Mulch Matters, Inc. and Prime Trees, Inc. D/B/A Mulch Matters v. Toro Rojo, D/B/A Action Trucking Company ( 2024 )

Opinion issued April 30, 2024
In The
Court of Appeals
For The
First District of Texas
————————————
NO. 01-22-00322-CV
———————————
MULCH MATTERS, INC. AND PRIME TREES, INC. D/B/A MULCH
MATTERS, INC., Appellants/Cross-Appellees
V.
TORO ROJO, INC. D/B/A ACTION TRUCKING COMPANY,
Appellee/Cross-Appellant
On Appeal from the County Civil Court at Law No. 2
Harris County, Texas
Trial Court Case No. 1155941
MEMORANDUM OPINION
This case arises from a contract dispute. Mulch Matters, Inc. and Prime Trees,
Inc. d/b/a Mulch Matters, Inc. (collectively, “Mulch Matters”) contracted with Toro
Rojo, Inc. d/b/a Action Trucking Company (“Action Trucking”) to perform hauling
services for a real estate development project. When a dispute arose concerning the
amount owed to Action Trucking, Action Trucking sued Mulch Matters for breach
of contract.
A jury awarded Action Trucking $86,973.50 in actual damages. The trial
court signed a final judgment in favor of Action Trucking, reducing the damages to
$74,453.50. The judgment took into account a credit of $12,520.00, prejudgment
interest at the rate of 5% per year, attorney’s fees in the amount of $80,000.00, court
costs, and post-judgment interest. Mulch Matters appealed, and Action Trucking
filed a cross appeal.
In six issues, Mulch Matters argues that: (1) the evidence is legally and
factually insufficient to support the award of actual damages, (2) the evidence does
not support the imposition of joint and several liability, (3) several jury charge errors
require a new trial, (4) the evidence is legally and factually insufficient to support
the jury’s liability findings, (5) the trial court erred by setting the wrong date for
accrual of prejudgment interest, and (6) the trial court erred by awarding
prejudgment interest on attorney’s fees.
Action Trucking seeks reformation of the judgment to reflect prejudgment
interest in the amount of 1.5% per month, or 18% per year, as allowed by the Prompt
2
Payment Act.1 It also seeks a conditional award of appellate attorney’s fees
consistent with the parties’ stipulation.
We modify the trial court’s judgment in part, affirm as modified, and remand
for the specific purpose of calculating prejudgment interest.
Background
ATZ Environmental Solutions, LLC was responsible for clearing land for a
real estate development in northwest Houston. In connection with that project, ATZ
subcontracted with Mulch Matters2 to complete the following tasks: “Mulching and
Hauling off all clearing and grubbing material” on 105 acres of the development
project.
Mulch Matters bid, and ATZ agreed to pay, $1,700 per acre for a total of
$178,500 for these services. The owner of Mulch Matters, Richard Lance Bowe,
testified that this bid was low because ATZ was a new customer and he hoped to
obtain business from the company again in the future.
Bowe then reached out to Darren Smith with Action Trucking to provide the
hauling services. No written contract was executed, but they verbally negotiated a
price of $110 per hour. At trial, the parties disputed whether this $110 rate was a
1
TEX. PROP. CODE § 28.004.
2
This subcontract was between ATZ and “Prime Trees Inc. dba Mulch Matters.”
3
flat rate for “gate-to-gate,”3 as maintained by Action Trucking, or whether it was
conditioned upon Action Trucking doing five loads per truck per day, as maintained
by Mulch Matters.
Action Trucking sent a credit application to Mulch Matters to process the
payments. From mid-October 2019, a few days after receiving the executed credit
application from Mulch Matters, through early December 2019, Action Trucking
performed hauling services for Mulch Matters. Throughout this time, Smith with
Action Trucking and Bowe with Mulch Matters communicated regularly via text
message and phone calls.
In November 2019, Smith and Bowe engaged in a text message discussion
about the average time it was taking per load, and whether any adjustments could be
made to the rate. Bowe informed Smith that Mulch Matters had a “budget of $200
per load” and asked if they could “work on a load price.” Smith responded with
“yes.” No additional discussion of a change in price appears in the text exchange.
According to Smith, he informed Bowe that he had to clear any changes in
price with the head office at Action Trucking. Smith did not get the approval, and
he informed Bowe that there could be “no change.” Bowe disputed this at trial,
3
Smith testified that “gate to gate” meant that “[f]rom the time the trucks leave
[Action Trucking’s] gate, they’re on the clock until they get back to [Action
Trucking’s] gate.”
4
testifying instead that he and Smith agreed in a phone conversation that the fees
would be capped at $220 per load. Bowe agreed that there was no written
documentation of any change in price.
As the job neared completion, Action Trucking sent invoices to Mulch
Matters. But, by mid-December 2019, no payments were received. At that point,
according to Smith, he met with Bowe and personally provided him with hard copies
of the invoices. Bowe indicated he would go through the invoices and that “he had
a dispute.”
A month later, in January 2020, Action Trucking had still not received any
payment from Mulch Matters. So, James Petrou, manager of operations who
oversaw billing for Action Trucking, went to Mulch Matters’ offices to retrieve a
check. When he arrived, the receptionist at Mulch Matters provided him with an
envelope that contained a check for $65,800, as well as “a folded-up bundle of all of
the invoices that [Action Trucking] had sent Mulch Matters for the job.”
According to Petrou, the check did not cover all the amounts that Action
Trucking had invoiced and no one at Mulch Matters indicated that this was a partial
payment. Action Trucking’s billing department then reached out to Mulch Matters,
which stated “they weren’t gonna pay for the invoices as they were. They were
gonna . . . pick a price . . . [of] $220 a load.” Petrou testified that this was the first
time that he had heard of a $220 per load price.
5
Bowe further testified that Mulch Matters determined the $65,800 figure by
calculating the number of loads it had recorded as of that date—329—and multiplied
it by $200. Bowe also testified that he withheld a “retainer” of about 10%, or $20,
for each load.
Action Trucking invoiced Mulch Matters again by email in January and
February 2020. When no additional payments were made, Action Trucking sent a
demand letter to Mulch Matters requesting payment of the outstanding balance—
$86,973.50—after the partial payment of $65,800.00 was applied. Receiving no
response, Action Trucking then filed this lawsuit in June 2020 for breach of contract.
After the lawsuit was filed, Bowe asked Lorena Chavez, Mulch Matters’
office manager, to audit the truck tickets to determine how many loads came into the
facility. Mulch Matters determined that Action Trucking had hauled a total of 356
loads into Mulch Matters’ facility. Multiplying 356 by the $220 per load, Mulch
Matters determined that it owed Action Trucking a total of $78,320, of which
$65,800 had already been paid. Accordingly, Mulch Matters issued a second check
to Action Trucking in the amount of $12,520 for the remaining balance.4
Mulch Matters subsequently counterclaimed for “breach of contract or
negligence,” alleging that Action Trucking “breached a promise to perform
transportation services without trucks being overturned” and that it may have been
4
This check was sent in July 2021, after the lawsuit was filed.
6
negligent when two trucks overturned. Mulch Matters sought damages in the
amount of $3,994.
As noted above, the jury returned a verdict in favor of Action Trucking and
awarded $86,973.50 in contract damages. After multiple post-trial motions, the trial
court signed the current final judgment reducing the damages to $74,453.50―to take
into account Mulch Matters’ additional payment of $12,520—and awarding
prejudgment interest at the rate of 5% per year, attorney’s fees in the amount of
$80,000, court costs, and post-judgment interest.
Sufficiency of the Evidence
In its first and fourth issues, Mulch Matters contends that the evidence is
legally and factually insufficient to support the jury’s findings of liability and
damages. When both legal and factual sufficiency of the evidence challenges are
raised on appeal, we must first examine the legal sufficiency of the evidence. See
City of Hous. v. Cotton, 171 S.W.3d 541, 546 (Tex. App.—Houston [14th Dist.]
2005, pet. denied).
Standard of Review
When an appellant challenges the legal sufficiency of the evidence supporting
an adverse finding on an issue on which it did not have the burden of proof, it must
demonstrate that no evidence supports the finding. See Exxon Corp. v. Emerald Oil
& Gas Co., 348 S.W.3d 194, 215 (Tex. 2011). We will sustain such a “no-evidence”
7
challenge if the record shows one of the following: (1) a complete absence of
evidence of a vital fact; (2) that rules of law or evidence bar the Court from giving
weight to the only evidence offered to prove a vital fact; (3) the evidence offered to
prove a vital fact is no more than a scintilla; or (4) the evidence conclusively
establishes the opposite of the vital fact. City of Keller v. Wilson, 168 S.W.3d 802,
810 (Tex. 2005).
In conducting our review, we credit favorable evidence if a reasonable
factfinder could do so and disregard contrary evidence unless a reasonable factfinder
could not. Id. at 827. We consider the evidence in the light most favorable to the
finding under review, and we indulge every reasonable inference that would support
the finding. Id. at 822. Evidence is legally sufficient if it “would enable reasonable
and fair-minded people to reach the verdict under review.” Id. at 827.
When reviewing for factual sufficiency, 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. Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986). The jury, as factfinder, is
the sole judge of the credibility of the witnesses and the weight to be given to their
testimony. Golden Eagle Archery, Inc. v. Jackson, 116 S.W.3d 757, 761 (Tex. 2003).
8
Breach and Whether Mulch Matters’ Breach was Excused
In its fourth issue, Mulch Matters argues that the evidence is legally and
factually insufficient to support the jury’s liability findings in Questions 2 and 3.
Question 2 asked: “Did Mulch Matters fail to comply with the terms of the parties’
agreement?” Mulch Matters contends that the jury’s answer of “yes” is not
supported by legally or factually sufficient evidence because the evidence shows that
Action Trucking was paid for its services in accordance with the parties’ agreement,
i.e., $220 per load.
Question 3 asked the jury: “Was Mulch Matters’ failure to comply excused?”
The question then provided jurors with three ways Mulch Matters’ failure to comply
could be excused:
Failure to comply is excused if Mulch Matters paid all of the amounts
owed under the parties’ agreement.
Failure to comply by Mulch Matters is excused by Action Trucking’s
previous failure to comply with a material obligation of the same
agreement.
Failure to comply by Mulch Matters is also excused by Action
Trucking’s fraud.
The court’s charge then defined fraud and misrepresentation. The jury
determined that Mulch Matters’ failure to comply was not excused.
Mulch Matters argues that this finding is not supported by legally and
factually sufficient evidence because Action Trucking:
(1) was paid for its services in accordance with the parties’ agreement,
9
(2) breached the agreement at issue by failing to perform its services
with the reasonable care, skill, expedience, and competence that
reasonably competent members of the profession would exercise under
similar circumstances; and
(3) committed fraud by refusing to honor the parties’ agreement and by
overstating the hours billed or by billing for time not legally chargeable
to Defendants.
This is the extent of Mulch Matters’ substantive argument with respect to the
sufficiency of the evidence supporting the jury’s answers to Questions 2 and 3.
Although our supreme court has instructed that appellate courts should reach the
merits of an issue whenever reasonably possible, to do so an appellant’s brief “must
contain a clear and concise argument for the contentions made, with appropriate
citations to authorities and to the record.” TEX. R. APP. P. 38.1(i); see Weekley
Homes, LLC v. Paniagua, 646 S.W.3d 821, 827 (Tex. 2022) (citation omitted)
Stated differently, in order for an appellate court to be able to address an issue,
the appealing party must argue the issue’s substance with legal and record support.
See St. John Missionary Baptist Church v. Flakes, 595 S.W.3d 211, 214 (Tex. 2020).
Failure to provide citations or argument and analysis as to an appellate issue may
waive it. See Ross v. St. Luke’s Episcopal Hosp., 462 S.W.3d 496, 500 (Tex. 2015).
Here, Mulch Matters’ sufficiency challenges to these two jury findings
consists of two paragraphs that have no citations to the record or the evidence, no
citations to any legal authorities, and no legal analysis. Even under the most liberal
view of our briefing rules, this is a bridge too far. We hold that Mulch Matters has
10
waived its fourth issue due to inadequate briefing. See TEX. R. APP. P. 38.1(i); Ross,
462 S.W.3d at 500.
We overrule Mulch Matters’ fourth issue.
Damages
In its first issue, Mulch Matters argues that the jury’s damages finding of
$86,973.50, to Question 4, is not supported by legally and factually sufficient
evidence. It contends that Action Trucking failed to present any competent evidence
of the “reasonable, necessary, and customary cost of the goods and services
delivered by Action Trucking” as instructed in this jury question.
According to Mulch Matters, Action Trucking had the burden to present some
specific evidence of the reasonableness and necessity of the costs it sought to recover
and, to do that, Action Trucking had to show more than just “the nature of the
injuries, the character of and need for the services rendered, and the amounts charged
therefor.” See McGinty v. Hennen, 372 S.W.3d 625, 627 (Tex. 2012). And it argues
that Action Trucking failed to do so.
To decide this issue, we must look to the language of Question 4. It asked the
jury as follows:
11
Question 4 embodies two different measures of contract damages―(1) the unpaid
amounts owed pursuant to the contract here, and (2) the “reasonable, necessary, and
customary cost of the goods and services delivered by Action Trucking, if any, that
Mulch Matters agreed to pay for, less any offsets, payments, or credits.” But it asked
the jury to make just a single damages finding.
As a result, we have no way of knowing the exact amount that was awarded
for either, or any, of the two measures of contract damages. The Texas Supreme
Court in Bombardier Aerospace Corp. v. SPEP Aircraft Holdings, LLC, 572 S.W.3d
213 (Tex. 2019), was faced with a similar situation.
In Bombardier, the plaintiffs, as the buyers of an aircraft, sued the seller,
Bombardier, for breach of contract, breach of express warranty, and fraud based on
Bombardier’s failure to disclose to the plaintiffs that the aircraft’s left engine had
been installed on two other aircrafts and designated as “repaired” before being
12
installed on the plaintiffs’ aircraft. Id. at 218. The plaintiffs’ aircraft appraisal expert
testified that the plaintiffs had incurred $2,694,160 in damages, which included the
diminution in value of the aircraft due the repaired engine plus a reduction for loss
of value of the engine’s warranties. Id. at 227.
The jury found in favor of the plaintiffs on both the breach of contract and
fraud claims, and the plaintiffs elected to recover on the fraud claim. Id. at 219.
Question four of the court’s charge had asked the jury to determine “what sum of
money would reasonably compensate the plaintiffs for Bombardier’s fraud,” and it
contained a single answer blank. Id. at 228. The jury awarded $2,694,160 in actual
damages for fraud. Id.On appeal, Bombardier argued that the award of $2,694,160 in fraud damages
was based solely on the expert’s conclusory opinion that the aircraft had sustained a
diminution in value due to its engine history and a loss in the value of the engine’s
warranty. Id. at 222. The diminution in value, according to the expert, “was
$2,694,160—$1,985,000 excluding the [$709,160] reduction for loss of warranty,
which is about 10% of the purchase price.” Id. at 227. The supreme court held that
the expert’s testimony was not conclusory. Id. at 228.
Turning to Bombardier’s no-evidence challenge to the “$709,160 in damages
for the lost engine warranties,” the supreme court explained:
Question four of the jury charge asked what sum of money would
reasonably compensate the plaintiffs for Bombardier’s fraud, and it
13
contained a single answer blank. [The expert] provided the jury with a
suggested sum of $2,694,160, which included both the diminution in
value plus a reduction for lost value in the warranties. But the jury was
not asked to provide specific dollar amounts to award damages for
diminution in value and for lost value in warranties. The parties agreed
to this damages question and the single answer blank, and neither party
objected. As a consequence, we cannot determine the exact portion of
the damages award that compensated the plaintiffs for warranty issues,
and we cannot separate it from diminution-in-value damages, which we
have already determined were supported by [the expert’s] non-
conclusory testimony. . . . Therefore, we do not have the ability to
review the legal sufficiency of the evidence to support any particular
award of damages to compensate for fraud as it relates to the engine
warranties without disturbing the jury’s entire answer to question four.
Id. at 228–29. The court thus “decline[d] to disturb the entire actual damages award
under jury charge question four because damages for diminution in value and for
loss in warranty value were combined into a single question with one answer blank,
to which the parties agreed.” Id. at 233–34.
The same is true here. Action Trucking presented the jury with a suggested
figure of $86,973.50. That amount was based on invoices detailing a certain number
of hours billed at $110 per hour, which, according to Action Trucking, was the price
to which the parties had agreed. But the jury was not asked exclusively to determine
damages based on a single measure of damages. Instead, Question 4 asked the jury
to consider two separate measures of damages and provided just a single answer
blank. Neither party objected to Question 4 as given. And no party raised the
14
specific objection that the damages question incorporated two measures of damages
in a single broad form question.5
Thus, even if we were to conclude that there is no evidence of reasonable and
necessary costs to support the jury’s damages award, as Mulch Matters argues we
must, that would not end our analysis. Rather, like in Bombardier, because of the
way Question 4 was presented to the jury, we cannot determine whether the jury’s
damages finding is based on what it determined to be the reasonable and necessary
cost of Action Trucking’s services or the unpaid amounts owed under the contract
or some combination of both.
As a result, we do not have the ability to conduct a meaningful legal
sufficiency review of the damages finding based on any particular measure of
damages. We must therefore reject Mulch Matters’ no evidence challenge to the
damages finding in Question 4. See Zoanni v. Hogan, __ S.W.3d __, 2023 WL
8939267, at *26–28 (Tex. App.—Houston [1st Dist.] Dec. 28, 2023, no pet. h.).
5
No party raises any issue of charge error with respect to Question 4. Therefore, we
express no opinion on the validity of the comingled damages measures in Question
4. See Crown Life Ins. Co. v. Casteel, 22 S.W.3d 378, 388 (Tex. 2000) (holding that
“when a trial court submits a single broad-form liability question incorporating
multiple theories of liability, the error is harmful and a new trial is required when
the appellate court cannot determine whether the jury based its verdict on an
improperly submitted invalid theory”); see also Burbage v. Burbage, 447 S.W.3d
249, 255 (Tex. 2014) (citing Casteel for proposition that commingling of “broad-
form damages questions” that incorporate both valid and invalid damages elements
may result in harmful error); Harris Cnty. v. Smith, 96 S.W.3d 230, 232–36 (Tex.
2002) (extending Casteel reasoning to damages questions).
15
Mulch Matters also argues that the evidence is factually insufficient to support
the damages finding because Action Trucking’s supporting evidence included
unsigned trip tickets, overcharges for time spent, and unauthorized sales tax.6 For
the reasons detailed above, the comingled submission of Question 4 also precludes
us from conducting a factual sufficiency review of the jury’s damages finding based
on any particular measure of damages. We thus cannot determine whether the jury’s
damages award is based on what it determined to be the reasonable and necessary
cost of Action Trucking’s services or the unpaid amounts owed under the contract
or some combination of both.
Consequently, and for the same reasons above, we must also reject Mulch
Matters’ factual sufficiency challenge to the damages finding in Question 4. See,
e.g., Bombardier Aerospace Corp., 572 S.W.3d at 228–29, 233–34. We overrule
Mulch Matters’ first issue.
6
Citing to Casteel, Mulch Matters maintains that reversal is additionally required
because this evidence “mixed invalid and valid liability theories.” But Mulch
Matters did not object to Question 4 on this basis, or any basis, during the charge
conference. Thus, this argument by Mulch Matters is not properly before us on
appeal. See Harris Cnty., 96 S.W.3d at 236.
16
Joint and Several Liability
In its second issue, Mulch Matters argues that the finding of joint and several
liability in the trial court’s final judgment is erroneous because, according to Mulch
Matters, Action Trucking failed to plead, prove, or secure a jury finding of any joint
and several liability between Prime Trees, Inc. d/b/a Mulch Matters and Mulch
Matters, Inc.
Joint and several liability arises in contract based upon the relationship
between the parties and the existence of what amounts to joint promises. Kang v.
Derrick, No. 14-13-00086-CV, 2014 WL 2048424, at *12 (Tex. App.—Houston
[14th Dist.] May 15, 2014, pet. denied) (mem. op.).7 Mulch Matters contends that
there is no jury finding of such a relationship or joint promise in this case, nor is
there any other pleading or finding that would support joint and several liability,
such as conspiracy or alter ego.
We disagree that the lack of a jury finding on the parties’ joint and several
relationship or their joint promise necessarily precluded the trial court from making
that determination when the court’s charge and the jury findings demonstrate that a
single contract is at issue. See id. at *13; see also Duradril, L.L.C. v. Dynomax
7
See also K-Bar Servs., Inc. v. English, No. 03-05-00076-CV, 2006 WL 903735, at
*3 (Tex. App.—Austin Apr. 7, 2006, no pet.) (mem. op.).
17
Drilling Tools, Inc., 516 S.W.3d 147, 166 (Tex. App.—Houston [14th Dist.] 2017,
no pet.).8
Here, the court’s jury charge defined “Mulch Matters” to mean “Mulch
Matters, Inc. and Prime Trees, Inc. d/b/a Mulch Matters, Inc.” And in Questions 1
and 2, the jury found that “Mulch Matters,” as defined to include both entities,
entered into “an agreement” with Action Trucking that Action Trucking would
provide transportation services for mulch and tree materials to “Mulch Matters” in
exchange for payment and that “Mulch Matters” failed to comply with the
agreement.
This is consistent with Action Trucking’s first amended petition which sought
to hold both Mulch Matters and Prime Trees liable for the breach of the same
agreement,9 as well as the evidence introduced at trial, which included the credit
application entered into by Prime Trees, listing Mulch Matters as the parent or
affiliate company, and Chavez’s testimony that she was filling out that application
8
See also id.9
Action Trucking alleged in its first amended petition that Bowe testified at his
deposition that Mulch Matters, Inc. is a d/b/a of Prime Trees, Inc. and that Mulch
Matters, Inc., as a stand-alone entity, is no longer in operation. However, Action
Trucking alleged that the Texas Secretary of State website still listed Mulch Matters,
Inc. as an active entity, and therefore, it added Prime Trees, Inc. as a party. Further,
Action Trucking clearly defined “Mulch Matters” in its first amended petition to
include both Mulch Matters, Inc. and Prime Trees, Inc. d/b/a Mulch Matters, i.e.,
the same way Mulch Matters was defined in the jury charge.
18
on behalf of Prime Trees and Mulch Matters. Thus, we conclude that under these
circumstances, joint and several liability is supported by the pleadings and jury
findings on the contract claims. See Duradril, L.L.C., 516 S.W.3d at 166; Kang,
2014 WL 2048424, at *12–13.10
We overrule Mulch Matters’ second issue.
Omissions from the Jury Charge
In its third issue, Mulch Matters makes a series of arguments that a new trial
is warranted because the trial court failed to correctly charge the jury and did not
adopt its tendered requests. Mulch Matters initially contends that the trial court
improperly refused its proposed Question 1 by not instructing the jury on the
disputed payment terms.11 Mulch Matters also asserts that the trial court improperly
refused its proposed Instruction 1 concerning circumstantial evidence.12 Finally,
10
See also K-Bar Servs., 2006 WL 903735, at *3–4.
11
In Question 1 of the jury charge, the jury was asked “Did Mulch Matters and Action
Trucking enter into an agreement that Action Trucking would provide transportation
services for mulch and tree materials to Mulch Matters in exchange for payment?”
In contrast, Mulch Matter’s proposed Question 1 asks: “Did Action Trucking agree
to provide goods or services to Mulch Matters at a flat hourly rate of $110 on the
Cypresswood project, and did Mulch Matters agree to pay Action Trucking a flat
hourly rate of $110 on the Cypresswood project?”
12
Mulch Matters’ proposed Instruction 1 states:
A fact may be established by direct evidence or circumstantial
evidence or both. A fact is established by direct evidence when
proved by documentary evidence or by witnesses who saw the act
done or heard the words spoken. A fact is established by
19
Mulch Matters claims that the trial court improperly refused its proposed
Instructions 5 and 6, concerning authority and acts of corporate agents,13 and its
proposed Instruction 7 and proposed Questions 4, 5, 6, and 12, concerning whether
Action Trucking breached the agreement and whether Action Trucking was
negligent.14 We cannot reach the merits of these jury charge complaints because
Mulch Matters did not properly preserve them in the trial court.
circumstantial evidence when it may be fairly and reasonably inferred
from other facts proved.
13
Mulch Matters’ proposed Instruction 5 states: “A corporation can only act through
its employees and agents. An act committed by an agent of a corporation for the
purpose of apparently carrying out the ordinary course of business of the corporation
binds the corporation.”
Proposed Instruction 6 states: “If Action Trucking and Mulch Matters agreed to
other essential terms but failed to specify price, it is presumed a reasonable price
was intended.”
14
Mulch Matters’ proposed Instruction 7 states:
With every contract, there is a common-law duty to perform it with
care, skill, reasonable expedience, and faithfulness. Likewise, a
contract for professional services creates a duty that the professional
exercise of the degree of care, skill, and competence that reasonably
competent members of the profession would exercise under similar
circumstances.
Proposed Question 4 asks: “Did Action Trucking agree to perform its transportation
services on the Cypresswood project without its trucks being overturned or without
interference of Mulch Matters’ operations?”
Proposed Question 5 asks: “Did Action Trucking fail to comply with the agreement
you found in response to Question No. 4?”
Proposed Question 6 asks: “Did the negligence of Action Trucking proximately
cause Mulch Matters’ damages?”
20
Preservation of Error
The Texas Rules of Civil Procedure obligate a party to present objections to
the charge “before the charge is read to the jury.” TEX. R. CIV. P. 272. The objection
must be specific; “[a] party objecting to a charge must point out distinctly the
objectionable matter and the grounds of the objection.” TEX. R. CIV. P. 274; Ford
Motor Co. v. Ledesma, 242 S.W.3d 32, 43 (Tex. 2007). “Any complaint as to a
question, definition, or instruction, on account of any defect, omission, or fault in
pleading, is waived unless specifically included in the objections.” TEX. R. CIV. P.
274.
Moreover, the party’s objection must have “stated the grounds for the ruling
that the complaining party sought from the trial court with sufficient specificity to
make the trial court aware of the complaint, unless the specific grounds were
apparent from the context.” TEX. R. APP. P. 33.1(a)(1). “A party must clearly
designate the alleged error and specifically explain the basis of its complaint in its
objection to the charge.” Hamid v. Lexus, 369 S.W.3d 291, 296 (Tex. App.—
Houston [1st Dist.] 2011, no pet.) (internal quotation marks omitted). “[These]
procedural requirements for determining whether a party has preserved error in the
Proposed Question 12 asks: “What sum of money, if any, if paid now in cash, would
fairly and reasonably compensate Mulch Matters for its damages that resulted from
such failure to comply or negligence?”
21
jury charge are explained by one basic test: whether the party made the trial court
aware of the complaint, timely and plainly, and obtained a ruling.” Thota v. Young,
366 S.W.3d 678, 689 (Tex. 2012) (internal quotation marks omitted).
In that regard, affirmative errors in the charge—i.e., a defective question,
definition, or instruction—must be preserved by objection, and omissions from the
charge, including omissions concerning a definition, instruction, or question on
which the complaining party has the burden of proof, must be preserved by an
objection and a request for a substantially correct definition, instruction, or question.
See TEX. R. CIV. P. 274, 278.15 Moreover, “[n]o objection to one part of the charge
may be adopted and applied to any other part of the charge by reference only.” TEX.
R. CIV. P. 274.
Application to the Facts
Here, Mulch Matters presented the trial court with a document entitled
“Defendant’s Proposed Jury Charge (Revised 12/2/2021).” Beneath each requested
instruction, definition, or question there was a space for the trial court to endorse
“given,” “refused,” or “modified.” Although a checkmark was placed next to some,
but not all, of the questions, instructions, and definitions indicating that they were
either refused or modified, the trial court did not endorse any of them individually.
15
See also Comm. on Pattern Jury Charges of the State Bar of Tex., Texas Pattern
Jury Charges—Bus., Consumer, Ins., Emp. PJC 116.1 (2022).
22
See TEX. R. CIV. P. 276. Instead, at the urging of Mulch Matters, the trial court
simply signed the cover page “refused” and added the date “12/2/21.”
At the charge conference, the following exchange occurred:
THE COURT: Let the record reflect that both parties are present in
the courtroom, the jury is not present. I have
prepared the charge of the Court and submitted it to
both parties for their review. Any objections to the
charge . . . ?
....
THE COURT: From defense, any objections?
[DEFENSE]: Yes. I have all of the proposed – of my charts that
I would like to make that as an objection, global
objection. I’d ask for the Court to sign refused on
that at the top and enter that into the record.
THE COURT: You have this all marked up.
[DEFENSE]: It’s got some highlights, but there isn’t anything
else.
THE COURT: There’s some checkmarks on all of them.
[DEFENSE]: Yeah. Some of them are modified. Some of them
were refused. You can globally – I think the easiest
way is to globally sign it “refused.”
THE COURT: Okay. Two sides. I don’t think my clerk is too
happy. Okay.
[DEFENSE]: Can we go enter that into the record now?
THE COURT: Yeah. We’ll go ahead and make this an exhibit or
do I just have her, the clerk file it?
COURT REPORTER: I thought it goes into the file.
THE COURT: Yeah. I think I’ll just have the clerk file it.
23
[DEFENSE]: Okay. Thank you, Your Honor.
THE COURT: But on the record, let’s state that I -- Defendant has
proposed the following changes that are called
Defendant’s Proposed Jury Charge revised 12
through 21. I’ve overruled all of those objections.
And so I’m going to go ahead and scan it and make
it part of the Court’s record.
[DEFENSE]: Thank you, Your Honor.
THE COURT: Okay. Thank you.
This is the extent of the charge conference. Mulch Matters did not make any
specific objections to the court’s charge as given. And although Mulch Matters
purports to have raised a “global objection,” that “global objection” was simply the
submission of its proposed jury charge. It included no objection to any part of the
court’s charge. This was insufficient to preserve any objections for appeal. See
Religious of Sacred Heart of Tex. v. City of Hous., 836 S.W.2d 606, 613–14 (Tex.
1992) (explaining that objection is required to complain about defectively submitted
question); see also TEX. R. CIV. P. 273 (“A request by either party for any questions,
definitions, or instructions shall be made separate and apart from such party’s
objections to the court’s charge.”).16
16
See also EYM Diner L.P. v. Yousef, No. 05-19-00636-CV, 2020 WL 6883171, at
*10–11 (Tex. App.—Dallas Nov. 24, 2020, pet. dism’d) (mem. op.) (holding that
trial court’s global denial of parties’ requested instructions and questions was
insufficient to preserve appellants’ allegations of charge error where parties did not
raise specific objections to charge); Clark v. Dillard’s Inc., 460 S.W.3d 714, 729–
30 (Tex. App.—Dallas 2015, no pet.) (same).
24
Mulch Matters’ global tender was no better. It failed to comply with Texas
Rule of Civil Procedure 278, which provides “[the] [f]ailure to submit a question
shall not be deemed a ground for reversal of the judgment, unless its submission, in
substantially correct wording, has been requested in writing and tendered by the
party complaining of the judgment.” TEX. R. CIV. P. 278. The same is true for a
requested definition or instruction. Id. And the party must secure a ruling from the
trial court on each tendered instruction, question, or definition. See TEX. R. CIV. P.
276.
Here, Mulch Matters tendered its proposed jury charge to the trial court as a
“global objection.” But, as noted above, it contained no objections. And rather than
endorse each proposed tender, the trial court, at Mulch Matters’ insistence, endorsed
only the front page of Mulch Matters’ filing with “refused.” See Marshall v. Harris
Cnty. Mun. Util. Dist. No. 358, No. 01-07-00910-CV, 2011 WL 286167, at *11 (Tex.
App.—Houston [1st Dist.] Jan. 20, 2011, pet. denied) (mem. op.) (error not
preserved in accordance with Rule 276 because trial court did not endorse any
question on proposed charge).
Endorsement by the trial court is not the exclusive means of preserving error
for refusing a charge request, so long as the court’s refusal of the tender is otherwise
clear from the record. Dall. Mkt. Ctr. Dev. Co. v. Liedeker, 958 S.W.2d 382, 387
25
(Tex. 1997) (per curiam), overruled on other grounds by Torrington Co. v. Stutzman,
46 S.W.3d 829, 840 n.9 (Tex. 2000). But that is also not shown by the record.
As described above, Mulch Matters provided only proposed submissions at
the charge conference in a global fashion. And it is evident from the exchange at
the charge conference, along with the court’s charge and Mulch Matters’ tenders,
that the trial court did not actually refuse all of Mulch Matters’ submissions. When
asked by the trial court what the various markings and checkmarks were on Mulch
Matters’ proposed submissions, Mulch Matters’ counsel answered: “Some of them
are modified. Some of them were refused. You can globally – I think the easiest
way is to globally sign it [all] ‘refused.’”
Mulch Matters’ proposed Question 3, relating to the whether Mulch Matters’
failure to comply was excused, and proposed Question 10, relating to damages for
Mulch Matters’ failure to comply, were already marked as “modified.” And
proposed Instruction 6 in the global tender was marked as “refused,” even though it
was actually included in the court’s charge as Instruction 1.
Taken together, we cannot conclude that the trial court was made aware of
each of the complaints to the court’s charge that Mulch Matters now makes on appeal
and that it plainly ruled on each of those complaints. See id.; see also Thota, 366
S.W.3d at 689. As a result, we must conclude that Mulch Matters’ complaints on
26
appeal about the court’s charge are not properly before us. See TEX. R. APP. P.
33.1(a)(1); TEX. R. CIV. P. 272, 274, 278.
We overrule Mulch Matters’ third issue.
Prejudgment Interest
A. Application of the Prompt Payment Act
In its first issue in its cross-appeal, Action Trucking argues that the trial court
had no discretion to disregard the Prompt Payment Act, which requires awarding
Action Trucking prejudgment interest at a rate of 1.5% per month, as opposed to the
5% per year the trial court awarded in the final judgment. See TEX. PROP. CODE §
28.004.17 We agree.
17
We reject Mulch Matters’ contention that Action Trucking failed to preserve this
argument by not obtaining a ruling on its motions for entry of judgment. Action
Trucking filed two motions for entry of judgment, in each arguing that it was entitled
to 1.5% interest per month, as provided for by the Prompt Payment Act, and attached
a proposed final judgment that included a prejudgment interest award in this
amount. See Benjamin Franklin Sav. Ass’n v. Kotrla, 751 S.W.2d 218, 224 (Tex.
App.–Houston [14th Dist.] 1988, no writ) (holding appellee’s complaint about
denial of prejudgment interest in final judgment preserved by its motion for entry
of judgment and proposed judgment which contained award of prejudgment
interest). These motions were implicitly denied when the trial court entered a final
judgment awarding prejudgment interest, but not at the rate requested by Action
Trucking in its motions. See TEX. R. APP. P. 33.1(a)(2)(a) (preservation shown when
trial court rules on motion “either expressly or implicitly”). Action Trucking also
moved for judgment, raising these same arguments, after the trial court signed the
final judgment. This motion was likewise implicitly denied when the trial court
signed the corrected final judgment that again awarded prejudgment interest, but not
at the rate requested by Action Trucking. See id.27
Applicable Law
The Prompt Payment Act provides:
A subcontractor who receives a payment under Subsection (b) or
otherwise from a contractor in connection with a contract to improve
real property shall pay each of its subcontractors the portion of the
payment, including interest, if any, that is attributable to work properly
performed or materials suitably stored or specially fabricated as
provided under the contract by that subcontractor, to the extent of that
subcontractor’s interest in the payment. The payment required by this
subsection must be made not later than the seventh day after the date
the subcontractor receives the contractor’s payment.
TEX. PROP. CODE § 28.002(c).
Section 28.004, captioned “Interest on Overdue Payment,” provides as
follows:
(a) An unpaid amount required under this chapter begins to accrue
interest on the day after the date on which the payment becomes due.
(b) An unpaid amount bears interest at the rate of 1 1/2 percent each
month.
(c) Interest on an unpaid amount stops accruing under this section on
the earlier of:
(1) the date of delivery;
(2) the date of mailing, if payment is mailed and delivery occurs
within three days; or
(3) the date a judgment is entered in an action brought under
this chapter.
Id. § 28.004.
Prejudgment interest is recoverable as a matter of right when an ascertainable
sum of money is found due and payable at a definite date before judgment. Gordon
28
v. Leasman, 365 S.W.3d 109, 118 (Tex. App.—Houston [1st Dist.] 2011, no pet.);
see, e.g., Henry Bldg., Inc. v. Milam, No. 05-99-01400-CV, 2001 WL 246882, at *3
(Tex. App.—Dallas Mar. 14, 2001, pet. denied) (holding that trial court erred by
awarding contractor six-percent-per-year prejudgment interest instead of one-and-
one-half percent per month prejudgment interest under section 28.004(b)). A
general prayer for prejudgment interest sufficiently invokes a statutory right to such
interest. Benavidez v. Isles Constr. Co., 726 S.W.2d 23, 25 (Tex. 1987).
Because the plaintiff is entitled to statutory prejudgment interest based on a
prayer for general relief alone, a plaintiff need not specifically plead prejudgment
interest if the claim falls within the scope of a statute authorizing prejudgment
interest. Gordon, 365 S.W.3d at 118.18
Analysis
We disagree with Mulch Matters’ contention that in order to be entitled to the
statutory prejudgment interest rate allowed by the Prompt Payment Act, Action
Trucking had to specifically plead its applicability and obtain findings by the jury.
In Gordon v. Leasman, this Court considered, and rejected, similar arguments.
365 S.W.3d at 118–19. There, a carpenter sued a husband and wife, along with the
18
See, e.g., Talley Constr. Co. v. Rodriguez, No. 01-03-01147-CV, 2006 WL 908180,
at *11 (Tex. App.—Houston [1st Dist.] Apr. 6, 2006, no pet.) (mem. op. on rehr’g)
(holding that trial court did not err in awarding claimant eighteen percent per year
in prejudgment interest under section 28.004(b) because claimant’s pleading
included prayer for general relief).
29
wife’s interior design company, for breach of contract, quantum meruit, and unjust
enrichment to recover a balance owed for work he performed at the couple’s home.
Id. at 112–14
Following a jury verdict in favor of the contractor on his breach of contract
claim, the trial court in Gordon entered judgment in favor of the contractor, awarding
him damages and prejudgment interest calculated at five percent per year. Id. at 114.
On cross-appeal, the contractor contended that the trial court erred in awarding
prejudgment interest at 5%, rather than at the rate of 1.5% per month, as authorized
by the Prompt Payment Act. Id. at 118. In response, the couple argued that the
contractor did not properly plead the rate of 1.5% and failed to obtain a jury finding
on whether they violated the Prompt Payment Act. Id.
This Court in Gordon concluded that a plaintiff need not specifically plead
prejudgment interest if the claim falls within the scope of a statute authorizing
prejudgment interest. Id. at 118. And, because the contractor’s claim was for “an
overdue payment that a real property owner owed him for contracting work,” this
Court held that “it [fell] within the provisions of section 28.002(a), [and] the trial
court should have awarded prejudgment interest at one and one-half percent per
month as provided in section 28.004(b).” Id. at 118–19.
The same is true here. In its amended petition, Action Trucking included a
general prayer for prejudgment interest, and we conclude that its claim falls within
30
the provisions of section 28.002(c). The undisputed evidence at trial established that
Mulch Matters entered into a subcontract with ATZ for services related to the
improvement and development of real property, specifically a 100-acre tract located
on Cypress Wood Drive. Mulch Matters then subcontracted with Action Trucking
to assist with improving, i.e., clearing, the land on the real estate project. See TEX.
PROP. CODE § 28.001(2)(B) (defining “improve” to mean “excavate, clear, grade,
fill, or landscape real property”).
Mulch Matters received its final payment from ATZ on March 13, 2020.
Despite having received invoices via email19 and an in-person demand for payment
of the outstanding balance, Mulch Matters failed to pay the remaining amounts owed
to Action Trucking within seven days after receiving final payment from ATZ.
Because Action Trucking’s claim is for an overdue payment that a subcontractor
owed it for subcontracting work related to the improvement of real property, its
claim falls within the provisions of section 28.002(c) of the Property Code. See id.
§ 28.002(c); Gordon, 365 S.W.3d at 118–19.
Accordingly, the trial court should have awarded prejudgment interest at 1.5%
per month as provided in section 28.004(b). TEX. PROP. CODE § 28.004(b). We
19
Bowe disputed that Mulch Matters was aware of the emailed invoices. He testified
that he received “four or five” emails in November and December 2019 with the
invoices, but he did not know the emails contained invoices, and the emails
remained unopened until after they were discovered during the discovery phase of
this litigation.
31
sustain Action Trucking’s first issue on cross-appeal, and remand to the trial court
for a calculation of prejudgment interest.
B. Accrual Date
In its fifth issue, Mulch Matters argues that the trial court erred in setting the
wrong date for the accrual of prejudgment interest. In the final judgment, the trial
court awarded Action Trucking prejudgment interest beginning on March 21, 2020.
Mulch Matters argues that prejudgment interest should not have begun to accrue
until June 16, 2020—the date Action Trucking filed this lawsuit. See TEX. FIN. CODE
§ 304.104 (“[P]rejudgment interest accrues on the amount of a judgment during the
period beginning on the earlier of the 180th day after the date the defendant receives
written notice of a claim or the date the suit is filed[.]”).
But because we have concluded that the Prompt Payment Act applies, we hold
that the trial court correctly set the accrual date for prejudgment interest as March
21, 2020. Under the Prompt Payment Act, “[a]n unpaid amount required under this
chapter begins to accrue interest on the day after the date on which the payment
becomes due.” TEX. PROP. CODE § 28.004(a).
Here, the evidence at trial conclusively established that Mulch Matters
received full payment from ATZ on March 13, 2020, making March 20, 2020 Mulch
Matters’ statutory deadline to pay its own subcontractor, Action Trucking. Pursuant
to sections 28.002 and 28.004, prejudgment interest started to accrue the day after
32
the due date of the payment, which was March 21, 2020. See id. §§ 28.002(c),
28.004(a). The trial court correctly noted March 21, 2020 as the accrual date for
prejudgment interest.
We overrule Mulch Matters’ fifth issue.
C. Prejudgment Interest on Attorney’s Fee Award
In its sixth issue, Mulch Matters argues that the final judgment erroneously
awarded prejudgment interest on attorney’s fees. See C&H Nationwide, Inc. v.
Thompson, 903 S.W.2d 315, 325 (Tex. 1994). While it is true that prejudgment
interest is generally not allowed on an award of attorney’s fees, we do not agree that
the final judgment here in fact awarded prejudgment interest on attorney’s fees.
The judgment in this case first lists the amount of damages the jury awarded,
“less a credit of $12,520.00 for a total principal sum in the amount of $74,453.50[.]”
It then awards “prejudgment interest at a rate of 5% per annum from March 21, 2020
through the date of judgment.” Following the prejudgment interest award, the
judgment then lists the attorney’s fees awarded. There is no indication in the
judgment that the prejudgment interest was based on or included the attorney’s fees
awarded.
In any event, this point is moot because we are remanding to the trial court for
a calculation of prejudgment interest―which will be based on the amount of actual
33
damages the jury awarded, taking into account the $12,520 partial payment, at the
statutory rate of 1.5% per month as directed by the Prompt Payment Act.
We therefore overrule Mulch Matters’ sixth issue.
Conditional Attorney’s Fees
In its second issue in its cross-appeal, Action Trucking argues that the trial
court erred in failing to award it the conditional appellate fees stipulated to by the
parties. Here, the parties stipulated to the reasonable and necessary trial and
appellate attorney’s fees, but the trial court included only the stipulated attorney’s
fees for trial in the corrected final judgment.
Action Trucking sued Mulch Matters for breach of contract and, in its
amended petition, sought to recover attorney’s fees under section 38.001 of the
Texas Civil Practice and Remedies Code. See TEX. CIV. PRAC. & REM. CODE
§ 38.001(8) (“A person may recover reasonable attorney’s fees from an individual
or corporation, in addition to the amount of a valid claim and costs, if the claim is
for . . . an oral or written contract.”) The Texas Supreme Court has held that “[t]o
recover attorney’s fees under [s]ection 38.001, a party must (1) prevail on a cause of
action for which attorney’s fees are recoverable, and (2) recover damages.” Green
Int’l, Inc. v. Solis, 951 S.W.2d 384, 390 (Tex. 1997); see also Ventling v. Johnson,
466 S.W.3d 143, 154 (Tex. 2015).
34
Under section 38.001, the trial court has no discretion to deny attorney’s fees
when presented with evidence of the same. Ventling, 466 S.W.3d at 154. An award
of reasonable attorney’s fees is mandatory under section 38.001 if there is proof of
the reasonableness of the fees. AMX Enters., L.L.P. v. Master Realty Corp., 283
S.W.3d 506, 516 (Tex. App.—Fort Worth 2009, no pet.).20 If trial attorney’s fees
are mandatory under section 38.001, appellate attorney’s fees are also mandatory
when proof of reasonable fees is presented. Ventling, 466 S.W.3d at 154.21
There is no dispute that Action Trucking prevailed on its breach-of-contract
claim and was awarded damages. Thus, it was entitled to attorney’s fees under
section 38.001 as a matter of law. See TEX. CIV. PRAC. & REM. CODE § 38.001(8);
Ventling, 466 S.W.3d at 154; Green Int’l, Inc., 951 S.W.2d at 390.
20
See also, e.g., Upshaw v. Lacado, LLC, 650 S.W.3d 61, 83 (Tex. App.—Fort Worth
2021, pet. denied) (“When a prevailing party in a breach-of-contract suit seeks
attorney’s fees, an award of reasonable fees is mandatory if there is proof of the
reasonableness of the fees.”); Brent v. Field, 275 S.W.3d 611, 622 (Tex. App.—
Amarillo 2008, no pet.) (“Under section 38.001, an award of reasonable attorney’s
fees is mandatory if there is proof of the reasonableness of the fees. A court
possesses discretion to determine the amount of attorney’s fees, but it lacks
discretion to deny attorney’s fees if they are proper under section 38.001.” (internal
citations omitted)).
21
See also, e.g., DaimlerChrysler Motors Co. v. Manuel, 362 S.W.3d 160, 198–99
(Tex. App.—Fort Worth 2012, no pet.) (holding that if an award of trial attorney’s
fees is mandatory under section 38.001, then an award of appellate attorney’s fees
is likewise mandatory).
35
The trial court had no discretion to deny attorney’s fees once it was presented
with proof of the reasonableness of those fees. See Ventling, 466 S.W.3d at 154.
Here, the parties stipulated on the record “to the reasonableness and necessity for
attorney’s fees for [Action Trucking] in the amount of $80,000 at trial and $20,000
on appeal, $10,800 on appeal to the Supreme Court, and another $5,800 in the event
there is oral argument before the Supreme Court.”
Because a stipulation constitutes some evidence of the reasonableness of
requested attorney’s fees, see, e.g., Karam v. Brown, 407 S.W.3d 464, 475 (Tex.
App.—El Paso 2013, no pet.), the trial court had no discretion to refuse to award
both trial and conditional appellate attorney’s fees to Action Trucking. See Ventling,
466 S.W.3d at 154; DaimlerChrysler Motors Co. v. Manuel, 362 S.W.3d 160, 198–
99 (Tex. App.—Fort Worth 2012, no pet.).
Because the trial court failed to do so, we sustain Action Trucking’s second
issue on cross-appeal.
36
Conclusion
Based on all of the foregoing, we modify the trial court’s final judgment to
reflect, in accordance with the uncontested and stipulated evidence, an award of
$20,000 in conditional attorney’s fees for the appeal to this Court, $10,800 in
conditional attorney’s fees for an appeal to the Supreme Court, and $5,800 in
conditional attorney’s fees for oral argument before the Supreme Court.22
We further modify the trial court’s final judgment to reflect the rate of
prejudgment interest of 1.5% per month, and we affirm the trial court’s judgment as
modified.
Finally, we remand this case to the trial court for the sole purpose of
calculating of the amount of prejudgment interest consistent with this opinion.
Terry Adams
Chief Justice
Panel consists of Chief Justice Adams and Justices Guerra and Farris.
22
See End Users, Inc. v. Sys. Supply For End Users, Inc., No. 14-06-00833-CV, 2007
WL 2790379, at *6 (Tex. App.—Houston [14th Dist.] Sept. 27, 2007, no pet.)
(modifying trial court’s judgment to award uncontested amount of appellate
attorney’s fees).
37