Seville Flexpack Corporation v. Bob Leathers, d/b/a R & L Steel Erectors--Appeal from 19th District Court of McLennan County

NO. 10-89-290-CV

IN THE

COURT OF APPEALS

FOR THE

TENTH DISTRICT OF TEXAS

AT WACO

* * * * * * * * * * * * *

SEVILLE FLEXPACK CORPORATION,

Appellant

v.

BOB LEATHERS, D/B/A R & L STEEL

ERECTORS,

Appellee

* * * * * * * * * * * * *

From 19th Judicial District Court

McLennan County, Texas

Trial Court # 88-1460-1

* * * * * * * * * * * * *

O P I N I O N

* * * * * * *

This appeal arose from a suit brought by Bob Leathers, doing business as R & L Steel Erectors (Leathers), against Seville Flexpack Corporation (Seville) in April 1989, seeking damages for breach of a construction contract and, alternatively, asserting a right to recover on the basis of quantum meruit for the reasonable value of labor and equipment used in erecting a steel structure as part of Seville's manufacturing plant. The primary complaints on appeal are that the trial court abused its discretion in submitting a charge on substantial performance when only full performance had been pleaded and in awarding Leathers the full contract price even though the jury found "zero" to be the cost of remedying any defects or omissions. Seville also complains of the admission into evidence of a letter which it maintains constituted settlement negotiations. Finally, Seville appeals the judgment in favor of Leathers for attorney's fees because there was no evidence to support such an award. The judgment will be affirmed.

The judgment awarded Leathers damages against Seville totaling $9,939, plus pre-judgment and post-judgment interest. The court expressly stated in the judgment that Leathers was awarded attorney's fees based on a stipulation that the prevailing party was to be awarded $3500 in attorney's fees as a part of the judgment. The court entered a take-nothing judgment against Seville on its counterclaim.

Seville contracted to pay Leathers for services rendered at an agreed rate per ton of steel, the contract price totaling $57,850. Leathers could periodically request payment based upon the approval and certification of the work by Drennon & Associates, the architectural firm who designed the building and inspected Leathers' work prior to payment by Seville. Although the first three "draws" Leathers submitted to Seville were paid in full, Seville refused to pay the fourth and final draw in the amount of $9,939, plus $800 allegedly due for extra work. This refusal resulted in Leathers filing suit. Seville counterclaimed, alleging violations of the Texas Deceptive Trade Practices Act (DTPA). Both parties sought to recover their attorney's fees.

The jury found that Leathers had substantially performed under the contract and that the cost of remedying any defects or omissions to make the structure conform to the contract was "zero." The jury failed to find that Leathers had done "extra welding" on the building at Seville's request or that Leathers had committed any DTPA violations. No questions concerning recovery of attorney's fees incurred by either party were submitted in the charge.

In points one through seven, Seville argues that the court abused its discretion in submitting the questions on substantial performance and the cost to remedy defects in the construction when Leathers had only pleaded full performance. Seville also argues that the court erred in entering judgment on the jury's finding of "zero" as the cost to repair any defects because Leathers failed to plead and prove such costs and because the answer of "zero" constituted no finding on the requisite element of cost to repair, thus rendering the jury's finding of substantial performance immaterial. Seville further contends that the court erred in entering a judgment for Leathers because, as a matter of law, Leathers' substantial performance cannot support a judgment for the entire contract price.

Whether the questions submitted in the charge control the disposition of the case as raised by the pleadings and the evidence and properly submit the disputed issues for the jury's determination are generally matters left to the discretion of the trial court. Baker Marine Corp. v. Moseley, 645 S.W.2d 486, 489 (Tex. App.--Corpus Christi 1982, writ ref'd n.r.e.). However, whether the charge has submitted the controlling theories of recovery or defense and whether particular questions submitted were supported by the pleadings are questions of law to be reviewed de novo. See Continental Casualty Co. v. Street, 379 S.W.2d 648, 651 (Tex. 1964).

The theory of substantial performance permits a contractor to recover the full performance price on the contract less the cost of remedying the defects that can be fixed. Vance v. My Apartment Steak House, Inc., 677 S.W.2d 480, 481 (Tex. 1984). A pleading of full performance of the contract will support submission of a question to the jury on substantial performance in a suit on a construction contract. Uhlir v. Golden Triangle Development Corp., 763 S.W.2d 512, 514-15 (Tex. App.--Fort Worth 1988, writ den'd); Shaddock v. Storm King Window Co., 696 S.W.2d 271, 273 (Tex. App. -- Fort Worth 1985, writ ref'd n.r.e.). Substantial performance was defined in the charge as "performance in all essential and important particulars, so that the building is suitable for the purpose intended, or may be made so with relatively minor corrective work." Seville introduced the majority of the evidence on what it claimed to be defects in the construction as well as on the cost to repair them. These alleged defects included five-hundred feet of parapet which had to be removed and replaced, removal and replacement of improperly welded steel bars which were removed in conjunction with the repair to the parapet, problems with steel lintels above and below windows, as well as the correction of a roof angle to allow window and brick installation. The record indicates that all of Leathers' work was inspected by the consulting structural engineer on the project and was approved by him or by Drennon & Associates and that Leathers adhered to the shop drawings drafted by Davis Iron Works from the project plans and specifications. Even the project manager for Seville testified that he knew of no reason why Leathers should not be paid in full, as Leathers had remedied the defects pointed out to him for which he was responsible.

In addition to the jury finding that Leathers had substantially performed, the jury failed to find in response to subsequent questions that the labor and materials provided by Leathers were represented to have certain characteristics, uses or benefits which they did not have, or that the labor and materials were of a particular standard, grade or quality when they were of another. Questions one and two correctly submitted the disputed, controlling issues as raised by the pleadings and evidence for the jury's determination.

Seville's contention that the jury's response to question two concerning cost of repair constituted no finding on one of the essential elements needed to support a recovery based upon substantial performance is also without merit. The jury's answer of "zero" was not a "failure to find" the cost of necessary repairs to make the structure conform to contract specifications, as Seville maintains, but rather an affirmative finding of Seville's cost to remedy sufficient to support a recovery based upon substantial performance. The "zero" response does not, as a matter of law, reflect a failure of proof of Leathers' substantial performance claim. See Ambassador Development Corp. v. Valdez, 791 S.W.2d 612, 615-16 (Tex. App.--Fort Worth 1990, no writ). In light of all the evidence, the jury's finding could have represented the jury's conclusion that any problems which remained after Leathers completed the project, later corrected by Seville, were not attributable to Leathers' performance. Seville has not challenged the sufficiency of the evidence to support the finding, and this court may not substitute its judgment for that of the jury, particularly in resolving conflicts or inconsistencies in the evidence. See Shaddock, 696 S.W.2d at 273. Points one through seven are overruled.

In points eight through ten, Seville complains that the court abused its discretion in admitting into evidence a February 7, 1988, letter from Walter Yakich, the president of Seville, to John Rogers, the consulting structural engineer, and to Drennon & Associates concerning Leathers' performance on the contract. Seville contends the letter constituted evidence of settlement negotiations. It also claims that the court erred in allowing testimony based upon the letter and in allowing the letter to be shown to the jury when it had not been properly admitted. Yakich stated in the letter that he had "spent about $5,000 paying my people and buying steel to correct the workmanship." He then stated, "I am willing to pay the balance due less $5,000 providing we receive from R & L a written legal document that this is final and complete payment for all work he has performed on the building." Following a conference with the court outside the presence of the jury, the court overruled Seville's objection to the exhibit and stated on the record, "I'm going to permit the testimony or the document."

Seville's complaint, that the letter was evidence of settlement negotiations between parties, necessarily assumes that Rogers was the representative or agent of Leathers on the project, though the record clearly shows Rogers to have been a representative of Seville and Yakich. See Tex. R. Civ. Evid. 408. Assuming that the letter included an offer to settle and further assuming that its admission was error, its admission and the related testimony were harmless because Seville has failed to demonstrate that it was reasonably calculated to cause and probably did cause rendition of an improper judgment. The record does not indicate that any offer was actually made to Leathers. See Tex. R. App. P. 81; Beutel v. Paul, 741 S.W.2d 510, 513-14 (Tex. App.--Houston [14th Dist.] 1987, no writ). Furthermore, if Seville thought that the court's ruling was unclear, it had the burden of securing a more definite ruling. See Perez v. Baker Packers, 694 S.W.2d 138, 141 (Tex. App.--Houston [14th Dist.] 1985, writ ref'd n.r.e.). Moreover, Seville failed to object to the particular portion of the letter it contended was inadmissible and thus error, if any, has been waived. See Speier v. Webster College, 616 S.W.2d 617, 619 (Tex. 1981). Points eight through ten are overruled.

In points eleven and twelve, Seville argues that the court abused its discretion in entering judgment for Leathers for attorney's fees because the evidence was legally insufficient to support the award. Although both parties sought to recover attorney's fees in their pleadings and alleged causes of action which would have supported the recovery of those fees, the only evidence of attorney's fees in the record is Leathers' testimony of Leathers that he agreed to pay his attorneys a reasonable fee. As previously stated, no questions on attorney's fees were included in the charge. Nevertheless, the court specified in its judgment that the attorneys had stipulated that the prevailing party would recover attorney's fees in the amount of $3,500. The court then rendered judgment for Leathers on the stipulation. Seville does not deny that a stipulation was in fact made and is accurately reflected in the judgment, but simply points to the lack of a written stipulation filed with the court as required by Rule 11. See Tex. R. Civ. P. 11 (Vernon 1979). However, Rule 11 is satisfied if the agreement is made in open court and is described in the judgment. See id.; City of Houston v. Clear Creek Basin Authority, 589 S.W.2d 671, 677 (Tex. 1979). The court in the present case did not abuse its discretion in adequately describing in the judgment the attorneys' agreement as the court apparently understood it. Points eleven and twelve are overruled.

The judgment is affirmed.

BOBBY L. CUMMINGS

Justice

Before Chief Justice Thomas,

Justice Cummings and

Justice Vance

Affirmed

Opinion delivered and filed February 28, 1991

Do not publish