Direct Value, LLC and Martin F. Cody, Jr. v. Stock Building Supply, LLC
2012 Tex. App. LEXIS 9520
| Tex. App. | 2012Background
- Krisel hired Direct, operating as DirectBuy of Austin, to supply and install new windows; payment of $34,026.74 was made to Direct.
- Direct ordered the windows and installation from Stock Building Supply (SBS); Direct's employee B.J. Wiatrek submitted the order.
- SBS quotes for installation were $33,124.25; SBS provided and installed the windows but Direct did not pay SBS the amount due.
- Cody, as manager/owner of Direct, controlled funds and could direct payments to SBS; SBS communications were directed to him during collection efforts.
- The trial court found Direct breached the contract and Cody misapplied Krisel’s funds under the Texas Construction Trust Act; a Modified Final Judgment awarded SBS $33,124.25 and $10,500 in attorney’s fees, jointly and severally against Direct and Cody.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Attorney's fees under the Act | SBS is entitled to fees under the Act for misapplication and contract claims | Fees not plead or permitted under the Act should not be awarded against Cody | Fees recoverable; affirmed |
| Double recovery / electing remedies | Joint recovery across theories is proper | Should elect a single remedy to avoid double recovery | No double recovery; joint and several judgment proper |
| Judgment against Cody for breach of contract | Cody liable for breach via contract theories | Cody not liable for breach of contract personally | Cody liable for breach of fiduciary duty, not breach of contract |
| Admission of attorney testimony | Testimony was proper to prove collection efforts | Improper testimony due to notice and hardship issues | Admission was not error; testimony cumulative and did not affect judgment |
| Sufficiency of the evidence for breach and trustee status | Evidence shows Direct breached and Cody was trustee under Act | Evidence insufficient to prove breach or trustee status | Evidence legally and factually sufficient |
Key Cases Cited
- Catalina v. Blasdel, 881 S.W.2d 295 (Tex. 1994) (standard for appellate review of trial‑court findings)
- In re K.R.P., 80 S.W.3d 669 (Tex.App.—Houston [1st Dist.] 2002) (procedural and evidentiary standards on review)
- Associated Indem. Corp. v. CAT Contracting, Inc., 964 S.W.2d 276 (Tex. 1998) (sufficiency standard and deference to findings)
- Formosa Plastics Corp. USA v. Presido Eng'rs & Contractors, Inc., 960 S.W.2d 41 (Tex. 1998) (liberal construction of the Construction Trust Act)
- Ortiz v. Jones, 917 S.W.2d 770 (Tex. 1996) (standard for weighing evidence on appeal)
- Choy v. Graziano Roofing of Texas, Inc., 322 S.W.3d 276 (Tex.App.—Houston [1st Dist.] 2009) (trustee liability under the Construction Trust Act)
- C & G, Inc. v. Jones, 165 S.W.3d 450 (Tex.App.—Dallas 2005) (construction trust funds and remedial construction-law principles)
- Fleming Foods, Inc. v. Rylander, 6 S.W.3d 278 (Tex. 1999) (limits of statutory interpretation in remedy provisions)
- Drury Southwest, Inc. v. Louie Ledeaux #1, Inc., 350 S.W.3d 287 (Tex.App.—San Antonio 2011) (single-injury rule and remedies)
- Birchfield v. Texarkana Mem'l Hosp., 747 S.W.2d 361 (Tex. 1987) (broad discretion in award and review of damages)
- Waite Hill Servs., Inc. v. World Class Metal Works, Inc., 959 S.W.2d 182 (Tex. 1998) (election of remedies and single-injury doctrine)