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 2009-07

William Whitecotton and Judith Whitecotton v. Silverlake Homes, L.L.C. and Thomas Hargrove ( 2009 )


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  • In The



    Court of Appeals



    Ninth District of Texas at Beaumont



    ________________



    NO. 09-08-00065-CV

    _____________________



    WILLIAM WHITECOTTON AND JUDITH WHITECOTTON, Appellants



    V.



    SILVERLAKE HOMES, L.L.C. AND THOMAS HARGROVE, Appellees





    On Appeal from the County Court at Law No. 2

    Montgomery County, Texas

    Trial Cause No. 06-04-03982 CV



    MEMORANDUM OPINION

    In this home construction dispute, Silverlake Homes, L.L.C. sued William Whitecotton and Judith Whitecotton for quantum meruit, and the Whitecottons filed a counterclaim against Silverlake and Silverlake's president, Tom Hargrove, for breach of contract, violations of the Deceptive Trade Practices Act, breach of various warranties, fraud in a real estate transaction, and a declaratory judgment. After a bench trial, the trial court rendered a judgment against the Whitecottons on their counterclaim and in favor of Silverlake Homes on its quantum meruit claim. The Whitecottons appeal. Based on a review of the record and considering the arguments made, we conclude the evidence supports the judgment and that no reversible error is presented. We affirm the trial court's judgment.

    The RCLA and The RCCA (1)

    The Texas Residential Construction Liability Act (RCLA) applies to "any action to recover damages or other relief arising from a construction defect, except a claim for personal injury, survival, or wrongful death or for damage to goods[.]" Tex. Prop. Code Ann. § 27.002(a)(1) (Vernon Supp. 2008). The RCLA does not create a cause of action. See Sanders v. Constr. Equity, Inc., 42 S.W.3d 364, 370 (Tex. App.--Beaumont 2001, pet. denied). At the time of this suit, the RCLA provided that it "prevails" over "any other law," including the DPTA or a common law cause of action, when there is a conflict between the RCLA and the other law. Act of June 2, 2003, 78th Leg., R.S., ch. 458, § 2.02, 2003 Tex. Gen. Laws 1703, 1723 (amended 2007) (current version at Tex Prop. Code Ann. § 27.002(b) (Vernon Supp. 2008)). (2)

    The RCLA provides in part that in a claim seeking damages against a contractor for a construction defect, the contractor is entitled to "make a written offer of settlement" or "an offer of repair" in accordance with certain specified requirements. See Tex. Prop. Code Ann. § 27.004(b) (Vernon Supp. 2008). If the settlement offer (3) is unreasonable, the contractor loses the benefit of a limitation on damages set out in section 27.004(e). SeeTex. Prop. Code Ann. § 27.004(f) (Vernon Supp. 2008).

    The Texas Residential Construction Commission Act (RCCA) provides for a state commission to oversee the registration of homes, homebuilders, and remodelers, to administer a state-sponsored inspection and dispute resolution process, and to create limited statutory warranties and building and performance standards. See Tex. Prop. Code Ann. §§ 401.001-438.001 (Vernon 2007 & Supp. 2008); In re Hall, No. 09-05-388 CV, 2005 WL 3440620, at *1 (Tex. App.--Beaumont Dec. 15, 2005, orig. proceeding) (mem.op.). The RCCA provides that before suit may be filed on an action for damages or other relief arising from a "construction defect," the homeowner or builder must comply with the Act's Subtitle D, which includes a state-sponsored inspection and dispute resolution process. See Tex. Prop. Code Ann. § 426.005 (Vernon Supp. 2008), §§ 428.001-.005 (Vernon 2007 & Supp. 2008), § 429.001 (Vernon 2007).

    The Commission adopted warranties and standards that apply to projects commenced on or after June 1, 2005. See 10 Tex. Admin. Code § 304.1(b) (2008), § 304.3 (2008) (The "source" listing at the conclusion of section 304.3 states, "The provisions of this § 304.3 [Limited Warranties] adopted to be effective June 1, 2005, 30 TexReg 669."). Because the house was completed before June 1, 2005, the warranties established under the TRCCA do not apply in this case. Hargrove testified he supplied the Whitecottons with a written warranty; it is not in evidence. Section 401.002 of the RCCA provides that any express warranty provided in writing by the builder applies in that circumstance, but if there is no express warranty, the usual and customary residential construction practices in effect at the time of the construction apply. Tex. Prop. Code Ann. § 401.002 (Vernon Supp. 2008).

    The Issues Asserted

    The Whitecottons raised the following eight issues:

    1. "The court erred when it impliedly held that the DTPA was inapplicable in this case or was preempted by either the RCLA or the TRCCA."



    2. "The court erred when it impliedly held that the laundry list section, Ch. 17 of the Tex. Bus. & Com. Code was inapplicable in this case. More specifically, that either one or all of § 17.46(b)(5), § 17.46(b)(7), § 17.46(b)(11), § 17.46(b)(12), §17.46(b)(22) and § 17.46(b)(24) were inapplicable or that Appellees did not violate those same sections of the Tex. Bus. & Com. Code."



    3. "The court erred when it impliedly held that the unconscionability section of § 17.45(5) was inapplicable in this case or that Appellees did not violate § 17.45(5) Tex. Bus. & Com. Code."



    4. "The trial court erred when it impliedly held that the Appellees did not commit common law fraud against Appellants."



    5. "The court erred when it impliedly held that the Appellees did not breach their construction contract with Appellants."



    6. "The court erred when it impliedly held that the Appellees did not commit fraud in a real estate transaction - a violation of § 27.01 of the Tex. Bus. & Com. Code."



    7. "The court erred when it overruled Counter Petitioners' Motion for Directed Verdict. Appellants re-urge the argument made to the court as recorded in and RR V4 p 64 - 66."



    8. "The court erred when it impliedly failed to find that Appellees failed to overcome the statutory presumption that there were 21 warranty defects as outlined in the SIRP report. See P-8."



    Essentially, in issues one through six and in issue eight, the Whitecottons argue the trial court erred in its "implied" holdings, and in issue seven they argue generally the court erred in not granting their "Motion for Directed Verdict."

    The record contains no findings of fact or conclusions of law. When findings of fact are not requested, or if the request is untimely filed, the trial court's judgment implies all findings of fact necessary to support it. See Sixth RMA Partners, L.P. v. Sibley, 111 S.W.3d 46, 52 (Tex. 2003); Wal-Mart Stores, Inc. v. Kelley, 103 S.W.3d 642, 645 (Tex. App.--Fort Worth 2003, no pet.). If a reporter's record is filed, the implied findings are not conclusive, and an appellant may challenge them for legal and factual sufficiency. See Sixth RMA Partners, L.P., 111 S.W.3d at 52. Reviewing their arguments, we read appellant's issues as including legal and factual sufficiency challenges.

    When parties attack the legal sufficiency of an adverse finding on an issue on which they have the burden of proof, they "must demonstrate on appeal that the evidence establishes, as a matter of law, all vital facts in support of the issue." Dow Chem. Co. v. Francis, 46 S.W.3d 237, 241 (Tex. 2001). If a party attacks the legal sufficiency of an issue on which he did not have the burden of proof, he must show there is no evidence to support the adverse finding. Croucher v. Croucher, 660 S.W.2d 55, 58 (Tex. 1983). In a legal sufficiency challenge, we view the evidence in the light most favorable to the verdict or finding, and credit favorable evidence if reasonable jurors could do so, and disregard contrary evidence unless reasonable jurors could not. City of Keller v. Wilson, 168 S.W.3d 802, 807 (Tex. 2005). In a factual sufficiency review, a court of appeals will set aside the verdict only if the evidence supporting the finding is so weak, or the finding is so against the great weight and preponderance of the evidence, that it is clearly wrong and unjust. Dow Chem., 46 S.W.3d at 242; Garza v. Alviar, 395 S.W.2d 821, 823 (Tex. 1965).

    The Evidence Presented

    January 7, 2005, Meeting

    The Whitecottons contracted with Silverlake Homes, LLC, a custom builder, in March 2004 for the construction of a house. Construction began in May, and the Whitecottons moved into the house in early January 2005. On January 4, 2005, Judith Whitecotton faxed a memo to Christi Evans, one of the "superintendents" on the job; the memo requested that certain changes be made to the house and pointed out some "omitted items." Judith Whitecotton contended Silverlake overcharged the Whitecottons on the change orders. Tom Hargrove, the principal and sole owner of Silverlake, disputed this claim and also testified he had completed some change orders for free. Evans indicated she and Hargrove, her father, met with the Whitecottons on January 7, 2005, and "settled up" with them on all the change orders. Admitted into evidence at trial was a handwritten document that Evans asserted was the January 7, 2005, settlement of all change orders. On the document was the notation "pd 1-7-05 . . . $2337.28[.]" Like Evans, Hargrove testified the parties reached an "agreement settling up on the house," and Judith Whitecotton wrote out a check that evening for $2,337.28 with the notation for "change orders, etc." handwritten on the check.

    Hargrove and Evans considered this meeting and the document arising out of it as a final settlement. The Whitecottons did not. At trial, Judith Whitecotton testified that as of May 2006 she and her husband had not yet closed on the house. She denied that anything final had taken place. Whitecotton explained the house was not finished, and there were still items that needed to be corrected. However, Whitecotton also acknowledged she did not know of any closing besides the January 7 meeting.

    Hargrove testified that he completed additional warranty work based on new lists he received from the Whitecottons after the January 7, 2005, meeting. He explained Judith Whitecotton told him if he did these projects, the Whitecottons would pay for the patterned concrete on the patio -- a project added by the Whitecottons after the January 7 meeting. Hargrove testified the Whitecottons later sent another list that was approximately a page-and-a-half single spaced. By April or May 2006, he had completed all the "punch lists." He indicated he pressed the Whitecottons for payment on the patterned-concrete-patio project. Hargrove filed suit for quantum meruit when they did not pay.

      Patterned Concrete  

    After the "closing" on January 7, 2005, the Whitecottons asked Silverlake to do some "patterned concrete work" for a patio. Evans informed the Whitecottons the cost of that work was $7,781.16. Hargrove testified the patterned concrete was not included in the contract on the house, while Judith Whitecotton testified the $10,000 of "extras" built into the contract included the patterned concrete. Later, Whitecotton testified she and her husband owed between $6,900 and $7,700 for the patio, but the amount was subject to offsets.

    On appeal, the Whitecottons acknowledge that the difference between the parties over the cost of the patterned-concrete-patio work is only a few hundred dollars. They dispute whether the cost of the additional patio work is offset by a proper accounting of the change orders and the costs borne by the Whitecottons in completing the punch list. The Whitecottons state, "[We] were never able to calculate the correct amount owed, if any, in light of the unknown offsets due then as a result of the incorrect accounting of the cost of the Change Orders and the cost of completing the Punch List."

    Change Orders

    The Whitecottons contend that Silverlake did not comply with its own change order policies. The Purchase Agreement provides that "[t]his contract contains the entire agreement of the parties, and cannot be changed except by their written agreement"; the Silverlake Homes Standard Specification Sheet provides that "[a]ll extras are to be paid directly at the time the selection is made." The record contains detailed testimony concerning the change orders. The parties dispute whether the January 7, 2005, meeting was a proper accounting of the change orders.

    Driveway

    The evidence regarding the size and cost of the driveway addition is conflicting. Evans and Hargrove testified the Whitecottons asked the "designer" to increase the width of the driveway to a double wide driveway on the plan. The site plan indicated a double-wide driveway to the street. Judith Whitecotton testified the original contract included a single driveway to the street, and she never asked for or approved a double driveway. Evans testified she and Bill Whitecotton were at the house when the double-wide driveway was poured. She explained that Bill Whitecotton, knowing the driveway would cost extra, asked her to make it double wide. Bill Whitecotton testified that he was not in Texas when the driveway was poured, and that he never signed any change order or authorized the additional cost for the driveway.

    Hargrove testified that at the "final settlement" meeting the Whitecottons did not dispute they had requested the double-wide driveway; instead, they were concerned he was overcharging them for the extra concrete. The Whitecottons' memo which they brought to the January 7 meeting supports that conclusion. The Whitecottons contend that Silverlake violated its own change order policies if an oral change order was made. They also maintain that the extra 300 square feet of concrete was already paid for out of the $10,000 "extras" fund. Judith Whitecotton testified Silverlake overcharged them $1,500 on the extra concrete in the driveway.

    $10,000 Extras in the Contract

    The Whitecottons contend that the actual base price of the house was $211,330, and the contract included an extra $10,000 on top of that for extras they wanted. Silverlake maintains that the price of the house was $221,330, and the $10,000 for extras was included in that price. Regardless, the Whitecottons argue that with a proper accounting, the double-wide driveway is included in the $10,000 of "extras."

    Punch Lists

    The Whitecottons assert they delivered their punch list to Silverlake on January 7, 2005, and within a few days Silverlake sent workers to the home to make the repairs or adjustments. The Whitecottons maintain that ultimately some punch-list items were taken care of, while others were not. For months, as explained by the Whitecottons, the parties went through this cycle. It was during this period that Silverlake completed the additional patio work for which Silverlake demanded approximately $7,700 in payment. The Whitecottons assert that before they "could make such a payment, Silverlake needed to complete a final accounting of the change orders as well as complete the punch list that remained outstanding."

    The   
    DTPA Claims -- SIRP Findings

    The Whitecottons argue in issues one through three that Silverlake's alleged failings were violations of the DTPA and constituted unconscionable actions under section 17.50(a) of the Deceptive Trade Practices Act; they further argue in issue eight that the SIRP findings were warranty defects not rebutted by Silverlake. See Tex. Bus. & Com. Code Ann. § 17.50(a)(3) (Vernon Supp. 2008). The elements of a DTPA cause of action are as follows: (1) the plaintiff is a consumer; (2) the defendant engaged in false, misleading, or deceptive acts; and (3) these acts constituted a producing cause of the consumer's damage. Doe v. Boys Club of Greater Dallas, Inc., 907 S.W.2d 472, 478 (Tex. 1995); Tex. Bus. & Com. Code Ann. § 17.50(a)(1) (Vernon Supp. 2008). Under the RCLA, which governs when the DTPA conflicts with the RCLA, the plaintiff must prove the acts are a proximate cause of the plaintiff's damages. See Act of June 2, 2003, 78th Leg., R.S., ch. 458, § 2.02, 2003 Tex. Gen. Laws 1703, 1723 (amended 2007) (current version at Tex. Prop. Code Ann. § 27.002(b) (Vernon Supp. 2008)); see also Tex. Bus. & Com. Code Ann. § 17.44(b) (Vernon 2002) (Chapter 27 of the Property Code prevails over this subchapter to the extent of any conflict.).

    "To prove an unconscionable action or course of action, a plaintiff must show that the defendant took advantage of his lack of knowledge and 'that the resulting unfairness was glaringly noticeable, flagrant, complete and unmitigated.'" Bradford v. Vento, 48 S.W.3d 749, 760 (Tex. 2001) (quoting Chastain v. Koonce, 700 S.W.2d 579, 583 (Tex. 1985)); Tex. Bus. & Com. Code Ann. § 17.45(5) (Vernon Supp. 2008). Although the Whitecottons allege certain conduct is unconscionable, they do not explain how the actions of Silverlake and Hargrove are "grossly unfair" and cite no authority and offer no analysis as to how and why the alleged conduct constitutes an unconscionable action or course of action. Under Rule 38.1(h), the appellant's brief must contain "a clear and concise argument for the contentions made, with appropriate citations to authorities and to the record." See Tex. R. App. P. 38.1(h). Reviewing courts are to construe appellate briefs reasonably, yet liberally, so that the right to appellate review is not lost by waiver, and are to "reach the merits of an appeal whenever reasonably possible." Perry v. Cohen, 272 S.W.3d 585, 587 (Tex. 2008) (citing Verburgt v. Dorner, 959 S.W.2d 615, 616 (Tex. 1997)). However, the appellate court should not make appellants' argument for them, and the court is not required to provide citations to authorities, find record citations, and make legal analyses for contentions not argued in the brief. See George v. Houston Eye Associates, No. 14-02-00629-CV, 2003 WL 22232651, at *3 (Tex. App.--Houston [14th Dist.] 2003, pet. denied) ("It is not the appellate courts responsibility to create the appellant's argument.").

    A breach of an express or implied warranty is actionable under the DTPA. See Tex. Bus. & Com. Code Ann. § 17.44(b) (Vernon 2002), §17.50(a)(2) (Vernon Supp. 2008). After Silverlake filed suit for quantum meruit, the Whitecottons requested a SIRP inspection of the house under the RCCA. See generally Tex. Prop. Code Ann. § 428.001 (Vernon Supp. 2008). The inspector's report, dated May 13, 2006, found nineteen defects, which, in effect, were breaches of warranty. Silverlake did not challenge the findings of the SIRP report. Section 426.008 of the Texas Property Code provides that the "recommendation or ruling [in the SIRP report] shall constitute a rebuttable presumption of the existence or nonexistence of a construction defect or the reasonable manner of repair of the construction defect." See Tex. Prop. Code Ann. § 426.008 (Vernon Supp. 2008). "A party seeking to dispute, vacate, or overcome that presumption must establish by a preponderance of the evidence that the recommendation or ruling is inconsistent with the applicable warranty and building and performance standards." Id.

    Hargrove testified that he offered to repair the defects found by the inspector in the SIRP report, but the Whitecottons refused. Judith Whitecotton likewise testified Hargrove offered to make the repairs, but he was not allowed to do so. Since the offer was not timely, however, the provisions of Section 27.004 do not affect the Whitecottons' ability to recover damages.

    Nevertheless, Chapter 27 does not create a cause of action, and provides that "in an action to recover damages resulting from a construction defect, the claimant must prove that the damages were proximately caused by the construction defect." See §§ 27.005-006. Section 27.003(b) provides that "[e]xcept as provided by this chapter, this chapter does not limit or bar any other defense or defensive matter or other defensive cause of action applicable to an action to recover damages or other relief arising from a construction defect." Tex. Prop. Code Ann. § 27.003 (Vernon Supp. 2008). Based on the evidence that Hargrove would repair the defects, and that the Whitecottons refused to allow him to make the repairs, the trial court reasonably could conclude that the Whitecottons did not establish, under section 27.006 of the RCLA, that a breach of warranty under the common law or through the SIRP report findings caused the Whitecottons' alleged damages. See Tex Prop. Code Ann. § 27.006 (Vernon 2000); see Sanders, 45 S.W.3d at 803 ("Plaintiff must obtain a finding of construction defect, a liability finding under the specific cause of action asserted, a proximate cause finding, and a finding of damages as defined in RCLA.")

    As to the alleged DTPA "laundry list" violations, the trial court reasonably could base its take-nothing judgment against the Whitecottons on the testimony of Hargrave and Evans concerning the change orders, the driveway, the punch lists, the January 7 "settlement" agreement, and the Whitecottons' refusal to allow Silverlake on their property to attempt any repairs of the defects. In a bench trial, the trial judge, as the trier of fact, assigns the weight to be given testimony, and resolves any conflicts or inconsistencies in the testimony. Young v. Young, 168 S.W.3d 276, 281 (Tex. App.--Dallas 2005, no pet.); see also McGalliard v. Kuhlmann, 722 S.W.2d 694, 697 (Tex. 1986). The testimony is conflicting, and the trial court was free to resolve those conflicts and conclude there were no DPTA violations. The evidence does not establish all elements of the Whitecotton's DTPA counterclaim as a matter of law. See City of Keller, 168 S.W.3d at 827. Further, considering all the evidence, the trial court's failure to find in favor of the DTPA counterclaim is not so weak or so against the overwhelming weight of the evidence as to be clearly wrong and unjust. We overrule issues one through three and issue eight.

    Section 27.01 Fraud and Common Law Fraud

    The Whitecottons pled statutory fraud in a real estate transaction under section 27.01 of the Business and Commerce Code. See Tex. Bus. & Com. Code Ann. § 27.01 (Vernon Supp. 2008). Other than the bare assertion that "Silverlake's attempts to extort monies from the Whitecottons also constitutes [f]raud[,]" the Whitecottons do not support their assertion with arguments or case law concerning either statutory fraud or common law fraud. Issues four and six are overruled. (4) See Tex. R. App. P. 38.1(h).

    Breach of Contract

    In issue five, the Whitecottons essentially argue that there is evidence Silverlake breached the contract through defects in construction, breaches of warranty, and overcharges for work performed. They assert that "Silverlake's attempts to extort monies from [them] also constitute[ ] breach of contract," and reference oral change orders that they maintain the contract prohibits.

    Based on the evidence, the trial court reasonably could conclude that the Whitecottons prevented Silverlake from performing certain work. Judith Whitecotton testified she would not allow Hargrove to attempt to repair the defects, though he had offered to so. Hargrove testified he offered to repair the defects, and he remains willing to do so. The trial court could reasonably conclude the plaintiffs did not prove a failure by the defendant to perform the contract without legal excuse, or prove that any damages were a result of defendant's breach. See generally Hussong v. Schwann's Sales Enterprises, 896 S.W.2d 320, 326 (Tex. App.--Houston [1st Dist.] 1995, no writ) (elements of breach of contract claim). See also generally Nelson Cash Register v. Data Terminal, 671 S.W.2d 594, 600 (Tex. App.--San Antonio 1984, no writ) (causal connection required). Issue five is overruled.

    Issue Seven

    Appellants assert generally in issue seven that the trial court erred in denying their motion for "directed verdict." See generally Koepke v. Martinez, 84 S.W.3d 393, 395 (Tex. App.--Corpus Christi 2002, pet. denied) (when motion is proper). In this bench trial, the evidence was conflicting and the trial judge as factfinder resolved the conflicts against appellants. As outlined under the other issues we have addressed, the evidence is sufficient to support the judgment. The trial court did not err in denying appellants' motion. Issue seven is overruled.

    The trial court's judgment is affirmed.

    AFFIRMED.

    _________________________________

    DAVID GAULTNEY

    Justice

    Submitted on March 2, 2009

    Opinion Delivered July 16, 2009



    Before McKeithen, C.J., Gaultney and Horton, JJ.

    1. Citations are to the current versions of the RCLA and RCCA unless the specific provisions at issue require application of the former versions of the statutes.

    2. The RCLA now provides that in any conflict between the RCLA and the RCCA, the RCCA prevails. Tex. Prop. Code Ann. § 27.002(b).

    3. The settlement offer may include an agreement by the contractor to repair. See Tex. Prop. Code Ann. § 27.004(b) (Vernon Supp. 2008).

    4. Similarly, the Whitecottons present no argument in their brief on their declaratory judgment cause of action.