Pat Wood and Johnny Wood v. Carpet Tech, Ltd.
07-16-00029-CV
Tex. App.Nov 2, 2016Background
- Pat and Johnny Wood hired Carpet Tech to remediate fire damage (contents salvage, demolition, reconstruction); total charges exceeded $200,000.
- The Woods paid as work progressed but withheld about $25,860 as final payment, alleging deficient or incomplete work.
- Carpet Tech charged interest on the outstanding sum at 1.5% per month (18% annually) and sued to collect; the Woods counterclaimed for breach of contract and usury.
- Trial was to the court; the trial court found Carpet Tech failed to fully perform and denied recovery to all parties, rejecting the Woods’ usury claim and awarding no damages to the Woods.
- The Woods appealed, arguing legal and factual insufficiency of the trial court’s findings on (1) usury and (2) damages for breach of contract.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Carpet Tech’s interest charge constituted usury | Woods: The 18% annual charge was usurious because Carpet Tech extended credit/loan and Woods had an absolute obligation to repay | Carpet Tech: Woods’ obligation to pay was contingent on Carpet Tech’s completion/performance; since performance was incomplete, no absolute obligation existed | Court: No usury — Woods’ obligation was contingent on completion; evidence supported trial court finding that Carpet Tech failed to fully perform |
| Whether Woods proved damages for breach of construction contract | Woods: Expert estimate of repair/completion costs (itemized ranges) established reasonable and necessary damages | Carpet Tech: Estimates were conclusory, lacked foundation and explanation of how amounts were derived; therefore not probative | Court: No damages — expert’s ranges were conclusory, lacked basis (materials, labor, quantities, methodology), so legally and factually insufficient |
Key Cases Cited
- First Bank v. Tony’s Tortilla Factory, 877 S.W.2d 285 (Tex. 1994) (elements of a usury claim)
- Anglo-Dutchman Petroleum Int’l, Inc. v. Haskell, 193 S.W.3d 87 (Tex. App.—Houston [1st Dist.] 2006) (repayment contingent on events is not an absolute obligation)
- Wagner v. Austin Sav. & Loan Ass’n, 525 S.W.2d 724 (Tex. Civ. App.—Beaumont 1975) (repayment dependent on contingencies defeats usury claim)
- Pansy Oil Co. v. Federal Oil Co., 91 S.W.2d 453 (Tex. Civ. App.—Texarkana 1936) (contingent repayment based on drilling/production precluded usury)
- McGinty v. Hennen, 372 S.W.3d 625 (Tex. 2012) (measures of damages for construction breaches and requirement that remedial cost evidence be reasonable and necessary)
- CCC Group, Inc. v. South Cent. Cement, Ltd., 450 S.W.3d 191 (Tex. App.—Houston [1st Dist.] 2014) (expert testimony must show basis for reasonableness of repair costs)
- Houston Unlimited, Inc. v. Mel Acres Ranch, 443 S.W.3d 820 (Tex. 2014) (expert opinion is valuable only to the extent its basis supports the opinion)