526 S.W.3d 709
Tex. App.2017Background
- CTC (general contractor) hired Vast (subcontractor) to perform Cornish Street work for $355,000; the signed Subcontract was silent as to which party must obtain permits and included an "entire agreement" merger clause and termination/cure provisions.
- Vast obtained several permits, sought a lane-closure permit (requiring a traffic control plan), invoiced CTC for mobilization, but CTC did not pay Vast before Vast ceased work in mid‑March 2014 and cancelled permits and bonds.
- CTC notified Vast of default (failure to prosecute, comply, and interference/abandonment), hired A&M to finish the work for higher cost, and sued Vast for breach seeking the difference in costs; Vast counterclaimed for breach, prompt-payment violations, and violation of the Texas Construction Trust Fund Act (TCTFA).
- At trial the court excluded Vast’s pre-bid proposal (which expressly excluded permits), submitted broad-form questions whether Vast or CTC failed to comply, and the jury found Vast breached and CTC did not; jury awarded CTC $91,900 in damages and the trial court awarded CTC attorneys’ fees under Tex. Civ. Prac. & Rem. Code § 38.001.
- On appeal the court affirmed the breach and damages findings (breach supported by undisputed evidence that Vast abandoned the job), rejected Vast’s evidentiary and charge-error arguments, but held the award of attorneys’ fees under § 38.001 against an LLC was erroneous and modified the judgment to remove all fee awards.
Issues
| Issue | Plaintiff's Argument (CTC) | Defendant's Argument (Vast) | Held |
|---|---|---|---|
| Whether Vast breached the Subcontract | Vast abandoned the project and therefore breached; jury should decide | Vast argued as matter of law Subcontract did not require it to obtain permits so no breach | Court: Affirmed breach verdict — broad-form question allowed finding of breach (abandonment) supported by legally sufficient evidence |
| Admissibility of Vast’s pre-bid proposal | Exclusion proper under parol-evidence/merger; Subcontract controls | Proposal should be admitted to show permits were excluded | Court: Even if exclusion erroneous, any error was harmless because abandonment alone supported verdict |
| Requested materiality instruction | Not necessary given evidence of substantial breach | Materiality instruction required for jury | Court: Refusal not reversible error; other findings (abandonment) made instruction unnecessary |
| Sufficiency of damages award | Award within range of evidence (difference between CTC’s completion costs and Vast’s price) | Award unsupported because A&M contract covered extra items (bonds, fire line, permits) | Court: Award supported by factual evidence; jury discretion; not so contrary to weight of evidence as to be unjust |
| Prompt-payment statute claim (Tex. Prop. Code) | N/A (CTC plaintiff) | Vast argued CTC received owner payment and failed to timely pay subcontractor, entitling Vast to relief and fees as matter of law | Court: Jury found CTC did not breach; Vast could not show entitlement as matter of law; prompt-payment claim and fee request denied |
| TCTFA jury question | N/A | Vast argued CTC misapplied trust funds by paying unrelated attorneys’ fees | Court: No evidence CTC used trust funds for improper purposes; refusal to submit question proper |
| Attorneys’ fees under Tex. Civ. Prac. & Rem. Code § 38.001 | Sought fees for breach of contract against Vast | Vast argued LLC is not an individual or corporation under § 38.001 | Court: Sustained Vast’s claim; § 38.001 does not authorize fees against an LLC — vacated all attorney fee awards |
Key Cases Cited
- City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) (standard for legal sufficiency review and viewing evidence in light most favorable to the verdict)
- Meek v. Bishop Peterson & Sharp, P.C., 919 S.W.2d 805 (Tex. App.—Houston [14th Dist.] 1996) (court determines contractual duties as legal questions)
- Hammerly Oaks, Inc. v. Edwards, 958 S.W.2d 387 (Tex. 1997) (broad-form jury charge governs when not objected to on appeal)
- Marathon Corp. v. Pitzner, 106 S.W.3d 724 (Tex. 2003) (standards for sustaining legal-sufficiency/no-evidence challenges)
- Dealers Elec. Supply Co. v. Scroggins Constr. Co., 292 S.W.3d 650 (Tex. 2009) (TCTFA trust-fund principles and beneficiary status)
- Thota v. Young, 366 S.W.3d 678 (Tex. 2012) (harmless-charge-error standard)
- Epps v. Fowler, 351 S.W.3d 862 (Tex. 2011) (American Rule and that fees are recoverable only by statute or contract)
- Alta Mesa Holdings, L.P. v. Ives, 488 S.W.3d 438 (Tex. App.—Houston [14th Dist.] 2016) (§ 38.001 does not authorize recovery of attorney’s fees against an LLC)