Peggy Hartman D/B/A Hartman Homes v. P. J. Norman
09-16-00333-CV
| Tex. App. | Oct 19, 2017Background
- Norman hired Hartman (Hartman Homes) in April 2011 to remodel and add onto her home for a fixed price of $250,000; the written contract required change orders in writing and payment per a draw schedule, but no draw schedule was ever created.
- Norman paid $200,000 (including a $50,000 deposit) and then refused the final $50,000 after disputes over unapproved change orders and when Hartman requested the remainder without providing an accounting.
- The parties orally agreed to changes during construction; they disputed the scope, square footage, and cost of those changes and did not reduce them to written change orders as the contract required.
- Hartman left the job when Norman withheld the final payment; Hartman later produced an accounting showing about $188,000 spent of the $200,000 received.
- Norman hired another contractor, spending $236,667.51 to finish the project and sought damages for the difference caused by Hartman’s abandonment.
- The trial court found Hartman breached the contract by abandoning the project, concluded Hartman had a duty under the Construction Trust Fund Act (CTFA) to provide an accounting, and awarded Norman $136,667.51; Hartman appealed.
Issues
| Issue | Plaintiff's Argument (Norman) | Defendant's Argument (Hartman) | Held |
|---|---|---|---|
| Whether CTFA or related duties required contractor to provide an accounting before owner releases final payment | Owner: CTFA makes owner a beneficiary of trust funds and contractor must maintain records; without accounting owner cannot determine "satisfactorily completed" work and may withhold funds | Contractor: Fixed-price contract contains no accounting requirement; CTFA does not impose duty to produce accounting for fixed-price jobs; she was justified in stopping work when owner refused payment | Court: Affirmed — CTFA duties to maintain records/records of disbursements support owner’s right to an accounting; owner justified in withholding final payment; contractor breached by abandoning job |
Key Cases Cited
- BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789 (Tex. 2002) (standard of review for conclusions of law and legal correctness)
- City of Houston v. Bates, 406 S.W.3d 539 (Tex. 2013) (statutory interpretation reviewed de novo; legislative intent governs)
- Direct Value, L.L.C. v. Stock Bldg. Supply, L.L.C., 388 S.W.3d 386 (Tex. App.—Amarillo 2012) (CTFA’s purpose to ensure trust funds reach labor and material providers; owners are beneficiaries)
- Weinberger v. Longer, 222 S.W.3d 557 (Tex. App.—Houston [14th Dist.] 2007) (evidence of contractor charging for unrelated work considered in breach/accounting disputes)
- Kenny v. Portfolio Recovery Assocs., LLC, 464 S.W.3d 29 (Tex. App.—Houston [1st Dist.] 2015) (judgment may be affirmed on any legal theory supported by the evidence)