Dealers Electrical Supply Co., Inc. v. Williams Industries, et al--Appeal from 74th District Court of McLennan County

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State: Texas

Court: Texas Northern District Court

Docket No: 10-89-00040-CV

Case Date: 04/30/1990

Plaintiff: Dealers Electrical Supply Co., Inc.

Defendant: Williams Industries, et al--Appeal from 74th District Court of McLennan County

Preview:Dealers Electrical Supply Co., Inc. v. Williams Industries, et al--Appeal from 74th District Court of McLennan County
Dealers Elec v. Williams Ind. /**/ AFFIRMED APRIL 30, 1990

NO. 10-89-040-CV Trial Court # 88-949-3 IN THE COURT OF APPEALS FOR THE TENTH DISTRICT OF TEXAS AT WACO

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DEALERS ELECTRICAL SUPPLY CO., INC., Appellant v.

WILLIAMS INDUSTRIES, ET AL, Appellees

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From 74th Judicial District Court McLennan County, Texas

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OPINION

******* This is an appeal by plaintiff Dealers Electrical Supply Co., Inc. ("Dealers"), from a take-nothing judgment in its suit against defendants, Williams Industries ("Williams"), and Hartford Insurance Company ("Hartford"). Trial was before the court. Dealers assigns 14 points of error, which we shall group topically and discuss why each must be overruled. We will then affirm the judgment of the trial court. Dealers sued Fort Bend Electric ("Fort Bend"), Williams, and Hartford to enforce its claims to payment for electrical materials provided to Fort Bend for use in construction on the "Beto" and "Trusty Camp" units of the Texas Department of Corrections. Fort Bend was subsequently severed out of the case. As to construction at both units, Fort Bend was the electrical subcontractor, Williams was the general contractor, and Dealers was the supplier of electrical materials. Dealers claimed it had not been paid $8,421 for materials used at the "Beto" unit and $18,093 for materials used at the "Trusty Camp" unit. Upon the close of Dealers's case, Williams and Hartford moved for a verdict that Plaintiff take nothing. The trial court granted such motion and rendered judgment accordingly. Thereafter, the trial judge filed findings of fact and conclusions of law, the pertinent parts of which are summarized as follows: Findings of Fact 1 and 2: Williams contracted with the State of Texas for the construction of Department of Corrections Units known as the "Beto Unit" and the "Trusty Camp Unit."

3, 4, and 5: Fort Bend subcontracted with Williams to do the electrical work on the two units. 6 and 7: Dealers supplied non specially-fabricated materials to Fort Bend for use on the two units. 8 and 9: Williams was the general prime contractor for both of the units. 10 and 11: Fort Bend was the electrical subcontractor to Williams on both units. 12 and 13: Dealers was a material supplier to Fort Bend for Fort Bend's subcontract with Williams on both units. 14 and 15: Dealers had no direct contractual relationship with Williams for material supplied for the construction of the two units. 16 and 17: Dealers gave written notice to Williams by certified mail of its claims on the two units on July 15, 1987;

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but gave no other written notice. 18 and 19: Dealers's claim against Williams and Hartford on the "Beto Unit" was $4,800.54; and on the "Trusty Camp Unit" was $16,131.89. 20 and 21: No materials were delivered by Dealers for either unit during or after May 1987, for which Dealers claims it was not paid. 22 and 23: Williams paid Dealers a total of $233,247.98 for materials used in construction of the two units, of which Dealers turned over $104,983.80 to Fort Bend, without giving Williams credit therefor.

24: Of the $104,983.80 Dealers turned over to Fort Bend, $31,727.40 was paid by Williams on May 21, 1987.

25: Williams has paid all amounts to Dealers which Dealers claims are owed on the two units.

26: Dealers failed to give Williams credit for all amounts paid by Williams to Dealers on the two units. 27: Dealers did not incur any reasonable and necessary attorneys fees in connection with trial or appeal of this case.

28 and 29: Hartford did not act as a surety on any payment bond on the two units.

Conclusions of Law 30: Dealers' claim against Williams and Hartford was based only on Article 5160, Tex. R. Civ. Stat. 31: Dealers was required to notice Williams of amounts claimed on or before the 36th day following the 10th day of the month following delivery of materials for which it claims it was not paid, before it could enforce any right of action against Williams pursuant to Article 5160B(b)(2), Tex. R. Civ. Stat. 32: Dealers' notice to Williams of July 15, 1987, would only be sufficient to support recovery by Dealers for materials delivered in May 1987, for which it had not been paid. 33: Dealers failed to give sufficient notice to Williams of the claims pursuant to Article 5160B(b)(2), Tex. R. Civ. Stat. 34: The amounts claimed by Dealers to be due from Williams are not just, true, and due. 35:Williams is entitled to credit for amounts paid jointly to Dealers and Fort Bend. 36:Dealers is not entitled to recover any amounts by way of its cause of action against Williams and Hartford.

Dealers' 14 points of error may be profitably summarized as

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follows:

(1) The trial court erred in finding that Dealers had no direct contractual relationship with Defendants for the construction of the Beto and Trusty Camp Units, because the evidence conclusively established the opposite. (Findings 14,15).

(2) The trial court erred in finding that no materials were delivered by Dealers for either unit during or after May 1987, for which Dealers was not paid, because the evidence established that materials were delivered to the Trusty Camp Unit from 4/27/87 through 5/21/87, and to the Beto Unit from 4/24/87 through 5/18/87. (Findings 20, 21).

(3) The trial court erred in finding that Dealers was paid $233,247.98 for material for the two units, because the evidence conclusively established that Dealers did not receive all of such funds, nor were such funds paid during a period relevant to Dealers' claim. (Finding 22).

(4) The trial court erred in finding that Dealers turned over $104,983.80 of such $233,247.98 to Fort Bend without giving Williams credit therefor, because such finding is against the great weight and preponderance of the evidence. (Finding 23).

(5) The trial court erred in finding that Dealers turned over to Fort Bend $31,727.40, on May 21, 1987, because the uncontroverted evidence shows that such payment was for invoices through 4/20/87. (Finding 24).

(6) The trial court erred in finding Williams had paid all amounts due and owing to Dealers on the two units because the only evidence shows payment for invoices through April 20, 1987. (Finding 25).

(7) The trial court erred in finding that Dealers incurred no attorney's fees because the finding is against the great weight and preponderance of the evidence. (Finding 27).

(8) The trial court erred in finding that Hartford did not act as a surety on any payment bond on the two units. (Findings 28, 29).

(9) The trial court erred in concluding that Dealers was required to give the "36 day rule" notice, because Dealers was in contractual relationship with Williams and the "90 day rule" applied. (Conclusion 31).

(10) The trial court erred in concluding that the July 15, 1987, notice would only be sufficient to support recovery for materials delivered in May 1987, because Dealers was in contractual relationship with Williams, and the July 15, 1987, notice covered all deliveries in April, May, and June 1987, under the "90 day rule." (Conclusion 32).
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(11) The trial court erred in concluding that Dealers failed to give sufficient notice to Williams of the claim under Article 5160B(b)(2) Tex. R. Civ. Stat., because the only evidence shows proper notice on July 15, 1987, well within the "90 day rule." (Conclusion 33).

(12) The trial court erred in concluding that the amounts claimed by Dealers are not just, true, and due, because the only evidence shows Dealers to be entitled to either $16,131.89 and $4,800.54, or the amounts of $18,093.24 and $8,421.20. (Conclusion 34).

(13) The trial court erred in concluding that Williams is entitled to credit for the amounts paid jointly to Dealers and Fort Bend, because it is uncontroverted that Williams has paid upon no invoices for materials delivered after April 20, 1987. (Conclusion 35).

(14) The trial court erred in concluding that Dealers is not entitled to recover any amounts against Williams and Hartford because such conclusion is against the great weight of the evidence. (Conclusion 36).

We address first Dealers's points 1, 2, 9, 10, 11, 12, and 14. Williams, the contractor, is liable to all who have furnished material directly to him. However, as to derivative claimants who have furnished material to a subcontractor, the obligation arises by virtue of the statutes, and in order to recover against the contractor as well as against the surety, the derivative claimant must file his itemized claims in compliance with the statute. The statute relevant to this case provides for a 36-day notice for a claimant who does not have a contractual relationship with the contractor and for a 90-day notice for a claimant who has a contractual relationship with the contractor. Both provisions require that notice be given 36 or 90 days, as the case may be, from the date of delivery of the materials. See TEX. REV. CIV. STAT. ANN. art. 5160B(a),(b) (Vernon 1987). Plaintiff here failed to offer any evidence of the date it delivered the materials involved. See Rife Constr. Co. v. Brans, 298 S.W.2d 254, 262 (Tex. Civ. App.--Dallas 1956, writ ref'd n.r.e.); Metropolitan Cas. Ins. Co. of New York v. Texas Sand & Gravel Co., 68 S.W. 2d 551, 553 (Tex. Civ. App.--Waco 1934, writ dism'd). Dealers, having failed to show the date of delivery of the materials furnished the subcontractor, has failed to show that it gave timely notice of its claim. Thus it has failed to establish its derivative claim against Williams. Points 1, 2, 9, 10, 11, 12, and 14 are overruled. We next address Plaintiff's points 3, 4, 5, 6, and 13. To review, these points assert that the trial court erred in finding that Plaintiff was paid $233,247.98; that Plaintiff turned over $104,983 of said sum to Fort Bend without giving Plaintiff credit therefor; that Plaintiff turned over $31,727 on May 21, 1987; that Williams had paid all amounts owing to Plaintiff on the two units; and that Williams is entitled to credit for the amounts paid jointly to Dealers and Fort Bend. Dealers failed to prove the date of delivery of the materials furnished. Without such proof, Dealers could not prove that it gave either the 36-day or the 90-day notice, nor could it establish a derivative cause of action against Williams. Moreover, the evidence shows Williams paid Dealers a total of $233,247.98 for materials used in the construction of the two units, $104,983.80 of which Dealers turned over to Fort Bend. The evidence is undisputed that Dealers endorsed the checks and turned them over to Fort Bend without giving Williams any credit therefor. Finally, the trial court concluded, with justification, that Williams was entitled to credit for the amounts paid jointly to Dealers and Williams.

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The issuance and acceptance of checks payable jointly to a supplier and a subcontractor constitute payment by the contractor to the supplier so as to preclude enforcement of a materialman's lien. Friedman Steel Sales, Inc. v. Texas Utilities Co., 574 S.W.2d 849 (Tex. Civ. App.--Texarkana 1978, writ ref'd n.r.e.); F. & C. Engineering Co. v. Texas Utilities Co., 300 S.W.2d 323, 327 (Tex. Civ. App.--San Antonio 1957, writ ref'd n.r.e.). Points 3, 4, 5, 6, and 13 are overruled. Points 7 and 8 become immaterial under our view of the case, and are overruled. The judgment of the 74th Judicial District Court, McLennan County, Texas, is affirmed. Terry R. Means DO NOT PUBLISHJustice

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