346 S.W.3d 172
Tex. App.2011Background
- BW Affordable Housing contracted Concept to renovate apartment units in Hereford, Texas; Concept, as general contractor, obtained a payment bond from Capitol Indemnity Corp. for the project.
- AMS entered into a subcontract with Concept to perform asbestos abatement in restricted areas of 125 units; the contract allowed a less intrusive abatement method.
- AMS provided additional asbestos abatement work at Concept's request, which was billed to Concept and initially paid.
- Over time, Concept directed numerous extra abatement tasks that expanded the scope and altered the means of performance; AMS continued to perform and bill for these extras.
- Concept stopped paying for the extra work around the fifth invoice; AMS continued some work but ultimately abandoned the site when Concept did not authorize payment, while Concept hired another company to finish the project; AMS sued Concept and Capitol for unpaid extra work and related damages, resulting in a trial court judgment for AMS of $120,883.95 plus prejudgment interest and $25,000 in attorney’s fees.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether AMS’s quantum meruit and payment bond theories were properly disclosed | AMS’s pleadings expressly asserted quantum meruit and payment bond theories. | AMS failed to expressly disclose these theories in response to discovery requests. | AMS’s theories were properly pled and notice given; exclusion for non-disclosure not warranted. |
| Whether the challenged documents were admissible as business records | Coins evidence established business-record authentication and compliance with Rule 803(6). | Evidence unauthenticated and hearsay. | Trial court did not abuse discretion; exhibits properly authenticated and admissible. |
| Whether AMS could pursue quantum meruit against Concept despite BW ownership | Extra work benefited Concept as the general contractor directing the project. | Only BW as owner should benefit; legitimate quantum meruit against third party. | Extra work benefited Concept; AMS properly asserted quantum meruit against Concept. |
| Whether recovery under quantum meruit is barred where express contracts exist | Express contracts did not cover the extra work; quantum meruit allowed for value beyond contract. | Express contracts preclude quantum meruit for covered work. | Extra work exceeded express-contract scope; quantum meruit permitted for reasonable value. |
| Whether Capitol’s payment bond notice requirements were satisfied | AMS, in direct contract with Concept, is exempt from bond notice under the bond’s terms. | Notice requirements apply; AMS failed to provide notice. | Notice satisfied under bond terms; AMS is exempt from notice requirement. |
Key Cases Cited
- Truly v. Austin, 744 S.W.2d 934 (Tex. 1988) (central to recovery in quantum meruit is ownership of benefits; incidental benefits insufficient)
- Bashara v. Baptist Mem'l Hosp. Sys., 685 S.W.2d 307 (Tex. App.—Dallas 1985) (business records and related exceptions to hearsay acknowledged)
- Sourignavong v. Methodist Healthcare Sys., 977 S.W.2d 382 (Tex. App.—Amarillo 1998) (incidental benefits do not support quantum meruit against third parties)
- Heldenfels Bros., Inc. v. City of Corpus Christi, 832 S.W.2d 39 (Tex. 1992) (elements of quantum meruit require value, benefit, acceptance, and notice)
- Iron Mountain Bison Ranch, Inc. v. Easley Trailer Mfg., Inc., 42 S.W.3d 149 (Tex. App.—Amarillo 2000) (quantum meruit scope beyond express contracts if extra work is valuable)
- Kirwan v. City of Waco, 249 S.W.3d 544 (Tex. App.—Waco 2008) (affects authentication and business-record considerations in appellate review)