Edifika Investments, LLC D/B/A Military Village Apartments v. Chain & Chain Construction, LLC

Fourth Court of Appeals
San Antonio, Texas
MEMORANDUM OPINION
No. 04-21-00568-CV
EDIFIKA INVESTMENTS, LLC d/b/a Military Village Apartments,
Appellant
v.
CHAIN & CHAIN CONSTRUCTION, LLC,
Appellee
From the 438th Judicial District Court, Bexar County, Texas
Trial Court No. 2021-CI-14175
Honorable Nicole Garza, Judge Presiding
Opinion by: Beth Watkins, Justice
Sitting: Luz Elena D. Chapa, Justice
Beth Watkins, Justice
Liza A. Rodriguez, Justice
Delivered and Filed: May 17, 2023
REVERSED AND REMANDED
Appellant Edifika Investments, LLC d/b/a Military Village Apartments challenges a
judgment in favor of appellee Chain & Chain Construction, LLC. We reverse the trial court’s
judgment and remand this cause for further proceedings.
BACKGROUND
Edifika and Chain entered into a written contract for Chain to design and construct an
apartment complex on land Edifika owned in San Antonio. Edifika ultimately sued Chain under
various tort and contract theories, alleging that Chain’s work on the project was defective and that
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Chain demanded payment not contemplated by the contract. Chain filed counterclaims for breach
of contract, quantum meruit, statutory interest under Chapter 28 of the Texas Property Code, and
attorney’s fees, alleging that Edifika requested and agreed to additional work outside the scope of
the contract. Chain further alleged that Edifika barred Chain from the premises before the
construction was finished. Chain also filed third-party actions against several entities that are not
party to this appeal.
Chain filed a motion for partial summary judgment on its counterclaims against Edifika,
and Edifika responded. Chain filed a reply in support of its motion and objected to two of Edifika’s
summary judgment exhibits. On April 19, 2021, the trial court signed an order granting Chain’s
motion. The partial summary judgment awarded Chain monetary damages on its breach of contract
and quantum meruit claims, interest under Chapter 28 of the Texas Property Code, and post-
judgment interest. The trial court also sustained Chain’s objections to Edifika’s summary judgment
evidence.
After the partial summary judgment, Chain moved to sever its counterclaims, including its
unresolved claim for attorney’s fees, from the remaining issues in the case. On July 15, 2021, the
trial court signed an order granting the motion to sever and assigning a new cause number to
Chain’s counterclaims. The trial court’s order noted, “The parties have agreed to severance” and
provided that Chain’s severed counterclaims “may be pursued to final resolution as a separate
matter.”
In the new cause number, Chain filed a motion for summary judgment on its claim for
attorney’s fees. On September 21, 2021, the trial court signed a final judgment in the new cause
number that incorporated the April 19, 2021 partial summary judgment and awarded trial and
contingent appellate attorney’s fees to Chain. Edifika timely appealed the trial court’s judgment.
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ANALYSIS
Edifika raises eight issues on appeal. In its first five issues, Edifika argues: (1) Chain’s
motion for summary judgment was not sufficient to shift the evidentiary burden to Edifika; and
(2) Chain did not conclusively establish that it was entitled to judgment on its breach of contract,
quantum meruit, Chapter 28, and attorney’s fee counterclaims. Edifika’s final three issues, which
it presents in the alternative, challenge the trial court’s exclusion of Edifika’s summary judgment
evidence, the amount of damages awarded to Chain, and the severance order. We address only
those issues that are necessary to the disposition of this appeal. TEX. R. APP. P. 47.1.
Standard of Review
Chain moved for traditional summary judgment on its breach of contract, quantum meruit,
Chapter 28, and attorney’s fee counterclaims. See TEX. R. CIV. P. 166a(c). A party is entitled to
traditional summary judgment on its own affirmative claim if it conclusively proves all essential
elements of that claim. Compass Bank v. Durant, 516 S.W.3d 557, 565 (Tex. App.—Fort Worth
2017, pet. denied). As the summary judgment movant, Chain bore the burden to establish that there
were no genuine issues as to any material facts and it was therefore entitled to judgment as a matter
of law. TEX. R. CIV. P. 166a(c); Lightning Oil Co. v. Anadarko E&P Onshore, LLC, 520 S.W.3d
39, 45 (Tex. 2017). A motion for summary judgment must stand or fall on its own merits, and a
summary judgment may only be granted or affirmed on grounds expressly presented in the motion
itself. See, e.g., Weekley Homes, LLC v. Paniagua, 646 S.W.3d 821, 826 (Tex. 2022) (per curiam);
Hardaway v. Nixon, 544 S.W.3d 402, 412 (Tex. App.—San Antonio 2017, pet. denied).
As the nonmovant, Edifika was not required to respond to Chain’s motion or present any
controverting evidence unless and until Chain established its entitlement to judgment as a matter
of law. Energen Res. Corp. v. Wallace, 642 S.W.3d 502, 509 (Tex. 2022). We review a summary
judgment de novo, “taking as true all evidence favorable to the nonmovant, and indulging every
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reasonable inference and resolving any doubts in the nonmovant’s favor.” Id. (internal quotation
marks omitted).
Breach of Contract
Applicable Law
To be entitled to summary judgment on its breach of contract counterclaim, Chain was
required to establish as a matter of law: (1) the existence of a valid contract; (2) Chain performed
or tendered performance under the contract; (3) Edifika breached the contract; and (4) Chain was
damaged by Edifika’s breach. See, e.g., Brooks v. Excellence Mortg., Ltd., 486 S.W.3d 29, 36
(Tex. App.—San Antonio 2015, pet. denied); see also TEX. R. CIV. P. 166a(c).
Application
A party that moves for summary judgment on its own breach of contract claim has “the
burden to establish, as a matter of law, what performance was required under the [contract] and
that it fulfilled those requirements.” Tribble & Stephens Co. v. RGM Constructors, L.P., 154
S.W.3d 639, 652 (Tex. App.—Houston [14th Dist.] 2004, pet. denied) (plurality op.). Chain’s
motion for partial summary judgment argued the parties “had a contractual agreement . . . wherein
[Edifika] agreed to pay a specific price for the work performed by” Chain; that Chain and Edifika
“entered into a construction contract for a new multi-family residential apartment complex called
‘Military Villages’”; and that “[t]he agreed contract price was $7,620,000.00.” However, Chain
did not include a copy of the parties’ written contract or quote any excerpts from that contract with
its motion for partial summary judgment. We must therefore begin by determining whether
Chain’s summary judgment evidence was sufficient to conclusively establish Chain’s contractual
obligations. 1 See id.; TEX. R. CIV. P. 166a(c).
1
Edifika attached a copy of the parties’ contract to both its original petition and its response to Chain’s motion for
summary judgment. But the copies of the contract Edifika provided indicated that the “Plans and Specifications” to
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Chain’s summary judgment evidence included Certificates of Occupancy for two buildings
identified as “Bldg 3” and “Bldg 4.” Chain also presented an affidavit from its president, Eduardo
Cadena, in which Cadena averred that the issuance of the certificates “meant that Edifika could
begin renting out and earning income.” But these exhibits did not show what obligations Chain
owed under the contract or that the completion of Buildings 3 and 4 satisfied those obligations.
See Tribble & Stephens, 154 S.W.3d at 652; Brooks, 486 S.W.3d at 36. The motion and its exhibits
did not establish, for example, how many buildings or apartments the parties agreed Chain would
construct, which portions of the design and construction Chain was wholly or primarily responsible
for, or whether the construction was to have been completed by a specific date. Moreover, Chain’s
own summary judgment evidence showed Chain performed work on at least two other buildings
for which it did not present a Certificate of Occupancy. Under the appropriate standard of review,
we must infer that Chain was required to complete those buildings but did not do so. See, e.g.,
Townsend v. Hindes, 619 S.W.3d 763, 770 (Tex. App.—San Antonio 2020, no pet.) (summary
judgment evidence must be viewed in light most favorable to nonmovant); see also Gilbert v.
Kalman, 650 S.W.3d 135, 145–46 (Tex. App.—El Paso 2021, no pet.) (reversing summary
judgment because movant’s own evidence raised a fact issue).
In its reply in support of its motion for summary judgment, Chain argued the two
Certificates of Occupancy were “clear evidence of substantial performance.” Substantial
performance is “an equitable doctrine that was adopted to allow a contractor who has substantially
completed a construction contract to sue on the contract rather than being relegated to his cause of
action for quantum meruit.” Vance v. My Apartment Steak House of San Antonio, Inc., 677 S.W.2d
which the parties agreed appear in a separate “Exhibit A.” Neither Exhibit A nor any other plans or specifications
appear in the appellate record. Accordingly, even if we were to consider the copies of the contract Edifika presented,
we cannot say those documents are sufficient to conclusively establish Chain’s contractual obligations. See Tribble &
Stephens, 154 S.W.3d at 652.
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480, 482 (Tex. 1984). But Chain’s motion for summary judgment did not expressly seek recovery
under a theory of substantial performance; instead, Chain sought to recover the full contract price
with no deductions. See id. (“When a contractor has substantially performed a building contract,
he is entitled to recover the full contract price less the cost of remedying those defects that are
remediable.”). As a result, we may not affirm the summary judgment on grounds of substantial
performance. See Hardaway, 544 S.W.3d at 412. In any event, because Chain’s motion for
summary judgment did not establish Chain’s contractual obligations, the motion offered no basis
upon which to conclude that Chain “did substantially perform in accordance with the agreement.”
Smith v. Smith, 112 S.W.3d 275, 279 (Tex. App.—Corpus Christi–Edinburg 2003, pet. denied);
see also Turner v. Ewing, 625 S.W.3d 510, 518 (Tex. App.—Houston [14th Dist.] 2020, pet.
denied) (reviewing authority defining substantial compliance with construction contract).
Chain’s motion for summary judgment also argued that Edifika breached the contract by
excluding Chain from the premises and by failing to pay amounts owed under the contract. A
party’s material breach of a contract can excuse the other party’s future performance. See Earth
Power A/C & Heat, Inc. v. Page, 604 S.W.3d 519, 524 (Tex. App.—Houston [14th Dist.] 2020,
no pet.); but see Bartush-Schnitzius Foods Co. v. Cimco Refrigeration, Inc., 518 S.W.3d 432, 436
(Tex. 2017) (per curiam) (nonmaterial breach will support a claim for damages but will not excuse
non-breaching party from performing). Additionally, this court has held that “[a] contractor can
recover on a contract when the failure to substantially perform is the fault of the other party.” Tips
v. Hartland Devs., Inc., 961 S.W.2d 618, 623 (Tex. App.—San Antonio 1998, no pet.). Chain’s
motion therefore appeared to argue that Chain was entitled to recover the entire contract price
because its failure to fully perform was excused by Edifika’s breaches.
As explained above, however, Chain did not present a copy of the parties’ contract or
otherwise conclusively establish its terms. While Chain’s motion asserted that Chain “considered
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[its exclusion from the premises] a breach of contract by Edifika,” it did not present evidence
showing that the exclusion constituted a breach of Edifika’s contractual obligations as a matter of
law. The motion did not conclusively establish, for example, that Edifika lacked a contractual right
to bar Chain from the premises under these circumstances. See Villarreal v. Chesapeake Zapata,
L.P., No. 04-08-00171-CV, 2009 WL 1956387, at *6 (Tex. App.—San Antonio July 8, 2009, pet.
denied) (mem. op.) (noting summary judgment standard of review does not permit reviewing court
to make inferences in movant’s favor). Chain therefore did not conclusively establish that Edifika
breached the contract or that Chain’s failure to perform was Edifika’s fault. See Brooks, 486
S.W.3d at 36.
For these reasons, Chain’s motion for summary judgment did not establish that Chain was
entitled to judgment as a matter of law on all required elements of its breach of contract claim. See
id.; TEX. R. CIV. P. 166a(c). As a result, it did not trigger Edifika’s burden to present controverting
evidence on that claim. See TEX. R. CIV. P. 166a(c); Energen, 642 S.W.3d at 509. We therefore
sustain Edifika’s challenge to the summary judgment on Chain’s breach of contract claim.
Quantum Meruit
Applicable Law
“Quantum meruit is an equitable remedy that is based upon the promise implied by law to
pay for beneficial services rendered and knowingly accepted.” Hill v. Shamoun & Norman, LLP,
544 S.W.3d 724, 732 (Tex. 2018) (internal quotation marks omitted). To be entitled to summary
judgment on its quantum meruit claim, Chain was required to conclusively establish: (1) Chain
rendered valuable services or furnished materials to Edifika; (2) Edifika accepted, used, and
enjoyed those services and materials; and (3) Edifika was reasonably notified that Chain expected
to be paid for the services and materials. See id. at 732–33; E-Learning LLC v. AT&T Corp., 517
S.W.3d 849, 860 (Tex. App.—San Antonio 2017, no pet.). “A party generally cannot recover under
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a quantum-meruit claim when there is a valid contract covering the services or materials
furnished.” Hill, 544 S.W.3d at 733.
Application
Chain’s motion for summary judgment argued that Edifika requested and agreed to pay for
“change order” work that went beyond the scope of the parties’ contract. The motion listed some
of the purported change order work, and an exhibit to the motion included “a line-by-line
accounting of the requested and performed changes.” Again, however, Chain’s motion did not
establish the terms of the parties’ contract. Consequently, the motion did not conclusively show
that the change order work fell outside of Chain’s express contractual obligations. See San Antonio
Masonry & Tool Supply, Inc. v. Epstein & Sons Int’l, Inc., 281 S.W.3d 441, 445–46 (Tex. App.—
San Antonio 2005, no pet.) (holding existence of an express contract barred recovery in quantum
meruit).
Under certain circumstances, such as construction contracts, “recovery in quantum meruit
is permitted despite the existence of an express contract that covers the subject matter of the claim.”
STR Constructors, Ltd. v. Newman Tile, Inc., 395 S.W.3d 383, 391 (Tex. App.—El Paso 2013, no
pet.) (internal quotation marks omitted). But under those circumstances, the claimant must show
that the owner of the land accepted and retained “benefits arising as a direct result of the
contractor’s partial performance.” Truly v. Austin, 744 S.W.2d 934, 937 (Tex. 1988). Here, Chain’s
motion showed that Edifika: (1) “made and approved” requests for change order work; and (2)
used “permits issued in the name of Chain & Chain Construction, LLC” to continue construction
after Chain was excluded from the premises. But Chain’s evidence did not establish as a matter of
law that Edifika accepted, used, and enjoyed all of the materials and services for which Chain
sought to recover in quantum meruit. See Hill, 544 S.W.3d at 733; Truly, 744 S.W.2d at 937. For
this additional reason, Chain did not conclusively establish all the required elements of its quantum
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meruit claim and, as a result, did not trigger Edifika’s burden to present controverting evidence.
TEX. R. CIV. P. 166a(c); Energen, 642 S.W.3d at 509.
We therefore sustain Edifika’s challenge to the summary judgment on Chain’s quantum
meruit claim.
Chapter 28
Applicable Law
Chapter 28 of the Texas Property Code, entitled “Prompt Payment to Contractors and
Subcontractors,” provides:
If an owner or a person authorized to act on behalf of the owner receives a written
payment request from a contractor for an amount that is allowed to the contractor
under the contract for properly performed work or suitably stored or specially
fabricated materials, the owner shall pay the amount to the contractor, less any
amount withheld as authorized by statute, not later than the 35th day after the date
the owner receives the request.
TEX. PROP. CODE ANN. § 28.002(a). If a property owner fails to pay a contractor’s invoice as
required by section 28.002, the “unpaid amount bears interest at the rate of 1 ½ percent each
month.” TEX. PROP. CODE ANN. § 28.004(b).
Application
Chain’s motion for summary judgment identified three exhibits that ostensibly supported
its claim under Chapter 28. The first exhibit, Cadena’s affidavit, averred that Edifika failed to pay
outstanding amounts under both the contract and the change orders. The second, a spreadsheet
attached to Cadena’s affidavit, itemized those amounts and appeared to show the dates those
amounts accrued. However, neither the affidavit nor the spreadsheet indicated when Edifika
received “a written payment request from [Chain]” for those amounts. See TEX. PROP. CODE
§ 28.002(a). Accordingly, those exhibits did not conclusively show Chain was entitled to judgment
on its claim under Chapter 28. See id.; TEX. R. CIV. P. 166a(c).
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The third exhibit upon which Chain relied for its Chapter 28 claim was an excerpt from
Chain’s fourth supplemental disclosure responses. That document purported to identify the unpaid
amounts in question, the “35 day due date” for those amounts, and a total “Penalty under Chapter
28” as of the date of that document. However, a party generally may not rely on its own discovery
responses as summary judgment evidence. See Morgan v. Anthony, 27 S.W.3d 928, 929 (Tex.
2000) (per curiam); Sprague v. James River Ins. Co., No. 03-19-00859-CV, 2021 WL 5457217, at
*3 (Tex. App.—Austin Nov. 18, 2021, no pet.) (mem op.). We note, moreover, that the “[t]otal
contract portion unpaid amount” listed in this exhibit was $267,390.07, while Cadena’s affidavit
identified the “original contract price . . . unpaid to date” as $267,367.07. See Sadeghian v. Wright,
No. 06-18-00062-CV, 2019 WL 255741, at *8 (Tex. App.—Texarkana Jan. 8, 2019, pet. denied)
(mem. op.) (concluding “summary judgment was improper” where movants’ “own summary
judgment evidence created fact issues”).
Finally, as noted above, Chain’s motion for summary judgment did not conclusively
establish either the terms of the contract or the extent of Chain’s performance of those terms. The
motion therefore did not show as a matter of law that the amounts Chain sought were “allowed to
the contractor under the contract for properly performed work[.]” See TEX. PROP. CODE
§ 28.002(a).
For these reasons, Chain’s motion for summary judgment did not conclusively establish
that Chain was entitled to judgment as a matter of law on its claim under Chapter 28 or shift the
evidentiary burden to Edifika. TEX. R. CIV. P. 166a(c); Energen, 642 S.W.3d at 509. We sustain
Edifika’s challenge to the summary judgment on Chain’s Chapter 28 claim.
Attorney’s Fees
In addition to the partial summary judgment on Chain’s substantive claims, the trial court
granted Chain a separate summary judgment on its claim for attorney’s fees. Chain sought
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attorney’s fees under section 38.001 of the Texas Civil Practice and Remedies Code and section
28.005 of the Texas Property Code. See TEX. CIV. PRAC. & REM. CODE ANN. § 38.001(b)(1), (2),
(8); TEX. PROP. CODE ANN. § 28.005(b).
“To obtain an award of attorney’s fees under Section 38.001, ‘a party must (1) prevail on
a cause of action for which attorney’s fees are recoverable, and (2) recover damages.’” Peterson
Grp., Inc. v. PLTQ Lotus Grp., L.P., 417 S.W.3d 46, 60 (Tex. App.—Houston [1st Dist.] 2013,
pet. denied) (quoting Green Int’l, Inc. v. Solis, 951 S.W.2d 384, 390 (Tex. 1997)). Because we
have held that Chain was not entitled to summary judgment on its breach of contract and quantum
meruit claims, it was not entitled to attorney’s fees under section 38.001. See id.; Harley Rogers
P’ship, Ltd. v. Quick Roofing, LLC, No. 04-21-00030-CV, 2022 WL 2230954, at *2 (Tex. App.—
San Antonio June 22, 2022, no pet.) (mem. op.).
In a claim under Chapter 28 of the Property Code, a trial court “may award costs and
reasonable attorney’s fees as the court determines equitable and just.” TEX. PROP. CODE
§ 28.005(b). In light of our disposition of Chain’s Chapter 28 claim, the trial court could, in its
discretion, conclude that a fee award to Chain is not “equitable and just.” See id.; cf. Lemus v.
Aguilar, 491 S.W.3d 51, 61–62 (Tex. App.—San Antonio 2016, no pet.) (applying similarly
worded attorney’s fee statute). For that reason, we hold Chain did not conclusively establish its
entitlement to attorney’s fees under Chapter 28. See Vast Constr., LLC v. CTC Contractors, LLC,
526 S.W.3d 709, 726 (Tex. App.—Houston [14th Dist.] 2017, no pet.).
We sustain Edifika’s challenge to the fee award. Because our resolution of Edifika’s first
five issues is dispositive, we need not consider its remaining issues. TEX. R. APP. P. 47.1.
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CONCLUSION
We reverse the trial court’s September 21, 2021 final judgment and remand this cause to
the trial court for further proceedings consistent with this opinion.
Beth Watkins, Justice
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