H2O Solutions, Ltd. v. PM Realty Group, LP
438 S.W.3d 606
| Tex. App. | 2014Background
- Hurricane Ike damaged two office buildings owned by the B & R entities; PM Realty managed the properties and H20 Solutions performed emergency remediation in Sept. 2008.
- H20 began work after oral communications with PM Realty’s construction manager; written Limited Scope Service Agreements (LSSAs) dated Sept. 26, 2008 identified the B & R entities as Owners and PM Realty as agent, with integration and agent-no-liability clauses.
- H20 invoiced for nearly $800,000; when unpaid it filed mechanic’s liens and sued the B & R entities and PM Realty for breach, quantum meruit, fraud, negligent misrepresentation, and related claims.
- H20 repeatedly (in pleadings, affidavits supporting liens, and a motion for summary judgment) stated the work was performed pursuant to written contracts with the B & R entities; it later settled with the B & R entities and recovered against their insurer.
- After settlement H20 amended to assert it had contracted directly with PM Realty and that the LSSAs were unenforceable; PM Realty moved for summary judgment arguing H20’s prior sworn statements were judicial admissions and that LSSAs governed the work.
- Trial court granted summary judgment for PM Realty on all claims (H20 nonsuited negligent misrepresentation); the court of appeals affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Existence of enforceable contract with PM Realty | H20: parties reached oral agreement on scope/price with PM Realty before work began; LSSAs were mere formality or only for future work | PM Realty: H20 judicially admitted the work was under written contracts with B & R; no separate contract with PM Realty | Held: Judicial admissions bind H20; no valid contract with PM Realty—summary judgment affirmed |
| Effect of LSSAs and attached purchase orders | H20: LSSAs unenforceable for lack of consideration and/or addressed future work; purchase orders unauthenticated/forged | PM Realty: LSSAs are integrated agreements with B & R; purchase orders and LSSAs properly authenticated as business records | Held: Greeson’s affidavit sufficiently authenticated LSSAs/purchase orders; trial court did not abuse discretion |
| Quantum meruit recovery | H20: alternative recovery if no contract with PM Realty | PM Realty: valid written contract with B & R covers services, barring quantum meruit | Held: Because H20 is bound by admissions that a contract with B & R covered the work, quantum meruit is barred |
| Fraud / fraudulent inducement | H20: PM Realty induced H20 to sign LSSAs and forged/Back‑dated POs; relied on misrepresentations (e.g., that signing was mere formality) | PM Realty: alleged oral misrepresentations contradicted by the LSSAs; reliance not justified as a matter of law | Held: No genuine fact issue; reliance contradicted by written agreements—fraud claim fails |
Key Cases Cited
- Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844 (Tex. 2009) (standard for de novo review of summary judgment)
- Khan v. GBAK Props., Inc., 371 S.W.3d 347 (Tex. App.—Houston [1st Dist.] 2012) (pleadings can constitute judicial admissions that bar contrary positions)
- Holy Cross Church of God in Christ v. Wolf, 44 S.W.3d 562 (Tex. 2001) (assertions pleaded in the alternative are not judicial admissions)
- In re Spooner, 333 S.W.3d 759 (Tex. App.—Houston [1st Dist.] 2010) (judicial admissions must be clear, deliberate, and unequivocal)
- In re Kellogg Brown & Root, Inc., 166 S.W.3d 732 (Tex. 2005) (quantum meruit barred where valid contract covers services)
- DRC Parts & Accessories, L.L.C. v. VM Motori, S.P.A., 112 S.W.3d 854 (Tex. App.—Houston [14th Dist.] 2003) (reliance on oral representations contradicted by written contract is not justified)