Chambers County, Texas v. Pelco Construction Company

Opinion issued September 29, 2020
In The
Court of Appeals
For The
First District of Texas
————————————
NO. 01-18-00832-CV
———————————
CHAMBERS COUNTY, TEXAS, Appellant
V.
PELCO CONSTRUCTION COMPANY, Appellee
On Appeal from the 344th District Court
Chambers County, Texas
Trial Court Case No. CV26356
MEMORANDUM OPINION
This is the third appeal involving a contract between Chambers County and
Pelco Construction Company for the reconstruction of a hurricane-damaged fire
station. Pelco sued Chambers County for breach of contract to recover unpaid work
and lost profits and for interest and attorney’s fees under the Prompt Payment Act.1
Chambers County asserted a breach of contract counterclaim to recover the cost to
complete the work and attorney’s fees. After a jury trial on the parties’ competing
claims and a bench trial on attorney’s fees, the trial court rendered judgment for
Pelco. Both parties appealed.
In ten issues, Chambers County contends that (1) its governmental immunity
from suit on Pelco’s claims has not been waived; (2) Pelco did not prove or obtain a
jury finding that it satisfied the conditions precedent to its contract claim; (3) the
evidence was legally and factually insufficient to support the jury’s findings on
liability and damages; (4) Pelco engaged in improper jury argument; (5) the
judgment includes an impermissible double recovery of interest; and (6) Pelco failed
to segregate its proof of attorney’s fees. And in two issues, Pelco contends that the
trial court abused its discretion by refusing to award all of the attorney’s fees that
Pelco seeks.
We affirm in part, reverse in part, and render judgment.
Background
Hurricane Ike destroyed the Oak Island fire station in 2008. Chambers County
developed plans with its architect, Dannenbaum Engineering Corp., to rebuild the
fire station based on funding from the Federal Emergency Management Agency
1
See TEX. GOV’T CODE §§ 2251.001–.055.
2
(“FEMA”). Pelco was one of two qualified contractors that bid on the project. As
the lowest bidder, at $565,000, Pelco was awarded the contract.2
The contract provided for progress payments to Pelco during construction.
The contract designated Dannenbaum as Chambers County’s “representative
(1) during construction [and] (2) until final payment [was] due” and imposed upon
Dannenbaum certain performance responsibilities. Based on its evaluations of
Pelco’s applications for payment, Dannenbaum was to “review and certify the
amounts due” to Pelco and “issue certificates for payment . . . .”
Specifically, the contract provided that, “within seven days after the receipt
of” Pelco’s application for payment, Dannenbaum would either issue to Chambers
County a certificate for payment for the amount Dannenbaum determined was
“properly due” or notify the parties “in writing” of the reasons “for withholding
certification in whole or in part.” The issuance of a certificate for payment was “a
representation by [Dannenbaum] to [Chambers County]” that the work had
“progressed to the point indicated and that, to the best of [Dannenbaum’s]
knowledge, information and belief, the quality of the Work [was] in accordance with
the Contract Documents.”
2
The contract documents in this case include the American Institute of Architects
(“AIA”) A201-1997 “General Conditions of the Contract for Construction.” Unless
otherwise noted, the contract provisions discussed in this opinion are from the AIA
A201-1997 contract.
3
During construction, Pelco submitted two applications for payment—it
submitted the first application, on September 1, 2010, for $45,121.50 and the second
application, on October 29, for $99,873.50. Dannenbaum certified the first
application more than two months after it was submitted for 90% of the application
amount. Chambers County paid the certified amount three days before the
certification process was completed. Dannenbaum certified the second application
more than one month after it was submitted, again for only 90% of the application
amount. Chambers County paid the certified amount seven days after certification.
On October 28, the day before Pelco submitted its second application,
Chambers County ordered work on the project to stop. Dannenbaum informed Pelco
by letter that the “ceasing of the construction operations is required while required
administrative paper work [sic] for the construction of the project is reviewed and
approved by FEMA.” Dannenbaum said it would inform Pelco when work could
resume. According to Pelco, the order to stop work came as a surprise because
representatives of Chambers County indicated in the bid-solicitation process that the
FEMA had already approved the project.
About forty days later, Dannenbaum instructed Pelco to resume construction
on the project. In response, on December 14, 2010, Pelco sent Dannenbaum a letter
giving notice of its termination of the contract. The letter stated that Pelco had a
right to terminate the contract because the “work-stoppage continued for forty
4
consecutive days.” Pelco demanded payment for the “[m]oney due and owing” on
the two payment applications as well for additional “work now complete.” Pelco
submitted its third application for payment in the amount of $52,243.50 with the
letter. Dannenbaum did not issue a certificate of payment for the third application,
and Chambers County did not make any payment toward the amounts applied for in
Pelco’s third application.
Pelco subsequently filed suit against Chambers County and other defendants
not parties to this appeal.3 Pelco alleged that Chambers County materially breached
the contract by “(1) failing, by itself, or through its representative, to timely certify
for payment and/or pay Pelco[’s] . . . first two payment applications, and (2) failing
to pay 100% of Pelco[’s] . . . first two applications, instead withholding, without
prior written notice, 10% of the amounts due under each application.” Pelco sought
damages for the unpaid work already performed and for lost profits that it would
have earned under the contract. Pelco also asserted a claim for interest on the
overdue payments and attorney’s fees under the Prompt Payment Act. See TEX.
GOV’T CODE §§ 2251.001-055.
3
The other defendants included Dannenbaum. Because Pelco failed to file a
certificate of merit as required by section 150.002 of the Texas Civil Practice and
Remedies Code, the trial court dismissed Dannenbaum. We affirmed the dismissal
in the first appeal in this case. See Pelco Constr., Inc. v. Dannenbaum Eng’g Corp.,
404 S.W.3d 48, 57 (Tex. App.—Houston [1st Dist.] 2013, no pet.).
5
Chambers County pleaded a breach of contract counterclaim against Pelco.
Chambers County alleged that Pelco had materially breached the contract by
“wrongfully terminat[ing] the contract based on the exercise of Chambers County’s
contractual right to temporarily suspend the project for approximately 40
days . . . [and] by failing and refusing to perform the contract as the contract
required.” The damages sought by Chambers County included its costs to complete
the work and attorney’s fees.
In the course of litigation, the trial court granted summary judgment against
Pelco on its claims for breach of the contract and violation of the Prompt Payment
Act. The trial court also granted summary judgment on liability in favor of
Chambers County on its counterclaim for breach of the contract. After a jury trial
on the sole issue of Chambers County’s damages, the trial court rendered a judgment
in favor of Chambers County. The case was then appealed to this Court a second
time. We reversed and remanded for a new trial on both Pelco’s claims and
Chambers County’s counterclaim.4
After a new trial on remand on the parties’ competing claims, the jury found
that Chambers County breached the contract and Pelco did not. The jury then
determined that Chambers County owed Pelco $52,243.50 for work already
4
See Pelco Constr. Co. v. Chambers Cty., 495 S.W.3d 514 (Tex. App.—Houston [1st
Dist.] 2016, pet. denied).
6
performed and that Pelco suffered $35,667.45 in lost anticipated profits as a result
of Chambers County’s breach. The jury also found that Chambers County violated
the Prompt Payment Act by failing to timely pay Pelco’s applications for payment.
By agreement, the parties tried the issue of Pelco’s attorney’s fees under the
Prompt Payment Act to the bench. The trial court found that Pelco was entitled to
some, but not all, of the attorney’s fees requested and rendered judgment for Pelco
in accordance with the jury’s verdict. The judgment awards Pelco interest under the
Prompt Payment Act on the unpaid amounts of the first, second, and third payment
applications as well as prejudgment interest on the unpaid amounts and Pelco’s lost
anticipated profits.
Governmental Immunity
In its ninth issue, Chambers County contends it is immune from suit on
Pelco’s claims for breach of contract and under the Prompt Payment Act. Pelco
responds that section 262.007 of the Local Government Code—the County Contract
Claims Act—waives Chambers County’s immunity for each of the challenged
claims. See TEX. LOC. GOV’T CODE § 262.007. Because a governmental entity’s
immunity from suit affects the Court’s jurisdiction, we address this issue first. See
Witchita Falls State Hosp. v. Taylor, 106 S.W.3d 692, 696 (Tex. 2003).
7
A. Section 262.007
Under the doctrine of governmental immunity, a governmental entity, like
Chambers County, cannot be sued without its consent. See Tooke v. City of
Mexia, 197 S.W.3d 325, 331 (Tex. 2006). Governmental immunity includes both
“immunity from liability, which bars enforcement of a judgment against a
governmental entity, and immunity from suit, which bars suit against the entity
altogether.” Id. at 332. Both forms of immunity must be waived; however, only
immunity from suit deprives the courts of jurisdiction and thus bars a claim against
the governmental entity. See id.; Wichita Falls State Hosp., 106 S.W.3d at 696.
By entering a contract, a governmental entity waives immunity from liability
for breach of that contract, “voluntarily binding itself like any other party to the
terms of the agreement, but it does not waive immunity from suit.” Tooke, 197
S.W.3d at 332. Only the Legislature can waive an entity’s immunity from suit by
“clear and unambiguous” statutory language. TEX. GOV’T CODE § 311.034 (“In order
to preserve the legislature’s interest in managing state fiscal matters through the
appropriations process, a statute shall not be construed as a waiver of sovereign
immunity unless the waiver is effected by clear and unambiguous language.”); see
also Tooke, 197 S.W.3d at 328–29 (agreeing that statutory waiver of immunity must
be “by clear and unambiguous language”).
8
Pelco pleaded section 262.007 of the Local Government Code as the basis for
the waiver of Chambers County’s immunity from suit in this case. In section
262.007, the Legislature has provided a limited waiver of a county’s immunity from
suit for claims “arising under” a construction contract. See TEX. LOC. GOV’T CODE
§ 262.007(a). The statute provides: “A county that is a party to a written contract
for . . . construction services . . . may sue or be sued, plead or be impleaded, or
defend or be defended on a claim arising under the contract.” Id.
This immunity waiver is limited in terms of both the types of contracts under
which a party can sue and the types and amounts of damages the party can recover.
See id. § 262.007(b), (c); see also Cty. of Galveston v. Triple B Servs., LLP, 498
S.W.3d 176, 182 (Tex. App.—Houston [1st Dist.] 2016, pet. denied) (party must
plead damages that are recoverable under the statute to meet requirements of
immunity waiver). Subsection (b) of section 262.007 identifies the four categories
of recoverable damages, and subsection (c) lists the three categories of
unrecoverable damages. See TEX. LOC. GOV’T CODE § 262.007(b), (c). The
recoverable damages are limited to:
(1) the balance due and owed by the county under the contract as it may
have been amended, including any amount owed as compensation for
the increased cost to perform the work as a direct result of owner-
caused delays or acceleration;
(2) the amount owed for change orders or additional work required to
carry out the contract;
9
(3) reasonable and necessary attorney’s fees that are equitable and just;
and
(4) interest as allowed by law.
Id. § 262.007(b). The recovery of certain other damages, including “consequential
damages, except as allowed under [s]ubsection (b)(1),” is prohibited. Id. at §
262.007(c)(1).
In interpreting section 262.007, our primary goal is to determine and give
effect to the Legislature’s intent. City of San Antonio v. City of Boerne, 111 S.W.3d
22, 25 (Tex. 2003). “We must enforce the statute as written and refrain from
rewriting text that the lawmakers chose.” Jaster v. Comet II Constr., Inc., 438
S.W.3d 556, 562 (Tex. 2014). We “apply the plain meaning . . . unless a different
meaning is apparent from the context or the plain meaning leads to absurd or
nonsensical results.” Id. (internal quotations omitted).
B. Pelco’s Breach of Contract Claim
The parties’ construction contract is within the category of contracts for which
the Legislature waived immunity in section 262.007. See TEX. LOC. GOV’T CODE
§ 262.007(a) (including written contracts for “construction services”). Chambers
County nevertheless argues that Pelco’s claim for breach of the contract falls outside
the scope of the waiver because the breaches alleged were based, “in whole or in
large part, on Dannenbaum’s alleged failure to certify [p]ayment [a]pplications”;
Dannenbaum is an entity over which Chambers County “exercised no control”; and
10
thus the breach allegations concern “obligations Chambers County did not have
under the [c]ontract.” In other words, Chambers County argues that Pelco’s claim
is not one “arising under the contract” because Chambers County purportedly had
no contractual responsibility for any errors in the certifications of payment. We
disagree.
Although section 262.007 of the Texas Local Government Code does not
define the phrase “arising under,” those words must be afforded their plain meaning.
See Jaster, 438 S.W.3d at 562. “The term ‘arise’ has broad meaning and includes
‘to originate; to stem (from) . . . [t]o result (from),’ and ‘to originate from a specified
source . . . to come into being . . . to become operative . . . to come about: come up:
take place . . . to become apparent in such a way as to demand attention[.]’” Plains
Expl. & Prod. Co. v. Torch Energy Advisors Inc., 473 S.W.3d 296, 308 (Tex. 2015)
(internal citations omitted). The word “under” means “subject to the authority,
control, guidance, or instruction of.” MERRIAM-WEBSTER (n.d., accessed Sept. 28,
2020); see also THE NEW OXFORD AMERICAN DICTIONARY 1840 (ed. 2001) (“as
provided for by the rules of; in accordance with”); Powell v. City of Baird, 128
S.W.2d 786, 790 (Tex. 1939) (“under” means “by authority of” when used in the
phrase “under the laws of the State of Texas”). Applying these plain meanings to
the undefined statutory phrase, we conclude that a “claim arising under the contract”
is a claim that originates from the contract and is subject to the contract.
11
Our prior opinion setting aside the summary judgment for Chambers County
on Pelco’s breach of contract claim did not consider that claim in the specific context
of the statutory waiver of immunity at issue here, but we find the Court’s
interpretation of the contract persuasive on the issue now before us as to whether
Pelco’s particular claim “aris[es] under the contract.” See Pelco Constr. Co. v.
Chambers Cty., 495 S.W.3d 514, 522 (Tex. App.—Houston [1st Dist.] 2016, pet.
denied). More specifically, in the prior appeal, Pelco argued that it could proceed
on its claim because Chambers County breached the contract by retaining funds
owed to Pelco. Id. Chambers County responded that it had not breached the contract
because it was only required to pay the amount certified by Dannenbaum. Id. In
rejecting Chambers County’s argument, we interpreted the contract as follows:
The contract provides . . . Dannenbaum would “provide administration
of the Contract as described in the Contract Documents and will be the
Owner’s representative (1) during construction and (2) until final
payment is due . . . .’” It further provides that Dannenbaum, “as a
representative of” Chambers County was required to periodically visit
the site “to endeavor to guard Chambers County against defects and
deficiencies in the Work.” Dannenbaum’s authority under the contract
to certify less than the full amount of the applications for payment is
based on deficiencies in the work or monetary claims from other
parties. Certification of payment constituted a representation by
Dannenbaum to Chambers County “that the Work has progressed to the
point indicated and that . . . the evaluation of the Work is in accordance
with the Contract Documents.” Certification of payment, then, is part
of Dannenbaum’s administration of the contract, which Dannenbaum
performed as Chambers County’s representative. Accordingly, the
responsibility to pay Pelco rests fully on Chambers County and any
actions taken or recommendations made by Dannenbaum were
performed as Chambers County’s representative.
12
Id. (internal parentheticals and brackets omitted; emphasis in original). Stated
differently, we concluded that the contract was not reasonably susceptible to a
reading that divorced Chambers County from responsibility for Dannenbaum’s
errors in certifying less than the full amount of Pelco’s payment applications. See id.
This interpretation applies equally under the statutory waiver of immunity for
claims “arising under the contract.” Because the contract designates Dannenbaum
as Chambers County’s agent and places the ultimate responsibility for payment on
Chambers County, the breaches alleged by Pelco for failures related to the
certification and payment of its payment applications originate from and are subject
to the contract. Pelco’s contract claim thus is one “arising under the contract.” See
TEX. LOC. GOV’T CODE § 262.007(a).
We note that for the immunity waiver in section 262.007 to apply in this case
to Pelco’s breach of contract claim, not only must the contract be of the type for
which immunity is waived but the claimed damages must also be recoverable under
the statute. See Triple B Servs., 498 S.W.3d at 183. Although Chambers County
challenges whether Pelco’s lost profits are recoverable damages, it does not dispute
that Pelco’s claim for unpaid work falls within the scope of the immunity waiver.
We agree that the unpaid work is recoverable under the waiver statute. Subsection
(b)(1) allows recovery of “the balance due and owed by the county under the
contract . . . .” TEX. LOC. GOV’T CODE § 262.007(b)(1). That phrase has been
13
interpreted to mean “simply the amount of damages for breach of contract payable
and unpaid.” Zachry Constr. Corp. v. Port of Hous. Auth. of Harris Cty., 449 S.W.3d
98, 111 (Tex. 2014). As direct damages—the necessary and usual result of
Chambers County’s alleged wrongful act—Pelco’s claim for unpaid work “certainly
qualif[ies].” See id.
We therefore conclude that section 262.007 waives Chambers County’s
immunity from suit on Pelco’s breach of contract claim. We overrule the portion of
Chambers County’s ninth issue asserting governmental immunity from suit on
Pelco’s breach of contract claim.5
C. Pelco’s Claim under the Prompt Payment Act
Chambers County further argues that it is immune from suit for interest and
attorney’s fees under the Prompt Payment Act. See TEX. GOV’T CODE §§ 2251.001–
.055. The Prompt Payment Act requires a governmental entity, including a county,
to make timely payments for goods and services purchased by contract. See TEX.
GOV’T CODE § 2251.021. It sets forth a specified time by which payments must be
made and provides for an interest penalty on overdue payments. See id.
5
Given our disposition below of Chambers County’s second issue—in which we
conclude that Pelco did not establish the elements of its contract claim—we do not
decide whether, as Chambers County contends, immunity is not waived for Pelco’s
claimed lost profits. See TEX. R. APP. P. 47.1. We would note, however, that with
respect to the issue of condition precedent, Chambers County has argued that the
lost profits sought by Pelco constitute a claim “arising out of or relating to the
Contract.”
14
§ 2251.021(a) (time for payments); id. § 2251.025(a) (accrual of interest); id.
§ 2251.027 (interest owed by political subdivisions). It also permits an award of
attorney’s fees to the prevailing party. Id. § 2251.043 (attorney’s fees).
Chambers County’s claim of immunity rests on its assertion that the Prompt
Payment Act itself does not contain a clear and ambiguous wavier of immunity. But
Pelco does not rely on the Prompt Payment Act to establish a waiver of Chambers
County’s immunity. As already stated, Pelco relies on section 262.007. See TEX.
LOC. GOV’T CODE § 262.007(a). And the question of whether section 262.007
waives immunity from suit to recover interest under the Prompt Payment Act has
already been decided by this Court. See Triple B Servs., 498 S.W.3d at 187–89.
In Triple B, a road-expansion contractor’s breach of contract suit against
Galveston County included a claim for interest and attorney’s fees under the Prompt
Payment Act, and the county argued that there was no waiver of its immunity for the
Prompt Payment Act claims. See id. at 178–79. We rejected the county’s argument,
holding:
Based on the plain text of [s]ection 262.007, a county may be sued for
late payment and “interest as allowed by law.” Because the [Prompt
Payment Act] allows a contractor to recover interest from a county for
late payment, the interest sought by Triple B is “interest allowed by
law”—namely, allowed by the [Prompt Payment Act]—for which
immunity is waived.
Id. at 188 (citation omitted); see also TEX. LOC. GOV’T CODE § 262.007(b)(4) (“The
total amount of money recoverable from a county on a claim for breach of the
15
contract is limited to . . . interest as allowed by law.”). Applying the Triple B holding
here, as we must, we conclude that section 262.007 waives immunity from suit for
interest under the Prompt Payment Act. See 498 S.W.3d at 188.
Triple B also addressed section 262.007’s waiver of immunity for attorney’s
fees in suits against a county for breach of a construction contract, though to a more
limited extent. See id. at 189. Specifically, the Court considered whether section
262.007 serves as a “substantive basis” for a claim of attorney’s fees. Id. It does
not. Id. at 189–90 (statute defines extent to which immunity is waived but does not
create entitlement to recovery from county). But the Court noted that subsection
(b)(3) “allows attorney’s fees if another statute—or the contract—allows attorney’s
fees.” Id. at 189. Because the contractor in Triple B had not pleaded the Prompt
Payment Act or any other statute that was a valid basis for its attorney’s fees, the
Court concluded that the contractor was “not currently asserting an attorney’s fee
claim for which immunity has been waived.” Id. at 190. The Court thus declined to
address whether the contractor could have received attorney’s fees under the Prompt
Payment Act. Id. at 189 n.7.
Unlike the contractor in Triple B, Pelco has pleaded the Prompt Payment Act’s
provision for attorney’s fees as the substantive basis for its claim. See TEX. GOV’T
CODE § 2251.043 (in “judicial action to collect an invoice payment or interest due
under this chapter, the opposing party, which may be the governmental entity or the
16
vendor, shall pay the reasonable attorney fees of the prevailing party”). And, relying
on the same interpretation of a “claim arising under the contract” set out above, we
conclude Pelco’s claim for attorney’s fees under the Prompt Payment Act falls
within the scope of the immunity waiver in section 262.007. See TEX. LOC. GOV’T
CODE § 262.007(a), (b)(3).
This is because Pelco’s claim for attorney’s fees under the Prompt Payment
Act originates from and is subject to the contract. Although the Prompt Payment
Act provides remedies for ensuring payment under a contract, it is not the source of
any payment obligation. Triple B Servs., 498 S.W.3d at 187 (citing Billy Smith
Enters. v. Hutchison Constr., Inc., 261 S.W.3d 370, 376 (Tex. App.—Austin 2008,
pet. dism’d)). That is, the Act does not create an “independent obligation to pay
monies not otherwise owed under the contract . . . .” Billy Smith Enters., 261 S.W.3d
at 376. Without the contract then, Pelco would not have a claim for attorney’s fees
under the Prompt Payment Act.
Pelco’s attorney’s fees claim thus is one “arising under the contract,” and
section 262.007 constitutes a waiver of Chambers County’s immunity on the claim.
We overrule the portion of Chambers County’s ninth issue asserting governmental
immunity from suit on Pelco’s breach of contract claim.
17
Jury Charge
In its second issue, Chambers County argues that the trial court erred in
rendering judgment for Pelco on its breach-of-contract claim and Prompt Payment
Act claims because Pelco did not “prove or obtain a jury finding that it satisfied all
conditions precedent necessary to terminate and recover under the contract.” More
specifically, Chambers County argues that Pelco asserted claims are subject to the
contract’s alternative dispute-resolution procedure as a condition precedent to—and
an essential element of—Pelco’s recovery. And in the absence of a jury finding or
conclusive evidence of performance of this condition precedent, Pelco waived its
recovery under the contract.
We agree that Pelco waived its grounds for relief by failing to obtain a jury
finding on the condition precedent or on being excused or waived from performing
it or, otherwise, failing to conclusively establish performance of the condition
precedent.
A. Pelco’s Breach of Contract Claim
Performance of a condition precedent is an essential element of a party’s
breach of contract claim. See Assoc. Indem. Corp. v. CAT Contracting, Inc., 964
S.W.2d 276, 283 (Tex. 1998); Centex Corp. v. Dalton, 840 S.W.2d 952, 956 (Tex.
1992) (“A condition precedent is an event that must happen or be performed before
a right can accrue to enforce an obligation.”); Emerald Forest Util. Dist. v. Simonsen
18
Constr. Co., 679 S.W.2d 51, 54 (Tex. App.—Houston [14th Dist.] 1984, writ ref’d
n.r.e.) (“When a contract provides for a particular form of notice, compliance with
such provisions is a condition precedent to invoking the contract rights which are
conditioned on the notice.”).
We determine whether a contractual provision is a condition precedent, or
merely a covenant,6 by examining the contract to ascertain the parties’ intent. See
Criswell v. European Crossroads Shopping Ctr., Ltd., 792 S.W.2d 945, 948 (Tex.
1990). “Our goal is to determine whether the parties intended that the right or
responsibility at issue be conditional.” Arbor Windsor Court, Ltd. v. Weekley Homes,
LP, 463 S.W.3d 131, 136 (Tex. App.—Houston [14th Dist.] 2015, pet. denied).
To glean the parties’ intent to create a condition precedent, we look for
conditional language such as “if,” “provided that,” or “on condition that.” Criswell,
792 S.W.2d at 948. The conditional language must connect the condition precedent
to the conditioned obligation. See Solar Applications Eng’g, Inc. v. T.A. Operating
Corp., 327 S.W.3d 104, 110 (Tex. 2010) (rejecting notion that conditioning some
obligations necessarily operates to condition others). Our task is to construe the
entire agreement, and that task is not altered by the parties’ use of “magic words” in
the contract or the absence of such words. See Criswell, 792 S.W.2d at 948 (“While
6
A covenant is “an agreement to act or refrain from acting in a certain way.” Solar
Applications Eng’g, Inc. v. T.A. Operating Corp., 327 S.W.3d 104, 108 (Tex. 2010).
The remedy for a party’s breach of a covenant is a claim for damages. See id.
19
there is no requirement that such phrases be utilized, their absence is probative of
the parties intention that a promise be made, rather than a condition be imposed.”).
“In construing a contract, forfeiture by finding a condition precedent is to be avoided
when another reasonable reading of the contract is possible.” Id.
Here, the contract document we must interpret is the AIA form document
A2011-1997, which contains alternative dispute-resolution procedures that are
generally accepted as “valid, enforceable and favored as a matter of public policy.”
Cf. Tribble & Stephens Co. v. RGM Constructors, L.P., 154 S.W.3d 639, 662 (Tex.
App.—Houston [14th Dist.] 2004, pet. denied) (citing Zandri Cosntr. Corp. v. Wolfe,
737 N.Y.S.2d 400, 402 (N.Y. App. Div. 2002)).
Specifically, section 4.3 addresses “Claims and Disputes” and begins by
defining a “Claim” as follows:
A claim is a demand or assertion by one of the parties seeking, as a
matter of right, adjustment or interpretation of Contract terms, payment
of money, extension of time or other relief with respect to the terms of
the Contract. The term “Claim” also includes other disputes and
matters in question between the Owner and Contractor arising out of or
relating to the Contract. Claims must be initiated by written notice.
The responsibility to substantiate Claims shall rest with the party
making the Claim.
Subsection 4.3.2 requires that “Claims by either party must be initiated within 21
days after the occurrence of the event giving rise to such Claim or within 21 days
after the claimant first recognizes the condition giving rise to the Claim, whichever
is later,” and instructs that “Claims must be initiated by written notice to
20
[Dannenbaum] and the other party.” Subsections 4.3.4 through 4.3.10 address
specific examples of “Claims,” such as claims for concealed or unknown conditions,
claims for additional cost, claims for additional time, claims relating to injury or
damage to person or property, and claims for consequential damages.
Important here, the contract establishes a dispute-resolution procedure for
“Claims.” It expressly requires that Claims be referred initially to the project
architect—here, Dannenbaum—as a “condition precedent” to litigation.
Specifically, subsection 4.4.1 states:
Decision of Architect. Claims, including those alleging an error or
omission by the Architect [Dannenbaum] but excluding those arising
under Sections 10.3 through 10.5,[7] shall be referred initially to the
Architect for decision. An initial decision by [Dannenbaum] shall be
required as a condition precedent to mediation, arbitration, or
litigation of all Claims between [Pelco] and [Chambers County] arising
prior to the date final payment is due, unless 30 days have passed after
the Claim has been referred to the Architect with no decision have been
rendered by the Architect.
(Emphasis added). And the dispute-resolution procedure includes additional steps
beyond the initial decision from Dannenbaum. Subsection 4.5.1 provides that after
Dannenbaum’s initial decision “or 30 days after submission of the Claim to
[Dannenbaum],” any “Claim arising out of or related to the Contract . . . shall . . . be
7
Sections 10.3 and 10.5 of the General Conditions relate to hazardous materials and
the remediation of hazardous materials.
21
subject to mediation as a condition precedent to arbitration or the institution of legal
or equitable proceedings by either party.” (Emphasis added).
Given the clear and unambiguous language in subsections 4.4.1 and 4.5.1, we
must construe the contract as establishing its dispute-resolution procedure as a
condition precedent to Pelco’s recovery in litigation. Any other construction would
ignore the contract’s plain language. Cf. T.F.W. Mgmt., Inc. v. Westwood Shores
Prop. Owners Ass’n, 162 S.W.3d 564, 570 (Tex. App.—Houston [14th Dist.] 2004,
no pet.) (noting that although conditions precedent are harsh in operation, court
cannot ignore contract’s plain language to avoid harshness). Indeed, even Pelco does
not dispute in its appellate briefing that the dispute-resolution mechanism is a
condition precedent.
Pelco’s argument appears to be that the real question is not whether the
dispute-resolution procedure is a condition precedent but whether Pelco has asserted
a “Claim” under the contract that is subject to the dispute-resolution procedure. And,
according to Pelco, the Court’s opinion in the prior summary-judgment appeal
resolves that issue in Pelco’s favor. Pelco’s argument is based on the following
discussion in the Court’s prior opinion:
Section 4.3 of the contract establishes the procedure for certain disputes
between the parties. The section defines a claim as “a demand or
assertion by one of the parties seeking . . . payment of money . . . .” As
an initial matter, it is not clear that this provision applies in this
circumstance. The section provides more specifically that “[i]f [Pelco]
believes additional costs is involved . . . [the] Claim shall be filed in
22
accordance with this Section 4.3.” This suggests that other claims for
payment of money do not fall under this provision. Otherwise, this
requirement would be superfluous language.
Similarly, other provisions in the contract require resolution of disputes
pursuant to section 4.3. For example, section 8.3 of the contract
concerns “delays and extensions of time.” That section explicitly
provides, “Claims relating to time shall be made in accordance with
applicable provisions of Section 4.3” The portion of the contract
concerning applications for payment is article 9. No section of article
9 requires disputes to be resolved pursuant to section 4.3.
Pelco Constr. Co., 495 S.W.3d at 525–26 (citations omitted). Chambers County
responds that Pelco’s claim seeking payment under the contract for work performed
and lost anticipated profits qualifies as a claim for “payment of money . . . or other
relief with respect to the terms of the Contract” or as a claim under the catchall
phrase including “other disputes and matters in question between [Chambers
County] and [Pelco] arising out of or relating to the Contract.” We agree.
The Court’s prior opinion setting aside the summary judgments for Chambers
County did not decide, or even consider, whether the dispute-resolution procedure
was a condition precedent to Pelco’s recovery for breach of contract in this litigation.
See id. The discussion on which Pelco relies is found in the portion of the Court’s
opinion evaluating whether Chambers County was entitled to judgment as a matter
of law on its counterclaim because “Pelco’s failure to follow the procedure under
the contract for resolution of payment disputes prevent[ed] Pelco from claiming the
withholding [was] a [prior] material breach.” Id. at 525. That is a different question
23
than the one presented in this appeal concerning whether the dispute-resolution
procedure is a condition precedent.
And the qualifying language in the Court’s discussion—the language noting
“it is not clear that [section 4.3] applies” and “suggest[ing]” that the scope of the
provision may be limited to claims for payment of money that involve additional
costs—merely indicates the existence of a question as to the dispute-resolution
procedure’s application. See id. It does not purport to resolve that question. See id.
It is dictum. See Edwards v. Kaye, 9 S.W.3d 310, 314 (Tex. App.—Houston [14th
Dist.] 1999, pet. denied) (“Dictum is an observation or remark made concerning
some rule, principle, or application of law suggested in a particular case, which
observation or remark is not necessary to the determination of the case.”). The
Court’s prior holding was only that Chambers County’s summary judgment motion
did not establish the immateriality of the retainage withholding on Pelco’s first and
second payment applications as a matter of law. See Pelco Constr. Co., 495 S.W.3d
at 525–26.
We hold now that Pelco’s breach of contract claim seeking damages for
unpaid work and lost profits under the contract are “Claims” for the “payment of
money . . . or other relief with respect to the terms of the Contract.” The definition
of a Claim in section 4.3 speaks in terms of “a demand or assertion by one of the
parties seeking, as a matter of right, [a] payment of money [or] relief with respect
24
to the terms of the Contract.” The definition of a Claim is broad enough to include
instances where, as here, the party initiating the claim is entitled to payment under
the existing terms of the contract. The specific examples of Claims in subsections
4.3.4 through 4.3.10 of the contract do not limit the definition of a Claim or otherwise
narrow its scope to exclude Pelco’s breach of contract claim seeking to recover for
unpaid work and lost profits.
Instead, these provisions merely incorporate additional procedures for those
specific types of Claims. For example, section 4.3.5’s provision for “Claims for
Additional Cost” requires a contractor who wishes to “make [a] Claim for an
increase in the Contract Sum” to provide written notice of the claim “before
proceeding to execute the work.” Even if the definition of a Claim reasonably could
not be read so broadly, at the very least, Pelco’s claims for unpaid work and lost
profits under the contract are “disputes . . . between [Chambers County] and [Pelco]
arising out of or relating to the [c]ontract” and, thus, would still be subject to the
contract’s dispute-resolution procedure. Based on our construction of the contract’s
definition of a Claim, we conclude that the dispute-resolution procedure in the
contract is a condition precedent to Pelco’s recovery for breach of contract in this
case.8
8
A broad interpretation of “Claims” to include Pelco’s claims for unpaid work and
lost profits is consistent with the interpretation of other courts considering the scope
of the same definition under the AIA standard form. See, e.g., Hartford Cas. Ins.
25
We next consider whether Pelco waived its recovery by failing to submit the
performance of the condition precedent as an element of its breach of contract claim.
Even though Pelco’s performance of the condition precedent was an essential
element of its recovery for breach of the contract, Pelco did not obtain a jury finding
on its performance of the condition precedent, on waiver, or on any excuse for failing
to perform the condition precedent. And Chambers County objected to the omission
of a condition precedent issue from the court’s charge.
“[W]hen a disputed and essential issue is omitted over the objection of a party,
the appellate court must find that the party waived that element and by so doing did
not meet the burden placed on him by law.” Winfield v. Renfro, 821 S.W.2d 640,
657 (Tex. App.—Houston [1st Dist.] 1991, writ denied) (op. on reh’g); see also TEX.
R. CIV. P. 279; State Dep’t of Highways & Pub. Transp. v. Payne, 838 S.W.2d 235,
241 (Tex. 1992); McKinley v. Stripling, 763 S.W.2d 407, 410 (Tex. 1989). “The
objection or request places the burden of submitting a correct question on the party
with the burden of proof, . . . and the result of that party’s failure to submit a correct
Co. v. MDI Constr., L.L.C., Civil Action No. 10-4369, 2012 WL 4970210, at *2
(E.D. La. Oct. 17, 2012) (“The law of the contract is clear: Any claim relating to the
Contract must be initiated by written notice to the project architect . . . .”); RCR
Bldg. Corp. v. Pinnacle Hosp. Partners, No. M2012-00286-COA-R3-CV, 2012 WL
5830587, at *10 (Tenn. Ct. App. Nov. 15, 2012) (“The definition of a Claim is
certainly broad enough to include instances where the party initiating the Claim is
entitled to payment under the existing terms of the contract.”); Metzler Constr. Co.
LLC v. Stephens, 774 F. Supp. 2d 1073, 1081 (D. Haw. 2011) (rejecting narrow
definition of “Claims”).
26
question after objection is waiver of the ground of relief.” Mangum v. Turner, 255
S.W.3d 223, 227 (Tex. App.—Waco 2008, pet. denied); see also McKinley, 763
S.W.2d at 410; Winfield, 821 S.W.2d at 657.
Pelco argues that the absence of a jury finding on the condition precedent does
not result in a waiver of its recovery here because the testimony of its bookkeeper,
Charlotte Kramer, established that Pelco followed the dispute-resolution procedure
“to the letter.” See TEX. R. CIV. P. 279 (“grounds of recovery or of defense not
conclusively established under the evidence and no element of which is submitted
or requested are waived”) (emphasis added); see also City of Keller v. Wilson, 168
S.W.3d 802, 814–15 (Tex. 2005) (“uncontroverted issues need not be submitted to
a jury at all”). We disagree that the evidence is conclusive on that issue so as to
avoid the need for a jury finding.
The evidence to which Pelco refers is Kramer’s testimony, and the exhibits
supporting her testimony, that she sent Pelco’s first application for payment to the
County representative at Dannenbaum in September 2010 and then followed up by
email or telephone at various times with Dannenbaum, the County Engineer, the
County Auditor, and eventually the County Judge about the status of the application
over the course of two months. Although this may be some evidence that Pelco
attempted more than once to obtain payment on its first payment application, it is
not conclusive evidence that Pelco submitted its claim for the unpaid work to
27
Dannenbaum for an initial decision and then also submitted its claim to mediation
in accordance with the contract’s dispute-resolution condition precedent.
Because Chambers County properly objected to the omission of a condition-
precedent issue, Pelco, having failed to submit such an issue after objection, has
waived its recovery for breach of the contract. See TEX. R. CIV. P. 279. In the
absence of a finding or conclusive evidence of Pelco’s performance of the dispute-
resolution condition precedent, there can be no recovery on Pelco’s breach of
contract claim. See McKinley, 763 S.W.2d at 410; Winfield, 821 S.W.2d at 657.
Accordingly, we sustain Chambers County’s second issue as to Pelco’s breach of
contract claim.9
B. Pelco’s Claim under the Prompt Payment Act
Our disposition of Pelco’s contract claim raises the additional question of
whether Pelco’s claim for interest and attorney’s fees under the Prompt Payment Act
survives or must also fail because the Prompt Payment Act does not create an
independent entitlement to payment. See Triple B. Servs., 498 S.W.3d at 187 (citing
Billy Smith Enters., 261 S.W.3d at 376). Stated differently, we must consider
whether Pelco’s waiver of its recovery under the contract negates the existence of an
9
Given our disposition of this issue, we do not reach Chambers County’s third, fifth,
or sixth issues challenging the sufficiency of the evidence to support the jury’s
liability and damages findings on Pelco’s breach of contract claim. See TEX. R. APP.
P. 47.1.
28
underlying payment obligation for the purpose of the Prompt Payment Act’s interest
penalty and attorney’s fees provision. See TEX. GOV’T CODE §§ 2251.025, .027,
.043. Applying the rules of statutory construction, we conclude it does.
Statutory construction presents a question of law. See State v. Shumake, 199
S.W.3d 279, 284 (Tex. 2006). Our primary objective in statutory construction is to
give effect to the Legislature’s intent. Id. We seek that intent “first and foremost”
in the statutory text. Lexington Ins. Co. v. Strayhorn, 209 S.W.3d 83, 85 (Tex.
2006). We rely on the plain meaning of the text, unless a different meaning is
supplied by legislative definition or is apparent from context, or unless such a
construction leads to absurd results. City of Rockwall v. Hughes, 246 S.W.3d 621,
625–26 (Tex. 2008).
The Legislature has instructed that the rights and remedies in the Prompt
Payment Act are not exclusive. See TEX. GOV’T CODE § 2251.055. As already
described, a governmental entity’s prime liability under the Prompt Payment Act is
the imposition of an interest penalty on untimely payments for goods and services
and an award of attorney’s fees to the prevailing party. See id. §§ 2251.025, .027,
.043. The Prompt Payment Act provides, in relevant part, that a “payment by a
governmental entity . . . is overdue on the 31st day after the later of: (1) the date the
governmental entity receives the goods under the contract; (2) the date the
performance of the service under the contract is completed; or (3) the date the
29
governmental entity receives an invoice for the goods or service.” Id. § 2251.021(a)
(emphasis added). The failure to timely make a payment, in turn, is the basis for the
Prompt Payment Act’s interest penalty—“[a] payment begins to accrue interest on
the date the payment becomes overdue.” Id. § 2251.025(a) (emphasis added). These
provisions use the term “payment” to define the governmental entity’s liability. Id.
§§ 2251.021, .025. And that term is statutorily defined to mean “money owed to a
vendor.”10 Id. § 2251.001(4).
The Prompt Payment Act does not purport to create a right to payment beyond
merely requiring that payments be made timely or else accrue interest. See id. §§
2251.021, .025. Reading the Prompt Payment Act as a whole, it contemplates that
a vendor’s right to payment is governed by the contract between the governmental
entity and the vendor. We therefore conclude that the Prompt Payment Act does not
create an independent obligation to pay money not otherwise owed under the
contract. Cf. Billy Smith Enters., 261 S.W.3d at 376–77 (construing Prompt Payment
Act’s provisions for timely payment of “the appropriate share of the payment” to
subcontractors as not imposing independent obligation to pay money not otherwise
owed under contract).
10
As a “person who supplies goods or services to a governmental entity,” Pelco is a
“vendor.” TEX. GOV’T CODE § 2251.001(10).
30
The effect of our holding that Pelco has waived its claim for breach of the
contract by failing to obtain a jury finding or conclusively establish that it complied
with the dispute-resolution condition precedent is that Chambers County does not
owe any amount under the contract. And under our construction of the Prompt
Payment Act, absent a payment obligation under the contract, its remedies and
requirements simply are not implicated. See id. We therefore hold that Pelco cannot
recover interest or attorney’s fees under the Prompt Payment Act. Accordingly, we
sustain Chambers County’s second issue as to Pelco’s claim under the Prompt
Payment Act.11
Sufficiency of the Evidence
In its first issue, Chambers County contends that the trial court erred by
rendering judgment against Chambers County on its breach of contract counterclaim
because the evidence is legally and factually insufficient to support the jury’s finding
that Pelco did not fail to comply with the contract.
11
Because we have concluded that the Prompt Payment Act claim is not an
independent basis for the recovery of interest and attorney’s fees in this case, we do
not reach Chambers County’s fourth issue challenging the sufficiency of the
evidence to support the jury’s finding that Chambers County violated the Prompt
Payment Act; Chambers County’s seventh issue challenging the awards of interest
in the judgment; or Chambers County’s tenth issue challenging Pelco’s attorney’s
fees. See TEX. R. APP. P. 47.1. We also do not reach Pelco’s cross-appeal related to
its own attorney’s fees under the Prompt Payment Act. See id.
31
 To recover on its counterclaim, Chambers County had the burden to prove
that Pelco failed to comply with the contract. See Bank of Tex. v. VR Elec., Inc., 276
S.W.3d 671, 677 (Tex. App.—Houston [1st Dist.] 2008, pet. denied) (listing
elements for breach of contract, including showing defendant breached contract).
When, as here, the appellant challenges the legal sufficiency of the evidence
supporting an adverse finding on which it had the burden of proof, the appellant must
demonstrate that the evidence establishes, as a matter of law, all vital facts in support
of the issue. Sterner v. Marathon Oil Co., 767 S.W.2d 686, 690 (Tex. 1989). And
when the appellant challenges the factual sufficiency of the evidence supporting an
adverse finding on which it had the burden of proof, the appellant must demonstrate
that the adverse finding is against the great weight and preponderance of the
evidence. Dow Chem. Co. v. Francis, 46 S.W.3d 237, 242 (Tex. 2001).
We measure the evidentiary sufficiency of the jury’s finding that Pelco did
not fail to comply with the contract against the charge given to the jury because
Chambers County did not object to its submission. See Serv. Corp. Int’l v. Guerra,
348 S.W.3d 221, 228–29 (Tex. 2011). The jury charge included a single liability
question on Chambers County’s breach-of-contract counterclaim, asking: “Did
Pelco [ ] fail to comply with the [c]ontract?” The charge instructed the jury that a
“failure to comply must be material” and set out the factors for determining
32
materiality in accordance with the Texas Supreme Court’s decision in Mustang
Pipeline Co., Inc. v. Driver Pipeline Co., Inc., 134 S.W.3d 195, 199 (Tex. 2004).12
Chambers County argues that the jury’s finding that Pelco did not fail to
comply with the contract is not sustainable because “uncontroverted evidence” at
trial established that Pelco breached the contract by terminating the “[c]ontract in its
December 14, 2010 letter, without ever utilizing any of the dispute resolution
processes outlined in the [c]ontract.” However, the only argument Chambers
County makes in support of the materiality of these breaches is not based on the
record developed at trial; instead, Chambers County rests its material-breach
argument exclusively on this Court’s prior opinion in the summary-judgment appeal.
Specifically, Chambers County asserts: “In its prior opinion, this Court noted
that Pelco’s clear and unequivocal termination of the [c]ontract constituted an
‘undisputed’ material breach of the [c]ontract.” Beyond this assertion, Chambers
County does not, as the legal-sufficiency standard requires, identify any evidence
12
These factors, which derive from the Restatement (Second) of Contracts, are (1) the
extent to which the injured party will be deprived of the benefit which he reasonably
expected; (2) the extent to which the injured party can be adequately compensated
for the part of that benefit of which he will be deprived; (3) the extent to which the
party failing to perform or to offer to perform will suffer forfeiture; (4) the likelihood
that the party failing to perform or to offer to perform will cure his failure, taking
into account the circumstances including any reasonable assurances; [and] (5) the
extent to which the behavior of the party failing to perform or to offer to perform
comports with standards of good faith and fair dealing. Mustang Pipeline Co., Inc.
v. Driver Pipeline Co., Inc., 134 S.W.3d 195, 199 (Tex. 2004) (citing RESTATEMENT
(SECOND) OF CONTRACTS § 241).
33
presented at trial that established materiality as a matter of law or, as the factual-
sufficiency standard requires, explain why the adverse jury finding is against the
great weight and preponderance of the evidence presented at trial. See Sterner, 767
S.W.2d at 690; Dow Chem. Co., 46 S.W.3d at 242; see also TEX. R. APP. P. 38.1(i)
(appellant’s brief “must contain a clear and concise argument for the contentions
made, with appropriate citations to authorities and to the record”).
The Court’s prior opinion in the summary judgment appeal does not compel
us to set aside the jury’s finding that Pelco did not fail to comply with the contract.
Again, any binding effect of the Court’s prior opinion cannot be determined without
a close review of its important facts. See Edwards, 9 S.W.3d at 313. The prior
opinion must be considered in its specific context, which is an appeal of a summary
judgment. See id.
In that specific summary judgment context, the Court noted that “[i]t [was]
undisputed that Pelco’s December 14, 2010 letter terminating the construction
contract would constitute a material breach of the contract.” Pelco Constr. Co., 495
S.W.3d at 520. This was not a holding of the Court; the Court merely clarified the
scope of the parties’ dispute in the summary judgment appeal. See id. Although the
materiality of the alleged breach by Pelco might have been undisputed by the parties
in the prior summary judgment appeal, we do not evaluate the sufficiency of the
evidence to support a jury finding based on the state of the summary judgment
34
record. Cf. City of Keller, 168 S.W.3d at 810–22 (framing evidentiary sufficiency
standard based on record developed before the factfinder). Rather, this case is now
before us after a jury trial at which both parties’ liability for alleged breaches of
contract was hotly contested. There was no agreement as to the materiality of any
breach by Pelco.
To the extent Chambers County’s brief can be read to impliedly argue that the
Court’s clarifying statement on the scope of the prior summary judgment appeal is
the law of the case, we reject that argument. The law-of-the-case doctrine does not
apply to questions of fact. See Hudson v. Wakefield, 711 S.W.2d 628, 630 (Tex.
1986). And the materiality of a contract breach typically is a question of fact for the
jury. See Pelco Constr. Co., 495 S.W.3d at 522; see also Henry v. Masson, 333
S.W.3d 825, 835 (Tex. App.—Houston [1st Dist.] 2010, no pet.) (“The materiality
of a breach—the question of whether a party’s breach of contract will render the
contract unenforceable—generally presents a dispute for resolution by the trier of
fact.”). As described above, nothing in the Court’s opinion in the prior summary
judgment appeal removed the issue of materiality from the province of the jury.
We therefore reject Chambers County’s argument that this Court must set
aside the jury’s finding that Pelco did not fail to comply with the contract based on
its “conclusion that Pelco committed an ‘undisputed’ material breach.” Because that
is Chambers County’s exclusive argument as to the materiality element of its breach-
35
of-contract counterclaim—meaning Chambers County has not identified any other
reason why materiality was either established as a matter of law or why the adverse
jury finding was against the great weight and preponderance of the evidence—we
overrule Chambers County’s first issue.
Jury Argument
In its eighth issue, Chambers County contends that a new trial is required on
its contract counterclaim against Pelco because Pelco’s counsel made an improper
jury argument. During rebuttal argument, Pelco’s counsel stated:
Mr. Harris’ attorney at that time, . . . in his termination letter, not only
did he refer to the retainage, he also referred to Section 14 of the
contract which is in front of you, termination by the contractor.
Chambers County’s attorney is correct that the owner can terminate –
can stop the contract. This paragraph right here says that if they stop
the contract for 30 or more days, then we [Pelco] get some rights. We
[Pelco] have some rights.
Chambers County objected that the contract “does not say that.” The trial court
overruled the objection, admonishing the jury that “[i]t’s argument. You have the
evidence before you.” Chambers County did not offer any further explanation of its
objection, though it complains now on appeal that the rebuttal argument was
improper because the trial court had “already found in a prior summary judgment
order that Pelco had no such right” to terminate and Pelco did not “plead that it had
a right to terminate the [c]ontract based on” the provision that were the subject of
the rebuttal argument.
36
The Rules of Appellate Procedure require that, to preserve an allegation of
error for appellate review, the record must show a timely objection stating the
grounds for the requested ruling with enough specificity to make the trial court aware
of the complaint, unless the specific grounds were apparent from the context. See
TEX. R. APP. P. 33.1(a)(1)(A). From the language used in the objection and the
response of the trial court, it is apparent that the trial court did not perceive the
objection to be directed at the alleged violation of a prior order or pleading rules.
Rather, the record reflects that the trial court perceived the objection to be a
disagreement with Pelco’s interpretation of the evidence. Nor can we say that the
context of the objection makes the specific grounds now complained of clear. We
therefore conclude that the error alleged was not preserved at trial pursuant to the
Texas Rules of Appellate Procedure. See Philllips v. Bramlett, 288 S.W.3d 876, 883
(Tex. 2009) (objection to improper jury argument was not sufficiently specific to
preserve error).
In addition, this is not the type of jury argument for which an objection is not
required because the statement’s prejudice was incurable. See Living Ctrs. of Tex.,
Inc. v. Peñalver, 256 S.W.3d 678, 680 (Tex. 2008) (incurable jury argument is rare
because “[t]ypically, retraction of the argument or instruction from the court can cure
any probable harm”); Standard Fire Ins. Co. v. Reese, 584 S.W.2d 835, 839 (Tex.
1979) (complaint must prove improper jury argument “was not curable by an
37
instruction, a prompt withdrawal of the statement or a reprimand by the judge”).
Incurable argument is that which strikes at the very core of the judicial process and
may be raised even without timely objection. See Peñalver, 256 S.W.3d at 681–82.
Cases finding incurable harm typically involve “unsubstantiated attacks on the
integrity or veracity of a party or counsel, appeals to racial prejudice, or the like.”
Phillips, 288 S.W.3d at 883. Pelco’s rebuttal argument regarding the contract’s
termination provision is not of this same class of impropriety, and, considering the
record as a whole, not so extreme as to be incurable even if it was improper.
Accordingly, we overrule Chambers County’s eighth issue.
Conclusion
We affirm the portion of the trial court’s judgment denying Chambers County
relief on its breach of contract claim against Pelco. We reverse the remainder of the
trial court’s judgment and render judgment that Pelco take nothing on its breach-of-
contract and Prompt Payment Act claims against Chambers County.
Terry Adams
Justice
Panel consists of Chief Justice Radack and Justices Hightower and Adams.
38