreement and be charged for damages arising from that agreement in quantum meruit for services to improve another's property). We hold that the evidence is legally and factually sufficient to support the jury's determination that RCM accepted, used, and enjoyed the benefits of TWS's services.

Lastly, RCM contends that the evidence is insufficient to establish that it was reasonably notified that TWS expected payment from RCM for its garbage services. RCM compares this matter to circumstances in the case of Heldenfels Bros., Inc. v. City of Corpus Christi, 832 S.W.2d 39 (Tex. 1992). In Heldenfels, subcontractors sued a property owner for problems caused by the general contractor. The City of Corpus Christi employed La-Man Constructors, Inc. to build a recreation center. Id. at 40. In turn, La-Man contracted with Heldenfels to furnish the beams to support the roof of the structure. Id. Heldenfels constructed the beams and delivered them. Id. The City made a payment to La-Man for the beams; however, La-Man failed to make complete payment to Heldenfels. Id. La-Man later abandoned the project, leaving creditors unpaid. Id.

Heldenfels filed suit against the City, asserting a claim for quantum meruit. Id. On appeal, the court of appeals reversed the judgment in favor of Heldenfels on its claim for quantum meruit. Id. at 42. The court determined that the evidence demonstrated Heldenfels never actually informed the City that it expected to be paid prior to La-Man's abandonment of the project. Id. at 41. Further, it was not enough that there was evidence that industry or construction practice called for a sub-contractor to approach the owner for payment when the general contractor did not make payment. Id. RCM contends that, like the City of Corpus Christi in Heldenfels, it was never communicated to it that it would have to pay for TWS's services. Additionally, RCM contends that any payments made were made as agents and not as principal.

The evidence in the record negates RCM's contentions that it was never on notice. The evidence reflects that TWS made demands for payment as of December 1998. The jury considered the evidence that RCM paid TWS for services under the sales agreements on at least four occasions. The jury considered two TWS invoices and two checks reflecting payment of those invoices by RCM in December 1998. Reneau testified that prior to December 1998, RCM was presented with other invoices for services in October and November and that RCM paid those invoices. There was also uncontroverted evidence that TWS continued to provide garbage services through February 1999. Mel Kempt testified that service continued through that time frame. Reneau also acknowledged that services were provided at least through February 1999. Further, there was evidence that such services continued without objection from RCM. Reneau admits RCM never called TWS to even inquire about the increased container size. Laura Hewtty, Springhill property manager, testified that RCM just needed certain containers to be moved. However, she also testified that she was aware that larger containers had been supplied, but never called to complain. Both Reneau and Hewtty testified that they understood there would be a higher price for the larger containers. We conclude that this evidence is sufficient to establish that RCM knew TWS expected to be paid by RCM for the waste services rendered by it. See Angroson, 711 S.W.2d at 273 (holding that payment for work provided by plaintiff was evidence of defendant accepting and benefitting from plaintiff's services with knowledge of plaintiff's expectation of payment).

We also consider the evidence regarding a series of letters exchanged between the parties in February 1999. It is undisputed that RCM made no payments to TWS after December 30, 1998. On February 3, 1999, Degrood sent a letter to SAHA and copied Amy Estess, RCM's property manager, demanding enforcement of the sales agreement, including payment terms. The record reflects that on February 9, 1999, Reneau responded to Degrood's letter denying the existence of a contract based on the sales agreements signed by Nava. In that letter Reneau acknowledged RCM's good faith payments for the increased services through December 1999. On February 11, 1998, Kempt sent a letter to Donald Reneau seeking enforcement of the terms of the sales agreements. On February 17, 1999, Reneau responded once again stating that RCM would not comply with the sales agreements. We conclude that the letters provided a basis for the jury to reasonably infer that RCM was on notice that Texas Waste expected payment for the materials and services provided.

Viewed in the light most favorable to the judgment, the forgoing evidence supports a claim for quantum meruit by TWS. Additionally, viewing all the evidence, we cannot say that the jury's finding that TWS satisfied the elements of quantum meruit was against the great weight and preponderance of the evidence. Accordingly, we overrule RCM's sole issue on appeal.

Catherine Stone, Justice

PUBLISH