Cimco Refrigeration, Inc. v. Bartush-Schnitzius Foods Co. ( 2018 )

ACCEPTED
02-14-00401-CV
SECOND COURT OF APPEALS
FORT WORTH, TEXAS
5/25/2018 11:09 AM
DEBRA SPISAK
CLERK
NO. 02-14-00401-CV
FILED IN
IN THE COURT OF APPEALS FOR THE2nd COURT OF APPEALS
FORT WORTH, TEXAS
SECOND JUDICIAL DISTRICT OF TEXAS, FORT WORTH
05/25/2018 11:09:22 AM
DEBRA SPISAK
CIMCO REFRIGERATION, INC., Clerk
Plaintiff—Appellant
V.
BARTUSH SCHNITZIUS FOOD COMPANY,
Defendant—^Appellee
On Appeal from Civil Action No. 2011-11002-16
in the 16*" Judicial District Court of Denton County, Texas
The Honorable Sherry Shipman, Presiding
CIMCO REFRIGERATION, INC.’S
MOTION FOR PANEL REHEARING
Patricia Hair
Texas Bar No. 08713500
PHELPS DUNBAR LLP
500 Dallas Street, Suite 1300
Houston, Texas 77002
(713) 626-1386 Telephone
(713) 626-1388 Fax
Patricia.hair@phelps.com
Blake A. Bailey
Texas State Bar No. 01514700
Christopher R. Jones
Texas State Bar No. 24070018
PHELPS DUNBAR LLP
115 Grand Avenue, Suite 222
Southlake, Texas 76092
(817) 488-3134 Telephone
(817) 488-3214 Fax
blake.bailev@phelps.com
chris.iones@phelps.com
ATTORNEYS FOR APPELLANT
PD.23767125.2
MOTION FOR PANEL REHEARING
APPELLANT CIMCO REFRIGERATION, INC. (Cimco)
respectfully requests panel rehearing, pursuant to Rule 49.1 of the
Texas Rules of Appellate Procedure, of the attached memorandum
opinion on remand and judgment issued on April 26, 2018 (the
Memorandum Opinion)(Attachment 1).
The Memorandum Opinion largely eviscerates the parol evidence
rule and renders meaningless the merger clause included in a contract
by allowing one party to modify an unambiguous written contract by
the addition of oral terms that, in this instance, also contradict the
written terms. The Memorandum Opinion conflicts with established
precedent holding that a fully integrated and unambiguous written
agreement may not be added to, varied or contradicted by parol
evidence of prior negotiations or agreements. See, e.g., Section 202.2,
Tex. Bus. & Com Code Ann.; First Bank v. Brumitt, 519 S.W.3d 95, 111
(Tex. 2017) (admission of evidence a previous oral agreement adding a
term to a subsequent written loan commitment letter violated the parol
evidence rule); Houston Expl. Co. v. Wellington Underwriting Agencies,
Ltd., 352 S.W.3d 462, 475 (Tex. 2011) (supplementing the interpretation
2
of an unambiguous written insurance policy with parol evidence of pre­
settlement negotiations is inappropriate); Quintanilla v. West, 534
S.W.Sd 34, 48 (Tex. App.^—San Antonio 2017, pet. filed) (where
consideration in the form of debts to be discharged is specifically
enumerated, parol evidence of an alleged side agreement contradicting
the written terms is inadmissible); Baroid Equip., Inc. v. Odeco
Drilling, Inc., 184 S.W.3d 1, 13-166 (Tex. App.^—Houston [1st Dist.]
2005, pet. denied)(where written contract provides a specific, limited
warranty against defects in materials and workmanship, previous oral
agreements regarding other warranties are inadmissible).
The Memorandum Opinion relies upon parol evidence of a pre­
contract discussion to create a performance requirement and a
warranty that contradicts the written contract. The written contract
required the sale of specific refrigeration equipment and excludes all
warranties other than an express warranty against defects in
manufacture or installation. The Memorandum Opinion then utilizes
this parol evidence to impose a contractual term that the room would be
a certain temperature after installation of the equipment, thus
transforming the contract from the sale and installation of the specified
3
equipment, to a contract to provide environmental engineering,
potentially remodeling the manufacturing facility, and re-structuring
the operational aspects of the customer’s business.
The Memorandum Opinion awards damages to a purchaser of
refrigeration equipment in order to purchase additional equipment, a
damage award that that the written contract expressly excludes
contract by limiting the seller’s liability to the cost of repair or
replacement of purchased equipment.
The original memorandum opinion issued by the panel on
November 25, 2015, was correct insofar as it awarded damages only to
the unpaid seller, Cimco, and excluded an award of damages to the
purchaser, Bartush Schnitzius Food Company (Bartush).
I. Permitting parol evidence to add to the written
contract a warranty or guaranty that the Bartush
rooms would maintain a constant 35 degrees after
installation conflicts with and contradicts the terms
of the written contract and does not supplement it.
The written contract (the Contract)) between Cimco and Bartush
(P.Ex. 7, P.Ex.l2 ) (Attachment 2) was complete in itself as it required
only that Cimco sell and install specific refrigeration equipment and
warrant that this equipment was free of manufacturing defects or
4
defects in installation. The Contract contained no warranty or
guaranty that the Bartush refrigerated production rooms post­
installation would be or remain at any particular temperature. The
Contract contained a merger clause stating
THIS QUOTATION/CONTRACT CONTAINS
THE COMPLETE AGREEMENT BETWEEN
THE PURCHASER AND THE VENDOR, AND
SUPERSEDES ALL PRIOR ORAL OR
WRITTEN REPRESENTATIONS, PROMISES,
AGREEMENTS OR UNDERSTANDINGS WITH
RESPECT TO THE SUBJECT MATTER
HEREOF.
The Memorandum Opinion is in error by permitting, contrary to
the terms of the Contract and established legal precedent, a casual oral
statement made by the Bartush maintenance superintendent three
months before the Contract was executed to vary the written and
agreed terms of the Contract by adding a requirement/warranty that
the refrigerated rooms would maintain a 35F degree temperature post­
installation. Specifically, the Memorandum Opinion is in error in
holding that a warranty concerning post installation temperatures was
created by the precontract statement of a Bartush representative:
Cimco’s representative, Michael Winslow,
testified that Bartush required the system to
maintain a thirty-five degree temperature. This
5
testimony was supported by Winslow’s notes from
the initial walkthrough, which were admitted as
a trial exhibit.
Memorandum Opinion on Remand at 9-10. An oral warranty regarding
a constant post installation temperature of the Bartush production
rooms is in direct conflict with the terms of the Contract, which
specifically limited in Paragraph 6 entitled WARRANTY the warranties
that Cimco would provide:
UNLESS OTHERWISE SPECIFIED IN THIS
QUOTATION/CONTRACT, THE VENDOR
WARRANTS THE GOODS AND
INSTALLATION SOLD HEREUNDER
AGAINST ORIGINAL DEFECTS IN
MANUFACTURE AND WORKMANSHIP FOR A
PERIOD OF ONE YEAR FROM COMPLETION
AS DEFINED IN SECTION 9 OF THESE
TERMS AND CONDITIONS. THIS WARRANTY
IS IN LIEU OF ALL OTHER WARRANTIES,
STATUTORY OR OTHERWISE, EXPRESS OR
IMPLIED,INCLUDINGFOR ERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE.
This unwritten requirement concerning the post-installation
temperature of the Bartush production rooms is the only breach of the
Contract that the Memorandum Opinion attributes to Cimco. Without
the addition of a post-installation warranty, the trial record contains no
evidence that Cimco breached the Contract.
6
The reliance by the panel on the opinion in Morgan Bldgs. & Spas,
Inc. V. Humane Socy of Se. Tex., 249 S.W.Sd 480 (Tex. App.^—Beaumont
2008, no pet.), to support the creation of an unwritten warranty is
misplaced. In Morgan Buildings, the court found from evidence of the
surrounding circumstances that “the written purchase agreement alone
was not intended to be a complete and exclusive statement of all terms
of the parties’ agreement” and was therefore only partially integrated.
Id. at 488. The Morgan court specifically noted that the parties had
signed written specifications and a drawing that supplemented the
written purchase agreement, demonstrating that the written purchase
agreement did not represent the complete and exclusive terms of the
agreement, thereby rendering the Morgan purchase agreement
“partially integrated.” Because the written purchase agreement was
only “partially integrated,” the Morgan court held that “evidence of
consistent additional terms to explain or supplement the terms of the
written agreement could be considered.” Id. (Emphasis supplied).
The Memorandum Opinion does not cite nor does the trial record
contain any evidence of any circumstance indicating that the Contract
was not intended to be a complete and exclusive statement of the
7
parties’ agreement. Unlike in Morgan, there were no specifications to
which the written Cimco agreement referred and no ambiguous or
omitted terms that needed clarification in order for Cimco to supply the
refrigeration equipment Bartush ordered. While the height of the
prefabricated building that Morgan Buildings constructed for the SPCA
was necessary in order to fabricate the building, the constancy of the
temperature of the Bartush rooms post-installation was not necessary
in order for Cimco to supply and install the specific refrigeration
equipment that was the subject of the Contract.
Adding to the Contract the additional term mandated by the
Memorandum Opinion regarding post-installation room temperatures
altered the nature of the Contract from an agreement to supply and
install specific equipment to a contract requiring engineering and
physical analysis, redesign, and modification of the manufacturing
facility and an operational analysis of the facility.
Morgan is wholly distinguishable from the instant case in another
very important aspect: the terms that were added by parol evidence to
the Morgan Buildings purchase order were not in conflict with the
terms of its written agreement. Here, the addition of a warranty as to
8
post-installation production room temperature is in direct conflict with
the written terms that limit Cimco’s warranty to repair or replacement
of manufacturing or installation defects.
By holding that the addition by parol evidence of a post­
installation room warranty merely supplemented the terms of the
Contract, the Memorandum Opinion actually imposes on Cimco an
obligation that conflicts with and contradicts the terms of the Contract
The trial testimony of Danny Rose, the Cimco district manager
who prepared the proposal, explained that the post installation
temperature of any room is not the responsibility of Cimco as it depends
on factors beyond Cimco’s control, such as the proper operation of the
refrigeration equipment by Bartush, the amount of equipment and the
number of people in the room, windows, doors, ventilation, as well as
the insulation of the room and whether the room is opened to outside
air, precluding it from agreeing to warrant or guarantee the post­
installation temperatures. (3 RR 31-32).
The Contract required Cimco to provide specific refrigeration
equipment and nothing more. Cimco did not undertake in supplying
the equipment and in quoting the price of the equipment to guarantee
9
that the Bartush rooms would be any specific temperature. If that had
been a part of the agreement, Cimco would have been required to
conduct an engineering and operational analysis of the building and the
intended equipment and personnel to be present in the room and
required Bartush to reconstruct and insulate its production rooms and
operate the defrost system properly. The Contract does not call for
engineering or design services or operational requirements or for Cimco
to warrant conditions over which it had no control; the Contract calls
only for the sale and installation of the specified equipment. Adding
through parol evidence a requirement that a room maintain a certain
temperature during food processing operations completely changes the
nature of the Contract and imposes a warranty that conflicts with the
express terms of the Contract.
II. Awarding Bartush damages based upon the unwritten
warranty contradicts the limitation of liability
contained in the written contract.
The Memorandum Opinion and Judgment is also in error in
awarding Bartush damages in the amount of the “additional costs
BARTUSH had to pay to add any necessary defrost system . . . . ” This
award conflicts with the limitation of liability in the Contract. Oral
10
representations or warranties made before a written agreement that
conflict with the a written limited warranty constitute inadmissible
parol evidence that cannot form the basis of a damage award. See, e.g.,
Baroid Equip., Ine. v. Odeco Drilling, Inc., 184 S.W.Sd 1.
The only evidence of contract damages offered at trial by Bartush
was the cost of purchasing from others equipment not included in the
Contract that Bartush argued was necessary to maintain the 35F
degree temperature but which did not repair or replace the Cimco
equipment. (4 RR 107) The Bartush damages arose solely as a result of
the parol warranty regarding post-installation room temperatures and
conflicts with the limitation of liability provisions of the Contract:
In respect of goods sold with installation, the
Vendor’s sole liability shall be to repair or
replace, at the Vendor’s option, any defective
goods or parts thereof or any defective
workmanship.
THE FOREGOING CONSTITUTES THE
PURCHASER’S EXCLUSIVE REMEDY AND
THE VENDOR’S SOLE LIABLITY ARISING
OUT OF THE DESIGN, MANUFACTURE,
SALE, INSTALLATION, OR USE OF THE
GOODS.
11
The Vendor shall not be liable for any losses,
injuries, expenses or damages, whether direct,
indirect, special, incidental, consequential or
punitive, arising out of the goods, or the
installation, operation, or failure of operation of
the goods or related systems even if caused by the
Vendor’s negligence.
The Morgan Buildings case illustrates how the damage award to
Bartush constitutes error. In spite of finding that the written purchase
agreement was only partially integrated making parol evidence
admissible, the appellate court in Morgan Buildngs held to be
enforceable the written limitation on damages that excluded incidental
and consequential damages. As with the Morgan Buildings purchase
agreement, the liability limitation in the Contract is in large
conspicuous type and clearly visible and excludes any damages other
than the cost to replace or repair the Cimco equipment.
In the instant case, the trial court erred in submitting over
Cimco’s objection (5 RE, 64-67) Question No. 6 that asked the jury to
consider as an element of contract damages “The additional costs
BARTUSH had to pay to add any necessary defrost system”, to which
the jury answered “$168,000”. The trial court refused to submit Cimco’s
tendered issue that named as a contract damage element “The cost to
12
repair or replace any defective goods or parts thereof or any defective
workmanship.” The Memorandum Opinion is in error not just in
allowing parol evidence to create a warranty regarding a post­
installation temperature, but also in utilizing the unwritten warranty
to award Bartush damages contrary to the Contract, which limited
Cimco’s liability to repair or replacement of its equipment. The
Memorandum Opinion awarded Bartush as contract damages the cost
of equipment not sold under the Contract, equipment that was not
necessary to repair or replace the Cimco equipment and equipment that
constituted consequential damages that were specifically excluded by
the Contract.
III. The record contains no evidence that Cimco ever
agreed to a contract term whereby it warranted the
post-installation temperature of the Bartush rooms.
Even if the parol evidence rule and the contractual merger clause
are held inapplicable to the unilateral statement by the Bartush
maintenance superintendent concerning the post-installation
temperatures of the Bartush production rooms, that statement in and of
itself does not constitute an agreement between Bartush and Cimco.
13
The trial record contains no evidence the Cimco ever agreed to warrant
the post-installation temperature of the Bartush rooms.
The Memorandum Opinion on page 9 cites only the October 22,
2010, notes of Michael Winslow, the Cimco account manager (PX 29), as
the evidence of an agreement. Those notes were made during the an
initial inspection of the Bartush facility in which Winslow merely
recorded the statement of the Bartush maintenance superintendent
that the Bartush packing room “needs to be 35F.” This is the only
mention of a 35 degree post-installation temperature before the written
contract was agreed upon three months later and the equipment was
completely installed.
Winslow’s recording in his notes the statement of the Bartush
maintenance superintendent does not and cannot constitute evidence
that Cimco agreed to warrant the post installation temperature of the
Bartush rooms. Winslow admitted that he never conveyed this request
for a 35 degree post-installation temperature to Danny Rose, the Cimco
district manager who prepared the proposal. (4 RR 15). Rose testified
that he had never heard of the 35 degree requirement before the
installation was complete and never gave any warranty or guarantee to
14
Bartush that the rooms would be a consistent 35 degrees. (3 RR 65)
The evidence also demonstrated that Bartush’s Pearson subsequently
told the Cimco district manager that the rooms “needed to be 40-44°.” (2
RR 81; P.Ex.3)
In order to prevent misunderstandings or assumptions that are
not confirmed in writing, the Contract contained a merger clause to
ensure that an oral statement during negotiations that is not included
in a contract does not later become the fundamental purpose of the
entire contract according to one party when the other party is not
relying on the unwritten requirement.
Cimco was entitled to rely on this clause in order to know and
appropriately price what its responsibilities were under the Contract
and should not be bound by a pre-contract oral statement of which the
Cimco management had no knowledge.
IV. Admission of parol evidence of a 35 degree post­
installation warranty was harmful error because
without it there is no basis for finding that Cimco
breached the Contract or that Bartush sustained any
damage.
The only evidence that the Memorandum Opinion identifies to
support the jury’s finding that Cimco breached the Contract is the oral
15
statement made by the Bartush maintenance superintendent that the
rooms needed to be 35 degrees and
apart from the thirty-five degree temperature,
there was evidence that the Cimco system did not
function property by failing to maintain a
sufficient cool temperature because the testimony
supported that temperatures rose to the 50’s and
60’s.
Memorandum Opinion on Eemand at p. 9-10. The record contains no
evidence that Cimco provided any defective goods or defect in
workmanship and no evidence concerning the cost to repair or replace
Cimco’s defective goods or workmanship, which are the only damages
permitted by the Contract. To the contrary, even Bartush’s expert
testified that he found no evidence of a manufacturing or installation
defect and that the newly purchased Bartush equipment did not replace
but only supplemented the Cimco equipment. (4 RR 107)
At trial, much of the evidence focused on whether the Bartush
rooms were or were not a constant 35 degree temperature and whether
the temperature of the rooms was the result of circumstances beyond
the control of Cimco, such as the improper operation of the equipment
or the lack of insulation in the Bartush production rooms. However, the
post-installation temperature of the Bartush rooms is not evidence of a
16
contract breach by Cimco because evidence violative of the parol
evidence rule has no legal effect and is merely proof of immaterial and
inoperative facts. DeClaire v. G & B Mcintosh Family Ltd. P'ship, 260
S.W.Sd 34, 46 (Tex. App.^—^Houston [1st] 2008, no pet.); Baroid Equip.,
Inc. V. Odeco Drilling, Inc., 184 S.W.Sd at 13. Without permitting parol
evidence to add to the Contract an unwritten warranty concerning post­
installation room temperature, evidence of room temperature
constitutes nothing more than immaterial and inoperative facts.
In the absence of a post-installation temperature warranty, the
record contains no evidence that Cimco breached the Contract or that
Bartush suffered any damages resulting from a breach of the Contract.
The admission of parol evidence that varied the Contract is
unequivocally harmful as it forms the basis on which the Memorandum
Opinion and Judgment awarded Bartush damages of $168,000, plus
attorney’s fees. Only by ignoring the limitations of liability and
damages contained in the Contract and by permitting parol evidence to
vary its terms can an award of damages to Bartush be sustained as the
judgment in this case is based solely on Bartush’s claim for breach of
contract. Permitting the terms of the Contract to be varied by
17
Bartush’s initial statement and to ignoring the damage limitations and
exclusions contained in the Contract based upon that variance is
contrary to all legal precedent.
V. Cimco’s objection to Question No. 2 and Question No.
3 preserved error as to the conditioning instruction
on Question No. 24
If parol evidence is not permitted to vary the terms of the Contract
by creating a warranty concerning post-installation room temperatures,
the record contains no evidence that Cimco breached the Contract and
no evidence that Bartush sustained any of the damages permitted by
the Contract. At the close of the evidence, Cimco moved for a directed
verdict on the basis of no evidence of a contract breach and no evidence
of contract damages sustained by Bartush. (5 RR 98-99) Cimco
specifically objected (5 R.R. 61-62, 64-67) to the submission of Questions
No. 2, No. 3 and No. 6 and specifically cited to the court the testimony of
Bartush’s expert, Anthony Jacques, that all the equipment ordered was
installed (4 RR 100), that there were no manufacturing or installation
defects (4 RR 103), and that the Cimco equipment had sufficient
capacity to cool the Bartush rooms (4 RR 99). The trial court overruled
these objections.
18
Nonetheless, they were sufficient to apprise the Court of Cimco’s
complaint that no evidence supported the submission of Bartush’s
defensive issues as all evidence demonstrated that Cimco had complied
with all requirements of the Contract.
There should be but one test for determining if a
party has preserved error in the jury charge, and
that is whether the party made the trial court
aware of the complaint, timely and plainly, and
obtained a ruling.
Transcon. Ins. Co. v. Crump, 330 S.W.3d 211, 22Q-21 (Tex. 2010)
{quoting State Dept, of Highways v. Payne, 838 S.W.2d 235, 241 (Tex.
1992). Because Cimco’s objections to Question No. 2, No. 3, and No. 6
apprised the trial court that Bartush had provided no evidence of a
breach of the Contract by Cimco and no evidence of contract damages,
they preserved error as to the impact that these issues had upon the
erroneous conditioning instruction that the Court added to the issue
regarding Cimco’s attorney’s fees.
Once a party objects to the inclusion of invalid
bases for liability in the charge, this objection
also preserves error for any impact the wrongful
inclusion has on other charge questions.
McFarland v. Boisseau, 365 S.W.3d 449, 454-55 (Tex. App^—^Houston[l®t
Dist.] 2011, no pet.) citing Missouri Pacific R.R. Co. v. Limmer, 180
19
S.W.Sd 803 (Tex. App.—Houston [14* Dist.] 2005), rev’d on other
grounds, 299 S.W.Sd 78 (Tex. 2009); see also Gonzales v Southwest
Olshan Foundation Repair Co., LLC, 400 S.W.Sd 52 (Tex. 2013);
Schrock V. Sisco, 229 S.W.Sd 392 (Tex. App.—Eastland 2007, no pet.)
Cimco’s objection to Question Nos. 2 and 3 preserved error for the
impact that the erroneous conditioning instruction had on Question No.
24 regarding attorney’s fees.
Cimco preserved error as to the erroneous conditioning instruction
in the same manner that this Court has recognized that the plaintiffs
had preserved error in Cunningham v. Haroona, 382 S.W.Sd 492, 508-
09 (Tex. App.—Fort Worth 2012, pet. denied). In that case, even though
the plaintiffs had not objected to an erroneous conditioning instruction,
they were held to have preserved error by objecting to the issues upon
which the conditioning instruction was based. This court noted that
error was preserved because the “trial court clearly understood the
[plaintiffs’] complaint and this is all that was required.” Id. at 510.
The cases the court relied upon in the Memorandum Opinion on
Remand are inapposite to the issue of error preservation under the
circumstances of this case. Neither case involves “no evidence”
20
objections to liability issues upon which a conditioning instruction is
premised.
More specifically, in Environmental Procedures, Inc. v. Guidry,
282 S.W.Sd 602 (Tex. App.^—Houston [14* Dist.] 2009, pet. denied), the
appellants were held to have waived a right to a new trial because they
did not object to the conditioning instructions for jury issues concerning
the principal issues of liability and damages, as opposed to a subsidiary
issue of attorney’s fees. Unlike the instant case, the trial evidence had
not “conclusively proved liability and damages as to the [appellants’
claims]. “ Id. at 631. Because Cimco has been held to be entitled to
recover damages for breach of contract, the trial court’s conditional
submission of its attorney’s fees issue on the Bartush defense issues for
which there was no evidence is error that was preserved by Cimco’s
objections. Cimco’s award of contract damages mandates a remand to
determine the amount of the statutory attorney’s fees to which Cimco is
entitled.
The decision in Hunter v. Carter, 476 S.W.2d 41 (Tex. App.—
Houston [14* Dist.] 1972, writ refd n.r.e.), is inapplicable because the
appellant failed to object, unlike the instant case, to the errors in the
21
issues upon which the unanswered issues were conditioned. Moreover,
the unanswered issues were immaterial as a result of the jury’s answer
to other issues. The opinion merely holds in accord with Rule 279 of the
Texas Rules of Civil Procedure that issues omitted from submission to
the jury may be deemed found so as to support a judgment if there is
factually sufficient evidence to support the finding. See Martin u.
McKee Realtors, 663 S.W.2d 446, 449 (Tex. 1984).
The reversal of the trial court’s judgment and the award of
contract damages to Cimco requires a remand for a determination of the
reasonable amount of attorney’s fees. In a case in which damages are
awarded for breach of contract. Section 38.001 of the Civil Practice and
Remedies Code mandates the award of attorney’s fees where there has
been proof of presentment and proof that the amount of the fees is
reasonable. See, e.g., Smith v. Patrick W.Y. Tam Trust, 296 S.W.3d 545,
547 (Tex. 2009); Stovall & Associates, P.C. v. Hihbs financial Center,
Ltd., 409 S.W.3d 790, 803 (Tex. App.—Dallas 2013, no pet.);
Daimler Chrysler Motors Co., LLC v. Manuel, 362 S.W.3d 160, 198 (Tex.
App.—Fort Worth 2012, no pet.); AMX Enterprises, LLP v. Master
Realty Corp., 238 S.W.3d 506, 517 (Tex. App.—Fort Worth 2009, no
22
pet.); World Help v. Leisure Lifestyles, Inc., 977 S.W.2d 662, 683 (Tex.
App.—Fort Worth 1998, pet. denied). While a trial court does have
discretion to determine the amount of attorney’s fees, it has no
discretion to deny attorney’s fees entirely. Smith, 296 S.W.Sd at 547;
Stovall & Associates, P.C., 409 S.W.Sd at 803; World Help, 977 S.W.2d
at 683.
“Once a jury finds that a party should prevail on
a claim on which attorney’s fees are mandated,
the only question remaining is the reasonable
value of the attorney’s fees, not whether they
should be awarded.”
West V. Brenntag Southwest, Inc., 168 S.W.3d 327, 338 (Tex. App.—
Texarkana 2005, no pet.). To recover the attorney’s fees mandated by
statute, it is necessary only that a party prevail in its claim for breach
of contract and recover damages. E.g, Green International, Inc. v. Solis,
951 S.3d 384, 390 (Tex. 1997); Woodhaven Partners, Ltd. v. Shamoun &
Norman, LLP, 422 S.W.3d 821, 838 (Tex. App.^—^Dallas 2014, no pet.).
Only in cases in which there are no damages recovered for the breach of
contract is the prevailing party not entitled to recover attorney’s fees.
See Mustang Pipeline Co. v. Driver Pipeline Co., 134 S.W.3d 195 (Tex.
2004); Green International, Inc. v. Solis, 951 S.3d 384, 390 (Tex. 1997).
23
The fact that the trial court erroneously conditioned the Cimco
attorney’s fee issue on Bartush’s unsupported claim that Cimco had
breached the Contract does not and should not deny Cimco its
statutorily mandated attorney’s fees when Cimco has recovered
damages.
VI. Conclusion
The Memorandum Opinion on Remand should be reconsidered. A
unilateral oral statement by one party to a written contract complete in
itself should never be permitted to contradict the written terms..
Unsupported by precedent and the evidence presented at trial, the
Memorandum Opinion on Remand creates confusion in the law of
contracts and in the market place where parties need to rely upon
written terms to know their duties and obligations.
The Memorandum Opinion on Remand should be withdrawn and
replaced with an opinion holding that parol evidence of a post­
installation warranty is not admissible, that the record contains no
evidence that Cimco breached the Contract or that Bartush sustained
damages as a result of a breach by Cimco and that Cimco preserved
error as to the conditioning instruction to its attorney’s fees issue by
24
objecting to the issues upon which the conditioning instruction was
based.
The original opinion of this court in which no damages were
awarded to Bartush is correct as to that point. The Judgment issued on
April 26, 2018, should be reformed to award damages only to Cimco and
to remand the case to the trial court for a determination of amount of
Cimco’s attorney’s fees.
25
Respectfully submitted,
/s/ Patricia Hair
Patricia Hair
Texas Bar No. 08713500
PHELPS DUNBAR LLP
500 Dallas Street, Suite 1300
Houston, Texas 77002
(713) 626-1386 Telephone
(713) 626-1388 Fax
Patricia.hair@phelps.com
Blake A. Bailey
Texas State Bar No. 01514700
Christopher R. Jones
Texas State Bar No. 24070018
PHELPS DUNBAR LLP
115 Grand Avenue, Suite 222
Southlake, Texas 76092
(817) 488-3134 Telephone
(817) 488-3214 Fax
blake.bailev@phelps.com
chris.iones@phelps.com
ATTORNEYS FOR CIMCO
REFRIGERATION, INC.
CERTIFICATE OF COMPLIANCE
I certify that the foregoing document complies with the typeface
requirement of Texas Rule of Appellate Procedure Rule 9.4(e) because it
has been prepared in a conventional typeface no smaller than 14-point
for text and 12-point for footnotes. This document also complies with
the word-count limitations of Texas Rule of Appellate Procedure Rule
26
9.4(i) because it contains 4487 words, excluding contents exempted by
Texas Rule of Appellate Procedure Rule 9.4(i)(l).
/s/ Patricia Hair
Patricia Hair
CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the foregoing
instrument and served upon all counsel as listed below by facsimile,
electronically, and/or hand delivery on this 25*^ day of May, 2018, as
follows:
Kevin J. Allen
Jones, Allen & Fuquay, L.L.P.
8828 Greenville Avenue
Dallas, Texas 75243
Telephone: (214) 343-7400
Fax: (214) 343-7455
kallen@ionesallen.com
Melissa A. Lorber
Enoch Kever PLLC
5918 W. Courtyard Dr., Suite 500
Austin, Texas 78730
Telephone: (512) 615-1200
Fax: (512) 615-1198
mlorber@enochkever.com
/s/ Patricia Hair
Patricia Hair
27
COURT OF APPEALS
SECOND DISTRICT OF TEXAS
FORT WORTH
NO. 02-14-00401-CV
CIMCO REFRIGERATION, INC. APPELLANT
V.
BARTUSH-SCHNITZIUS FOODS APPELLEE
CO.
FROM THE 16TH DISTRICT COURT OF DENTON COUNTY
TRIAL COURT NO. 2011-11002-16
MEMORANDUM OPINION ON REMAND^
I. Introduction
This case is on remand from the Supreme Court of Texas after the court
granted petitions for review filed by both Appellant Cimco Refrigeration, Inc.
(Cimco) and Appellee Bartush-Schnitzius Foods Co. (Bartush), issued a per
curiam opinion and a judgment reversing this court’s judgment, and ordered our
^See Tex. R. App. P. 47.4.
1
opinion published.^ See Bartush-Schnitzius Foods Co. v. Cimco Refrigeration,
Inc., 518 S.W.Sd 432 (Tex. 2017) {Bartush II). Holding that “neither the trial court
nor the court of appeals properly effectuated the jury’s verdict[,]” the supreme
court directed us on remand to address the following issues that we did not reach
in Bartush I: (1) “Cimco’s alternative argument that the trial court’s judgment
should be reversed on the ground that no evidence supported the jury’s finding
that Cimco failed to comply with the parties’ agreement”; (2) Cimco’s argument
that the parole-evidence rule bars enforcement of the disputed term regarding
temperature; and (3) “whether Cimco’s objection to Question 3 was sufficient to
preserve error on Question 24.”^ Id. at 438 & n.3.
Because we hold that these issues lack merit but that we must give effect
to the jury’s damages awards to both parties as instructed by the supreme court,
we will reverse the trial court’s judgment that Cimco take nothing, and remand for
entry of a judgment that Cimco recover $113,400 from Bartush plus pre- and
post-judgment interest and affirm the trial court’s judgment that Bartush recover
$168,079 from Cimco plus pre- and post-judgment interest and that Bartush
recover from Cimco its attorney’s fees in the amount of $165,000.
^ Clmoo Refrigeration, Inc. v. Bartush-Schnitzius Foods Co., 518 S.W.3d 57
(Tex. App.—Fort Worth 2015, pet. granted) {Bartush /).
^We did not order new briefing from the parties on remand.
'^Bartush II, 518 S.W.3d at 437 (“Bartush contends that the court [of
appeals] should have given effect to the jury’s damages awards to both parties.
We agree.”).
2
II. Pertinent Background on Remand^
A. The Dispute
Cimco, a refrigeration contractor, agreed to install a specific refrigeration
system for Bartush, a food-product manufacturer. A dispute arose as to whether
the system worked properly because it did not maintain a consistent thirty-five-
degree temperature. Bartush II, 518 S.W.Sd at 434. Bartush claimed that Cimco
promised the system could maintain a consistent thirty-five-degree temperature,
while Cimco contended that it made no enforceable promise regarding a
consistent thirty-five-degree temperature. Id. Having already paid $306,758,
Bartush refused to pay the remaining $113,400 owed to Cimco and instead spent
an additional $168,079 to secure a system that could maintain a consistent thirty-
five-degree temperature. Id.
B. Proceedings in the Trial Court
Cimco filed suit against Bartush and brought a breach-of-contract claim for
nonpayment. Id. Bartush filed a breach-of-contract counterclaim. Id. The
claims were tried to a jury. Id. at 435. After the close of the trial, the court
submitted breach-of-contract questions for both Cimco and Bartush. Id.
^The background facts of this case are set forth fully in Bartush /; we
therefore set forth only an abbreviated version of the facts that are necessary to
dispose of the remanded issues.
3
Question 1 regarding Bartush’s alleged breach of contract asked, “Did
BARTUSH fail to comply with the agreement to purchase the refrigeration
equipment and services for The Facility?”
Question 2 regarding Cimco’s alleged breach of contract asked,
Did CIMCO fail to comply with the agreement to provide the
refrigeration equipment and services to [Bartush]?
You are instructed that CIMCO is required to perform its
services under the contract in a good and workmanlike manner.
A good and workman like manner is that quality of work
performed by one who has the knowledge, training, or experience
necessary for the successful practice of a trade or occupation and
performed in a manner generally considered proficient by those
capable of judging such work.
The court’s charge defined “agreement” as “the written documents reflecting the
agreement of the parties, together with any additional terms that supplement the
written documents.” Notably, Question 2 did not predicate any breach-of-
contract finding on the thirty-five-degree-temperature requirement.
Question 3 asked.
If you answered “Yes” to both Question No. 1 and Question No. 2,
then answer Question No. 3. Otherwise, do not answer the following
question.
Who failed to comply with the agreement first?
Answer “CIMCO” or “BARTUSH”.
Question 4 asked, “If you answered “Yes” to Question No. 1, then answer
Question No. 4. Otherwise, do not answer the following question. Was
BARTUSH’s failure to comply excused?” In determining whether Bartush’s
4
breach was excused, the trial court instructed the jury in Question 4 to evaluate
the materiality of Cimco’s breach under the Mustang Pipeline^ factors.
Cimco also submitted Question 24 for recovery of its attorney’s fees. In
submitting Question 24, Cimco included the following conditioning instructions:
“If you have answered “Yes” to Question No. 1, “BARTUSH” to Question No. 3,
and “No” to Question No. 4, then answer the following Question. Otherwise, do
not answer the following question.” Question 23, Bartush’s attorney’s-fees
question, did not include the same conditioning instruction.
The jury found that both parties breached the contract, that Cimco
breached first, and that Bartush’s breach was not excused.^ Id. at 435. Because
the jury found that Cimco breached first when it answered Question 3, the jury
did not answer Question 24, thus not awarding attorney’s fees to Cimco. Id.
Despite the jury’s awards to both parties, the trial court entered a judgment solely
in favor of Bartush for its damages and attorney’s fees. Id.
C. Proceedings in the Court of Appeals—Bartush I
In Bartush /, we reversed the trial court’s judgment that Cimco take nothing
(despite the jury’s award of $113,400 to Cimco) and reversed the trial court’s
judgment that Bartush recover from Cimco $168,079 from Cimco plus pre- and
^Mustang Pipeline Co. v. Driver Pipeline Co., 134 S.W.3d 195 (Tex. 2004).
^The jury’s finding that Bartush’s breach was not excused constituted an
implied finding that Cimco’s first-occurring breach was not material. Bartush II,
518 S.W.3d at 435.
5
post-judgment interest and attorney’s fees in the amount of $165,000. We
remanded the case to the trial court for entry of judgment solely in favor of Cimco
because of the jury’s implied finding that Cimco’s breach was not material, which
we held rendered irrelevant the jury’s finding that Cimco breached first and
precluded Bartush’s recovery. Bartush /, 518 S.W.Sd at 62. We held, however,
that Cimco failed to preserve any error in the jury’s failure to answer Cimco’s
attorney’s fees question because Cimco did not object to the conditional
submission of its attorney’s fees question. Id. at 62 n.9. For this reason, and
because Cimco did not raise an issue challenging attorney’s fees, we declined to
remand the issue of Cimco’s attorney’s fees to the trial court. Id.
D. Proceedings in the Texas Supreme Court—Bartush II
Both parties filed petitions for review with the supreme court. Bartush II,
518 S.W.Sd at 435. Bartush asserted that despite the jury’s implied finding that
Cimco’s breach was not material, the breach by Cimco constituted a material
breach as a matter of law. Id. at 435-36. In rejecting Bartush’s argument, the
supreme court noted that “[gjenerally, materiality is an issue ‘to be determined by
the trier of facts’” and may “be decided as a matter of law only if reasonable
jurors could reach only one verdict.” Id. at 436 (quoting Hudson v. Wakefield,
645 S.W.2d 427, 430 (Tex. 1983)). The supreme court explained that in this
case, the evidence concerning the materiality of Cimco’s breach was not such
that it enabled the jurors to reach only one verdict. Id. The supreme court further
explained:
6
The parties presented trial evidence that could have led the jurors to
reasonably disagree regarding the application of these [Mustang
Pipeline] factors, including conflicting evidence on the parties’
communications regarding temperature requirements.
Id. at 437. Consequently, the supreme court held that the evidence supported
the jury’s finding that Cimco’s breach was not material:
No such conclusive evidence of materiality [of Cimco’s breach]
exists in this case. Because reasonable jurors could have disagreed
on whether Cimco breached a material obligation, we may not
overrule the jury’s implied finding on that issue.
Id. The supreme court then agreed with Bartush’s alternative contention that we
should have given effect to the jury’s damages awards to both parties, explaining
that
the jury’s findings that Cimco failed to comply with the agreement
first and that its failure to comply was not material mean that (1)
Bartush remained liable for its subsequent failure to comply, but (2)
Bartush’s claim for damages caused by Cimco’s prior breach
remained viable. Cimco had a preexisting duty to perform under the
contract, and the jury found that Cimco violated that duty before
Bartush breached by withholding payment.
Id. at 437-38 (citations and footnote omitted).
Thus, the supreme court affirmed the jury’s finding that Cimco breached
the agreement first (Question 3) and agreed with our conclusion that the jury
made an implied finding that Cimco’s breach was not material because of the
jury’s finding that Cimco’s breach did not excuse Bartush’s performance
(Question 4). The supreme court, however, reversed our judgment that
Bartush’s subsequent material breach precluded Bartush from recovering for
Cimco’s prior nonmaterial breach. Because Cimco had three remaining
7
unaddressed issues challenging the jury’s finding in favor of Bartush, the
supreme court remanded this case to us.
III. CiMco’s No-Evidence Challenges to Question 2
In the first remanded issue, Cimco argued that the trial court’s judgment
should be reversed on the ground that no evidence supported the jury’s finding in
Question 2 that Cimco failed to comply with the parties’ agreement to provide a
refrigeration system. In the second remanded issue, Cimco argued that no
evidence supported the jury’s finding in Question 2 that Cimco failed to comply
with the agreement because any evidence of a thirty-five-degree-temperature
requirement was barred by the parol-evidence rule.
A. Standard of Review
In determining whether there is legally sufficient evidence to support a
finding under review, we must consider evidence favorable to the finding if a
reasonable factfinder could and disregard evidence contrary to the finding unless
a reasonable factfinder could not. Cent. Ready Mix Concrete Co. v. Islas, 228
S.W.Sd 649, 651 (Tex. 2007); City of Keller v. Wilson, 168 S.W.Sd 802, 807, 827
(Tex. 2005). Anything more than a scintilla of evidence is legally sufficient to
support a finding, and more than a scintilla of evidence exists if the evidence
furnishes some reasonable basis for differing conclusions by reasonable minds
about the existence of a vital fact. Rocor Int’l, Inc. v. Nat’l Union Fire Ins. Co. of
Pittsburgh, 77 S.W.Sd 253, 262 (Tex. 2002). Direct evidence of a vital fact
defeats a legal-sufficiency challenge. See Serv. Corp. Int’l v. Guerra, 348
8
S.W.Sd 221, 228 (Tex. 2011). In circumstances where a reasonable jury could
resolve conflicting evidence either way, we presume the jury did so in favor of the
prevailing party. Thota v. Young, 366 S.W.Sd 678, 696 (Tex. 2012).
B. Analysis
1. Some evidence supports the jury’s finding
Regarding the first remanded issue, the supreme court gave us guidance
in its opinion, in rejecting Bartush’s contention that Cimco’s breach was material
as a matter of law, the supreme court explained,
The parties presented trial evidence that could have led the jurors to
reasonably disagree regarding the application of these [Mustang
Pipeline] factors, including conflicting evidence on the parties’
communications regarding temperature requirements. . . . Because
reasonable Jurors could have disagreed on whether Cimco breached
a material obligation, we may not overrule the jury’s implied finding
on that issue.
Bartush II, 518 S.W.Sd at 437 (emphasis added).
We have thoroughly reviewed the evidence presented at trial and viewing
all evidence favorable to the jury’s finding, we conclude, as did the supreme
court, that there was some evidence to support the finding in Question 2 that
Cimco breached the agreement. Cimco’s representative, Michael Winslow,
testified that Bartush required the system to maintain a thirty-five-degree
temperature. This testimony was supported by Winslow’s notes from the initial
walkthrough, which were admitted as a trial exhibit. And, apart from the thirty-
five-degree temperature, there was evidence that the Cimco system did not
9
function properly by failing to maintain a sufficient cool temperature because the
testimony supported that temperatures rose to the 50s and 60s.®
Because conflicting evidence exists concerning whether Cimco failed to
comply with the agreement and because the jury could have reasonably so
concluded, we presume that the Jury resolved this conflicting evidence in favor of
Bartush. See Thota, 366 S.W.Sd at 696. Viewed in the light most favorable to
the jury’s findings, deferring to the jury’s reasonable resolution of conflicting
evidence, more than a scintilla of evidence exists enabling a reasonable
factfinder to conclude that Cimco failed to comply with the agreement. See
United Serve. Auto. Ass’n v. Croft, 175 S.W.Sd 457, 467 (Tex. App.—Dallas
2005, no pet.) (holding that testimony of breach was legally sufficient to affirm
trial court’s breach-of-contract finding). We overrule the first issue on remand.
2. The parol-evidence rule does not bar evidence of
the thirty-five-degree-temperature requirement
In the second issue on remand, Cimco claims that no evidence supports
the jury’s finding that it failed to comply with the parties’ agreement because any
evidence of a thirty-five-degree-temperature requirement was barred by the
parol-evidence rule.
®ln rejecting Bartush’s contention that Cimco’s prior breach was a material
breach as a matter of law, the supreme court recognized the “conflicting
evidence on the parties’ communications regarding temperature requirements”
that existed; this same conflicting evidence constitutes some evidence that
Cimco did breach the parties’ agreement concerning temperature requirements.
This evidence is likewise dispositive of all Cimco’s sufficiency complaints.
10
To the extent the jury relied on the alleged parol evidence concerning the
thirty-five-degree-temperature requirement that Cimco complains of, that
evidence was admissible because it explained and supplemented the parties’
partially integrated agreement, which was silent as to a temperature requirement.
See Morgan Bldgs. & Spas, Inc. v. Humane Soc’y of Se. Tex., 249 S.W.Sd 480,
488 (Tex. App.—Beaumont 2008, no pet.) (holding that parol evidence regarding
design of the building to be constructed was admissible even though contract
contained a merger clause because parole evidence supplemented the written
contract); see also Sanders v. Future Com, Ltd., No. 02-15-00077-CV, 2017 WL
2180706, at *4 (Tex. App.—Fort Worth May 18, 2017, no pet).
We also note that although the jury found that Cimco had failed to comply
with “the agreement to provide the refrigeration equipment and services,” the
finding was not predicated on the system’s failure to maintain a thirty-five-degree
temperature because no question was submitted to the jury regarding the thirty-
five-degree-temperature requirement. Thus, even if evidence concerning the
thirty-five-degree-temperature requirement was barred by the parol-evidence rule
and improperly admitted, it is not a ground for reversal. See U-Haul Int’l, Inc. v.
Waldrip, 380 S.W.3d 118, 132 (Tex. 2012) (“Even if the trial court abused its
discretion in admitting certain evidence, reversal is only appropriate if the error
was harmful, i.e., it probably resulted in an improper judgment.”).
Therefore, we overrule the second remanded issue.
11
IV. CiMco’s Objection to Question 3
Did Not Preserve Cimco’s Asserted Error as to Question 24
In the third remanded issue, Cimco argued that although it did not object to
Question 24, which conditionally submitted the issue of Cimco’s attorney’s fees,
its objection to Question 3 adequately preserved any error in Question 24.
Cimco contends that an objection to a question with an invalid basis for liability
preserves error for any impact the wrongful inclusion has on other charge
questions.
A. Law on Error Preservation
The fundamental premise underlying error preservation is that the party
seeking to preserve an alleged error must take some action to apprise the trial
court of the alleged error in a way that provides the trial court with the opportunity
to correct it. See Tex. R. App. P. 33.1(a) (preservation requires either a ruling or
a refusal to rule); Burbage v. Burbage, 447 S.W.3d 249, 257 (Tex. 2014) (“[T]he
objection must apprise the trial court of the error alleged such that the court has
the opportunity to correct the problem.”); see also Thota, 366 S.W.3d at 691.
“There should be but one test for determining if a party has preserved error in the
jury charge, and that is whether the party made the trial court aware of the
complaint, timely and plainly, and obtained a ruling.” Transcon. Ins. Co. v.
Crump, 330 S.W.3d 211, 226-27 (Tex. 2010) (quoting State Dep’t of Highways v.
Payne, 838 S.W.2d 235, 241 (Tex. 1992) (op. on reh’g)).
12
B. Question 3 and Cimco’s Objection
Question 3 was conditioned on the jury’s findings in Questions 1 and 2 that
both Bartush and Cimco breached the agreement. Question 3 then asked the
jury, if both parties failed to comply with the agreement, “[w]ho failed to comply
with the agreement first?” Question 3 instructed the jury to answer “CIMCO or
Bartush.” The jury answered, “CIMCO.”
At the charge conference, Cimco’s trial counsel objected to Question 3 as
follows:
[CIMCO’S COUNSEL]: Cimco objects to the submission of Question
No. 3 and that there is no evidence that Cimco failed to comply with
the agreement and, therefore, there is no reason to suggest or to
submit that issue.
THE COURT: Your objection is noted and overruled.
Question 24—Cimco’s attorney’s fees question—^was conditionally
submitted, instructing the jury to answer it “[i]f you have answered ‘Yes’ to
Question No. 1, ‘BARTUSH’ to Question No. 3, and ‘No’ to Question No. 4.”
Because the jury answered “CIMCO” to Question 3, it did not answer Question
24.
C. Analysis
Cimco’s above-quoted, no-evidence objection to Question 3 did not
preserve the error alleged by Cimco in conditionally submitting Question 24
based on the jury’s answers to Questions 1, 3, and 4. Cimco’s no-evidence
objection to Question 3 did not apprise the trial court of Cimco’s complaint (raised
13
in the supreme court) that Question 24 should not be conditionally submitted
based on the jury’s answer of “BARTUSH” to Question 3. Because Cimco did
not object to the conditional submission of Question 24—its own question on its
attorney’s fees—any error in this submission was not preserved. See EnvtI.
Procedures, Inc. v. Guidry, 282 S.W.Sd 602, 631, 652 n.28 (Tex. App.—Houston
[14th Dist.j 2009, pet. denied) (collecting cases to support holding that failure to
object to conditioning instructions waived error arising from the jury’s failure to
answer question when answer could not be implied and holding that lack of
objection waived right to new trial to have jury answer questions); Hunter v.
Carter, 476 S.W.2d 41, 46 (Tex. Civ. App.—Houston [14th Dist.j 1972, writ ref’d
n.r.e.) (holding failure to object to conditioning instructions waived error arising
from jury’s failure to answer question); Tex. Emp’rs’ Ins. Ass’n v. Ray, 68 S.W.2d
290, 295 (Tex. Civ. App.—Fort Worth 1933, writ ref’d) (holding appellant could
not complain of jury’s failure to answer question because charge instructed jury
not to do so based on its answer to prior question and because appellant did not
object to instruction).
Cimco argues that once a party objects to the inclusion of an invalid basis
for liability in the charge, this objection preserves error for any impact the
wrongful inclusion has on other charge questions. Cimco bases its argument on
McFarland v. Boisseau, a defamation case that concerned a broad-form
submission question that comingled valid and invalid theories of liability. 365
S.W.3d 449, 454-55 (Tex. App.—Houston [1st Dist.j 2011, no pet.). Because
14
Question 3 is not a broad-form submission question comingling valid and invalid
theories of liability, Cimco’s authority supporting its argument is inapplicable to
the facts of this case.
We hold that Cimco’s objection to Question 3 failed to preserve any error
arising from Question 24. Therefore, we overrule the third remanded issue.
V. Conclusion
Having overruled the issues that we were instructed to address on remand
and giving effect to the jury’s verdict as instructed by the supreme court, we
affirm the trial court’s judgment that Bartush recover $168,079 from Cimco plus
pre- and post-judgment interest and that Bartush recover from Cimco its
attorney’s fees in the amount of $165,000, reverse the trial court’s judgment that
Cimco take nothing, and remand this case to the trial court for entry of a
judgment that Cimco recover $113,400 from Bartush plus pre- and post-judgment
interest.
/s/ Sue Walker
SUE WALKER
JUSTICE
PANEL: WALKER, GABRIEL, and PITTMAN, JJ.^
DELIVERED: April 26, 2018
^Senior Justice Lee Ann Dauphinot, who served on the Bartush I panel, did
not participate in this decision on remand due to her retirement. Justice Pittman,
succeeding Justice Dauphinot, has been substituted in place of Justice
Dauphinot.
15
COURT OF APPEALS
SECOND DISTRICT OF TEXAS
FORT WORTH
NO. 02-14-00401-CV
Cimco Refrigeration, (nc. § From the 16th District Court
§ of Denton County (2011-11002-16)
V.
§ April 26, 2018
Bartush-Schnitzius Foods Co. § Opinion by Justice Walker
JUDGMENT
This court has considered the record on appeal in this case and holds that
there was error in part of the trial court’s judgment. It is ordered that the
judgment of the trial court is affirmed in part and reversed in part. We affirm that
portion of the trial court’s judgment that Bartush recover $168,079 from Cimco
plus pre- and post-judgment interest and that Bartush recover from Cimco its
attorney’s fees in the amount of $165,000. We reverse that portion of the trial
court’s judgment that Cimco take nothing and remand this case to the trial court
for entry of a judgment that Cimco recover $113,400 from Bartush plus pre- and
post-judgment interest.
It is further ordered that all parties shall bear their own costs of this appeal.
for which let execution issue.
SECOND DISTRICT COURT OF APPEALS
By /s/ Sue Walker
Justice Sue Walker
Cimco Befikreratbn Inc.
B707 Sc-uih >i‘’‘ SitBvi
Grrvic;?:i -'j Van Buren, <4/?. ’/PMSS
- •' t-v-. *- Teh (479} 474-54B2 Fbx: (479) 474-S4:-.0
November 19,2010
Mr. Biad Crisaliri!
Mr. Jo])n Pearson
Baitosh ScliDifziiis Foods Company
1137 Nonh Kcaly
Lewisville, IX'75057
Subject;: Platit Refrigeration Renovatioii
Quote; Q()45-2iJ
Cimco Rebigerauoii, Bio, is pteised to submi t proposal to modify tie jdant refrigeraikir. system at.
your facilUy. We v.uU pmpoise iliree method.s of renovating tlie refrigcnuion syslera. Eacfi metl ied will
have, a miml-ier of feaiures both for and against iL By offering fliese options we I'osI you will Ik; able, to
make a Kelectloii that gives yon (iui gieatest value fqryour investincnt
OplJoii Nmnbfcr One- Orilk'il Water system
9 Ceitirally located Air cooled Chiller package
» Two (21 Semi Hermetic compresstm; 25 HI' eaeli
» Five (5) yearinanufaciuref's warraiily on the compre.s.soj.s i.s included.
® “VED drive condenser fan.S
« Miaimi'ces refrigerant chart'c
a Pfiniaiy Refrigerant clrirge is located otrisidu of the plant.
® Seccndsry refrigerant is 30% Food Grade Ptopyleue Giycol
Your cost for Oplioii Nti-rtiber One $ 354 ,050.00
Q0-f5~10 UarUiiili Sdmitiiufi.diifix
RsfrinaelSM Inc, £707 S, 47 Sstcel <■ VAN BUHEft, AP 77536 • PMOI-ifS t379!-47a-5432FAX (47a; .lor&ISO
BSFCOOOOD3
Page 2 of 10
Option Number Two- Single Condensing Unit
• Centrally located Air cooled condensing unit
•" Genesis Rack controller
® Three (3) Discus hermetic compressors 20 I IP each
“ Standard one (1) year warranty*
» Optional extended warranty available at an additional charge
o Refrigerant (R507) runs to all air coils
» Air Defrost on evaporator coils
Your cost for Option Number Two $332,000.00
Optional Warranty Add $2700.00
Option Number Three-Multiple Condensing Units
» Air cooling evaporators are grouped to condensing units
« Scroll comprcssor.s
® One (1) year manufacturer’s warxanty.
“ Optional extended warranty available at an additional cliargc
“ Refrigerant (R507) mns to all air coils from multiple condensers
» Air Defrost on evaporator coils
Your cost for Option Number Three .$282,100.00
Optional extended warranty Add $3,100,00
Cimen RsSigntslkBi (iic. 2/07 S. Slionl Van Euran, A;kE»5a.s 7295G
BSFC000003
Pages of’10
(1) Lot of non-union labor to install the above, rates includes pretnium lime to complete the
installation.
(1) Lot of freight on materials shipped to the job site.
(I) Lot of equipment rental to unload and set all refrigeration equipment and materials.
Items not included in this quote:
® 7 axes (Sales and Usage Taxes)
» Applicable permits and bonds.
0 Housekeeping pads
■» Concrete work
« Electrical (other than hook up)
® Diffusers/ grilles
“ Hazardous material disposal
Note: This price does not include any sales or usage taxes. Please advise how the cusfomer
will pay for tlie taxes or if this project is tax exempt. If tax exctnpt a tax exemption
certificate must be provided •with purchase order.
Please call if you have any questions concerning this proposal.
We appreciate the oppoifunity to quote on this project.
See attached sheets forCimeo Refrigeration’s, Inc. terms and conditions.
This proposal is firm for (30) thirty days.
Best Regards.
Cimeo Refrigeration, Inc.
Danny Ro.se
Danny Rose
Branch Manager
Gimeo Retrigerstion Jnc. 2707 S. 4®' Slrnct Van Bu.'en. 72956
BSFC000004
TERMS AMD COMDITTONS
SUBJECT TO WRITTEN APPROVAL BY A DULY AUTHORISED OFHCER OF CMCO
REFRIGERATION INC. (THE "VENDOR"). THIS QUOTATION, IF ACCEPTED IN WRITING
BY THE PURCHASER, SHALL CONSTirUTB A BINDING CONDITIONAL CONTRACT OF
SALE AS OF THE DATE OF THE PURCHASER'S ACCEPTANCE OR AS OF THE DATE OP
'IHE VENDOR'S APPROVAL, WHICHEVER IS LATER. THIS QUOTATION IS INVALID IF
NOT ACCEPTED BY THE PURCHASER WITHIN SIXTY DAYS OP THE DATE OF
QUOTATION.
1. TITLE
(a) The title aad ownership to and in the materials, equipment and other goods sold
hereunder'(the "goods”) shall remain in the Vendor until payment in full of the
Contract Price and any additional amounts payable to the Vendor pursuant to sections 2
and 10 of these Terms and Conditions. The Vendor hereby reserves, and the Purchaser
hereby grants to the Vendor, a security interest in and to the goods, and the proceeds
thereof, to secure the said payment and all of the other obligations of the Purchaser. At
the option of the Vendor, the Purchaser will join with tlie Vendor in executing, in a
form satisfactory to the Vendor, one or more financing statements or similar
insbTiments pursuant to any applicable personal propei-ty security legi.slatiou. The
Purchaser hereby authorises the Vendor to file one or more such statements or
instruments signed by the Vendor alone as the secured party. If the goods are or are to
become affixed to real properly, the Purchaser represents that a true and correct
description of such real property and that the name of the registered owner thereof arc
as indicated on Page 1 of this Quotation/Contract.
(b) In the event of default by the Purchaser under the terms of payment of this contract, tlie
full amount of the Contract Price, less any payments previou.sly made, shall become
due and payable, and the Vendor or its agent shall have the right to enter upon the
premises and remove the goods, and to dispose of them as the Vendor may deteimine.
If the proceeds from such disposal, less any related expenses, including but not limited
to costs of seizure, removal arid sale, and legal costs (including reasonable attorneys'
Clmco RofrignrBlIon Inc, 27D7 S. 4’’'' Streol Van Buren, ArKansns 72B5B
BSFC000005
Page 5 of 10
rf oiMcia ^
fees and expenses) connected therewith (the “net proceeds"), are not sufficient to cover
the amount in default, the Purchaser shall be liable to the Vendor for such deficiency.
If the net proceeds exceed the amount in default such excess shall be returned to the
Purchaser, and the Vendor shall not be liable further whether in respect of completion,
performance, warranty or other contract terms.
(c) The Purchaser-hereby waives all rights and clakn.s against the Vendor in the event that
the circumstances provided for in section 1 (b) arise, except for the express right of
recovery of excess net proceeds as provided in that section.
(d) The Purchaser hereby waives the provisions of any Conditional Sales Act or otlier
applicable legislation which limits the Vendor's rights to seize the security provided for
herein, and to sue for any deficiency. The Purchaser expressly confers upon the
Vendor the rights to seize and sell the goods and to recover from the Purchaser, by
action on the covenant, the principal, interest and other moneys from time to time
owing under this contract.
2. PMCE ADJUSTMENTS
(a) The Purchaser shall pay all taxes, duties, levies and other charges assessed against or in
respect of the goods, except tliose taxes, duties, levies and other charges expressly
included in the Contract Price.
(b) If any taxes, duties, levies, or other charges shown to be included in the Contract Price
arc increased subsequent to the Date of Quotation, and increase the Vendor's costs
hereunder, such increase shall be paid by the Purchaser to the Vendor.
(c) The Contract Price quoted herein is based on prices, costs and conditions prevailing at
the Date of Quotation. Unless otherwise specified, if the estimated delivery and / or
installation date is more than six months from the date of the contract, and if prior to
shipment or installation there is an increase in the Vendor's costs due to increases in
labour rates, cost of materials, suppliers' prices, foreign exchange, storage charge.s, or
freight rates, such increase shall be paid to tlie Vendor by the Purchaser.
(d) If delivery or installation is delayed by the Purchaser, or by anyone under the
fhirchaser's control, for more dtan two months after the time estimated, any increase in
those categories of the Vendor ' s costs lusted in section 2(c) shall be paid to the Vendor
by the Purchaser.
(e) All payments by the Purchaser to the Vendor under section 2 shall be in addition to the
Contract Price and shall be paid at the time the final payment under the contract is due.
Cimi'ji Rnlriaeialion Inc. 2707 S. s"' SIrefil Vnn Bumn. Aiimnsss 72956
BSFC000006
3. DELIVERY AND INSTALLATION - Delivery and installation times and dates are
approximate and are subject to extension for delays caused by fire, strike, lockont,
labour dispute, civil or military authority, riot, embargo, car shortage, wrecks or delays
in transportation, Acts of God, late delivery or non-delivery by the Vendor's suppliers,
changes in the scope of the work as provided in section 8 of these Terms and
Conditions, or other causes beyond the reasonable control of the Vendor, and the
Vendor shall not be liable for any losses or damages resulting fiorn any such causes.
Acceptance of the work shall be a waiver by the Purchaser of all claims for damages for
delay fiom any cause whatsoever.
4. RESPONSIBILITY AND INSURANCE
(a) In re.spect of goods sold F.O.B. point of origin, the Vendor shall deliver the goods in
good condition to a comrnon carrier or to the Purchaser at the Vendor's shipping point,
and thereupon all risks of loss or damage thereto shall pass to the Purchaser.
(b) fii respect of goods sold F.O.B. Job site or sold with installation, all risks of loss or
damage shall pass to the Purchaser upon receipt of the goods at the job site or at the
Purchaser's designated delivery point.
(c) The Purchaser shall insure the goods against loss or damage from fire, thett. malicious
damage or other causes as and from the time the Purchaser becomes responsible for the
goods pursuant to sections 4(a) and 4(b) of these Terms and Conditions. The face value
of the insurance policy shall be in an amount not less than the Contract Price. Any loss
under such insurance policy shall be made payable to the Vendor as its interest may
appear until the Contract Price shall be paid in full.
(d) Upon the reque.st of the Vendor, the Purchaser shall provide an insurance certificate as
evidence of the compliance with section 4(c) of these Terms and Conditions.
5. TERMS OF PAYMENT
(a) Unle.ss otherwise specified in this Quotation/Contract, payment shall be made by the
Purchaser to the Vendor in respect of the Contract Price as follows:
Cimeo Reiflgoration Inc. 2707 S. 4^ .$frGet Vm) puraji, ArKanass ?2B5G
BSFC000007
Page 7 of 10
(i) Goods sold without installation; 25% upon acceptance of this quotation by the
Purchaser; an amount representing the value of each shipment, payable upon
delivery; and the unpaid balance upon final shipment.
(ii) Goods sold with installation: 25% upon acceptance of this quotation by the Purchaser;
an additional 30% upon written notification by the Vendor to the Purchaser that tfie
goods are ready for shipment; an additional 35% immediately after installation but prior
to the commencement of operation of the goods or related systems; and a final payment
of 10% upon completion.
(b) Timely payment according to the terms of tliis Quotation/Contract is of the essence of
the contract.
(c) Payment shall be made in the specified currency.
WARPwkN'rY - UNLESS OTHERWISE SPECIFIED IN THIS
QUOTATION/CONTRACT, THE VENDOR WARRANTS THE GOODS AND
INSTALLATION SOLD HEREUNDER AGAINST ORIGINAL DEFECTS IN
MANUFACTURE AND WORKMANSHIP FOR A PERIOD OF ONE YEAR PROM
COMPLETION AS DEFINED IN SBCTTON 9 OP THESE TERMS AND
CONDITIONS. THIS WARRANTY IS IN LIEU OF ALL OTHER WARRANTIES,
STATUTORY OR OTHERWISE, EXPRESS OR IMPLIED, INCLUDING FOR
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. THE
TERMS OF THE VENDOR'S WARRANTY ARE AS FOLLOWS:
(a) In respect of goods sold without installation, the Vendor's sole liability shall be to
repair or replace, at the Vendor's option, F.O.B. point of manufacture, any defective
goods or parts thereof.
(b) In respect of goods sold with installation, the Vendor's sole liabUity shall be to repair or
replace, at the Vendor's option, any defective goods or pacts thereof or any defective
workmanship. The Vendor shall be responsible for all of its costs in connection
therewith other than the out-of-pocket expenses incurred by the Vendor's employees
and agents travelling from the Vendor's nearest place of business to the jobsite and
charges for labour performed after normal working hours at the request of the
Purchaser, which latter expenses and chai-ges shall be for the account of the Purchaser.
Oiinco Roliifleration Inc. 2707 S. SIroet Van Suren, Arimiisas 725.35
BSFC0000D8
Page 8 of 10
SB'i^OSt S
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iX’JSSiiSWrsCilEBSCSh JjW.trKCS=*i5-*-::i.',;erp.v.f«.-!«;aS.-.=^tK:t-—tzj
(c) The Vendor warrants goods not of the Vendor's manufacture only to the extent to which
Ifie Vendor is able to enforce a claim for liability against the manufacturer thereof.
(d) The Purchaser shall promptly give written notice to the Vendor after the discovery of
an apparent defect.
(e) As a condition precedent to any liability by the Vendor hereunder, the Purchaser shall
use, operate and maintain the goods and related systems in a careful, prudent, and
reasonable manner, and in conformity with die Vendor’s and / or the manufacturers'
instruettons.
(f) TffE FOREGOING CONSTITUTES THE PURCHASER’S EXCLUSIVE REMEDY
AND THE VENDOR'S SOLE LIABILITY ARISING OUT OF THE DESIGN,
MANUFACTURE, SALE, INSTALLATION. OR USB OF THE GOODS.
(g) This warranty shaU be void if the Purchaser is in default under the terms of payment
of this conlract,
7. The Vendor shall not be liable for any losses, injuries, expenses or damages, whether
direct, indirect, special, incidental, consequential or punitive, ari.sing out of the goods,
or the installation, operation, or failure of operation of the goods or related sy.steros
even if caused by the Vendor’s negligence.
8. CHANGE IN SCOPE OF WORK - If the Purcha.ser requests a change in the scope of
the work under this Quotation/Contract, the Vendor will submit a Contract Revision to
the Purchaser which shall set forth the propo.scd changes in the work, and if the
proposed changes result in an addition to or a deduction from die Contract Price, tlie
Contract Revision shall set forth the amount of such addition or deduction. A Contract
Revision shall not be binding or enforceable unless accepted in writing by the
Purchaser and approved in writing by a duly authorised officer of the Vendor. Upon
such acceptance and approval, the Contract Revision shall become part of the contiact
and, except when inconsistent therewith, shall be subject to alt its provisions.
9. COMPLETIONAND ACCEPTANCE OF WO RK
Cimcc Uefrigernlicm Inc. 2707 S. 4"' Slr«tit Van Bura.i, Arkansas 7205B
BSFC000009
Page 9 of 10
(a) In respect of goods sold without installation, "Completion' shall be deemed to occur
when risk of loss of the goods passes to the Purchaser in accordance with section 4 of
these Tenns and Conditions.
(b) In respect of goods sold with installation, and unless otherwise defined in this
Quotation/Contract, 'Completion" shall he deemed to occur when atty one of the
following events takes place;
(i) The Purchaser signs an acceptance certificate;
(ii) The Vendor has installed and, where applicable, successfully tested the installation;
(iii) The Purchaser commences regular use of the goods or related systems;
(iv) An independent expert, mutually acceptable to the Purchaser and the Vendor,
certifies that die work has been completed.
(c) Nothing in subsections (a) or (b) shall relieve the Vendor from its obligation to honour
the wananty provisions contained herein.
(d) The occurrence of any one of the events described in section 9(b)(i), (iii) and (iv) shall
constitute acceptance of the work.
10. BONDS - Performance bonds and material and labour payment bonds will be provided
by die Vendor upon request Unless the Contract Price expressly includes the cost of
such bonds, the Purchaser, in addition to the Contract Price, shaU pay the cost of such
bonds to the Vendor at the time of the receipt thereof by the Purchaser.
11. MISCELLANEOUS.
(a) This Quotation and any resulting contract shall be governed, enforced and
constnied in accordance with the ]aw.s of the State of New York widiout regard to
that state’s rules governing conflict of laws.
(b) All rights and remedies of the Vendor under this conhact and under applicable
law shall be cumulative and may be exercised successively or concurrently, in any
order, and on more than one occasion. The election by Vendor to exercise one
remedy shall not preclude it from thereafter exercising one or more other
remedies.
(c) The Purchaser agi'ees to pay, in addition to the other amounts payable to Vendor
under the contract, all costs and expenses, including reasonable attorneys’ fees,
incurred by the Vendor in enforcing this contract, exercising its rights hereunder
Cimeo Rslrigeration Inc. 2707 S. 4*' SImet Van Bu/sn, AUiansaE 72S.S6
BSFC000010
Page 10 of 10
or collecting or attempting to collect all amounts due the Vendor hereunder
following default by the Purchaser in the payment or performance of its
obligations hereunder, including tliose incun'cd in connection with any
bankruptcy, insolvency, liquidation, reorganization or similar proceeding
involving the Purchaser.
(d) Any as.signment or attempted assignment of this contract, in whole or in part,
without the prior written consent of tlie Vendor shall be void. The Vendor may
assign any of its rights, liabilities or obligations arising out of this contract
witlrout prior notice to the Purchaser and without the Purchaser’s written consent.
(c) If any provision of this contract is unenforceable, such iincnforceabilily shall not
affect tlie remaining terms, which shall be enforced, if the same can be done,
without regard to the unenforceable provision.
(1) The headings to the paragraphs of lliis contract arc provided for ease of reference
only and shall not be co.nstmed to vary or limit the terms thereof.
THIS QUOTATION/CONTRACr CONTAINS THE COMPLm'B AGREIiMENT BlfTWEBN
THB PURCHASER AND THE VENDOR, AND SUPERSEDES AI.L PRIOR ORAL OR
WRITTRN REPRESENTATIONS, PROMISES, AGREEMENTS OR UNDERSTANJ.IINGS
■WITH RESPECl' TO 'ITIE SUBJECf MATTER HEREOF. NQ REPRESENTATION, PROMISE,
AGREEMENT OR UNDERSTANDING ENTERED INTO OR MADE SUBSEQUENT TO THE
DATE OF THE CONTRACT WIBCH VARIES OR MODIFIES THE PROVISIONS OF THIS
CONTRACT SHALL BE BINDING ON THE VENDOR UNLESS CONVEYED IN -WRITING
AND EXECUTED BY A DULY AUTHORISED OPITCER OF THE VENDOR,
CImw Ra1ngcr.'j)U]0 Inn. 2707 U. <5“' Simnt Van Bursn, Arl Initial cost of equipment is less expensive that chilled water system.
Disadvantages:
o Longer lead time for equipment. Not an in stock item.
9 Freon Charge is in the facility increasing the chance of contact with production
workers.
» Initial cost of equipment is more expensive than packaged units.
CIMCO Inc. Tel: (479) 474-5432
2707 South SIreet • Van Buren, AR 72955 Fax (479) 474-5430
St John'i. Dartmouth, Montfon, Aloia, Quttcc City, Gaspt, Montreal, Ottawa^Torontii, London, \Vlnilso»*,'VS'lnnlj>t*^,Saslwioen, Caljary, tuJmoolon, Kelownfl, Vstneouver, Victoria
Hnrtford, CT—Sytacus*, NV — Phoeniif, Peirolt, MT 9- MoUlc, AL—V.in I?ur