Stan Martin and Roma Martin v. Cottonwood Creek Construction, LLC ( 2018 )

IN THE
TENTH COURT OF APPEALS
No. 10-17-00005-CV
STAN MARTIN AND ROMA MARTIN,
Appellants
v.
COTTONWOOD CREEK CONSTRUCTION, LLC,
Appellee
From the 249th District Court
Johnson County, Texas
Trial Court No. C201300177
OPINION
Stan and Roma Martin contracted with Cottonwood Creek Construction, LLC to
build the Martins a house. The estimated cost was over $880,000, and Cottonwood’s
estimated fees were over $120,000. When the Martins failed to pay two draws,
Cottonwood suspended further work on the project. The Martins then retained another
contractor to finish the house.
Cottonwood sued the Martins for breach of contract. The Martins filed a
counterclaim against Cottonwood and a claim against a third party.1 After a jury trial,
the trial court rendered judgment against the Martins on all the claims alleged by the
parties.
On appeal, the Martins raise five issues. Because we overrule each issue, the trial
court’s judgment is affirmed.
ANTICIPATORY REPUDIATION/LOST PROFITS
In their first issue, the Martins assert the trial court erred in submitting Question 3
and in refusing to submit their Requested Question 4 on what they believed to be
Cottonwood’s claim of anticipatory repudiation. Specifically, the Martins assert that the
inclusion of the ability to recover damages for lost profits in Question 3 without another
question submitted about repudiation, was error. Alternatively, the Martins argue in
their second issue that if there was no error in the wording of Question 3, nevertheless
there was error in submitting it because there was no evidence to support the value
damages found by the jury.
Initially, we note that a request for submission is the method of preserving the
right to complain of the omission of, or failure to submit, an issue or question which is
relied on by the complaining party. Lyles v. Tex. Employers' Ins. Asso., 405 S.W.2d 725, 727
(Tex. Civ. App.—Waco 1966, writ ref’d n.r.e.). An objection, on the other hand, is the
proper method to preserve a complaint as to (1) an issue or question actually submitted,
but claimed to be defective; or (2) the failure to submit, where the ground of recovery or
1
The Martins have no issue on appeal regarding the third-party claim.
Martin v. Cottonwood Creek Construction, LLC Page 2
defense is relied on by the opposing party. Id. See Religious of Sacred Heart v. Houston, 836
S.W.2d 606, 614 (Tex. 1992).
At the charge conference, the Martins made the following objection to Question 3:
Objection is made to Pattern Jury Charge Question No. 3 for the reason that
it says, Cottonwood Creek may not recover – may recover not only for the
value of the work actually done. There's been no evidence of the value of
the work performed before this jury, and that assumes there was a value for
work performed. Objection is further made that … for any profit
Cottonwood Creek would have made had it been permitted to complete the
contract. That assumes that the Martins repudiated the contract and
stopped Cottonwood Creek from completing the contract. And that
assumes a fact that has not been established, although pled by the Plaintiff.
The Plaintiff has not submitted an issue for that. Therefore, I submit Issue
No. 4, Question No. 4 for the jury on anticipatory repudiation.
***
Objection is made to the lost profits, 12 percent fee for remaining contract
balance. It assumes as an anticipatory repudiation by the Martins which
requires an unconditional repudiation of which there's no evidence of and
nevertheless assumes that before asking the jury to receive a lost profit.
The Martins objected to the submission of Question 3 because, according to the Martins,
the question was defective in that it included the ability to recover damages for lost
profits which assumed repudiation by the Martins.
The Martins’ request for submission of Requested Question 4 regarding
anticipatory repudiation, however, did not preserve their complaint for appellate review
because anticipatory repudiation was not an issue relied upon by the Martins, i.e. the
complaining party. The Martins were required to object to the trial court’s failure to
submit a question on anticipatory repudiation because it was, arguably, a ground of
recovery relied on by Cottonwood. The Martins did not object. Thus, any complaint
about the trial court’s failure to submit the Martins’ Requested Question 4 on anticipatory
Martin v. Cottonwood Creek Construction, LLC Page 3
repudiation is not preserved; and we need not decide that part of the Martin’s first issue.2
As to the lost profits portion of the Martins’ first issue, they complain that the trial
court improperly included lost profits in Question 3. In substance, the Martins argue on
appeal that the damages question improperly mixed breach of contract damages with
damages only recoverable under quantum meruit. Question 3 provided, in relevant part:
What amount of money, if paid in cash today, would fairly and reasonably
compensate Cottonwood Creek for the Martins’ failure to comply with the
Agreement?
You are instructed that Cottonwood Creek may recover not only for the
value of the work actually done, but also for any profit Cottonwood Creek
would have made had it been permitted to complete the contract.
Therefore, in answering Question No. 3, consider the following elements of
damages, if any, and none other.
***
Lost Profit (12% Fee) for Remaining Contract Balance: $65,514.35
The Martins argue that an attempt to recover lost profits is an attempt to recover on the
contract; but because the trial court instructed the jury that Cottonwood could recover
for the “value” of the work done, this was a recovery in quantum meruit for which
Cottonwood could not recover in addition to lost profits. The Martins contend the Court
should have used the phrase “work done” rather than the phrase “value of the work
done.”
2
Additionally, we note that the jury was asked whether the Martins failed to comply with the Agreement,
which was Question 1, and answered, “Yes.” In Question 2, the jury was asked whether the failure to
comply with the Agreement was excused by a prior material breach by Cottonwood, which the jury
answered, “No.” Under the conditional submission of Question 3, the jury was then asked about damages.
Thus, while the Martins complain about the failure to submit a question on anticipatory repudiation of a
contract, which is one method of establishing a breach of contract, it is not the only type of breach. The
Martins fail to address why Question 1 and Question 2 do not properly set up Question 3 for damages for
their breach of contract as found by the jury.
Martin v. Cottonwood Creek Construction, LLC Page 4
But that was not the objection the Martins made to the trial court. There, the
Martins only objected that there was “no evidence of the value of the work performed
before this jury, and that assumes there was a value for work performed.” The Martins
did not object that “value” corresponded to a recovery in quantum meruit which is
inconsistent with a recovery for breach of contract. In order to preserve error for
appellate review, a party's argument on appeal must comport with its argument in the
trial court. See In re D.E.H., 301 S.W.3d 825, 829 (Tex. App.—Fort Worth 2009, pet.
denied); Kershner v. State Bar of Tex., 879 S.W.2d 343, 347 (Tex. App.—Houston [14th Dist.]
1994, writ denied). Because the objection asserted at trial does not comport with the
complaint argued on appeal, the second portion of the Martins’ first issue that an
improper measure of damages was submitted is not preserved. See TEX. R. APP. P. 33.1(a).
Accordingly, the Martins’ first issue is overruled.
VALUE
Next, the Martins assert there is no evidence in the record to support the amounts
awarded by the jury of the “value of the work actually done” in response to the first eight
elements of damages in Question 3.
As discussed above, the Martins equate the word “value” in Question 3 with
“value” for a recovery in quantum meruit. Quantum meruit is an equitable theory of
recovery which is based on an implied agreement to pay for benefits received. Heldenfels
Bros., Inc. v. Corpus Christi, 832 S.W.2d 39, 41 (Tex. 1992). The correct measure of damages
to recover on quantum meruit is the “reasonable value” of work performed and the
materials furnished. M.J. Sheridan & Son Co. v. Seminole Pipeline Co., 731 S.W.2d 620, 625
Mart. v. Cottonwood Creek Construction, LLC Page 5
(Tex. App.—Houston [1st Dist.] 1987, no pet.). But Cottonwood did not sue on quantum
meruit, it sued for breach of contract. Where a valid express contract covering the subject
matter exists, there can be no quantum meruit; and thus, recovery on both is inconsistent.
Id. at 624. Thus, that there may be no evidence of “value” as would be necessary for a
recovery in quantum meruit is of no consequence. There was no need for Cottonwood
to prove the type of “reasonable value” as required to recover in quantum meruit.3
The Martins’ second issue is overruled.
ABATEMENT
In their third issue, the Martins contend the trial court erred in abating the
underlying case pursuant to Chapter 27 of the Texas Property Code (Residential
Construction Liability Act; the “RLCA”), refusing to entirely lift the abatement, and
refusing to submit all of the Martins’ defect claims to the jury.4 We divide this issue into
two parts: the abatement and the submission of the defect claims.
Abatement under the RCLA
In this part of the issue, we are called upon to determine, as an issue of first
impression, the manner in which a counterclaim for construction defects affects the
procedures for abatement and settlement under the RCLA. We review a trial court's
3
While perhaps not the best language to use, the instruction comes directly from a construction breach of
contract case, Tower Contracting Co. v. Flores, 294 S.W.2d 266, 272-73 (Tex. Civ. App.—Galveston 1956)
modified on other grounds, 302 S.W.2d 396 (1957) (“the proper measure of damages, where the contractor sues
on the contract, is … the contract value of the work actually done plus any profit the contractor would
have made had he been permitted to complete the performance of his contract”).
4
The Martins only complain about the abatement of their counterclaims against Cottonwood. They do not
complain about the abatement of their third-party claim. Thus, we will not discuss the propriety of the
abatement of the third-party claim.
Martin v. Cottonwood Creek Construction, LLC Page 6
action on a plea in abatement for abuse of discretion. Dolenz v. Cont'l Nat'l Bank of Fort
Worth, 620 S.W.2d 572, 575 (Tex. 1981); F&S Constr., Inc. v. Saidi, 131 S.W.3d 94, 98 (Tex.
App.—San Antonio 2003, pet. denied).
Generally, the RCLA requires a claimant to provide written notice to a contractor
"specifying in reasonable detail the construction defects that are the subject of the
complaint" at least 60 days before the claimant “initiates an action” against the contractor.
TEX. PROP. CODE ANN. § 27.004(a) (West 2014). In addition to the notice requirement, the
contractor must be given (1) a reasonable opportunity to inspect the property that is the
subject of the complaint and (2) the opportunity to make a reasonable offer of settlement,
including an agreement by the contractor to repair or have repaired any construction
defect described by the claimant. See id. The notice provision activates a timetable for an
inspection of the property and the offer of settlement which, if reasonable, affects the
claimant's potential recovery under the Act. See id.; In re Anderson Constr. Co., 338 S.W.3d
190, 192 (Tex. App.—Beaumont 2011, orig. proceeding).
A trial court is required to abate an action if, after a hearing, the court finds the
claimant failed to (1) provide the required notice, (2) give the contractor a reasonable
opportunity to inspect the property, or (3) follow the procedures specified in 27.004(b)
(regarding the offer of settlement and its related procedures). See TEX. PROP. CODE ANN.
§ 27.004(a), (d) (West 2014). An action is automatically abated without a court order
beginning the eleventh day after the date a verified motion to abate is filed if the motion
is not controverted by an affidavit filed by the claimant. See id. (d).
Cottonwood filed a verified motion to abate the Martins’ counterclaim alleging
Martin v. Cottonwood Creek Construction, LLC Page 7
they “failed to comply with the notice, inspection and settlement procedures of the
RCLA.” The Martins did not file a controverting affidavit. After a hearing, the trial court
ordered the counterclaim abated because the Martins failed to file a controverting
affidavit but also noted that the counterclaim had been automatically abated because of
the same failure.
The Martins, however, were not required to controvert the motion to abate with
an affidavit. The Martins did not “initiate an action” as provided by subsection (a). See
TEX. PROP. CODE ANN. § 27.004(a) (West 2014). They filed a counterclaim which is
governed by subsection (c). Id. (c). Under subsection (c), notice is not required, and the
timetables for the opportunity to inspect and the offer of settlement are recalculated.5 Id.
Further, the abatement procedure in subsection (d) does not apply to actions governed
by subsection (c).
Subsection (d) provides, in relevant part:
The court … shall abate an action governed by this chapter if Subsection (c)
does not apply and the court … after a hearing, finds that the contractor is
entitled to abatement because the claimant failed to…provide the notice or
failed to give the contractor a reasonable opportunity to inspect the
property as required by Subsection (a), or failed to follow the procedures
specified by Subsection (b). An action is automatically abated without the
order of the court … beginning on the 11th day after the date a motion to
abate is filed if the motion: … (2) is not controverted by an affidavit filed
by the claimant before the 11th day after the date on which the motion to
abate is filed.
TEX. PROP. CODE ANN. § 27.004(d) (West 2014) (emphasis added). Thus, because
5
The pleadings of the counterclaim act as notice and are required to “specify in reasonable detail each
construction defect that is the subject of the complaint.” Id. (c). Cottonwood did not, and does not, contend
the Martins failed to reasonably detail each of the construction defects in their counterclaim.
Martin v. Cottonwood Creek Construction, LLC Page 8
subsection (c) applies to the Martins’ counterclaim, subsection (d) does not.
Cottonwood disputes this interpretation of subsection (d). Relying on In re
Anderson Constr. Co., 338 S.W.3d 190 (Tex. App.—Beaumont 2011, orig. proceeding),
Cottonwood contends that while the Martins were excused from providing notice under
subsection (c), they were not excused from giving Cottonwood an opportunity to inspect
the alleged defects or offer a settlement. Thus, its argument continues, the Martins were
still subject to the automatic abatement provision of subsection (d) because they did not
file a controverting affidavit.
However, Cottonwood’s reliance on In re Anderson is misplaced. In re Anderson
was not a counterclaim case and cannot be used as support for the procedure to be used
when defects are raised in a counterclaim; i.e. when subsection (c) applies.
Further, in construing a statute, words and phrases are read in context and
construed according to the rules of grammar and common usage. TEX. GOV'T CODE ANN.
§ 311.011(a) (West 2013). Initially, we note that subsection (d) is one full paragraph
composed of two sentences. In the first sentence, an abatement by court order is limited
to actions where “Subsection (c) does not apply.” The very next sentence discusses an
automatic abatement. There is no need to repeat the phrase “if Subsection (c) does not
apply” because a basic rule of thumb in paragraph construction is to keep one idea to one
paragraph. See Purdue Online Writing Lab, On Paragraphs,
https://owl.english.purdue.edu/owl/resource/606/01/. Our interpretation might
have been different had the second sentence been in a new paragraph. See id. (“If you
begin to transition into a new idea, it belongs in a new paragraph.”). It was not. Thus,
Martin v. Cottonwood Creek Construction, LLC Page 9
reading the words and phrases of the statute in context and construing them according
to the rules of grammar and common usage as required, we find the statute is clear: the
entirety of subsection (d) does not apply when construction defects are raised in a
counterclaim.
Subsection (d) was the only basis upon which Cottonwood sought an abatement.6
Thus, the trial court abused its discretion in issuing an abatement order because the
subsection (d) abatement procedure did not apply to the Martins’ counterclaim. For the
same reason, the trial court also abused its discretion in finding that the Martins’
counterclaim was automatically abated and in refusing to lift the abatement in its entirety.
Failure to Submit All Claims
We next determine what, if any, effect the abatement had on the presentation of
the Martins’ counterclaim to the jury. Rule 278 of the Texas Rules of Civil Procedure
requires the submission of questions to the jury raised by the written pleadings and the
evidence. TEX. R. CIV. P. 278; Grohman v. Kahlig, 318 S.W.3d 882, 888 (Tex. 2010); Elbaor v.
Smith, 845 S.W.2d 240, 243 (Tex. 1992). A court may refuse to submit a requested jury
question if no evidence exists to warrant its submission. Grohman, 318 S.W.3d at 888;
Elbaor, 845 S.W.2d at 243. A judgment will not be reversed for charge error, however,
unless the error was harmful because it probably caused the rendition of an improper
verdict or probably prevented the petitioner from properly presenting the case to the
appellate court. Columbia Rio Grande Healthcare, L.P. v. Hawley, 284 S.W.3d 851, 856 (Tex.
6
Subchapter (c) has its own provisions for abatement which do not include automatic abatement.
Martin v. Cottonwood Creek Construction, LLC Page 10
2009); see TEX. R. APP. P. 44.1.
According to the pleadings, the Martins alleged that the retaining wall was
installed improperly, the concrete slab failed to match with the wooden floor, the concrete
slab in the garage tilted backwards and water puddled in the garage, the soffit over the
front door was incorrectly placed, the bay window was built without a ledge, and several
windows were damaged or would not open or shut. The Martins requested a question
to be submitted to the jury on all of those claims except the claim regarding the soffit.7
The request was refused. Instead, the trial court submitted Question 8 which identified
three general types of claimed construction defects. Those three types were: 1) the north
retaining wall; 2) the foundation; and 3) the installation of the windows.
Assuming without deciding evidence supported the Martins’ requested jury
question, we find the trial court did not err because the jury question as submitted did
not differ in substance from the Martins’ requested jury question. First, the claim
regarding the retaining wall was clearly submitted in Question 8. Second, the parties,
witnesses, and counsel used the word “foundation” interchangeably with the word
“slab.” Thus, substantively, the claims regarding the slab, the slab’s match-up with the
wooden floor, and the slope in the garage floor were submitted in Question 8 under the
general label of “foundation.” Third, the majority of the testimony about the windows
dealt with the installation, or lack thereof, of a brick ledge for the bay window while a
7
Specifically, the Martins’ proposed question listed the alleged defects as “the retaining wall,” “the brick
ledge in the bay window,” “the concrete slab,” “the concrete slab matched the wooden floor,” “the garage
floor,” and “windows.”
Martin v. Cottonwood Creek Construction, LLC Page 11
minority of the testimony dealt with the installation of windows that were cracked or
unable to be opened. Thus, the window claims were substantively submitted in Question
8 under the general category of “installation of windows.”
A judgment shall not be reversed because of the failure to submit other and
various phases or different shades of the same question. TEX. R. CIV. P. 278. Because
Question 8 does not differ in substance from the Martins' requested question, we cannot
say the trial court’s failure to submit the Martins’ defect claims in the form of the question
requested by the Martins was error. See id.
The Martins’ third issue is overruled.
GOOD AND WORKMANLIKE MANNER
We next address whether the trial court erred in refusing to submit the Martins’
Requested Question 8. The Martins contend that Question 8 as submitted to the jury—
“Did Cottonwood Creek fail to perform its work in a good and workmanlike manner?”—
was incomplete. The Martins’ Requested Question 8 asked whether Cottonwood “failed
to design and build the house pursuant to the plans in a good and workmanlike manner[.]”
(Emphasis added). Submission of the Requested Question 8 was refused by the trial
court.
The Martins’ pleadings defined “good and workmanlike manner” in terms of
“work” and “buil[d].” The term “design” was not used. Further, the Martins alleged in
their pleadings that the contract between the parties defined “good and workmanlike
manner” in terms of “work” rather than “design and build.” Thus, the Martin’s
Requested Question 8 was not raised by the written pleadings, and the trial court did not
Martin v. Cottonwood Creek Construction, LLC Page 12
err in refusing to submit it. See TEX. R. CIV. P. 278; Grohman v. Kahlig, 318 S.W.3d 882, 888
(Tex. 2010); Elbaor v. Smith, 845 S.W.2d 240, 243 (Tex. 1992).8
The Martins’ fourth issue is overruled.
ATTORNEY’S FEES
In their fifth, and final, issue, the Martins request that, if this Court reverses the
damages judgment, we also reverse the award of attorney’s fees. Since we did not reverse
the damages judgment, we do not reverse the attorney’s fees award.
The Martins’ fifth issue is overruled.
CONCLUSION
Having overruled each issue raised on appeal, we affirm the trial court’s judgment.
TOM GRAY
Chief Justice
Before Chief Justice Gray,
Justice Davis, and
Justice Scoggins
Affirmed
Opinion delivered and filed October 3, 2018
[CV06]
8
Additionally, the question as requested by the Martins is nothing more than a different shade of the
question actually submitted and thus, was not error. See TEX. R. CIV. P. 278.
Martin v. Cottonwood Creek Construction, LLC Page 13