Trinity Drywall Systems, LLC v. TOKA General Contractors, Ltd., and Vineyard Village, MSV, LLC
2013 Tex. App. LEXIS 13697
| Tex. App. | 2013Background
- Vineyard owns the Shops at Vineyard Village Shopping Center in Euless, Texas, and contracted with TOKA for general contracting.
- TOKA hired Trinity as a subcontractor to perform lath, plaster, and simulated stone finishing work for the project.
- After Trinity completed its work, cracking appeared in the stucco; Trinity and TOKA agreed Trinity would repair it, and Trinity invoiced $60,795, which TOKA did not pay.
- Trinity filed a mechanic’s lien and suit for breach of contract, unjust enrichment, quantum meruit, and to foreclose its lien; Vineyard counterclaimed for declaratory judgment that the lien was invalid and for attorney’s fees.
- The trial court denied Trinity’s summary judgment motion, but pretrial rulings caused Vineyard to prevail on declaratory judgment issues; a jury later found in Trinity’s favor on its breach of contract claim against TOKA.
- The trial court ultimately held Trinity’s lien invalid, awarded Vineyard attorney’s fees, and conditioned sums payable to Vineyard on appeals and potential Supreme Court briefing; Trinity appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether 53.026 sham contracts elevates a subcontractor to original contractor for a constitutional lien | Trinity (plaintiff) contends it is an original contractor under 53.026 and may enforce a constitutional lien without statutory perfection. | Vineyard contends 53.026 does not apply to constitutional liens and would not alter rights under the Constitution. | Issue sustained; 53.026 can elevate a subcontractor to original contractor for a constitutional lien. |
| Whether Trinity admitted it was a subcontractor, affecting lien viability | Trinity argues it did not admit subcontractor status and pleaded original contractor under 53.026. | Vineyard argues Trinity admitted subcontractor status in pleadings and affidavits. | Issue sustained; trial court erred by finding a binding admission of subcontractor status. |
| Whether Trinity’s lien foreclosure claim and Vineyard’s declaratory judgment/fees were properly resolved | Trinity seeks foreclosure and argues the lien is valid under 53.026 as original contractor. | Vineyard seeks declaratory judgment invalidating the lien and attorney’s fees. | Issue sustained; declaratory judgment for Vineyard reversed; attorney’s fees remanded for reconsideration. |
| Whether Trinity is entitled to judgment as a matter of law under 53.026 | Trinity argues the sham contract evidence shows Vineyard and TOKA controlled each other, creating a sham contract. | Vineyard contends the record shows genuine disputes about control; remand needed. | Issue sustained; remand for further proceedings on whether a sham contract exists. |
Key Cases Cited
- Da-Col Paint Mfg. Co. v. American Indem. Co., 517 S.W.2d 270 (Tex. 1974) (sham contracts protect subcontractors from alter ego owner control)
- Shaw v. McPhail Elec. Co., Inc., 544 S.W.2d 497 (Tex. Civ. App. Dallas 1976) (sham contracts can elevate a subcontractor to original contractor status for lien purposes)
- CVN Group, Inc. v. Delgado, 95 S.W.3d 234 (Tex. 2002) (constitutional lien enforcement requires statutory framework; distinction from statutory lien)
- First Nat’l Bank, 517 S.W.2d 265 (Tex. 1974) (related to sham contracts and original contractor status (contextual))
- Gibson v. Bostick Roofing and Sheet Metal Co., 148 S.W.3d 482 (Tex. App. 2004) (subcontractor generally does not have a constitutional lien)
- City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) (standards for reviewing legal conclusions and factual sufficiency)