Howard Michael Lauderback, Individually, and D/ B/A New Era Contract Services v. FMWB Inc.
02-16-00057-CV
| Tex. App. | Oct 6, 2016Background
- Lauderback contracted with TxDOT to provide mowing services; the contract required subcontractors to provide a Certificate of Insurance showing workers’ compensation coverage "Statutory."
- On June 4, 2013, Lauderback subcontracted the Cooke County mowing work to FMWB for $100,159.26; FMWB was to complete in 57 working days and did so.
- Lauderback’s insurer reviewed FMWB’s certificate and told Lauderback it was "inadequate" and did not show the minimum workers’ compensation coverage; Lauderback withheld the final payment of $42,951.64.
- FMWB demanded payment, then sued asserting breach of contract, suit on a sworn account, and alternatively quantum meruit; FMWB moved for traditional summary judgment on the breach claim (and sought attorney’s fees).
- The trial court granted summary judgment for FMWB for $42,951.64 plus interest, fees, and costs; on appeal the court affirmed, concluding FMWB proved all elements of breach and that Lauderback failed to raise a fact issue.
Issues
| Issue | Plaintiff's Argument (FMWB) | Defendant's Argument (Lauderback) | Held |
|---|---|---|---|
| Whether FMWB conclusively proved breach of contract by performance and Lauderback’s nonpayment | FMWB: subcontract existed, FMWB timely performed, Lauderback breached by withholding final payment; damages $42,951.64 | Lauderback: FMWB failed to perform because its insurance certificate was inadequate under the subcontract’s incorporated TDOT provision | Court: Held for FMWB — statute governing subcontractor WC (Tex. Lab. Code §505.013) did not require FMWB to provide the certificate; FMWB established performance and damages, summary judgment affirmed |
| Whether Lauderback raised a viable offset/affirmative defense based on alleged inadequate insurance | FMWB: offset not shown; Lauderback still owes contract balance | Lauderback: entitled to withhold payment as offset for costs he may incur to obtain workers’ comp coverage because FMWB’s certificate was inadequate | Court: Held for FMWB — Lauderback failed to produce conclusive evidence of actual damages from the alleged deficiency (speculative future costs), so offset defense failed |
Key Cases Cited
- Travelers Ins. Co. v. Joachim, 315 S.W.3d 860 (Tex. 2010) (standard of review for summary judgment)
- Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844 (Tex. 2009) (viewing summary-judgment evidence in favor of nonmovant)
- 20801, Inc. v. Parker, 249 S.W.3d 392 (Tex. 2008) (every reasonable inference indulged for nonmovant)
- MMP, Ltd. v. Jones, 710 S.W.2d 59 (Tex. 1986) (plaintiff must conclusively prove all elements for summary judgment)
- Amedisys, Inc. v. Kingwood Home Health Care, LLC, 437 S.W.3d 507 (Tex. 2014) (burden shift after movant produces summary-judgment evidence)
- Triton 88, L.P. v. Star Elec., L.L.C., 411 S.W.3d 42 (Tex. App.—Houston [1st Dist.] 2013) (elements required for breach-of-contract judgment)
- Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211 (Tex. 2003) (affirmance appropriate if any ground presented to trial court is meritorious)
- Rizk v. Fin. Guardian Ins. Agency, Inc., 584 S.W.2d 860 (Tex. 1979) (suit on a sworn account is a procedural device for certain contractual claims)
- Bellair, Inc. v. Aviall of Tex., Inc., 819 S.W.2d 895 (Tex. App.—Dallas 1991) (party asserting offset must prove amount of damages)
