Safeco Surety and C. A. Walker Construction v. J.P. Southwest Concrete, Inc. ( 2013 )

Opinion issued October 29, 2013
In The
Court of Appeals
For The
First District of Texas
NO. 01-12-00672-CV
SAFECO SURETY AND C.A. WALKER CONSTRUCTION, Appellants
V.
J.P. SOUTHWEST CONCRETE, INC., Appellee
On Appeal from the 189th District Court
Harris County, Texas
Trial Court Cause No. 2005-70198
MEMORANDUM OPINION
This is the second appeal in this dispute between C.A. Walker Construction
and Safeco Surety (collectively “Walker”) and J.P. Southwest Concrete, Inc.
(“J.P.”). See C.A. Walker Constr. Co. v. J.P. Sw. Concrete, Inc., No. 01-07-00904-
CV, 2009 WL 884754 (Tex. App.—Houston [1st Dist.] Apr. 2, 2009, no pet.)
(mem. op.). In the first appeal, we remanded for a new trial on damages. Walker
now appeals from the trial court’s judgment on remand, which awarded J.P.
$74,193.90 in actual damages, as well as attorney’s fees and pre- and post-
judgment interest. Walker contends that the trial court erred in allowing J.P. to
present new damages theories and evidence that were precluded by our 2009
opinion in this case. It also challenges the trial court’s findings of fact and
conclusions of law and contends that the evidence is legally and factually
insufficient to support the judgment. We modify the trial court’s judgment to
exclude the award of retainage in the amount of $7,105.28, and we affirm the
judgment as modified.
Background
2007 Trial and First Appeal
Our first opinion sets forth in detail the factual background that gave rise to
this dispute. Walker was the general contractor on a Spring Branch Independent
School District construction project. J.P. was a subcontractor. In their written
contract, Walker agreed to pay J.P. $243,000 to do all the concrete work for the
project. The contract price for J.P.’s work was later revised via change orders to
$274,149.
2
When J.P. began work in September 2004, it encountered severe subsoil
obstructions that prevented it from drilling pier holes. Walker instructed J.P. to
prepare and submit written change orders to cover the removal of the obstructions.
J.P. submitted a number of written change orders, but Walker only approved some
of them.
The contract provided that J.P. would be paid in monthly installments as the
work progressed. Accordingly, as work on the project progressed, J.P. submitted
applications for payment along with supporting documentation. As of December
2004, J.P. had been paid $57,349.25. In January 2005, J.P. requested further
payment of $79,796. Later, J.P. sought payment of $17,099 for work done in
February 2005. On March 16, 2005, Walker paid J.P. $84,756.35. In exchange for
that payment, J.P.’s president, Jeff Pantle, executed a “Subcontractor Affidavit of
Payment and Partial Release of Lien” on behalf of J.P. The release states that the
payment received on March 16, 2005 “constitutes full payment for the work
performed to date and any and all change orders or claims for additional work
performed.” The release further provides:
Subcontractor waives, releases, relinquishes and discharges all known
and unknown causes of action, including, but not limited to those
arising out of contract, by statute, in tort or otherwise, and waives,
releases, relinquishes and agrees to discharge any suits, debts,
accounts, bonds, contracts, promises, damages, liens, encumbrances,
judgments, claims and demands whatsoever, in law or equity, which
3
are against the Contractor . . . that the Subcontractor now has or might
hereinafter obtain that relates directly or indirectly to the aforesaid
relationship, Contract, and/or Project.
J.P.’s work on the project continued after it entered into the release. Walker
told J.P. that subsoil debris and obstructions had been removed and requested it
continue drilling pier holes. J.P. went to the site, bringing with it another drilling
subcontractor, but was unable to perform the work due to subsoil debris and
obstructions. J.P.’s last day at the site was March 22, 2005. Walker acknowledged
that it owed J.P. for work that was done after March 16, but contended the amount
owed was only $2,848.
For several months, J.P. attempted to collect payment from Walker. J.P.
eventually sued for breach of contract, and Walker counterclaimed. In its pre-trial
disclosures and at the 2007 bench trial, J.P. asserted that it was entitled to recover
the following damages: $19,501 for unpaid work and $58,000 for lost profits, for a
total of $77,501.
However, in its motion for entry of judgment filed several weeks after trial,
J.P. sought new and different damages. The motion asserted J.P. was entitled to
recover damages in the amount of $74,059.52, consisting of the following:
• $17,099 for unpaid contract work in February 2005;
• $21,748.52 for unpaid contract work in March 2005;
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• $8,389 for retainage;
• $26,823 for extra work completed for unsigned change orders; and
• $3,600 for attorney’s fees J.P. paid Transit Mix, another
subcontractor on the project, after Transit Mix sued J.P. to recover
payment for supplies Transit Mix provided for the project.
In addition, instead of the $58,000 originally sought for lost profits, J.P. requested
a lost profits award of $26,499.05. The trial court rendered judgment, awarding
J.P. $47,000 in damages, but did not indicate how it reached that figure. It entered
no findings of fact or conclusions of law.
In Walker’s first appeal, we reversed the trial court’s damages award, but
otherwise affirmed the judgment. We held that J.P. released all claims for any
amounts due for work performed before March 16, 2005 by signing the March 16,
2005 release and that “any lost profits incurred before March 16, 2005 are not
properly included in the award.” C.A. Walker Constr. Co., 2009 WL 884754, at
*5–6. With respect to lost profits, we concluded that J.P. failed to present
“objective facts, figures, or data from which the amount of lost profits can be
ascertained” and that therefore “the evidence [was] factually insufficient to support
an award of lost profits.” Id. at *6. In addition, we held that J.P. was not entitled
to “any damages for a suit filed against J.P. by Transit Mix for services or
materials, or the attorney’s fees incurred by Transit Mix and paid by J.P,” because
5
the plain language of the parties’ contract excused Walker from paying any
damages for a suit filed against J.P. Id. at *7. Finally, we held that Texas Rule of
Civil Procedure 193.6 precluded J.P.’s recovery of damages that had not been
disclosed before trial. TEX. R. CIV. P. 193.6, 194.2(d); C.A. Walker Constr. Co.,
2009 WL 884754, at *7. We concluded that the trial court erred in awarding
$47,000 in damages, “because the figure could not have been reached without
taking into consideration amounts that were disclaimed by the release, were for lost
profits, were for Transit Mix’s lawsuit, or were not properly disclosed before post
trial.” C.A. Walker Constr. Co., 2009 WL 884754, at *8. Accordingly, we
remanded the case to the trial court “for the limited purpose of conducting a new
trial on the issue of damages.” Id. at *8.
New Trial on Damages and Second Appeal
On remand, Walker moved for summary judgment, asking the trial court to
enter judgment awarding J.P. $2,848 in damages. Walker contended this was the
only amount supported by evidence that had not been rejected by this Court’s
opinion. The trial court denied the motion.
Before the retrial, J.P. timely supplemented its responses to Walker’s
requests for disclosure and disclosed an expert witness. The supplemental
responses reflected J.P.’s intent to seek damages in the amount of $38,000 for
6
unpaid labor, services, goods, and materials for work that J.P. performed between
March 16, 2005 and March 22, 2005, $10,355 for retainage, and $48,355 for lost
profits. J.P. also timely designated Lane Parish as a testifying expert on lost
profits, produced Parish’s report, served new discovery requests on Walker, and
sought an additional deposition. Walker objected to the supplementation and new
discovery on the grounds that they were precluded by our opinion, but the trial
court permitted them. Walker propounded no discovery and did not seek to depose
Parish.
The trial court held a bench trial on damages. At the trial, Walker objected
to the admission of new evidence of damages disclosed on remand, but the trial
court overruled Walker’s objections.
At trial, Pantle testified about the work J.P. performed for Walker between
March 16, 2005 and March 22, 2005. He testified about the number of employees
that were on site on each day, the work they performed, the tools, materials, and
equipment that were used each day, and the cost for each. He testified that the
total amount due for work performed on those dates was $30,422.23.
Pantle also testified that J.P. was seeking $7,105.28 in damages for
retainage. Under the parties’ contract, Walker would pay J.P. progress payments
equal to 95% of the value of J.P.’s work but retain the other five percent as
7
retainage until the end of the term of the contract. Pantle testified that J.P. was
owed the retainage for work performed through March 16, $7,105.28.
J.P.’s expert, Lane Parish, testified that J.P. was entitled to lost profits in the
amount of $36,642.39. Parish testified that he used information from the start date
to the end date of the job to calculate J.P.’s “job profit percentage.” To determine
that percentage, he subtracted the cost of the work performed through March 16
from the total amount J.P. was paid for that work plus five percent retainage, and
then divided that gross profit by the total amount paid plus five percent retainage.
This yielded a job profit percentage of 27.75%. Parish then applied this percentage
to the outstanding total contract amount that was reflected on the March 16, 2005
release, $132,043.40, and this yielded a lost profit figure of $36,642.39.
The trial court signed a final judgment awarding damages to J.P. in the
amount of $74,193.90, carrying forward the award of attorney’s fees awarded in
the first judgment and awarding fees for the new trial and conditional appellate
fees, and awarding pre- and post-judgment interest. The trial court also entered
findings of fact and conclusions of law. According to the trial court’s findings of
fact, the $74,193.90 damages award is comprised of $30,442.23 for unpaid labor,
goods, services, and materials, $7,105.28 for retainage, and $36,646.39 in lost
profits.
8
Law of the Case and Scope of Remand
In its first issue, Walker argues that our first opinion and the law of the case
doctrine precluded the trial court’s consideration of new damages theories and
evidence that had not been disclosed before the first trial on the merits.
A. Applicable Law
When we remand a cause to the trial court for a new trial, the remand is
generally unlimited in scope and the cause is reopened in its entirety. See Cedillo
v. Gaitan, 981 S.W.2d 388, 390 (Tex. App.—San Antonio 1998, no pet.). We may
limit our remand to include only certain issues, as stated in the mandate. Cessna
Aircraft Co. v. Aircraft Network, LLC, 345 S.W.3d 139, 144 (Tex. App.— Dallas
2011, no pet.) (“When an appellate court remands a case with specific instructions,
the trial court is limited to complying with the instructions and cannot re-litigate
issues controverted at the former trial.”). The scope of the remand is determined
by referring to both the appellate opinion and to the mandate itself. See Hudson v.
Wakefield, 711 S.W.2d 628, 630 (Tex. 1986) (in interpreting mandate of appellate
court, “courts should look not only to the mandate itself, but also to the opinion of
the court”).
Under the law of the case doctrine, “questions of law decided on appeal . . .
will govern the case throughout its subsequent stages” and therefore “a court of
9
appeals is ordinarily bound by its initial decision if there is a subsequent appeal in
the same case.” Briscoe v. Goodmark Corp., 102 S.W.3d 714, 716 (Tex. 2003);
Hudson, 711 S.W.2d at 630. “By narrowing the issues in successive stages of the
litigation, the law of the case doctrine is intended to achieve uniformity of decision
as well as judicial economy and efficiency.” Briscoe, 102 S.W.3d at 716 (quoting
Hudson, 711 S.W.2d at 630). The law of the case applies only to questions of law
and does not apply to questions of fact. Hudson, 711 S.W.2d at 630.
B. Analysis
Our first opinion stated that we were remanding the case “for the limited
purpose of conducting a new trial on the issue of damages.” C.A. Walker Constr.
Co., 2009 WL 884754, at *8. Our mandate stated that the cause was remanded
“for the limited purpose of conducting a new trial on the issue of the amount of the
amount [sic] of damages.” We otherwise affirmed the judgment of the trial court.
Walker argues that the trial court exceeded the scope of the remand in three ways.
First, Walker argues that our original opinion precluded J.P. from introducing
evidence of damages that had not been disclosed before the first trial. Second,
Walker argues that our holding that the release bars J.P. from recovering damages
for work performed before March 16, 2005 also bars J.P. from recovering an award
of retainage attributable to work performed during that period of time. Third,
10
Walker argues that the trial court impermissibly entered findings of fact and
conclusions of law regarding matters beyond the limited scope of the remand. We
address these issues in turn.
1. Does Rule 193.6 preclude J.P. from seeking damages in amounts that
had not been disclosed before the first trial?
Walker urges that this Court’s holding that Rule 193.6 precluded J.P. from
recovering damages not disclosed before the first trial became the “law of the
case,” and, therefore, J.P. was limited on remand to recovering only the amount of
damages disclosed before the first trial. We disagree. When a new trial is ordered,
the case is reopened in its entirety except to the extent that any limiting instructions
are provided. See Hudson, 711 S.W.2d at 630; Manon v. Solis, 142 S.W.3d 380,
386 (Tex. App.—Houston [14th Dist.] 2004, pet. denied); Cedillo, 981 S.W.2d at
390. Here, the new trial was limited to the issue of damages, but it was not
otherwise limited, and J.P. was therefore not precluded, in the trial court’s
discretion, from amending its disclosures or seeking additional discovery on
remand. See Dillard Dep’t Stores, Inc. v. Hall, 909 S.W.2d 491, 492 (Tex. 1995)
(scope of discovery is within the trial court’s discretion); Hudson, 711 S.W.2d at
630; Manon, 142 S.W.3d at 386; Cedillo, 981 S.W.2d at 390.
Walker argues that “[t]he punitive impact of the exclusionary mandate set
forth in rule 193.6 would be eviscerated” if parties are permitted to introduce new
11
evidence after remand for a new trial. However, on remand for a new trial, the
case is again in a pre-trial posture. And as we explained in our previous opinion,
the purpose of Rule 193.6 “is to prevent trial by ambush” by requiring a party to
“make, amend, or supplement a discovery response in a timely manner.” C.A.
Walker Constr. Co., 2009 WL 884754, at *7 (quoting Harris Cnty. v. Inter Nos,
Ltd., 199 S.W.3d 363, 367 (Tex. App.—Houston [1st Dist.] 2006, no pet.). Walker
does not argue that J.P. failed to disclose its damage model before the retrial.
Accordingly, J.P. was not precluded by Rule 193.6 from adducing on remand
damages evidence that had not been disclosed before the first trial.
We overrule this subpart of Walker’s first issue.
2. Does the release preclude J.P.’s recovery of the retainage award?
Walker next contends that our holding that the release bars J.P.’s recovery
for amounts it is owed on account of pre-March 16, 2005 work is the law of the
case, and it bars J.P. from recovering the retainage due on J.P.’s pre-March 16
work. See Hudson, 711 S.W.2d at 630. We agree. In the first appeal, we
concluded that “by signing the release, J.P. acknowledged it was fully paid for all
work it had performed as of March 16, 2005.” C.A. Walker Constr. Co., 2009 WL
884754, at *5. Accordingly, J.P. cannot recover for any amounts attributable to
work performed as of March 16, 2005.
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Walker argues that the $7,105.28 retainage award is attributable to work
performed before March 16, 2005, and it is therefore unrecoverable. The record
demonstrates that the amount the trial court awarded for retainage, $7,105.28, is
five percent of $142,105.60, which is the amount J.P. had been paid as of March
16, 2005.
J.P. nevertheless contends it is not barred from recovering this retainage,
because J.P. was not entitled to collect it until Walker made the final payment due
under the contract. Accordingly, J.P. argues that its right to receive the retainage
had not arisen as of March 16, 2005, and therefore the March 16, 2005 release
could not operate as a release of the retainage.
The March 16, 2005 release is broad. It states that the payment received on
that date “constitutes full payment for the work performed to date and any and all
change orders or claims for additional work performed.” It also states that J.P.
waived, released, relinquished, and discharged all debts, claims and demands
“whatsoever, in law or equity, which are against [Walker] . . . that [J.P.] now has
or might hereinafter obtain that relates directly or indirectly to the abovesaid
relationship, Contract, and/or Project.” (Emphasis added). It does not expressly
carve out unpaid retainage, and it does expressly release even those claims that
would arise in the future, provided they related to pre-March 16 work. The plain
13
language of the release thus bars recovery of the retainage award. And we have
already held that “by signing the release, J.P. acknowledged it was fully paid for all
work it had performed as of March 16, 2005.” Id. at *5. Accordingly, we hold
that the trial court erred in awarding J.P. the five percent retainage for work
performed on or before March 16. See Briscoe, 102 S.W.3d at 716 (court of
appeals is bound by its initial decision if there is a subsequent appeal in the same
case); see also Keck, Mahin & Cate v. Nat’l Union Fire Ins. Co., 20 S.W.3d 692,
698 (Tex. 2000) (broad release releases all claims pertaining to subject matter).
We sustain Walker’s first issue with respect to the $7,105.28 award of
retainage.
3. Findings of Fact and Conclusions of Law
Walker complains that the trial court entered findings of fact and
conclusions of law regarding matters outside the scope of our remand.
Specifically, Walker complains that the trial court entered findings and conclusions
related to liability, and it did not limit its findings and conclusions to the issue of
damages. But we cannot ascertain, and Walker does not explain, how, if at all,
14
these findings and conclusions caused the rendition of an improper judgment. * See
TEX. R. APP. P. 44.1(a); McWhorter v. Sheller, 993 S.W.2d 781, 786 (Tex. App.—
Houston [14th Dist.] 1999, pet. denied) (overruling issue regarding alleged errors
in findings of fact and conclusions of law where party did not explain how alleged
errors caused the rendition of an improper judgment).
We overrule this subpart of Walker’s first issue.
Factual and Legal Sufficiency
In its second issue, Walker contends that the evidence is legally and
factually insufficient to support the trial court’s judgment, findings of fact, and
conclusions of law.
A. Standard of Review
In an appeal from a bench trial, we review a trial court’s conclusions of law
de novo. Zenner v. Lone Star Striping & Paving, L.L.C., 371 S.W.3d 311, 314
(Tex. App.—Houston [1st Dist.] 2012, pet. denied) (citing BMC Software Belgium,
*
To the extent that Walker is complaining here about the trial court’s award to J.P.
of attorney’s fees for the first appeal in the second judgment, we note that in the
first appeal, in addition to remanding the cause for a new trial on damages, this
Court affirmed the trial court’s take-nothing judgment against Walker as well as
the remainder of the judgment, which held Walker liable for breach of contract.
C.A. Walker Constr. Co. v. J.P. Sw. Concrete, Inc., No. 01-07-00904-CV, 2009
WL 884754, at *8 (Tex. App.—Houston [1st Dist.] Apr. 2, 2009, no pet.) (mem.
op.). Under these circumstances, the trial court did not abuse its discretion in
awarding attorney’s fees for the first appeal to J.P. See Weaver v. Jamar, 383
S.W.3d 805, 813 (Tex. App.—Houston [14th Dist.] 2012, no pet.) (award of
attorney’s fees for breach of contract is reviewed for abuse of discretion).
15
N.V. v. Marchand, 83 S.W.3d 789, 794 (Tex. 2002)). We will uphold the
conclusions on appeal if the judgment can be sustained on any legal theory
supported by the evidence. Id. at 314–15. A trial court’s conclusions of law may
not be challenged for factual sufficiency of the evidence, but we may review the
legal conclusions drawn from the facts to determine their correctness. Id. at 314.
In an appeal from a bench trial, the trial court’s findings of fact have the
same weight as a jury verdict. Catalina v. Blasdel, 881 S.W.2d 295, 297 (Tex.
1994); Nguyen v. Yovan, 317 S.W.3d 261, 269–70 (Tex. App.—Houston [1st Dist.]
2009, pet. denied). We review a trial court’s findings of fact under the same legal
and factual sufficiency of the evidence standards used when determining whether
sufficient evidence exists to support an answer to a jury question. Catalina, 881
S.W.2d at 297; Nguyen, 317 S.W.3d at 270.
The test for legal sufficiency is “whether the evidence at trial would enable
reasonable and fair-minded people to reach the verdict under review.” City of
Keller v. Wilson, 168 S.W.3d 802, 827 (Tex. 2005). In making this determination,
we credit evidence favoring the findings if a reasonable factfinder could and
disregard contrary evidence unless a reasonable factfinder could not. See id. at
822. Although we consider the evidence in the light most favorable to the
challenged findings, indulging every reasonable inference that supports them, we
16
may not disregard evidence that allows only one inference. Id. at 822.
In reviewing a factual sufficiency issue, we consider all the evidence
supporting and contradicting the finding. Plas—Tex, Inc. v. U.S. Steel Corp., 772
S.W.2d 442, 445 (Tex. 1989). We set aside the verdict only if the finding is so
contrary to the overwhelming weight of the evidence as to be clearly wrong and
unjust. Pitts & Collard, L.L.P. v. Schechter, 369 S.W.3d 301, 312 (Tex. App.—
Houston [1st Dist.] 2011, pet. dism’d by agr.) (citing Cain v. Bain, 709 S.W.2d
175, 176 (Tex. 1986)).
The trial court, as finder of fact, is the sole judge of the credibility of the
witnesses and the weight to be given their testimony. City of Keller, 168 S.W.3d at
819; Salomon v. Lesay, 369 S.W.3d 540, 549 (Tex. App.—Houston [1st Dist.]
2012, no pet.). The factfinder may believe or disbelieve the testimony of a
witness, in whole or in part, and it may resolve any inconsistencies in a witness’s
testimony. Salomon, 369 S.W.3d at 549. We may not pass upon the witnesses’
credibility or substitute our judgment for that of the factfinder, even if the evidence
would clearly support a different result. Maritime Overseas Corp. v. Ellis, 971
S.W.2d 402, 407 (Tex. 1998).
B. Analysis
In its second issue, Walker argues that the evidence presented at the new
17
trial on damages was legally and factually insufficient to support the judgment.
First, Walker argues that the trial court erroneously admitted Exhibit 33, a
compilation of J.P.’s business records supporting its claim for damages for unpaid
work and for lost profits, and that, without Exhibit 33, insufficient evidence
supports the award of $30,442.23 for unpaid labor, goods, services, and materials
and the award of $36,646.39 for lost profits. Walker next argues that Parish’s lost
profits calculation was impermissibly based on work performed and amounts paid
for work performed before March 16, 2005 and was based on unreliable evidence.
Walker also argues that the trial court abused its discretion in considering
testimony by Pantle that contradicted his testimony in the 2007 trial. Finally,
Walker contends that the trial court abused its discretion in admitting testimony on
attorney’s fees that had not been disclosed before the new trial on damages. We
address each contention in turn.
1. Exhibit 33
Walker asserts that the trial court erred in admitting Exhibit 33, a
compilation of J.P.’s records reflecting the costs J.P. incurred on the project.
Exhibit 33 was admitted as a business record and sponsored by J.P.’s president,
Pantle, who testified that the documents within Exhibit 33 supported J.P.’s claim
for unpaid work. Relying on Texas Rule of Civil Procedure 193.6, Walker argues
18
that Exhibit 33 should have been excluded, because it was not timely disclosed.
J.P. agreed that the documents that made up Exhibit 33 were not produced to
Walker before trial, but argued that Walker knew that the documents existed, were
being relied upon by J.P.’s lost profits expert, and were available for review at
J.P.’s counsel’s office if Walker had asked to review them.
A party’s failure to provide complete responses to discovery results in
automatic exclusion of the evidence, unless the trial court finds good cause or lack
of unfair surprise or prejudice. TEX. R. CIV. P. 193.6; see Dyer v. Cotton, 333
S.W.3d 703, 717 (Tex. App.—Houston [1st Dist.] 2010, no pet.); Norfolk S. Ry.
Co. v. Bailey, 92 S.W.3d 577, 580–81 (Tex. App.—Austin 2002, no pet.). The
burden of establishing good cause, lack of unfair surprise, or lack of unfair
prejudice is on the party seeking to introduce the evidence or call the witness.
TEX. R. CIV. P. 193.6(b); Dyer, 333 S.W.3d at 717. The trial court has discretion in
determining whether good cause or lack of unfair surprise exists. TEX. R. CIV. P.
193.6(b); Dyer, 333 S.W.3d at 717.
Here, Walker contends that pre-trial disclosure of the documents in Exhibit
33 was required by Rule 194.2(f)(4)(A). That rule required J.P. to disclose “all
documents, tangible things, reports, models, or data compilations that have been
provided to, reviewed by, or prepared by or for the expert in anticipation of the
19
expert’s testimony.” TEX. R. CIV. P. 194.2(f)(4)(A). Parish, J.P.’s expert, relied
upon the documents in Exhibit 33. Indeed, Parish included these documents as
exhibits to his report. His report, which was timely disclosed to Walker, makes
clear that Parish relied on the documents and that the documents were supposed to
be attached to Parish’s report as exhibits. Walker argues for exclusion on the basis
that it did not receive the exhibits to Parish’s report. But the information disclosed
by J.P. alerted Walker of the existence of the documents, the fact that they were
relied upon by Parish, and the fact that they should have been attached to Parish’s
report, and Walker nevertheless failed to notify J.P. that, in fact, the documents
were not attached as exhibits to Parish’s report. On this record, we hold that the
trial court did not abuse its discretion in concluding that Walker was not unfairly
surprised or unfairly prejudiced by the untimely disclosure and therefore, the trial
court did not abuse its discretion in admitting Exhibit 33. See Williams v. Cnty. of
Dallas, 194 S.W.3d 29, 33 (Tex. App.—Dallas 2006, pet. denied) (no abuse of
discretion in admitting undisclosed documents supporting damages where face of
pleading indicated that such damages would be sought at trial); see also Marin v.
IESI TX Corp., 317 S.W.3d 314, 323–24 (Tex. App.—Houston [1st Dist.] 2010,
pet. denied) (exhibits admitted through fact witness were not required to be
produced in response to Rule 194.2(f) disclosure request and were not subject to
20
exclusion under Rule 193.6).
We overrule Walker’s complaint about the admission of Exhibit 33.
2. Lost Profits
The rule concerning recovery of lost profit damages is “well established:”
Recovery for lost profits does not require that the loss be susceptible
of exact calculation. However, the injured party must do more than
show that they suffered some lost profits. The amount of the loss must
be shown by competent evidence with reasonable certainty. What
constitutes reasonably certain evidence of lost profits is a fact
intensive determination. As a minimum, opinions or estimates of lost
profits must be based on objective facts, figures, or data from which
the amount of lost profits can be ascertained. Although supporting
documentation may affect the weight of the evidence, it is not
necessary to produce in court the documents supporting the opinions
or estimates.
ERI Consulting Eng’rs, Inc. v. Swinnea, 318 S.W.3d 867, 876 (Tex. 2010) (quoting
Holt Atherton Indus., Inc. v. Heine, 835 S.W.2d 80, 84 (Tex. 1992)). Here, the
trial court awarded $36,646.39 in lost profits, based on the testimony of J.P.’s lost
profits expert, Lane Parish.
Walker argues that the lost profit award is improper in light of the release
and our earlier opinion, because Parish “admitted that his analysis and calculations
included amounts related to work performed prior to March 16, 2005.” The record
reflects that Parish calculated J.P.’s lost profits by determining J.P.’s profit margin
on the project during the first several months and then applying that percentage to
the outstanding total contract amount, $132,043.40. This yielded a lost profits
21
calculation of $36,642.39.
We agree with Walker that, based on our prior opinion, any pre-March 16
lost profits may not be awarded to J.P. However, Parish testified that he only used
pre-March 16 billing and cost data to determine J.P.’s “job profit percentage” on
the project. He multiplied the percentage by the contract amount that was
outstanding as of March 16, 2005 to ascertain the amount of profit J.P. would have
earned had it performed all of the work contemplated by the contract.
Accordingly, the record does not support Walker’s contention that Parish’s lost
profits calculation awards J.P. damages for pre-March 16 lost profits.
Walker also argues that Parish’s lost profits testimony was unreliable.
Walker was required to raise this objection before trial or when the testimony was
offered. See City of San Antonio v. Pollock, 284 S.W.3d 809, 816–17 (Tex. 2009).
Walker did object to the admission of Parish’s testimony at trial, but only on the
grounds that Parish should not be permitted to testify given the limited scope of the
remand. Accordingly, we hold this complaint is not preserved for our review. See
Pollock, 284 S.W.3d at 816–17.
Walker does not complain that the evidence of lost profits is otherwise
insufficient to support the lost profits award, and we conclude that it is. Parish
testified in detail about the manner in which he determined J.P.’s profit margin,
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and the post-March 16 lost profits figure. His conclusions were supported by
Exhibit 33. Accordingly, we hold the lost profits evidence is “reasonably certain”
and therefore legally and factually sufficient to support the lost profits award of
$36,646.39. Swinnea, 318 S.W.3d at 876 (recovery for lost profits does not require
that the loss be susceptible of exact calculation, but must be shown by reasonably
certain evidence); Anthony Equip. Corp. v. Irwin Steel Erectors, Inc., 115 S.W.3d
191, 204–05 (Tex. App.—Dallas 2003, pet. dism’d) (application of profit margin
percentage to anticipated total project amount indicated with reasonable certainty
the amount of lost profits).
3. Pantle’s testimony supporting unpaid work award
The trial court awarded J.P. $30,442.23 for work performed between March
16, 2005 and March 22, 2005. This was based on the testimony of J.P.’s president,
Pantle. Walker argues that the trial court abused its discretion when it awarded this
amount based on Pantle’s testimony, because Pantle’s testimony was not credible
as a matter of law and it is therefore legally and factually insufficient to support the
award. Walker argues that Pantle testified unequivocally in the 2007 trial that J.P.
was owed only $19,501 for unpaid work, but on remand, Pantle testified that J.P.
was entitled to a higher amount. Walker argues that this conflict makes Pantle’s
testimony on remand insufficient to support the award for unpaid work.
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Pantle testified on remand that the $19,501 figure he offered at the first trial
included amounts for February but not March. He clarified that he mistakenly
confused damages for unpaid work with lost profits damages during the first trial.
In addition, Pantle’s testimony regarding the value of unpaid work was supported
by J.P.’s invoices, ledgers, checks, and other business records reflecting the value
of J.P.’s work performed between March 16, 2005 and March 22, 2005.
The trial court is the sole judge of Pantle’s credibility and the weight to be
given his testimony. City of Keller, 168 S.W.3d at 819; Salomon, 369 S.W.3d at
549. The trial court could believe or disbelieve Pantle’s testimony, in whole or in
part, and it was entitled to resolve any inconsistencies in Pantle’s testimony.
Salomon, 369 S.W.3d at 549. We will not disturb the trial court’s determination
that Pantle’s testimony was credible. City of Keller, 168 S.W.3d at 819; Ellis, 971
S.W.2d at 407; Salomon, 369 S.W.3d at 549. We hold that legally and factually
sufficient evidence supports the trial court’s finding that J.P. was entitled to
recover $30,442.23 for unpaid work.
4. Attorney’s Fees
Walker argues that the trial court abused its discretion in admitting
testimony on attorney’s fees that had not been disclosed before the new trial.
Walker contends that “Texas Rules of Civil Procedure 193.6 and 194.2 required
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disclosure of the amount and any method of calculating damages.” Walker
apparently contends that evidence supporting a claim for attorney’s fees, like “the
amount and any method of calculating economic damages,” must be disclosed
under the timeframe prescribed in rule 194.2(d). See TEX. R. CIV. P. 194.2(d).
However, where, as here, attorney’s fees are not sought as an element of damages,
they are not economic damages and are therefore not required to be disclosed in
accordance with rule 194.2(d). See Carter v. Flowers, No. 02-10-00226-CV, 2011
WL 4502203, at *4 (Tex. App.—Fort Worth Sept. 29, 2011, no pet.) (mem. op.)
(“Attorney’s fees are not economic damages and are therefore not required to be
disclosed under rule 194.2(d).”); Shafer v. Gulliver, No. 14-09-00646-CV, 2010
WL 4545164, at *11 (Tex. App.—Houston [14th Dist.] Nov. 12, 2010, no pet.)
(mem. op.) (holding that Rule 194.2(d) did not require plaintiffs to disclose method
of calculating attorney’s fees). And, Walker agrees that J.P. properly designated
its attorney as a testifying expert on fees pursuant to Texas Rule of Civil Procedure
194.2(f) and made the disclosures required by that provision. Walker does not
otherwise challenge the sufficiency of the evidence to support the award of
attorney’s fees. Accordingly, we hold the evidence is legally and factually
sufficient to support the trial court’s fee awards.
We overrule Walker’s second issue.
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Conclusion
We modify the trial court’s judgment to exclude the award of $7,105.28 for
retainage and affirm the judgment as modified.
Rebeca Huddle
Justice
Panel consists of Chief Justice Radack and Justices Bland and Huddle.
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