Bluelinx Corporation v. Texas Construction Systems, Inc.--Appeal from Co Civil Ct at Law No 4 of Harris County
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Motion for Rehearing Overruled; Opinion filed January 27, 2011, Withdrawn;
Affirmed as Modified in Part, Reversed and Remanded in Part, and Substitute
Opinion on Rehearing filed March 11, 2011.
In The
Fourteenth Court of Appeals
NO. 14-09-00237-CV
BLUELINX CORPORATION, Appellant
V.
TEXAS CONSTRUCTION SYSTEMS, INC., Appellee
On Appeal from the County Civil Court at Law No. 4
Harris County, Texas
Trial Court Cause No. 870162
SUBSTITUTE OPINION ON REHEARING
We deny the motion for rehearing of appellee Texas Construction Systems, Inc.
(TCS). We withdraw our opinion of January 27, 2011, and issue the following substitute
opinion in its place.
Appellant Bluelinx Corporation appeals from the trial court’s judgment entered in
favor of TCS after a jury trial. In six issues, Bluelinx argues that (a) the trial court erred
in submitting a jury question on quantum meruit and the evidence is insufficient to
support the jury’s award for quantum meruit, (b) foreclosure against Bluelinx’s property
was improper, (c) the trial court erred in awarding attorney’s fees and costs, and (d) the
trial court erred in failing to submit findings of fact and conclusions of law. We conclude
that a portion of the jury’s quantum meruit award was improper, and therefore we modify
the judgment to eliminate this portion of the award. In light of our reduction in the
damages award, we also reverse and remand the award of attorney’s fees. We affirm the
remainder of the trial court’s judgment.
BACKGROUND
TCS is a construction contractor. Bluelinx hired TCS to design and build a
storage shed at a Bluelinx facility in Houston. The contract required that TCS ―obtain‖ a
building permit from the City of Houston. Harry Sturges, TCS’s president, spent 49.25
hours over four months attempting to secure the permit. Bluelinx then hired a ―permit
expediter‖ to take over work on the permit, and it was another three and a half months
before the City of Houston finally issued a permit.
Bluelinx fired TCS and hired another contractor to complete the construction job.
TCS then sued Bluelinx for breach of contract and quantum meruit and requested
foreclosure on a mechanic’s and materialman’s lien it placed on Bluelinx’s property.
Bluelinx counterclaimed for breach of contract. At trial, the jury found that neither party
breached the contract but that Bluelinx owed TCS $10,046.20 under the quantum meruit
theory. Post-trial, the trial court ordered foreclosure of TCS’s lien against Bluelinx and
awarded attorney’s fees and costs to TCS. Bluelinx now appeals.
ANALYSIS
A. Quantum Meruit
In its third issue, Bluelinx argues that the trial court erred in submitting a quantum
meruit question to the jury, and in its sixth issue, Bluelinx contends that the evidence is
legally and factually insufficient to sustain the jury’s award.
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Quantum meruit is an equitable remedy based on an implied promise to pay for
benefits received. See Vortt Exploration Co. v. Chevron U.S.A., Inc., 787 S.W.2d 942,
944 (Tex. 1990); Wohlfahrt v. Holloway, 172 S.W.3d 630, 634 (Tex. App.—Houston
[14th Dist.] 2005, pets. denied). To prove quantum meruit, a party must show (a)
valuable services were rendered or materials furnished, (b) for the person sought to be
charged, (c) the services or materials were accepted and used by the person sought to be
charged, (d) under such circumstances to reasonably notify the person to be charged that
the party seeking recovery was expecting to be paid by the person sought to be charged.
See Vortt Exploration, 787 S.W.2d at 944; Wohlfahrt, 172 S.W.3d at 634.1
1. Submitting Jury Question
Bluelinx argues that the trial court erred in submitting a jury question on quantum
meruit. All parties are entitled to have controlling issues that are raised by the pleadings
and evidence submitted to the jury. See TEX. R. CIV. P. 278; Lehmann v. Wieghat, 917
S.W.2d 379, 382 (Tex. App.—Houston [14th Dist.] 1996, writ denied). TCS pleaded
quantum meruit, but Bluelinx contends it should not have been submitted as a matter of
law because an express contract exists between the parties. We disagree. A party may
recover in quantum meruit when there is no express contract covering the services or
materials furnished. See Black Lake Pipe Line Co. v. Union Constr. Co., 538 S.W.2d 80,
86 (Tex. 1976), overruled on other grounds by Steiner v. Marathon Oil Co. 767 S.W.2d
686 (Tex. 1989); Coastal Chem, Inc. v. Brown, 35 S.W.3d 90, 101 (Tex. App.—Houston
[14th Dist.] 2000, pet. denied). The existence of an express contract does not preclude
quantum meruit recovery for services or materials that are not covered by the contract.
Black Lake, 538 S.W.2d at 86; Beverick v. Koch Power, Inc., 186 S.W.3d 145, 154 (Tex.
App.—Houston [1st Dist.] 2005, pet. denied); Coastal Chem, 35 S.W.3d at 101.
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The jury was asked if TCS performed compensable work for Bluelinx, and the jury charge
included the following instruction: ―One party performs compensable work if valuable services are
rendered or materials furnished for another party who knowingly accepts and uses them and if the party
accepting them should know that the performing party expects to be paid for the work.‖
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TCS argued at trial that it performed work outside the scope of the contract, and it
offered supporting evidence. For example, Sturges testified that, at Bluelinx’s request,
TCS spent $2,130.02 to obtain a more expensive type of building material than that
specified in the bid. A trial court may refuse to submit an issue to the jury only if no
evidence exists to warrant its submission. Elbaor v. Smith, 845 S.W.2d 240, 243 (Tex.
1992). Sturges’s testimony is some evidence to warrant submission of a quantum meruit
question to the jury. The trial court did not err in submitting a quantum meruit question
to the jury, and we therefore overrule Bluelinx’s third issue.
2. Sufficiency of the Evidence
In reviewing the legal sufficiency of the evidence, we view the evidence in the
light most favorable to the fact finding, crediting favorable evidence if reasonable
persons could, and disregarding contrary evidence unless reasonable persons could not.
City of Keller v. Wilson, 168 S.W.3d 802, 807 (Tex. 2005). We may not sustain a legal
sufficiency point unless the record demonstrates (a) a complete absence of a vital fact, (b)
the court is barred by the rules of law or of evidence from giving weight to the only
evidence offered to prove a vital fact, (c) the evidence to prove a vital fact is no more
than a scintilla, or (d) the evidence established conclusively the opposite of the vital fact.
Id. at 810. We must determine whether the evidence at trial would enable reasonable and
fair minded people to find the facts at issue. See id. at 827, To evaluate the factual
sufficiency of the evidence to support a finding, we consider all the evidence and will set
aside the finding only if the evidence supporting the finding is so weak or so against the
overwhelming weight of the evidence that the finding is clearly wrong and unjust.
Maritime Overseas Corp. v. Ellis, 971 S.W.2d 402, 406–07 (Tex. 1998); Cain v. Bain,
709 S.W.2d 175, 176 (Tex. 1986).
The jury heard testimony regarding expenses for certain materials.
Sturges
testified to $2,130.02 in changed materials expenses that were incurred at the request of
Frank Miller, the project manager at Bluelinx, and were not covered by the contract.
4
After Bluelinx fired TCS, TCS submitted a change order requesting reimbursement for,
among other things, the materials expenses. Miller testified that he never discussed the
change order with Sturges, but the jury could have reasonably inferred that Bluelinx
should have known TCS expected to be paid for accommodating his request for more
expensive materials than were provided for in the contract. See Vortt Exploration, 787
S.W.2d at 944; Wohlfahrt, 172 S.W.3d at 634. Therefore, quantum meruit recovery
based on $2,130.02 in materials expenses was proper.
The jury also heard evidence of the 49.25 hours that Sturges spent attempting to
obtain a building permit from the City of Houston. Bluelinx argues in its brief that the
hours Sturges spent working on the permit process are not compensable via quantum
meruit because obtaining a permit is within the scope of work covered by the contract.
We agree with Bluelinx that the plain language of the contract includes Sturges’s work to
procure the permit. The contract requires TCS ―to obtain all licenses and permits‖ and to
―furnish all labor, materials, services, [and] supervision‖ necessary to perform its duties
under the contract. This language unambiguously requires TCS to furnish all labor and
supervision necessary to obtain the permit. Sturges testified about his expectation to be
paid for the hours he spent obtaining the permit and his opinion of the industry practice,
but such parol evidence cannot be used to create an ambiguity in an otherwise
unambiguous contract. See In re Polyamerica, LLC, 296 S.W.3d 74, 77 (Tex. 2009)
(orig. proceeding) (stating that party’s beliefs regarding contract did not alter
unambiguous language of the contract); Tellepsen Builders, L.P. v. Kendall/Heaton
Assocs., Inc., 325 S.W.3d 692, 696 (Tex. App.—Houston [1st Dist.] 2010, pet. denied)
(―An unambiguous contract will be enforced as written and parol evidence will not be
received for the purpose of creating an ambiguity or to give the contract a meaning
different from that which its language imports.‖). Thus, the jury’s award cannot be
sustained based on the hours Sturges spent obtaining the permit.
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TCS argues that a portion of the jury’s damages award can be supported by
considering $8,613.34 Bluelinx withheld as a retainage from TCS’s payment application
that was never reimbursed. The goods and services to which this retainage relates are
covered by the parties’ contract. As a general rule, a plaintiff seeking to recover the
reasonable value of services rendered or materials supplied will be permitted to recover
in quantum meruit only if there is no express contract covering those services or
materials. See Truly v. Austin, 744 S.W.2d 934, 936 (Tex. 1988). But the Supreme Court
of Texas has recognized three exceptions to this general rule: (1) when the plaintiff has
partially performed an express contract, but because of the defendant’s breach, the
plaintiff is prevented from completing the contract; (2) under certain circumstances when
the plaintiff partially performs an express, unilateral contract; and (3) when a contractor
under a building or construction contract breaches the contract and the owner accepts and
retains the benefits arising as a direct result of the contractor’s partial performance of the
contract.2 See id. at 936–37. In the case under review, the contract is bilateral, not
unilateral. In addition, the jury found that neither party breached the contract, and no
party has challenged these findings in the trial court or on appeal.3 Accordingly, TCS’s
claim for the $8,613.34 does not fall within any of the three recognized exceptions, and
TCS cannot recover this amount under quantum meruit. See id. at 936–38; see Pepi
Corp. v. Galliford, 254 S.W.3d 457, 462–63 (Tex. App.—Houston [1st Dist.] 2007, pet.
denied) (recognizing three exceptions to general rule that an express contract bars
recovery under quantum meruit and holding recovery precluded under third exception
because plaintiff did not breach).
Both viewing the evidence in the light most favorable to the verdict and
considering all of the evidence, we conclude the evidence is legally and factually
2
Under the third exception, the plaintiff can recover in quantum meruit the reasonable value of
the services rendered or materials supplied less any damages suffered by the defendant as a result of
plaintiff’s breach of the contract. See Truly, 744 S.W.2d at 937.
3
At trial, TCS did not plead or argue partial performance. The evidence did not prove as a matter
of law that TCS failed to substantially perform the contract.
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sufficient only to support a finding of $2,130.02 due to TCS under the quantum meruit
theory. We therefore sustain Bluelinx’s sixth issue in part and modify the judgment to
reduce the damages award to $2,130.02.
B. Foreclosure
In its fourth issue, Bluelinx argues that the trial court erred in ordering foreclosure
of TCS’s mechanic’s and materialman’s lien against Bluelinx’s property. In its brief,
Bluelinx claims that it was denied the opportunity to present its defenses to foreclosure.
During pretrial proceedings, Bluelinx informed the court that it intended to dispute
foreclosure of the lien based on lack of notice. The court responded that the issue of
foreclosing the lien was a legal one that could be taken up between the verdict and entry
of judgment.
After the verdict, TCS moved for entry of judgment and requested
foreclosure of its lien. In its response to TCS’s motion for entry of judgment, Bluelinx
did not mention the foreclosure issue at all. The trial court rendered judgment, including
ordering foreclosure of TCS’s lien. Finally, in its motion to modify the judgment,
Bluelinx argued that the trial court’s foreclosure order was improper because Bluelinx did
not have an opportunity to present its defenses and because money damages is the only
proper remedy for a successful quantum meruit claim, and the trial court denied this
motion.
We conclude that Bluelinx was provided with the opportunity to present its
defenses. In its motion for entry of judgment, TCS specifically requested foreclosure,
and not only did Bluelinx fail to request a hearing to present its defenses, it failed to
mention the foreclosure issue entirely, though it easily could have done so in its motion
response or otherwise. Therefore, we reject Bluelinx’s argument that the trial court
granted foreclosure without any opportunity for Bluelinx to present defenses.
Bluelinx further argues that foreclosing the lien was improper because money
damages are the only available remedy for a quantum meruit claim. Bluelinx cites two
cases, neither of which supports its theory. See Campbell v. Nw. Nat’l Life Ins. Co., 573
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S.W.2d 496, 498 (Tex. 1978); Scott v. Walker, 170 S.W.2d 718, 720 (Tex. 1943).
Campbell merely held that quantum meruit was available for unpaid services, see 573
S.W.2d at 498, and Scott held that an obligation made unenforceable under the statute of
frauds could be enforced via quantum meruit, see 170 S.W.2d at 720. In this case, the
trial court ordered foreclosure on the lien securing payment for labor done or materials
furnished. See TEX. PROP. CODE § 53.021. Bluelinx offers no support for the theory that
this was improper solely because the damages were awarded on a quantum meruit claim.
Finally, Bluelinx contends that foreclosure of a lien is improper in the quantum
meruit context because TCS was required to prove breach of contract to foreclose on a
lien under section 53.021. Bluelinx never made this argument to the trial court, and thus
it is waived on appeal. TEX. R. APP. P. 33.1(a); Neely v. Comm’n for Lawyer Discipline,
302 S.W.3d 331, 339 n.6 (Tex. App.—Houston [14th Dist.] 2009, pet. denied).
The trial court did not err in granting foreclosure to TCS, and we overrule
Bluelinx’s fourth issue.
C. Attorney’s Fees
In its first issue, Bluelinx contends that the trial court erred in awarding attorney’s
fees to TCS because there was no jury finding regarding attorney’s fees. TCS pleaded for
attorney’s fees, and the trial court expressly awarded them, under both chapter 38 of the
Civil Practice and Remedies Code4 and section 53.156 of the Property Code.5 Bluelinx’s
appellate briefing focuses on chapter 38 and never mentions section 53.156. Because
Bluelinx does not challenge on appeal the trial court’s award of attorney’s fees under
section 53.156, any error in awarding attorney’s fees under chapter 38 without a jury
4
Attorney’s fees are recoverable under chapter 38 of the Civil Practice and Remedies Code in
both breach of contract and quantum meruit actions. See TEX. CIV. PRAC. & REM. CODE § 38.001(1)–(3),
(8); Caldwell & Hurst v. Myers, 714 S.W.2d 63, 65 (Tex. App.—Houston [14th Dist.] 1986, writ ref’d
n.r.e.).
Section 53.156 provides that in a proceeding to foreclose a lien such as TCS’s, ―the court may
award costs and reasonable attorney’s fees as are equitable and just.‖ TEX. PROP. CODE § 53.156.
5
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finding is harmless. See Britton v. Tex. Dep’t of Crim. Justice, 95 S.W.3d 676, 681 (Tex.
App.—Houston [1st Dist.] 2002, no pet.) (holding that failure to challenge independent
ground to support trial court’s ruling renders any error in complained-of ground
harmless).
Bluelinx further contends that TCS was not entitled to attorney’s fees because
TCS did not meet its burden of proving reasonable and necessary expenses and because
TCS’s attorney did not provide a current resume. We need not consider these arguments
because we reverse the attorney’s fees award and remand for a new trial in light of the
reduction in the damages award. See Barker v. Eckman, 213 S.W.3d 306, 313–15 (Tex.
2006) (holding that correct remedy when appellate court substantially reduces damages
award is to reverse and remand for a new trial on the issue of attorney’s fees); Tex. Mut.
Ins. Co. v. Morris, 287 S.W.3d 401, 429 (Tex. App.—Houston [14th Dist.] 2009, pet.
filed) (reversing attorney’s fees award and remanding for new trial when damages award
was reduced on appeal by over seventy-five percent).
D. Costs
In its fifth issue, Bluelinx argues that the trial court erred in awarding costs to TCS
because TCS was not the successful party and because TCS did not present an itemized
list of all costs. Section 53.156 of the Property Code authorizes the court to award not
only attorney’s fees in a proceeding to foreclose a lien but costs as well. As discussed
above, TCS was successful in its proceeding to foreclose on its lien, and the trial court
did not abuse its discretion in awarding TCS costs. See Wesco Distrib., Inc. v. Westport
Group, Inc., 150 S.W.3d 553, 562 (Tex. App.—Austin 2004, no pet.); Tex. Wood Mill
Cabinets, Inc. v. Butter, 117 S.W.3d 98, 107 (Tex. App.—Tyler 2003, no pet.). Further,
the judgment does not recite a specific amount of costs but merely states that ―[a]ll costs
of court are assessed against‖ Bluelinx. The clerk’s record contains an itemization of
costs, and TCS is entitled under the court’s order to recover those costs of record. We
overrule Bluelinx’s fifth issue.
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E. Findings of Fact and Conclusions of Law
In its second issue, Bluelinx argues that the trial court erred in not entering
findings of fact and conclusions of law. Texas Rule of Civil Procedure 296 provides a
right to require the trial court to provide findings of fact and conclusions of law in certain
circumstances. Bluelinx requested such findings and conclusions from the trial court, but
the trial court did not enter them. Assuming without deciding that the trial court was
required to enter findings of fact and conclusions of law, its failure to do so was harmless.
The test for harm is whether the circumstances of the case require an appellant to guess
the reason for the trial court’s ruling and therefore prevent the appellant from properly
presenting its appeal. Gen. Elec. Capital Corp. v. ICO, Inc., 230 S.W.3d 702, 711 (Tex.
App.—Houston [14th Dist.] 2007, pet. denied). Bluelinx complains that it had to guess
as to the trial court’s reasoning in awarding attorney’s fees. However, given that the
judgment specified that the attorney’s fees award was based on chapter 38 and section
53.156 and the amount of attorney’s fees the trial court awarded was within forty cents of
TCS’s request, Bluelinx had sufficient information to present its appellate case. We
overrule Bluelinx’s second issue.
CONCLUSION
The trial court properly submitted a quantum meruit question. The evidence is
sufficient only to support an award of damages under the quantum meruit theory of
$2,130.02. Thus, we modify the judgment to reduce the damages award from $10,046.20
to $2,130.02. Any error in awarding attorney’s fees without a jury finding was harmless
because Bluelinx did not challenge the award on all grounds relied upon by the trial
court, but in light of the reduction in the damages award, we reverse the award of
attorney’s fees and remand for a new trial on attorney’s fees. The trial court also did not
err in ordering foreclosure on TCS’s lien against Bluelinx’s property. Finally, the trial
court did not err in awarding costs, and did not reversibly err in failing to enter findings
of fact and conclusions of law. We reverse the award of attorney’s fees and remand for a
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new trial on that issue, and we affirm the remainder of the trial court’s judgment as
modified.
/s/
Martha Hill Jamison
Justice
Panel consists of Justices Frost, Boyce, and Jamison.
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