Austin Co. v. Vaughn Building Corp.

643 S.W.2d 113, 26 Tex. Sup. Ct. J. 64, 1982 Tex. LEXIS 352
CourtTexas Supreme Court
DecidedOctober 27, 1982
DocketC-637
StatusPublished
Cited by46 cases

This text of 643 S.W.2d 113 (Austin Co. v. Vaughn Building Corp.) is published on Counsel Stack Legal Research, covering Texas Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Austin Co. v. Vaughn Building Corp., 643 S.W.2d 113, 26 Tex. Sup. Ct. J. 64, 1982 Tex. LEXIS 352 (Tex. 1982).

Opinion

ON MOTION FOR REHEARING

RAY, Justice.

The original opinion and judgment of this Court dated July 14, 1982, are withdrawn and the following opinion and judgment are substituted.

This is an action by Vaughn Building Corporation against the Austin Company for breach of express and implied warranties contained in a contract to construct a commercial building. The trial court rendered a take-nothing judgment. The court of appeals reversed the judgment of the trial court and rendered judgment that Vaughn recover $68,000 together with post- *114 judgment interest. 620 S.W.2d 678. We affirm the judgment of the court of appeals.

On April 23, 1968, Vaughn Building Corporation and Austin Company entered into a contract under which Austin Company was to construct a printing plant and office building on land owned by Vaughn in Dallas, Texas. The contract provided that Austin Company was to furnish the plans and specifications. The specifications called for a roof of “[ajggregate surfaced built-up asphalt water-proofing installed in accordance with the manufacturer’s specifications for a 20-year bondable type roof.” On January 8, 1969, Vaughn gave its final acceptance of the facility, subject to Austin Company’s completion of a number of items, none of which involved the roof. On February 12, 1969, Vaughn Building Corporation leased the facility to its subsidiary, Steck-Warlick Company. The lease provided for a twenty-five year term but was cancelled by agreement on July 1,1971, the same day Vaughn conveyed the property by general warranty deed to Steck-Warlick.

Even before Steck-Warlick began its occupancy of the facility, the roof leaked whenever it rained. Steck-Warlick gave Austin Company oral notice of the problem and Austin attempted several times to repair the leaks. On January 19,1970, Robert H. Taylor, Vice-President of Vaughn Building Corporation, wrote a letter to the Austin Company, informing Austin of the continued leaks. The letter stated that Steck-Warlick, the occupant, was looking to Vaughn for repair of the roof and that Vaughn, in turn, was looking to the Austin Company. Following the receipt of this letter, Austin Company made numerous attempts to repair the roof but after each attempt the leaking recurred. All during this period, Austin contended the leaks were due not to a defective roof, but to lack of proper maintenance by Vaughn and Steck-Warlick and to damage to the roof membrane by someone other than itself. Finally, on June 27, 1973, an attorney for Steck-Warlick notified the Austin Company that leaks were recurring more frequently and that to avert an interruption of business, a new roof was needed as soon as possible. Austin Company offered to replace the roof if Steck-Warlick would reimburse it for its costs. Steck-Warlick refused.

On November 3,1975, Steck-Warlick filed suit against the Austin Company, alleging Austin had breached express and implied warranties regarding the roof. On October 28, 1976, Vaughn Building Company filed a petition in intervention, in which it expressly adopted Steck-Warlick’s pleadings. Thereafter, on January 10, 1977, Steck-Warlick asked leave of the court to amend its pleadings to substitute Vaughn Building Corporation as plaintiff in its place. After a hearing on the motion, the trial court found that Steck-Warlick brought suit in behalf of Vaughn and that Vaughn had at all times been the legal owner of the cause of action asserted in the suit. Accordingly, on April 5,1977, the trial court ordered that Vaughn Building Corporation be substituted as plaintiff in place of Steck-Warlick Company.

Trial was to a jury, which found the following: (1) the roof was defective on January 8, 1969, the date of final acceptance; (2) Vaughn Building Corporation discovered the roof was defective on October 21, 1974; (3) an ordinarily prudent person exercising ordinary care would have discovered the defect on November 29, 1972; (4) the reasonable cost of remedying the defect was $68,000. Austin Company moved for judgment on the verdict, contending that the jury’s finding that an ordinarily prudent person would have discovered the defect in November of 1972 conclusively demonstrated that the four-year statute of limitations had run by the time Vaughn, the true party in interest, was substituted as plaintiff. In the alternative, Austin Company asked for judgment non obstante ve-redicto. The trial court rendered judgment for Austin Company, stating that the jury’s verdict “was for the defendant and against the plaintiff.” The trial court apparently agreed with Austin Company that limitations had run as to Vaughn’s cause of action. The court also stated there was no *115 evidence or, alternatively, insufficient evidence to sustain the findings in Vaughn’s favor.

The court of appeals disagreed that Vaughn’s cause of action was barred by limitations. It held that the jury findings supported Vaughn’s recovery for breach of an implied warranty of fitness for a particular purpose. Accordingly, the court of appeals reversed the judgment of the trial court and rendered judgment that Vaughn recover $68,000 plus post-judgment interest.

The construction contract contained the following express warranty:

Austin guarantees the work against defective workmanship and material for one year from the date of completion of the work as follows: Upon written notice of any such defects, Austin will either make necessary repairs or at its option request Owner to make such repairs, all at Austin’s expense.

The court of appeals, because of its holding that Vaughn could recover under the implied warranty, found it unnecessary to consider the several points of error in which Vaughn argued it was entitled to recovery under the express one-year warranty. Vaughn asserts in this Court, by way of cross-point, that the district court erred in not allowing it to recover under the express warranty. We choose to decide the case on express warranty grounds and do not address the question of whether a commercial construction contract contains an implied warranty of fitness.

Vaughn did not give Austin Company written notice of the leaky roof until January 19, 1970, one year and eleven days after its final acceptance of the structure. Austin Company argues that the express warranty required Vaughn to give written notice of any defect within one year of the date of completion. (In their briefs in the court of appeals, both parties treat the date of final acceptance, January 8, 1969, as the date of completion). Vaughn argues that the warranty did not require written notice within one year of completion, only that the defect arise within one year. Applying the rule that “a writing is generally construed most strictly against its author and in such a manner as to reach a reasonable result consistent with the apparent intent of the parties," we determine that the warranty provision does not require written notice within one year. Republic National Bank of Dallas v. Northwest National Bank of Ft. Worth, 578 S.W.2d 109, 115 (Tex.1978).

The express warranty, so construed, does not specify a time by which the owner must give written notice of defects. In such a case, the law implies a reasonable time limit. Palmer v. Katz,

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Bluebook (online)
643 S.W.2d 113, 26 Tex. Sup. Ct. J. 64, 1982 Tex. LEXIS 352, Counsel Stack Legal Research, https://law.counselstack.com/opinion/austin-co-v-vaughn-building-corp-tex-1982.