A.I.G. Construction Company, Inc. v. Dave Thomson, Individually and D/B/A Waterside Company

• Court: Court of Appeals of Texas
• Decided: September 9, 2004
• Docket: 14-03-00021-CV
• Status: Published

Opinion

Motion for Rehearing Overruled; Affirmed; Memorandum Opinion of June 29, 2004, Withdrawn and Substitute Memorandum Opinion filed September 9, 2004

Motion for Rehearing Overruled; Affirmed; Memorandum Opinion of June 29, 2004, Withdrawn and Substitute Memorandum Opinion filed September 9, 2004.

In The

Fourteenth Court of Appeals

____________

NO. 14-03-00021-CV

A.I.G. CONSTRUCTION COMPANY, INC., Appellant

V.

DAVE THOMSON, INDIVIDUALLY AND D/B/A WATERSIDE COMPANY, Appellee

On Appeal from the 258th District Court

Trinity County, Texas

Trial Court Cause No. 18,176

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S U B S T I T U T E   M E M O R A N D U M   O P I N I O N

We overrule the motion for rehearing filed by appellant A.I.G. Construction Company, Inc.  We withdraw the memorandum opinion issued in this case on June 29, 2004, and we issue this memorandum opinion in its place. 

In this case, we must determine whether a subcontractor=s representation concerning goods and services constitutes a violation of the Texas Deceptive Trade Practices-Consumer Protection Act (ADTPA@) or whether the alleged failure in the representation is merely a breach of the subcontractor=s promise to perform under the contract.  We conclude that on the facts presented by this record, reasonable minds could differ as to whether the subcontractor violated the DTPA.  Accordingly, we affirm the trial court=s judgment.

I.  Factual and Procedural Background

Appellee Dave Thomson d/b/a Waterside Company (AThomson@) was in the construction business.  In 2000, he was approached regarding a large piece of business requiring pile-driving expertise.  Lacking this type of experience, Thomson sought to retain a pile driver through the Yellow Pages telephone directory.  Thomson contacted several area contractors advertising pile-driving services, and he received a return call from Richard Goff, President and Chief Executive Officer of appellant A.I.G. Construction Company, Inc. (AA.I.G.@).  Thomson met with Goff and some of his associates and viewed some of A.I.G.=s work.  According to Thomson, Goff represented that he had the expertise, manpower, and equipment to drive pilings and build bulkheads in a good and workmanlike manner.^[1]  Specifically, Thomson testified Goff stated, Ahe had been doing it [this type of work] all his life and his father and grandfather were in the business, third generation.@  Thomson did not receive the particular piece of business that had prompted his initial contact with A.I.G., but the parties entered into an oral agreement under which A.I.G. was to provide the labor and equipment on certain other projects Thomson obtained in Trinity and Polk Counties.  

One of the projects required A.I.G. to construct a bulkhead on waterfront property (the AHarris Project@).  According to Thomson=s testimony, A.I.G. was also responsible for installing backfill on the Harris Project; however, Goff disagreed that this task was a part of the parties= agreement.  Thomson testified that A.I.G. did not build the bulkhead straight and did not completely finish the backfill on the Harris Project.  When Thomson=s client was not satisfied with the work on the Harris Project, Thomson was forced to obtain another piece of equipment for the job, lower the price of the bulkhead, and hire another operator to finish the backfill.  

On the second project, A.I.G. was hired to drive pilings for a boathouse (Athe Tomlinson Project@).  Thomson noticed the pilings were not in alignment and he contacted Gary Bennett, a field inspector with the Trinity River Authority for his opinion.  Bennett notified Thomson that the pilings on the boathouse were not straight.  Thomson contacted Goff to inform him of the misalignment, and Goff attempted to remedy the situation by banding the pilings, a technique that was unsuccessful.  In addition, testimony indicates that there were problems with the crew on the Tomlinson Project.  Both the foreman and the crew abandoned the job at some point.  Thomson testified that his client was not happy with the work on the Tomlinson Project and that Thomson hired another subcontractor to complete the work.

Thomson paid A.I.G. a sum of $15,438.66 for the work on the Harris and Tomlinson Projects.  In March of 2001, Thomson filed two lawsuits, one in Polk County and the other in Trinity County; the suits were consolidated in Trinity County.  In his third amended petition, Thomson sued A.I.G. and Goff individually, alleging breach of contract and violations of the DTPA and the Residential Construction Liability Act (ARCLA@).  A jury found no breach of contract, but concluded A.I.G. had violated the DTPA by misrepresenting that its goods or services would be of a particular quality.  No RCLA question was submitted to the jury.  The jury awarded $6,000 in damages based on the DTPA violation and made findings as to Thomson=s reasonable attorney=s fees.  The trial court entered judgment that Thomson recover actual damages based on the jury=s verdict, plus attorney=s fees for trial in the sum of $12,875; $25,000 in attorney=s fees in the event A.I.G. unsuccessfully challenged the judgment in the court of appeals; and $20,000 in the event A.I.G. unsuccessfully challenged the judgment in the Texas Supreme Court, in addition to interest and court costs.  The trial court further ordered that Thomson take nothing from Goff individually.  A.I.G. filed a motion for judgment notwithstanding the verdict on the basis that the only evidence offered by Thomson in support of his DTPA claim was an alleged mere promise by A.I.G. to perform its contract.  At the conclusion of a hearing on the matter, the trial court denied the motion.

II.  Issues and Analysis

In its first issue, A.I.G. argues that the trial court erred by granting judgment on Thomson=s DTPA claim when the only evidence in support of his claim was an alleged mere promise to perform under the oral agreement between the parties.  A.I.G. contends the trial court erred in denying its motion for judgment notwithstanding the verdict, which asserted this argument.  A.I.G. does not challenge the sufficiency of the evidence to support the jury=s finding that A.I.G. misrepresented the standard, quality, or grade of its goods or services.  Nor does A.I.G. contend Goff=s statement to Thomson amounted to puffing. 

We review a denial of a motion for judgment notwithstanding the verdict under a legal sufficiency standard.  See Navarette v. Temple Indep. Sch. Dist., 706 S.W.2d 308, 309 (Tex. 1986).  We view the evidence in the light most favorable to the jury=s verdict, considering only the facts and inferences that support it.  Id.  If more than a scintilla of evidence exists supporting the jury=s verdict, the motion for judgment notwithstanding the verdict was properly denied.  See Mancorp, Inc. v. Culpepper, 802 S.W.2d 226, 228B30 (Tex. 1990).  Evidence supporting a finding amounts to more than a scintilla if the evidence supporting the finding rises to a level that would allow reasonable people to differ in their conclusions.  See Burroughs Wellcome Co. v. Crye, 907 S.W.2d 497, 499 (Tex. 1995). 

The DTPA prohibits A[f]alse, misleading, or deceptive acts or practices in the conduct of any trade or commerce.@  Tex. Bus. & Com. Code Ann. ' 17.46(a) (Vernon 2002).  Section 17.46(b) is a laundry list of specifically prohibited acts.  Helena Chem. Co. v. Wilkins, 47 S.W.3d 486, 501 (Tex. 2001).  Section 17.46(b)(7) prohibits Arepresenting that goods or services are of a particular standard, quality, or grade, or that goods are of a particular style or model, if they are of another.@ ' 17.46(b)(7).  Actionable representations may be oral or written.  Wilkins, 47 S.W.3d at 502.  A party need not prove intent to make a misrepresentation under section 17.46(b)(7); making the false representation itself is actionable.  Id.  For a consumer to maintain an action for this violation, the consumer must show that the misrepresentation was a producing cause of his damages and that the consumer relied on the misrepresentation to his detriment.  ' 17.50(a)(1)(A)B(B).

A.I.G. relies heavily on Crawford v. Ace Sign, Inc. in support of its contention that the representation made by Goff constituted a mere promise to perform and not a violation of DTPA section 17.46(b)(7).  In doing so, A.I.G. also argues Thomson=s damages, like those in Crawford, arose solely out of the contract and not as a result of any misrepresentations.  See Crawford v. Ace Sign, Inc., 917 S.W.2d 12, 14B15 (Tex. 1996) (per curiam).  In Crawford, Ace Sign alleged that Crawford made several misrepresentations during a meeting concerning an advertisement in the Yellow Pages.  Id. at 13B14.  Crawford represented that the advertisement would be published upon payment; that advanced payment was required; that Ace Sign was heavily dependent on Yellow Pages advertising; and that an advertisement would increase Ace Sign=s business.  Id. at 14.  The Crawford court held that these statements were representations that the defendants would fulfill their contractual obligation to publish the advertisement, not misrepresentations resulting in a violation of the DTPA.  Id. at 14B15.  In addition, the Crawford court noted that the statements themselves did not cause any harm; rather, the damages arose from the breach of the contract.  Id.

In this case, Thomson testified that Goff orally represented he had the ability to perform the work in a good and workmanlike manner.^[2]  Thomson also stated that he relied on Goff=s expertise in pile driving and building bulkheads and hired him because Goff had the appropriate equipment for the jobs.  We disagree with A.I.G. that this situation presents facts analogous to those in Crawford.  Crawford represented that the advertisement would be printed and it was not.  See Crawford, 917 S.W.2d at 13.  In this case, Goff represented to Thomson that he had the ability to perform the work in a good and workmanlike manner, a statement beyond the agreement the parties had for A.I.G. to drive pilings and build bulkheads.  See Howell Crude Oil Co. v. Donna Refinery Partners, Ltd., 928 S.W.2d 100, 108B09 (Tex. App.CHouston [14th Dist.] 1996, writ denied) (distinguishing Crawford when defendant made affirmative misrepresentation during contract formation in violation of DTPA and independent of contract).  Further, the jury found A.I.G. did not breach the contract, but did violate section 17.46(b)(7) of the DTPA.  Under that reasoning, the jury must have found that Thomson=s damages were caused by his reliance on A.I.G.=s representation rather than a breach of the parties= agreement.  Under these circumstances, Crawford does not apply.^[3]  See id. at 108B09; see also Jim Walter Homes, Inc. v. Valencia, 690 S.W.2d 239, 240B42 (Tex. 1985) (affirming jury=s finding of knowing DTPA violation when builder represented house was constructed in good, substantial, and workmanlike manner and it was not); Jim Walter Homes, Inc. v. Gonzalez, 686 S.W.2d 715, 718B19 (Tex. App.CSan Antonio 1985, writ dism=d) (finding knowing misrepresentation under DTPA section 17.46(b)(7) when builder represented by contract that house would be built, constructed, and completed in good, substantial, and workmanlike manner and it was not); Jim Walter Homes, Inc. v. Chapa, 614 S.W.2d 838, 841 (Tex. App.CCorpus Christi 1981, writ ref=d n.r.e.) (finding misrepresentation of good, substantial, workmanlike manner is sufficient to violate section 17.46(b)(7) of the DTPA). 

In Barnett v. Coppell North Texas Court, Ltd., Barnett challenged the legal sufficiency of the evidence to support the jury=s DTPA findings, including a violation of section 17.46(b)(7).  See Barnett v. Coppell North Texas Court, Ltd., 123 S.W.3d 804, 822 (Tex. App.CDallas 2003, pet. denied).  Lewis, the owner of the facility to be constructed by Barnett, testified he had no experience bidding construction projects and, therefore, relied on Barnett to oversee the project.  Id.  Barnett made representations regarding the cost of the project, the completion date, that he had adequate crews, and that the quality would be Agreat.@  Id. at 822B23.  With regard to the quality, Lewis testified that the concrete piers were not placed properly and structural changes were necessary because the company Barnett hired went bankrupt, which caused delay.  Id. at 815.  Based on Barnett=s representations, and the fact that Lewis testified he relied on Barnett=s representations in making the decision to hire him, the court found the evidence sufficient to support the jury=s findings that Barnett violated the DTPA.  Id. at 823.

As in Barnett, Thomson testified that he did not have experience with building bulkheads or driving pilings at that time, nor did he possess the proper equipment to do such work.  He stated that he relied on Goff=s expertise in those areas and hired Goff because Goff had the necessary equipment.  Thomson testified that on the Harris Project, the bulkhead was not straight and on the Tomlinson Project, the pilings were not in alignment.  Though the testimony regarding the representations made is sparse, reasonable minds could differ as to whether A.I.G. violated the DTPA under the facts in this case.  Accordingly, we overrule A.I.G.=s first issue.

In its second issue, A.I.G. claims the trial court erred by granting judgment for recovery of attorney=s fees when Thomson was not entitled to recover on the DTPA claim. Because we have concluded the trial court correctly denied A.I.G.=s motion for judgment notwithstanding the verdict on the DTPA claim, we find no merit in A.I.G.=s second issue regarding the award of attorney=s fees.  Thomson prevailed on the DTPA claim and therefore was entitled to obtain an award of attorney=s fees under the DTPA.  See Tex. Bus. & Com. Code Ann. ' 17.50(d) (Vernon 2002).  Accordingly, we overrule A.I.G.=s second issue.

                                                            III.  Conclusion

We hold that the trial court did not err in denying A.I.G.=s motion for judgment notwithstanding the verdict because, based on Goff=s representation that he had the ability to perform the work in a good and workmanlike manner, reasonable minds could differ as to whether A.I.G. violated the DTPA under the facts in this case.  Because Thomson prevailed on his DTPA claim, he was entitled to attorney=s fees under the statute. 

We affirm the trial court=s judgment.

/s/        Kem Thompson Frost

Justice

Judgment rendered and Substitute Memorandum Opinion filed September 9, 2004.

Panel consists of Justices Edelman, Frost, and Guzman.

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^[1]  In addition, Goff testified that in October of 2000, A.I.G. held itself out as being an expert in the areas of building boathouses, decks, and structures over, in, and around water.

^[2]  Q:  ADid he represent to you that he had the expertise, had the knowledge, had the know-how, had the manpower, had the equipment to drive pilings, build bulkheads in a good and workmanlike manner?@

    A:  AYes.  He said he had been doing it almost all his life and his father and grandfather were in the business, third generation.@

^[3]  A.I.G. insists that Thomson=s damages, like those in Crawford, arose solely out of the contract.  In support of its contention, A.I.G. argues the damages were for corrective work done after A.I.G. performed under the contract and, therefore, were not incurred as a result of any misrepresentation that occurred during contract formation.  We disagree.  Thomson testified that, prior to entering into their oral agreement, Goff represented he had the ability to perform work of this type in a good and workmanlike manner.  Thomson presented evidence of costs incurred to correct the misaligned pilings on the Tomlinson Project.  He also stated that the price of the bulkhead on the Harris Project had to be lowered because the client was not completely satisfied with the work on the bulkhead.  Unlike the damages in Crawford, these damages arose not from a failure to perform under the contract, but from Thomson=s reliance on A.I.G.=s misrepresentation as to the quality of its services.  See Howell, 928 S.W.2d at 109 & n.4.