In the Interest of C.S. a Child--Appeal from 308th District Court of Harris County

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State: Texas

Court: Texas Northern District Court

Docket No: 14-07-00405-CV

Case Date: 12/13/2007

Plaintiff: GCC Constructors, Inc., a Texas Corporation

Defendant: American Horizon Concrete, Inc., a Texas Corporation--Appeal from Co Civil Ct at Law No 2 of Harris

Preview:GCC Constructors, Inc., a Texas Corporation v. American Horizon Concrete, Inc., a Texas Corporation-Appeal from Co Civil Ct at Law No 2 of Harris County
Opinion issued March 29, 2007

In The Court of Appeals For The First District of Texas

NO. 01-04-00817-CV

GCC CONSTRUCTORS, INC., AND MANUEL A. GARCIA, Appellants

V.

AMERICAN HORIZON CONCRETE, INC., Appellee

On Appeal from the County Civil Court at Law No. 2 Harris County, Texas Trial Court Cause No. 785443

MEMORANDUM OPINION This case involves competing claims for breach of a construction subcontract. The subcontractor appellee, American Horizon Concrete, Inc. (American Horizon), sued appellant, GCC Construction, Inc. (GCC), claiming breach of the contract for insufficient payment and fraud, whereupon GCC asserted a counterclaim for damages arising out of American Horizon's having abandoned the project. The case was tried to the court, which entered a judgment awarding damages and attorney's fees to American Horizon and ordered that GCC take nothing on its counterclaim, but did not file and was not asked to file findings of fact and conclusions of law. GCC brings three issues that present legal and factual challenges to the sufficiency of the evidence to support the judgment. (1) We affirm.
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Background The general contractor for a construction project at the Clear Creek Community Church in League City entered into a subcontract with GCC for the project. On April 2, 2001, GCC entered into a $175,000 subcontract (the agreement) with American Horizon for "concrete work" that included both materials and manpower. Principals of American Horizon and GCC signed the agreement and each of its three exhibits, which detailed specifications for the project. Under the payment system between the parties, GCC received American Horizon's monthly invoices, which indicated work done, with degree of completion indicated by percentages. GCC would then submit its own invoices, which also indicated work done and percentage of completion, to the general contractor. The agreement specified that payment to American Horizon was "due within ten (10) working days following receipt of payment" from the general contractor to GCC. The agreement provided that time was of the essence for the project, but the same provision envisioned that GCC could "reasonably" amend the work schedule from time to time. The agreement did not specify a completion date or impose a work schedule. It is undisputed that American Horizon abandoned the project on November 5, 2001, and that rain impeded progress on the concrete work. American Horizon's verified pleadings against GCC and its president, Manuel A. Garcia, (2) allege that American Horizon provided concrete services to GCC on account, as detailed in independently verified documents for the account, which American Horizon incorporated into its petition. See Tex. R. Civ. P. 185 ("Suit on Account"). American Horizon claimed that payments due on September 25, October 26, and January 9, 2001 were not paid, and that $70,051.49 was due on the account after allowing all offsets, credits, and payments. See id. American Horizon also alleged that, from about May to September 2001, GCC certifications to the general contractor, which sought disbursements for American Horizon, misrepresented the percentages of work that American Horizon had completed, by understating the percentage, for GCC's own records, while overstating the percentage to the general contractor. American Horizon claimed that GCC's actions fraudulently enabled GCC to receive and retain funds that were due to American Horizon, but were not paid. In addition to breach of contract, American Horizon stated claims of fraud, breach of fiduciary duty, breach of the agreement by GCC that excused American Horizon's performance, recovery in quantum meruit, and attorney's fees and costs. GCC filed a verified denial of the account, a general denial, and a counterclaim asserting that American Horizon had breached the agreement by performing only partially and had provided defective performance by not providing adequate manpower, not performing the work properly and timely, and by voluntarily abandoning the project. GCC claimed that it had to hire others to complete American Horizon's work and incurred additional overhead, which warranted damages of $93,539.21. GCC also sought $5,000 in attorney's fees. At midpoint during the trial, the trial court ruled that GCC had breached the agreement with American Horizon and that American Horizon had not incurred any liability for damages to GCC for breach of the agreement when it abandoned the project. But, the trial court also ruled that GCC was entitled to more offsets and credits than American Horizon had acknowledged in its pleadings. The remainder of the trial concerned calculation of the offsets, based on testimony by both parties' principals and argument by counsel. The record confirms that determination of the offsets and credits was complicated by American Horizon's and GCC's accounting measures, which differed widely. In rendering judgment in favor of American Horizon, the trial court awarded $40,000 as damages, which accounts for approximately $30,000 in offsets and credits due to GCC, $10,000 for trial-court attorney's fees, and contingent attorney's fees for appeal. (3) GCC moved for a new trial, but did not prevail and thereafter posted a supersedeas bond pending this appeal. Standard of Review The record on appeal contains the reporter's record of the bench trial, but no party requested or proposed postjudgment findings under rule 296, despite the trial court's offer to comply with any request. A request for findings of fact and conclusions of law is not required to question the sufficiency of the evidence. Pruet v. Coastal States Trading, Inc., 715 S.W.2d 702, 704 (Tex. App.--Houston [1st Dist.] 1986, no writ). When there are no findings of fact and conclusions of law, however, we may infer that the trial court made all the findings necessary to support its judgment. BMC Software

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Belg., N.V. v. Marchand, 83 S.W.3d 789, 795 (Tex. 2002); Worford v. Stamper, 801 S.W.2d 108, 109 (Tex. 1990). We presume, therefore, that the trial court found all questions of fact in support of the judgment, and we must affirm the judgment if it can be upheld on any legal basis supported by the pleadings and the evidence. See Point Lookout W., Inc. v. Whorton, 742 S.W.2d 277, 278 (Tex. 1987); Worford, 801 S.W.2d at 109; Fair Deal Auto Sales v. Brantley, 24 S.W.3d 543, 546 (Tex. App.--Houston [1st Dist.] 2000, no pet.). Because the record includes the reporter's record, the trial court's implied findings of fact may be challenged in this Court for legal and factual sufficiency, BMC Software Belgium, 83 S.W.3d at 795, under the same standards that govern challenges to a jury's findings, but must show that the judgment of the court below cannot be sustained by any theory raised by the evidence. See Fair Deal Auto Sales, 24 S.W.3d at 546. Under the legal-sufficiency standard, we must credit evidence that supports the judgment if reasonable jurors could and disregard contrary evidence unless reasonable jurors could not. See City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex. 2005). If the evidence falls within the zone of reasonable disagreement, we may not invade the fact-finding role of the trial court, who alone determines the credibility of the witnesses, the weight to give their testimony, and whether to accept or reject all or any part of that testimony. See id. at 822. Unless "there is no favorable evidence . . . or if contrary evidence renders supporting evidence incompetent . . . or conclusively establishes the opposite," we must affirm. See id. 810-11. In determining factual sufficiency, this Court weighs all the evidence, both supporting and conflicting, and may set the finding aside only if it is so contrary to the overwhelming weight of the evidence as to be clearly wrong and manifestly unjust. Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986); Fair Deal Auto Sales, 24 S.W.3d at 546. Analysis By rejecting GCC's counterclaim and awarding damages of $40,000 and attorney's fees to American Horizon, the trial court concluded, as a matter of law, that GCC breached the agreement with American Horizon and found, as a matter of fact, that $40,000 in damages was due to American Horizon for concrete and labor provided on the project until American Horizon stopped performance in November 2002. By awarding only $40,000, however, as apposed to the $70,051.49 that American Horizon requested as damages, the trial court made the factual calculation that GCC was entitled to $30,051.49 as credits or offsets to American Horizon's damages. In its first two issues, GCC contends that the evidence "overwhelmingly establishes" that (1) GCC paid American Horizon in accordance with the agreement and that (2) American Horizon abandoned the construction project and failed to complete performance. These issues present challenges to the trial court's failure to rule in GCC's favor on its counterclaim that American Horizon, and not GCC, breached the agreement. In a third issue, GCC contends that it established its right to recover on the counterclaim as a matter of law. GCC thus contends that it did not breach the agreement, but that American Horizon did. Whether a party to a contract has breached the contract is a question of law for the court, which determines as a matter of law what the contract requires of the parties. See Meek v. Bishop Peterson & Sharp, P.C., 919 S.W.2d 805, 808 (Tex. App.--Houston [14th Dist.] 1996, writ denied). When the terms of a contract are clear and unambiguous, and the facts concerning breach or performance are undisputed or conclusively established, the trial court decides, as a matter of law, whether the facts show performance or breach. Id. Resolution by the fact-finder is appropriate only to resolve underlying factual disputes that pertain to the alleged breach, but not the breach itself. See id. Material breach by one party to a contract can excuse the other party from any obligation to perform and is generally a question of fact. See Mustang Pipeline Co. v. Driver Pipeline Co., 134 S.W.3d 195, 196 (Tex. 2004) (adopting factors of Restatement (Second) of Contracts 241(a) (1981), relating to materiality of breach); see also 2 Comm. on Pattern Jury Charges, State Bar of Tex., Tex. Pattern Jury Charges PJC 101.2 (2005-2006 ed.) (tracking Restatement factors adopted by supreme court in Mustang Pipeline to guide fact finder in determining materiality of breach). In its second issue, GCC contends that the evidence overwhelmingly establishes that American Horizon abandoned the work project without completing performance. In its third issue, GCC contends that the supreme court's interpretation of the construction contract in Mustang Pipeline compels the conclusion that American Horizon (1) breached the agreement in this case, which (2) excused GCC from any financial obligation to American Horizon. We address these issues together.

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In Mustang Pipeline, a pipeline owner, Mustang, had contracted with Driver to construct 100 miles of a 200-mile pipeline. As with the agreement at issue in this case, Driver and Mustang contemplated that time was of the essence. In contrast to this case, however, timely completion of the pipeline by a certain date was crucial in Mustang Pipeline. See id., 134 S.W.3d at 196. In this case, time was but one provision of the agreement and only one of several factors addressed at trial. Even at the bidding stage, Mustang and Driver contemplated that completion of the project would be "no later than" a specific date, and Driver increased its initial bid because of that requirement. Id. In further contrast to this case, the contract imposed a work schedule of fourteen weeks, ninety-eight-days, seven days a week, and eleven working hours daily. Id. at 196-97. Though Driver claimed that extensive rains caused delay and attempted to renegotiate the contract to obtain additional time, the specifics of the contract addressed means of protecting not only crews working in the rain, but also the pipeline welds, and thus contemplated that at least some work be done in inclement, rainy weather. Id. at 197. When Driver stopped work after fifty-eight days and later indicated that it was not ready to resume work, Mustang declared Driver in default. Id. at 196. Because Driver's timely performance was "essential," and Driver undisputedly did not perform timely, the supreme court ruled that the materiality of Driver's breach was a question of law that did not require resolution by the trier of fact. See id., 134 S.W.3d at 196, 199. The circumstances of this case demonstrate that American Horizon's timeliness was but one of several factors that the parties disputed. Despite the stated requirement in Article 8 of the agreement that time was "of the essence," the same provision envisioned that GCC would set and, if need be, revise the work schedule. The agreement neither stated a completion date, nor imposed a work schedule. At trial, American Horizon's principal acknowledged GCC's complaints about slow progress in August, but explained that GCC wanted American Horizon to continue on the project. On that basis, he agreed to hire and did hire more workers, but noted that this increased his expenses. Of the many problems associated with project, GCC attributed only 30 percent to American Horizon, faulted the general contractor for the remainder, agreed that rain shut down work on 31 days between June and October, and stipulated that the general contractor--not GCC or American Horizon--made the decision to close the worksite. Though American Horizon's principal conceded that his company left the job on November 6, 2001, his reason given was that he was either not being paid or was underpaid. And though he provided the additional manpower that GCC requested, the principal stated that GCC still wanted expedited work, despite not paying American Horizon for "two draws," that he had to pay his workers, and that he did not want to "throw good money after bad." In contrast to the undisputed factors that warranted determination of materiality of breach as a matter of law in Mustang Pipeline, the contentions of the parties in this case and the evidence they submitted to the trial court required that the court resolve their factually disputed allegations concerning the degree to which GCC actually required timely completion of the project, in addition to the degree to which delay could be attributed to American Horizon. See id., 134 S.W.3d at 196-97; Herndandez, 875 S.W.2d at 693 & n.2. Having reviewed the record of this case and contrasted it with the circumstances that warranted the supreme court's ruling in Mustang Pipeline, we hold that the record did not permit the trial court to determine, as a matter of law, the materiality of American Horizon's failure to complete the work on a timely basis as a matter of law. We overrule GCC's third issue. After inferring all facts needed to support the trial court's judgment in favor of American Horizon, in accordance with BMC Software Belgium, 83 S.W.3d at 795 and City of Keller, 168 S.W.3d at 810-11, 822, 827, we conclude that the evidence falls within the zone of reasonable disagreement and supports the trial court's resolution of the conflicting evidence by impliedly finding that GCC, and not American Horizon, materially breached the parties' agreement. We further conclude, after reviewing all the evidence, that the great weight of the evidence is not so contrary to the trial court's implied findings favoring American Horizon that the trial court's failure to find in favor of GCC on its counterclaim is clearly wrong and manifestly unjust. See Cain, 709 S.W.2d at 176; Fair Deal Auto Sales, 24 S.W.3d at 546. Accordingly, we reject GCC's contention, in its second issue, that the evidence "overwhelming establishes" that American Horizon materially breached the agreement with GCC, such that GCC would be excused from the

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performance required by the judgment granting $40,000 in damages to American Horizon. We overrule GCC's second issue. The same reasoning applies to defeat GCC's first issue, in which it contends that the evidence overwhelming establishes that GCC paid American Horizon in accordance with the agreement. Viewed in accordance with BMC Software Belgium, 83 S.W.3d at 795 and City of Keller, 168 S.W.3d at 810-11, 822, 827, the record shows that, at GCC's request, American Horizon added personnel, which increased its expenses while GCC was either not paying or was underpaying American Horizon, and that American Horizon abandoned the construction project for that reason. We defer to the trial court's decision to credit this version of the disputed facts of this case as presented by American Horizon. Because this evidence supports the judgment and falls within the zone of reasonable disagreement, we cannot say that the evidence overwhelming establishes the contrary proposition presented by GCC's issue. We further hold, after reviewing all the evidence, that the great weight of the evidence is not so contrary to the trial court's implied findings favoring American Horizon that the trial court's failure to find in favor of GCC on its claim that it paid American Horizon in accordance with the agreement is clearly wrong and manifestly unjust. See Cain, 709 S.W.2d at 176; Fair Deal Auto Sales, 24 S.W.3d at 546. We overrule GCC's first issue. Conclusion We affirm the judgment of the trial court.

Sherry Radack Chief Justice

Panel consists of Chief Justice Radack and Justices Jennings and Bland. 1. American Horizon has not filed an appellee's brief. 2. On June 23, 2005, this Court granted the voluntary motion to dismiss filed by appellant, Manuel A Garcia, who is president of GCC. 3. In addition, the trial court ordered that American Horizon take nothing by its counterclaim against GCC's president, Manuel Garcia, and that GCC take nothing by its counterclaim against American Horizon.

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