Gulf Coast Fiber Services, LLC v. BMF Drilling, LLC ( 2022 )

In The
Court of Appeals
Ninth District of Texas at Beaumont
__________________
NO. 09-20-00037-CV
__________________
GULF COAST FIBER SERVICES, LLC, Appellant
V.
BMF DRILLING, LLC, Appellee
__________________________________________________________________
On Appeal from the 410th District Court
Montgomery County, Texas
Trial Cause No. 18-09-12951-CV
__________________________________________________________________
MEMORANDUM OPINION
This appeal arose from a lawsuit filed by BMF Drilling, LLC, (BMF)
to collect a debt over the work it performed on a construction project
where BMF buried around 10,000 linear feet of 2 inch and smaller
conduit at the defendant, Gulf Coast Fiber Services, LLC’s, request. Gulf
Coast responded to the suit by filing an answer that included several
affirmative defenses and a counterclaim, which alleged that BMF is the
party who first breached the parties’ written agreement.
1
The parties tried the case before a jury, which found: (1) Gulf Coast
“fail[ed] to comply with the Agreement”; (2) “BMF fail[ed] to comply with
the Agreement”; (3) BMF “failed to comply with the Agreement first”; (4)
BMF’s “failure to comply was not excused”; and (5) BMF “substantially
perform[ed] all of its obligations in the Agreement.” As to damages, the
jury awarded BMF $17,409 in compensation for the work BMF performed
based on its finding that BMF substantially performed its obligations
under the Agreement. Additionally, the jury found the attorneys for each
party was entitled to recover a reasonable amount on that party’s
respective claim seeking to recover for attorney’s fees. 1
When the jury announced its verdict, neither party pointed out to
the trial court the conflict that existed between the jury’s findings on the
breach of contract questions and the substantial performance questions
before the trial court discharged the jury from its duties to the court. That
said, after the trial court discharged the jury, Gulf Coast filed a motion
for JNOV, which extended the time Gulf Coast had to file its notice that
it wanted to appeal. Gulf Coast later filed a timely notice of appeal.
1We rounded all amounts referenced in the opinion to the nearest
dollar.
2
In three appellate issues, Gulf Coast argues the trial court erred in
rendering judgment that favors BMF. First, Gulf Coast argues the trial
court erred in relying on the jury’s finding of substantial performance in
its judgment, findings based on jury questions seven and eight, when in
other findings the jury found BMF breached the Agreement first, that its
breach was material, and that BMF’s breach was unexcused. Second,
Gulf Coast argues the evidence is legally and factually insufficient to
support the jury’s award of $17,409 in damages. According to Gulf Coast,
BMF’s evidence is insufficient because it failed to introduce evidence
establishing what the reasonable costs were to repair and correct the
errors the jury determined existed with the work it completed at Gulf
Coast’s request. Third, Gulf Coast argues the trial court erred in
awarding BMF attorney’s fees for two reasons, first because BMF was
not the prevailing party in the trial given the jury’s answers to the
questions that BMF breached the Agreement and that its breach was
unexcused, and second because under the terms of the written
Agreement, BMF’s waived its right to sue Gulf Coast on a claim seeking
to recover attorney’s fees.
3
As to Gulf Coast’s argument that BMF cannot recover based on the
jury’s answers to the questions the trial court submitted to the jury, we
conclude Gulf Coast failed to preserve its complaint about the conflict
between the jury’s answer to the breach of contract issues and the
substantial performance issue for the purpose of having the argument
reviewed in its appeal. As to remaining arguments Gulf Coast relies on
to support the issues it raises in the appeal, we conclude its arguments
lack merit. For the reasons explained below, we conclude the trial court’s
judgment should be affirmed.
Background
Gulf Coast—a company that bores horizontal holes under the
ground—was hired by a commercial telecommunications company to
place a fiber-optic cable within an easement and underground. Gulf Coast
subcontracted some of its work to BMF, a company that specializes in
horizontal-directional drilling. While Gulf Coast and BMF signed a
written agreement (Agreement), the Agreement is incomplete as it
reflects other documents are incorporated in the Agreement by reference.
Based on the Agreement’s terms, the Agreement includes the “Prime
Contract between the Owner and Contractor as well as, and including,
4
any and all other documents, drawings and specifications enumerated
therein[.]” But even though the Agreement references several other
documents, none of the documents referenced in the Agreement were
admitted into evidence during the trial. For instance, the evidence the
jury considered did not include the Prime Contract, the drawings, or the
specifications, evidence that possibly might have identified and detailed
the requirements that Gulf Coast (and its subcontractors) were required
to follow in performing the work. These details might have included
details like how deep the horizontally drilled holes had to be drilled,
whether the depths of the holes were required to be uniform throughout
their length, or whether the conduit, after it was placed inside the holes,
had to be protected from mud (or if infiltrated with mud, cleaned out). As
to these types of details, Gulf Coast’s Agreement is also silent. Instead,
BMF’s Agreement with Gulf Coast apparently contemplated the details
would be specified in written authorizations Gulf Coast provided BMF to
perform the work Gulf Coast subcontracted out. As to the written
authorizations, the Agreement states: “Upon execution of this
Agreement, [Gulf Coast] will, from time to time, issue to [BMF] written
authorizations to proceed with specific work, at a certain price and upon
5
such other terms and conditions [as] may be set forth in a purchase order
(hereinafter ‘Purchase Order’).” (emphasis added).
But in the trial, Gulf Coast never introduced any of the written
authorizations into evidence. Nor did it introduce any of the other
extrinsic documents that we mentioned before that might have specified
details pertinent to BMF’s work, such as (1) how deep it was required to
drill the horizontally drilled holes; (2) whether the holes were to be drilled
at uniform depths; and (3) whether BMF had to protect the conduit from
being infiltrated by mud or to clean the mud out should mud enter the
conduit on being inserted into the holes.
BMF worked for Gulf Coast for around four months before Gulf
Coast terminated BMF from the fiber-optic cable project, ending the work
BMF performed for Gulf Coast as of early July 2018. When BMF did
perform its work on the project, Gulf Coast’s onsite supervisor, Ryan
Pemberton, supervised BMF’s work. Pemberton, however, did not testify
in the trial. Instead, Gulf Coast presented its case through one of its
owners and its Director of Operations, Earl Epps.
According to Epps, shortly after BMF started the project, Gulf
Coast began complaining that it was finding mud in conduit that BMF
6
had laid in the horizontally drilled holes that it drilled. And according to
Epps, about a month after BMF began its work, Gulf Coast (apparently
though Pemberton) began to complain the conduit that BMF had inserted
into the holes needed to be deeper and that some of the conduit had
become infiltrated with mud. Lee Winters, the owner of BMF,
acknowledged that BMF had on about five occasions borrowed Gulf
Coast’s air compressor to correct problems that Gulf Coast identified
regarding mud it found in conduit that BMF inserted in holes. However,
when Winters was asked how deep the Agreement required the fiber-
optic cable to be buried, he testified: “There’s no industry standard for
depth.” And when asked whether Epps told BMF the conduit was to be
buried at least three feet deep, Winters testified: “I don’t recall that. It -
- there is no contract document stating that.” Winters also said that when
the job started, Pemberton didn’t tell him the holes needed to be drilled
to at least a three-foot depth.
Over the four months BMF worked on the project, it submitted
eight invoices to Gulf Coast, which total $90,950 for its work. Of these,
Gulf Coast paid the first five invoices it received in full. But even though
Gulf coast paid the first five invoices, Earl Epps testified Gulf Coast did
7
so only because Gulf Coast “believe[d] that everything had been properly
done.” He claimed that after Gulf Coast paid the invoices, it discovered
the deficiencies with BMF’s work. According to Epps, after Gulf Coast
terminated BMF, it used its own employees to correct some of BMF’s
work and hired outside contractors to correct what Epps described as
other work BMF performed that failed to comply with the specifications
in the Agreement Gulf Coast had with BMF. So while it’s undisputed that
Gulf Coast paid BMF $48,357 for its work, it’s also undisputed that Gulf
Coast refused to pay BMF for the balance of the work it completed in the
three invoices in evidence that represent an additional $42,592 of work if
payable under the Agreement based on Winters’ testimony about the
work BMF completed on the fiber-optic cable project before it was
terminated from all Gulf Coast’s projects in July 2018.
During the trial, Epps described how he determined that Gulf Coast
owed BMF nothing more for the work BMF performed under the invoices
Gulf Coast refused to pay. According to Epps, of the total BMF charged
for its work, $90,950, BMF performed only about 53 percent of the work
properly—an amount that equaled exactly what Gulf Coast had already
paid BMF, $48,357. Since Gulf Coast determined that it paid BMF what
8
it owed, Epps decided Gulf Coast owed BMF nothing more when, in July
2018, he notified BMF of Gulf Coast’s decision to terminate the parties’
Agreement.
In September 2018, BMF sued Gulf Coast alleging it owed BMF the
remaining $42,592 that it had not paid BMF for its work. In its petition,
BMF alleged that Gulf Coast failed to pay the last three of its eight
invoices on the fiber-optic project. In BMF’s live pleading, which BMF
filed months before the trial, BMF alleged that if it was not entitled to
the full amount owed under the Agreement with Gulf Coast, it was
entitled to be paid what it billed less the cost to correct any non-
conforming work since it substantially performed the work Gulf Coast
requested of it on the project. Specifically, in its live petition, BMF alleged
that because it substantially performed its obligations under its
Agreement with Gulf Coast it was “entitled to full payment of the
contract sum min[us] the cost of completion or remediation.”
In Gulf Coast’s response to BMF’s live pleading, Gulf Coast
asserted a general denial and a laundry list of affirmative defenses, but
most of its defenses are irrelevant to the issues Gulf Coast has raised in
its appeal. That said, in its live pleading, Gulf Coast asserted BMF’s
9
“prior material breach of the contract for construction services” excused
its obligation to pay BMF any additional consideration for any work it
completed under the Agreement.
Turning to Gulf Coast’s arguments supporting it claim of excuse,
we observe that at two different points in the trial, Gulf Coast failed to
preserve the arguments it presents in its brief for the purpose of its
appeal. First, when the parties objected to the charge, Gulf Coast’s
attorney failed to object to the predicate instruction that accompanied
BMF’s substantial performance question (Question 7). The predicate to
Question 7 instructed the jury that if it answered “No” to the question
that asked the jury to decide if BMF’s failure to comply with the
Agreement (Question 5) was excused, to answer Question 7. 2 Second,
when the jury returned with its verdict, Gulf Coast failed to point out
that a fatal conflict existed between the jury’s answers to the questions
on the breach of contract questions (Questions 2, 3, and 5) and the jury’s
answer to the substantial performance question (Question 7). Even more,
2Stated another way, the trial court conditioned the jury’s answer
to Question 7, the substantial performance question, on a “No” answer to
Question 5, the question asking whether BMF’s failure to comply with
the Agreement was excused.
10
Gulf Coast failed to ask the trial court to instruct the jury further on
answering these four issues and to send the jury back to deliberate
further on its verdict.
Several weeks later (but after the trial court had discharged the
jury) Gulf Coast filed a Motion for JNOV. In the motion, Gulf Coast asked
the trial court to disregard the jury’s answer to the substantial
performance question. In the Motion for JNOV, Gulf Coast argued the
jury’s answer to the substantial performance question was immaterial.
That was so, it argued, because the jury found that BMF breached the
contract first, that BMF’s breach was material, and that its breach was
unexcused. Gulf Coast argued the trial court should consider these as the
controlling findings and disregard the jury’s other finding inconstant
with these findings where the jury found BMF substantially performed
its obligations under the parties’ Agreement. Additionally, Gulf Coast
argued that BMF failed to meet its burden to prove what the reasonable
costs were to remedy “the defects due to BMF’s errors and omissions.”
Finally, Gulf Coast’s Motion for JNOV asked the trial court to disregard
the jury’s findings awarding BMF attorney’s fees for three reasons: first,
according to Gulf Coast, BMF did not prevail on its breach of contract
11
claim; second, according to Gulf Coast, the Agreement allowed Gulf Coast
to “cancel and terminate the Agreement, without liability to [Gulf
Coast,]” a provision that Gulf Coast interprets as a waiver of BMF’s right
to recover attorney’s fees; and third, Gulf Coast claimed a party cannot
collect attorney’s fees when recovering on a claim of substantial
performance under Texas law.
The trial court denied Gulf Coast’s motion and signed a judgment
awarding BMF $17,409. The trial court also awarded BMF $15,000 in
attorney’s fees, plus conditional awards of additional attorney’s fees the
trial court made contingent on BMF’s success if Gulf Coast pursued but
then lost in future appeals. 3 After the trial court signed the judgment,
Gulf Coast filed a post-judgment motion seeking to modify the judgment
the trial court signed. In the post-judgment motion, Gulf Coast argued
that a conflict exists between the jury’s findings on a cluster of issues that
addressed BMF’s breach of the Agreement (Questions 2, 3, and 5) and the
substantial performance question (Question 7). In its post-judgment
3While the judgment awards attorney’s fees to Gulf Coast, BMF has
not challenged that award in the appeal. As to the award of attorney’s
fees, we express no opinion about whether Gulf Coast was (or was not)
entitled to an attorney’s fees award.
12
motion, Gulf Coast noted that “it is factually and legally impossible that
[BMF] substantially performed [under the Agreement] given the [jury’s]
findings on Question Nos. 1-5.” In the same motion, Gulf Coast re-urged
the arguments that it raised earlier in its Motion for JNOV, claiming
BMF was not entitled to recover attorney’s fees.
Analysis
Substantial Performance
In Gulf Coast’s first issue, it argues that because the jury found
BMF failed to comply with material terms of the Agreement first and that
its failure to comply with the Agreement was unexcused, the trial court
should have disregarded the jury’s finding that BMF substantially
performed the Agreement when rendering judgment, which it concludes
should have caused the trial court to render judgment in favor of Gulf
Coast, not BMF.
While the trial court could have chosen to resolve the conflict in the
jury’s findings in a manner that favored Gulf Coast, it did not. And Gulf
Coast’s failure to recognize the conflict between the jury’s findings on the
issues until after the trial court discharged the jury prevents this Court
from correcting the conflict on appeal. Had Gulf Coast brought the
13
conflict in the findings to the trial court’s attention promptly when the
issue could have been addressed by the jury—meaning before the jury
was discharged—the trial court could have given the jury additional
instructions to guide its deliberations, and perhaps the jury with the
additional instructions could have answered the issues in a way that
would have been consistent. Then, the jury could have resolved the
conflict as the finder of fact. 4 But since Gulf Coast failed to point the
conflict in the findings out when it had an opportunity to correct the
problem, its sole remedy now is to prove the record conclusively
established that BMF breached a material term of the contract, that BMF
breached the contract first, and that BMF’s breach was unexcused.
Gulf Coast does raise those arguments in its appeal, noting that
under Texas law, “a party to a contract who is himself in default cannot
maintain a suit for its breach.” 5 But the fact the jury return findings in
Gulf Coast favor does not conclusively establish the elements required to
4See Los Compadres Pescadores, L.L.C. v. Valdez, 622 S.W.3d 771,
787-88 (Tex. 2021) (“Because Los Compadres did not object to the jury’s
allegedly conflicting answers before the trial court discharged the jury, it
cannot now complain that the conflicting answers undermine the
judgment based on the jury’s verdict.”).
5Dobbins v. Redden, 785 S.W.2d 377, 378 (Tex. 1990) (per curiam).
14
prove BMF defaulted on its obligations given that the same jury found
BMF substantially performed its contractual obligations except for minor
variances to Gulf Coast. When the case involves a construction contract,
as is the case here, a contractor who hasn’t fulfilled the obligations of his
contract may still “sue on the contract, but his recovery is decreased by
the cost of remedying those defects for which he is responsible.” 6 The trial
court relied on that theory in rendering the judgment in BMF’s favor that
Gulf Coast complains about in its appeal.
In part, Gulf Coast argues the findings the jury returned on the
cluster of issues tied to BMF’s breach of the Agreement (Questions 2, 3,
and 5) are in fatal conflict with the jury’s answer to the substantial
performance question, Question 7. We agree with Gulf Coast that the
findings on the cluster of breach of contract issues that favor Gulf Coast
and the substantial performance issue that favors BMF fatally conflict.
But Gulf Coast failed to point out the conflict promptly before the jury
was discharged when it was before the trial court. It’s settled that a
party’s failure to point out a conflict in a jury’s findings to the trial court
6Vance v. My Apartment Steak House of San Antonio, Inc., 677
S.W.2d 480, 482 (Tex. 1984).
15
in a timely manner prevents the party from complaining later “that the
conflicting answers undermine the judgment based on the jury’s
verdict.” 7 To the extent Gulf Coast complains that findings the jury
returned on the breach of contract issues and the substantial
performance issue are in conflict, we hold it waived its complaint by
failing to point the problem out to the trial court in a timely manner.
Legal and Factual Sufficiency
Although Gulf Coast included some arguments complaining about
the insufficiency of the evidence with the arguments it included with its
first issue, for convenience we will address all legal and factual
sufficiency arguments in discussing Gulf Coast’s second issue. We
address Gulf Coast’s legal sufficiency arguments first since Gulf Coast
preserved those arguments by filing a Motion for JNOV.
On appeal, Gulf Coast argues the evidence admitted in the trial
conclusively establishes that BMF breached the material terms of the
Agreement first and without excuse. We disagree. At trial, Gulf Coast
argued BMF breached material terms of the parties’ Agreement by failing
to bury the conduit to specified depths, failing to provide Gulf Coast with
7Valdez, 622 S.W.3d at 787-88; Tex. R. App. P. 33.1(a).
16
the location of the conduit after burying it, and by failing to keep the
buried conduit clear of debris. But we find nothing in the four corners of
the Agreement that specifies how deep BMF was to bury the conduit,
whether BMF was to keep the conduit free of mud, or whether BMF was
to clean the mud from the conduit after inserting it into a hole. And we
find no other written documents, such as purchase orders or written
authorizations that required it to do so either. And while their possibly
might have been specifications like the ones Epps testified about in some
of the documents referenced in the Agreement, Epps never identified
what document the specifications were in, nor did Gulf Coast’s attorneys
bother to introduce the written specifications that controlled BMF’s work
into evidence during the trial.
The Agreement references several documents as “Subcontract
Documents” that possibly contained specifications requiring Gulf Coast’s
subcontractors to bury conduit to specified depths and likely contained a
number of other requirements relevant to BMF’s work. The Agreement
specified the Subcontract Documents “consist of:
(1) this Agreement;
(2) the Prime Contract;
(3) Extra Work Orders generated subsequent to the execution of
the Agreement;
17
(4) Purchase Orders as may be generated from time to time; and
(5) Modifications to this subcontract issued after execution of this
Agreement.”
In legal terms, the Agreement BMF signed with Gulf Coast is
integrated only as to the matters the Agreement addressed. 8 That said,
the Agreement’s terms don’t address the depth of the conduit, whether
BMF was required to prevent debris from entering the conduit after
running the conduit into the horizontally drilled holes, or whether BMF
was responsible for paying to clean out the mud from contaminated lines
after running the conduit into a hole. And the evidence the parties
provided the jury did not include the written work authorizations that
Gulf Coast’s Agreement contemplated, any purchase orders, or other
documents specifying the details like those Epps described when
explaining what he expected of BMF. But given the fact the Agreement
does not specify the depth of the holes or the details relevant to the issues
in dispute together with the failure of the parties to develop a record that
includes the documents referenced in the Agreement, we cannot now say
8See West v. Quintanilla, 573 S.W.3d 237, 244 (Tex. 2019)
(explaining that although a partially integrated contract is “complete and
final as to its subject matter, it does not purport to address or supersede
agreements related to other matters”).
18
that Epps’ testimony conclusively established BMF’s failure to bury the
conduit to the depths Epps described, to keep the conduit clean, and to
clean the mud out of the conduit were material breaches of the terms of
the parties’ Agreement as a matter of law.
Next, Gulf Coast argues the evidence is legally insufficient to
support the jury’s finding that BMF substantially performed its
Agreement with Gulf Coast and is legally insufficient to support the jury
award of $17,409 in damages based on the jury’s finding of substantial
performance. The test for legal sufficiency is “whether the evidence at
trial would enable reasonable and fair-minded people to reach the verdict
under review.”9 In reviewing for legal sufficiency, we “must credit
favorable evidence if reasonable jurors could, and disregard contrary
evidence unless reasonable jurors could not.” 10
Here, there were no objections to the charge over the definitions
accompanying the question on substantial performance (Question 7). The
instruction tied to Question 7 advised the jury that
[t]he term substantial performance, as used in the charge,
means that there has been no willful departure from the
terms of the agreement and no omission in essential points
9Del Lago Partners, Inc. v. Smith, 307 S.W.3d 762, 770 (Tex. 2010).
10City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex. 2005).
19
and that the agreement has been honestly and faithfully
performed in its material and substantial particulars and the
only variance from the strict and literal performance consists
of technical or unimportant omissions or details.
Without an objection to a definition in a charge, we measure the evidence
admitted in the trial against the charge and decide whether legally
sufficient evidence supports the jury’s finding on the issue the appellant
is challenging in the appeal. 11
At trial, the jury heard Lee Winters, BMF’s owner, and Earl Epps,
Gulf Coast’s Director of Operations, address their respective expectations
about BMF’s work under the Agreement. The Agreement required Gulf
Coast to pay BMF a unit price for each linear foot of conduit BMF buried
underground. Winters testified that Gulf Coast gave BMF project sheets,
sheets in which Gulf Coast designated where the conduit was to be
buried. While the project sheets are in evidence, they lack specifications
identifying how deep the conduit had to be buried, they do not specify
whether BMF is to clean the conduit or to protect its worksite to prevent
the conduit from being contaminated with mud, and we find nothing in
11See St. Joseph Hosp. v. Wolff, 94 S.W.3d 513, 530 (Tex. 2002).
20
the project sheets requiring BMF to provide Gulf Coast with as-built
drawings after it placed the conduit underground.
When Epps testified, he didn’t dispute that BMF buried conduit in
the locations specified in the project sheets; instead, he said BMF didn’t
bury the conduit based on the standards required under the parties’
Agreement. But as already noted, the Agreement is not fully integrated—
it doesn’t specify the depths for the lines, whether BMF had to protect
the conduit during its work, or whether BMF was to provide Gulf Coast
with as-built drawings after completing its work.
Since the terms Epps claims the parties agreed to are not among
the writings in evidence, we must disregard Epps’ testimony criticizing
BMF’s work in reviewing the evidence relevant to the jury’s finding that
BMF substantially performed its obligations under the Agreement. And
when the evidence favoring the jury’s finding of substantial performance
is viewed in the light that favors the judgment, the finding Gulf Coast
seeks to overturn is reasonable given the jury’s discretion to determine
what the Agreement required BMF to do and what constituted a material
breach under a partially integrated contract that involved a project
where BMF buried around 10,000 feet of conduit, a small part of which
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the jury may have decided that BMF failed to bury at a sufficient depth.
We overrule Gulf Coast’s argument that the evidence is legally
insufficient to support the jury’s answer to the substantial performance
question, Question 7.
Next, we address Gulf Coast’s argument that the evidence is legally
insufficient to support the jury’s award of $17,409 in damages. Generally,
juries may decide to award damages within the range of evidence the
parties present in the trial when a rational basis exists supporting the
jury’s award. 12 On appeal, “[t]he evidence need not correspond to the
precise amount found by the jury.” 13
The amount the jury awarded falls within the range of evidence the
parties presented to the jury during the trial. As a reviewing court, we
may not speculate about how the jury arrived at the award. 14 At trial, the
parties presented conflicting testimony about what the Agreement
required, whether BMF complied with the Agreement’s terms, who was
12Sw. Energy Prod. Co. v. Berry-Helfand, 491 S.W.3d 699, 713 (Tex.
2016); Gulf States Utils. Co. v. Low, 79 S.W.3d 561, 566 (Tex. 2002).
13Sam Rayburn Mun. Power Agency v. Gillis, No. 09-16-00339-CV,
2018 Tex. App. LEXIS 5743, at *44-45 (Tex. App.—Beaumont July 26,
2018, pet. denied).
14Id.
22
responsible for correcting the work that Gulf Coast criticized after BMF
ran the conduit into the holes, and whether what Gulf Coast spent was
reasonable for correcting the work Gulf Coast claimed was deficient.
We turn to BMF’s evidence first. During the trial, BMF established
that Gulf Coast paid $48,357 for work that BMF performed on the fiber-
optic project before Gulf Coast began disputing the invoices BMF was
submitting to Gulf Coast for its work. Even after Gulf Coast started
complaining about deficiencies in BMF’s work, Gulf Coast allowed BMF
to continue to work on the project. And BMF, based on the work it claimed
to have completed on the project, submitted additional invoices to Gulf
Coast claiming Gulf Coast owed it another $42,593 for laying another
5,782 feet of conduit at Gulf Coast’s request. The $42,593 of unpaid work
is reflected in invoice numbers 105-107. Gulf Coast refused to pay BMF
for $42,593 of work, but not because BMF did not do the work reflected
in those invoices. Instead, Gulf Coast presented evidence in the trial
showing it spent $37,377 to correct what it claimed were deficiencies and
errors in the work BMF did from the time it started working on the
project. While we can’t speculate about exactly how the jury arrived at
its award, we note the jury’s award is substantially less than the $42,593
23
that BMF billed in the invoices that Gulf Coast didn’t pay. And of the
$37,377 that Epps claims Gulf Coast spent to correct what he
characterized as BMF’s nonconforming work, part of the work that
accounts for Gulf Coast’s $37,377 calculation was completed by Gulf
Coast’s own employees. As to the work Gulf Coast’s employees performed,
the jury may have chosen to allocate some or all of the cost of that work
to Gulf Coast rather than BMF given the terms of the partially integrated
Agreement relevant to the issues in dispute, particularly since the
Agreement does not cover all of the disputed issues that the parties asked
the jury to consider when resolving the disputed issues in the trial.
In the end, by its verdict the jury struck a balance between the
testimony about what the Agreement required and who was responsible
for the problems BMF encountered after it signed the subcontract
agreement with Gulf Coast. 15 Based on the manner the parties conducted
the trial and the evidence the parties introduced, we conclude the record
Mayberry v. Tex. Dep’t of Agric., 948 S.W.2d 312, 317 (Tex.
15See
App.—Austin 1997, writ denied).
24
contains legally sufficient evidence to support the jury’s award of $17,409
in damages.
Last, we turn to Gulf Coast’s factual insufficiency arguments. In
these, Gulf Coast argues the evidence is factually insufficient to support
the jury’s substantial performance finding, Question 7, and damages
award for substantial performance, Question 8. To preserve factual
sufficiency complaints—a complaint that a jury finding is against the
great weight of the evidence, or a complaint about the inadequacy or
excessiveness of damages—the complaining party must raise its
complaint in a motion for new trial. 16 While Gulf Coast did file several
motions after the jury returned its verdict, its post-judgment motions all
asked the trial court to render judgment in Gulf Coast’s favor; none of
Gulf Coast’s motions complain the evidence is factually insufficient to
support the jury’s findings. And in these motions, Gulf Coast never asked
the trial court to award it a new trial.
We conclude that Gulf Coast failed to preserve its factual
sufficiency arguments for the purposes of having them reviewed on
appeal. We overrule Gulf Coast’s factual insufficiency arguments in
16See Tex. R. Civ. P. 324(b)(2), (3), (4).
25
issues one and two. And having now addressed all the arguments that
Gulf Coast raised in its first two issues, we overrule issues one and two.
Attorney’s Fees
In Gulf Coast’s third issue, it argues that because BMF’s recovered
on its claim for substantial performance, it had no right to recover against
BMF on its claim for attorney’s fees. Alternatively, Gulf Coast argues
BMF “contracted away its right to recover attorney’s fees” in the
Agreement.
Whether a party may recover attorney’s fees is a legal question, so
we review whether attorney’s fees are recoverable under a de novo
standard. 17 “Texas follows the American rule on attorney’s fees, which
provides that, generally, a party may not recover attorney’s fees unless
authorized by statute or contract.” 18 And awards of attorney’s fees are
“limited by the wording of the statute or contract.” 19
A statute provides a right to recover attorney’s fees based on the
record before us here. Under the Texas Civil Practice and Remedies Code,
17Holland v. Wal-Mart Stores, Inc., 1 S.W.3d 91, 94 (Tex. 1999).
18Rohrmoos Venture v. UTSW DVA Healthcare, LLP, 578 S.W.3d
469, 484 (Tex. 2019).
19JCB, Inc. v. Horsburgh & Scott Co., 597 S.W.3d 481, 491 (Tex.
2019).
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the legislature authorized individuals to recover reasonable attorney’s
fees in addition to the amount of a valid claim and costs when the
individual’s claim is for, among other things, (1) services rendered, (2)
labor performed, (3) materials furnished, or (4) an oral or written
contract. 20 To be awarded attorney’s fees under that statute, however,
the party must prevail on its claim under the statute and recover
damages on its claim. 21
Under the trial court’s judgment and on appeal, BMF was the
prevailing party under the trial court’s judgment on its substantial
performance claim. Even though claims for substantial performance
presume a quasi-contract theory, BMF’s claim is tied to a written
contract. And the contract required BMF to perform services, labor and
to provide materials to Gulf Coast. Given that Gulf Coast failed to
promptly object to the conflict in the jury’s findings, it may not now
complain of the conflict in the findings. And we hold that the trial court
did not abuse its discretion by awarding BMF attorney’s fees under
section 38.001 of the Texas Civil Practice and Remedies Code when, in
20Tex. Civ. Prac. & Rem. Code Ann. § 38.001(b).
21MBM Fin. Corp. v. Woodlands Operating Co., L.P., 292 S.W.3d
660, 666 (Tex. 2009).
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its discretion, it decided to sign a judgment favoring BMF that made BMF
the prevailing party in the suit. 22
Last, Gulf Coast argues that under the Agreement it signed with
Gulf Coast, BMF contracted away its right to recover attorney’s fees. Gulf
Coast points to section 14.3 of the Agreement to support its argument, a
paragraph that explains when Gulf Coast may, at its option, terminate
or suspend BMF’s work. Section 14.3 of the Agreement gave Gulf Coast
the right to stop BMF’s work “and take all necessary action to stop cost
commitment and protect any property in [BMF’s] possession which [Gulf
Coast] has or may acquire an interest.” The Agreement then states:
In any event, the total payments set forth above, together
with payments made pursuant to this Agreement prior to
termination shall not exceed the Contract Amount. In no
event shall [Gulf Coast] be liable for the loss of anticipated
profits or any special or consequential damages arising from
said termination. [BMF’s] remedies hereunder shall be
subject to the remedies provided by Owner to [Gulf Coast,] as
contained in the terms and conditions of the Prime Contract.
22See,e.g., Tex. Civ. Prac. & Rem. Code Ann. § 38.001 (stating a
party who prevails on a breach of contract claim is entitled to attorney’s
fees); Weitzul Constr., Inc. v. Outdoor Environs, 849 S.W.2d 359, 366
(Tex. App.—Dallas 1993, writ denied) (noting that “[a] party may recover
attorney’s fees for claims arising out of written contracts or quantum
meruit”).
28
Once again, we face the same problem we’ve already addressed—
Gulf Coast failed to establish what the Prime Contract says since it failed
to introduce the Prime Contract in the trial. Yet Gulf Coast insists the
that through the above language, BMF waived its statutory right to
recover attorney’s fees from Gulf Coast, a statutory right created by
section 38.001 of the Texas Civil Practice and Remedies Code.23
To be sure, had the Agreement contained language waiving BMF’s
right to attorney’s fees, we would have no quarrel with Gulf Coast’s claim
that BMF waived its recovery since in Texas a party may “waive
statutory rights including constitutional rights.” 24 But to establish that
a party waived its rights, the record must show the party intentionally
surrendered a right through a contract provision before a court will find
a provision in a contract operates as a waiver of a statutory right. 25
23Tex. Civ. Prac. & Rem. Code Ann. 38.001(b).
24Moayedi v. Interstate 35/Chisam Rd., L.P., 438 S.W.3d 1, 6 (Tex.
2014).
25We note that Gulf Coast pled waiver in its answer and in arguing
waiver, it argues BMF forfeited its right to recover attorney’s fees as a
matter of law.
29
In Texas, waiver is the “intentional relinquishment of a known
right or intentional conduct inconsistent with claiming that right.”26
When deciding whether the provisions in a contract resulted in waiving
of a party’s right to recover attorney’s fees, the Fifth Circuit Court of
Appeals in a case interpreting Texas law observed that the contract must
“specifically preclude [the claimant’s] statutory claim to an award of
attorney’s fees under Section 38.001.” 27 The provision that Gulf Coast
relies on here doesn’t meet that test.
Nothing in this record shows that when BMF signed the
Agreement, it intentionally relinquished its statutory rights under
section 38.001 to recovery attorney’s fees. For example, while the
Agreement mentions anticipated profits and consequential damages,
Gulf Coast has not argued that recovering attorney’s fees under a statute
26Shepherd v. Ledford, 962 S.W.2d 28, 36 (Tex. 1998) (quoting Sun
Expl. & Prod. Co. v. Benton, 728 S.W.2d 35, 37 (Tex. 1987)).
27Tex. Nat’l Bank v. Sandia Mortg. Corp., 872 F.2d 692, 701 (5th
Cir. 1989) (interpreting Texas law); see also Bank of Am., N.A. v. Hubler,
211 S.W.3d 859, 865 (Tex. App.—Waco 2006, pet. granted, judgm’t
vacated w.r.m.) (holding that the claimant did not waive her statutory
right to attorney’s fees because the contract provision that the bank
would not be liable “for attorney’s fees incurred,” was “too general to
apprise [the claimant] of what right she [was] relinquishing, namely her
statutory right to attorney’s fees under Chapter 38”).
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is a consequential damage or that the parties understood it to be a
consequential damage when they entered the Agreement. Because the
arguments Gulf Coast relies on to support its third issue lack merit, its
third issue is overruled.
Conclusion
Having overruled Gulf Coast’s issues, the trial court’s judgment is
AFFIRMED.
_________________________
HOLLIS HORTON
Justice
Submitted on September 1, 2021
Opinion Delivered July 28, 2022
Before Golemon, C.J., Kreger and Horton, JJ.
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