Bryan Smith D/B/A Vision Design and Build v. Robert Overby and Teresa Overby

Opinion

ACCEPTED 04-15-00436-CV FOURTH COURT OF APPEALS SAN ANTONIO, TEXAS 5/9/2016 10:16:58 PM KEITH HOTTLE CLERK

NO. 04-15-00436-CV FILED IN 4th COURT OF APPEALS IN THE FOURTH COURT OF APPEALS SAN ANTONIO, TEXAS AT SAN ANTONIO, TEXAS 5/9/2016 10:16:58 PM KEITH E. HOTTLE BRYAN SMITH D/B/A VISION DESIGN AND BUILDClerk

APPELLANT

V.

ROBERT OVERBY AND TERESA OVERBY

APPELLEES From the 438th District Court of Bexar County, Texas Trial Court No. 2008-CI-02799 Honorable Gloria Saldana, Judge Presiding

REPLY BRIEF OF APPELLANT, BRYAN SMITH D/B/A VISION DESIGN AND BUILD

THORNTON BIECHLIN REYNOLDS POZZA & WHYTE, PLLC & GUERRA Dan Pozza Marcella A. Della Casa State Bar No. 16224800 State Bar No. 24009862 Lorien Whyte 100 N.E. Loop 410, Suite 500 State Bar No. 24042440 San Antonio, Texas 78216 239 E. Commerce Street (210) 581-0288 – Phone San Antonio, TX 78205 (210) 525-0666 – Fax (210) 226-8888 – Phone MDellaCasa@thorntonfirm.com (210) 222-8477 – Fax danpozza@pozzaandwhyte.com lorienwhyte@pozzaandwhyte.com

ATTORNEYS FOR APPELLANT, BRYAN SMITH D/B/A VISION DESIGN AND BUILD TABLE OF CONTENTS Page

TABLE OF CONTENTS .......................................................................................... ii

INDEX OF AUTHORITIES.................................................................................... iii OBJECTIONS TO BRIEF AND STATEMENT OF FACTS...................................1 SUMMARY OF THE ARGUMENT ........................................................................2

REPLY ARGUMENT ...............................................................................................3 I. The numerous charge issues warrant a new trial. ................................ 3

A. Vision was entitled to a jury question as to the reasonableness of the offer of repair. ..........................................3

B. There was sufficient evidence to require that the trial court submit a mitigation instruction to allow the jury to consider whether the Overbys failed to mitigate their damages. ......................................................................................8

II. The Overbys are incorrect that simply the existence of a defect is sufficient—instead, the true test is whether Vision failed to live up to its warranty by not trying to cure the defect. ..................... 11

III. At a minimum, the suit must be remanded for a new trial because the Overbys’ evidence to support the lump sum award for cost of repair is legally and factually insufficient. ....................... 13

IV. Attorneys’ fees must be reversed or reduced. .................................... 24

V. The Overbys fail to respond to Vision’s complaint regarding the error on the face of the judgment. ...................................................... 27

CONCLUSION & PRAYER ...................................................................................27

CERTIFICATE OF SERVICE ................................................................................29 CERTIFICATE OF COMPLIANCE .......................................................................30

-ii- INDEX OF AUTHORITIES Cases Page

Barker v. Eckman, 213 S.W.3d 306 (Tex. 2006) ................................................................... 26

Cal-Tex Lumber Co., Inc. v. Owens Handle Co., Inc., 989 S.W.2d 802 (Tex. App.—Tyler 1999, no pet.) ................................. 23

Columbia Rio Grande Healthcare, L.P. v. Hawley, 284 S.W.3d 851 (Tex. 2009) ......................................................................8

Elbaor v. Smith, 845 S.W.2d 240 (Tex. 1992) .................................................................. 7,8

First State Bank v. Keilman, 851 S.W.2d 914 (Tex. App.—Austin 1993, writ denied) ....................... 23

Headington Oil Co., L.P. v. White, 287 S.W.3d 204 (Tex. App.—Houston [14th Dist.] 2009, no pet.) ........ 26 Hulcher Services, Inc. v. Emmert Indus. Corp., No. 02-14-00110-CV, 2016 WL 368180 (Tex. App.—Fort Worth Jan. 28, 2016, no pet. h.) ........................... 26, 27 Jones v. Pesak Bros. Const., Inc., 416 S.W.3d 618 (Tex. App.—Houston [1st Dist.] 2013, no pet.)........... 12

Lone Starr Multi-Theatres, Ltd. v. Max Interests, Ltd., 365 S.W.3d 688 (Tex. App.—Houston [1st Dist.] 2011, no pet.)........... 26

Maritime Overseas Corp. v. Ellis, 971 S.W.2d 402 (Tex. 1998) ................................................................... 13

McGinty v. Hennen, 372 S.W.3d 625 (Tex. 2012) ....................................................... 14, et seq.

Mustang Pipeline Co. v. Driver Pipeline Co., 134 S.W.3d 194 (Tex. 2004) ....................................................... 14, et seq.

O’Donnell v. Roger Bullivant of Texas, Inc., 940 S.W.2d 411 (Tex. App.—Fort Worth 1997, writ denied) ...................6

-iii- Sanders v. Constr. Equity, Inc., 45 S.W.3d 802 (Tex. App.—Beaumont 2001, pet. denied) .................... 12

Smith-Reagan & Associates, Inc. v. Fort Ringgold Limited, No. 04-13-00608-CV, 2015 WL 1120398 (Tex. App.—San Antonio Mar. 11, 2015, pet. filed) .............................. 23 Whitecotton v. Silverlake Homes, L.L.C., No. 09-08-00065-CV, 2009 WL 2045224 (Tex. App.—Beaumont July 16, 2009, no pet.) (mem. op.) .......................................................................................... 12, 13

Statutes & Rules Texas Property Code Annotated § 27.004(e)(2) .................................... 11, 24, 25 Texas Property Code Annotated § 27.004(h) .......................................................6 Texas Property Code Annotated § 27.006 ................................................... 12, 13 Texas Rule of Appellate Procedure 38.1(g)..........................................................1 Texas Rule of Appellate Procedure 38.1(i) ..........................................................1 Texas Rule of Appellate Procedure 38.2 ..............................................................1 Texas Rule of Appellate Procedure 44.1 ....................................................... 8, 24 Texas Rule of Civil Procedure 278 .......................................................................7

-iv- TO THE HONORABLE FOURTH COURT OF APPEALS:

Appellant, BRYAN SMITH D/B/A VISION DESIGN AND BUILD, files

this Reply Brief of Appellant, and respectfully shows the Court as follows:

OBJECTIONS TO BRIEF AND STATEMENT OF FACTS

Texas Rule of Appellate Procedure 38.1 requires that the statement of facts

and the argument be supported by appropriate citations to authorities and the

record. TEX. R. APP. P. 38.1(g),(i); 38.2 (applying Rule 38.1 to Appellee’s Brief).

Throughout Appellees’ Brief, the Overbys provide propositions of law and

assertions of fact with no record references. This Court and Vision should not be

required to pour through this extensive record to verify or respond to assertions of

law and fact not supported by record references. As such, Vision objects to all

assertions of law and fact not supported by appropriate citations to the law or the

record. SUMMARY OF THE ARGUMENT

This jury verdict resulted from an improperly charged jury and in the

absence of appropriate evidence supporting the jury’s findings and damage award.

The Overbys’ response to Vision’s brief fails to address many of Vision’s

arguments in support of this Court either entering a take nothing judgment or

remanding for a new trial. Rather, the Overbys rely on unsupported assertions of

law and fact and gloss over what was lacking in this trial—appropriate evidence

and a proper jury charge. The Overbys instead hope this Court will look past all of

the errors and affirm, but an affirmance cannot be had on this record.

At a minimum, the jury’s lump sum damage award cannot be upheld. The

Supreme Court has been quite clear that a plaintiff cannot simply take the stand

and testify that he incurred out-of-pocket expenses in support of recovering costs

of repair. And, all of the cost of repair damages have to be supported by

competent evidence that each cost is reasonable and necessary. By asking for a

lump sum award, the Overbys needed to direct this Court to sufficient evidence to

support the whole award, but they cannot and did not in their brief.

-2- REPLY ARGUMENT

I. The numerous charge issues warrant a new trial.

A. Vision was entitled to a jury question as to the reasonableness of the offer of repair.

Vision complains the jury was deprived of proposed Question 6 that would

have afforded the jury the opportunity to determine if Vision made a reasonable

offer in accordance with Section 27.004(e) of the RCLA. Appellant’s Brief at 12.

The Overbys’ sole response is that the offer was untimely, and, therefore, it was

proper to prevent the jury from considering the reasonableness of the offer in

accordance with the RCLA. Appellees’ Brief at 9. However, in doing so, the

Overbys fail to cite to the record in support of their various allegations and ignore

the plethora of evidence in the record establishing the offer of repair was timely.

The TRCC issued remanded findings on November 10, 2008, which was

mailed to Vision on November 12, 2008. RR Part 1, Plaintiffs’ Exh. 16, pg. 378.

Both the Overbys and Vision were provided an opportunity to appeal the remanded

findings on or before the 15th day of receipt of the findings. Id. On December 10,

2008, Vision mailed the TRCC a letter notifying the TRCC of the current status of

the project at the Overbys’ residence. RR Part 2, Defendant’s Exh. 48, pg. 99.

During this time period, Vision was already working with the Overbys to schedule

repair-work to be made at the Overbys, but the Overbys again stopped Vision from

completing such work. RR Part 2, Defendant’s Exh. 48, pg. 102.

-3- On December 30, 2008, Vision submitted a SIRP Follow-up Form to the

TRCC, updating the TRCC on the status of work by providing that: (1) repairs

were offered to the homeowner, (2) the homeowner accepted the offer of repairs,

(3) repairs have been made to the property, (4) the repairs included all

recommendations made in the final nonappealable report but were still ongoing,

and (5) repairs were not yet completed because Vision was awaiting an engineered

grading plan per the homeowners’ request prior to continuing repairs. RR Part 2,

Defendant’s Exh. 48, pg. 106.

Throughout the time the TRCC was conducting its third party inspections

and this matter was winding its way through the administrative process, Vision

continued to communicate with the Overbys, continued to honor its warranty and

the construction contract, and continued to try to fix the repairs sought by the

Overbys in an attempt to ensure their satisfaction with Vision’s work. RR Part 2,

Defendant’s Exh. 48, pg. 195. Between November 12, 2008, and February 8,

2009, Plaintiffs and Vision corresponded almost daily via email regarding

proposed repairs and scheduling. RR Part 2, Defendant’s Exh. 48. However, the

Overbys repeatedly denied Vision reasonable access to the home to complete the

repairs. RR Part 2, Exh. 48, 102-03.

To memorialize the parties’ agreement on Vision’s offer of repair, on

February 11, 2009, Vision sent a written offer of repair to the Overbys via certified

-4- mail. RR Part 2, Defendant’s Exh. 48, pg. 111. It is clear from the Overbys’

return correspondence of February 12, 2009 that they agreed that Vision had either

timely submitted an offer of repair or the parties had agreed in writing to an

extension:

RR Part 1 Exh. 17, pg. 384. The language in the Overbys’ letter is clear—they

were responding to Vision’s “offer of repair.” Id. This is further confirmed by a

series of letters back and forth between the parties.

On February 19, 2009, within 10 days as required by the TRCC, Vision sent

the Overbys a supplemental offer of repair in response to the Overbys reply letter

dated February 12, 2009. RR Part 2, Defendant’s Exh. 48, pg. 157 (specifically

indicating “This letter is in response to your reply dated February 12, 2009 to the

previously proposed “Update” and “Offer to Repair”). On February 27, 2009, the

Overbys replied to Vision’s February 19, 2009 supplemental offer of repair,

specifically providing that the Overbys were sending the “letter in response to the

aforementioned letter [dated February 19, 2009] from Vision Design and Build

considered to be a ‘Supplemental Written Offer to Repair’” as per section 313.23

of the TRCC. RR Part 2, Defendant’s Exh. 48, pg. 182. The Overbys’ letter further

-5- instructed Vision that his “response to this partial acceptance is expected within the

time frame set and required by the TRCC.” Id.

Section 27.004(h) of the Texas Property Code provides that a homeowner

and a contractor may agree in writing to extend any time period described in

Chapter 27. TEX. PROP. CODE ANN. § 27.004(h). The Fort Worth Court of Appeals

was presented with a similar issue in O’Donnell v. Roger Bullivant of Texas, Inc.,

940 S.W.2d 411, 419 (Tex. App.—Fort Worth 1997, writ denied). In O’Donnell,

the homeowners’ letter expressly gave the contractor 60 days to respond to their

letter. Id. The court provided that “[t]he O’Donnells cannot now be allowed to

claim an offer of repair that was received within the time period that they specified

was untimely.” Id. at 419. Thus, the court found the contractor’s offer to repair

timely. Id.

The parties’ ongoing correspondence evidences their agreement to extend

the time period to make and accept or reject an offer. RR Part 2, Defendant’s Exh.

48 (numerous letters within this exhibit). Section 27.004(h) explicitly permits such

agreement. TEX. PROP. CODE ANN. § 27.004(h). As such, the Overbys “cannot

now be allowed to claim an offer of repair that was received within the time period

that they specified was timely.” O’Donnell, 940 S.W.2d at 419. Accordingly,

Vision’s offer of repair dated February 19, 2009, that was agreed to by the Overbys

-6- and provided for by Vision within the specific deadlines the Overbys provided in

their responsive letters, was timely.

As such, the Overbys are incorrect that the trial court was not required to

submit Vision’s proposed Question 6 that would have allowed the jury to

determine if the February 19, 2009 offer of repair was “reasonable.” The plain

language of Rule 278 bound the trial court to submit the question for the jury’s

consideration since Vision’s pleadings and the evidence supported such a

submission. See TEX. R. CIV. P. 278 (A trial court is required to submit to the jury

the questions, instructions, and definitions “which are raised by the written

pleadings and the evidence.”); Elbaor v. Smith, 845 S.W.2d 240, 244 (Tex. 1992)

(As to the trial court’s failure to submit a question to the jury, the Supreme Court

has been clear that Rule 278 “imposes a substantive, nondiscretionary directive to

trial courts requiring them to submit requested questions to the jury if the pleadings

and any evidence support them.”); SCR 3; RR Part 2, Defendant’s Exh. 48, pg.

157.

The Overbys in no way dispute that Vision made several offers of repair,

and specifically the February 19, 2009 offer. Instead, they now want to, although

they treated the offer timely by the plain language in their own letters, argue the

offer of repair was not timely so that they can avoid the jury having the opportunity

to consider whether the offer made was reasonable. Vision clearly met its burden

-7- by asking that the trial court submit for the jury’s consideration whether that offer

was reasonable. Appellant’s Brief APPX Tab 4; CR 484. Because the trial court

failed to submit the question for the jury to determine if the offer was “reasonable,”

the trial court could not conduct a post-verdict reduction of the damages and

attorneys’ fees in accordance with Section 27.004(e). The error was harmful as it

prevented Vision from obtaining a reduction of the damages and attorneys’ fees,

which clearly caused the rendition of an improper judgment. Columbia Rio

Grande Healthcare, L.P. v. Hawley, 284 S.W.3d 851, 855 (Tex. 2009); TEX. R.

APP. P. 44.1. Such error necessitates a remand for a new trial. Elbaor, 845 S.W.2d

at 252.

B. There was sufficient evidence to require that the trial court submit a mitigation instruction to allow the jury to consider whether the Overbys failed to mitigate their damages.

This whole suit was about whether the Overbys mitigated their damages or

whether they instead tried to circumvent the RCLA and the TRCC and move into

costly litigation. The Overbys jumped ship from their agreement to allow Vision

to complete the repairs they agreed to on March 30, 2009 when they filed suit just

one day later on March 31, 2009, and as a result, claimed almost $100,000

attorneys’ fees and almost $75,000 in damages unsupported by the evidence. The

mitigation instruction Vision proposed would have allowed the jury to determine if

the Overbys failed to mitigate their damages. Appellant’s Brief at 15. Now,

-8- instead of recognizing the plethora of evidence in the record, the Overbys simply

focus on the November and December mitigation proposals to essentially argue

that they were too close in time to trial to support the instruction and that the offers

would not have made the Overbys whole. Appellees’ Brief at 12-13. But, had the

mitigation instruction been submitted, the jury would have had the ability to

determine whether the Overbys failed to take reasonable action to mitigate the

damages. The proposed instruction was as follows:

CR 446.

Despite the plethora of evidence in the record, the Overbys sole response is

that there was no evidence to support such a submission. Yet, the record is replete

with Vision’s numerous and ongoing offers to make the repairs identified by the

TRCC, and a series of settlement and buy-back offers, some without even

requesting a full and final release:

November 19, 2009 Vision Offer to Repair/Settlement, including buy-back offer (RR Part 2, Defendant’s Exh. 48, pg. 230)

December 4, 2009 Vision Supplemental Offer to Repair/Settlement (RR Part 2, Defendant’s Exh. 48, pg. 254)

-9- March 11, 2010 Vision Buy-Back Offer (RR Part 2, Defendant’s Exh. 48, pg. 278)

March 31, 2010 Vision Supplemental Offer of Repair (RR Part 2, Defendant’s Exh. 48, pg. 281)

November 25, 2014 Vision Mitigation Proposal (offer of repair/settlement offer) (RR Part 2, Defendant’s Exh. 48, pg. 292)

December 6, 2014 Vision Second Mitigation Proposal (buy- back offer) (RR Part 2, Defendant’s Exh. 48, pg. 304)

For instance, the November 25, 2014 offer of repair, if accepted, would have

allowed Vision to finish making the repairs, rather than allowing the Overbys to

recover cash from Vision in lieu of the repairs (completely contrary to the intent of

the RCLA and the TRCC). RR Part 2, Defendant’s Exh. 48, pg. 292. Likewise,

the jury should have been able to determine if Vision’s buy-back offer was

reasonable and failure to accept the offer equated to the Overbys’ not mitigating

their damages as the RCLA contemplates. RR Part 2, Defendant’s Exh. 48, pg.

304. Vision was entitled to have the jury consider, based on these offers of repair

and mitigation offers, whether the Overbys failed to mitigate their damages.

The record is also replete with evidence that the Overbys declined Vision’s

repeated attempts to finish the repair work, as the TRCC contemplates the parties

will do, and when the Overbys did finally authorize some of the repair work they

often delayed and thwarted the work. RR Part 2, Defendant’s Exh. 48, pgs. 102-03,

-10- 214, 225; RR Part 2, Defendant’s Exh. 49, pgs. 329-331, 336, 339; 6 RR 183-85,

190-91. And, in addition to limiting damages recoverable, Section 27.004 also

limits the attorneys’ fees that are recoverable if the Plaintiff “does not permit the

contractor or independent contractor a reasonable opportunity to inspect or repair

the defect pursuant to an accepted offer of settlement.” TEX. PROP. CODE ANN. §

27.004(e)(2). There is clearly evidence that the damages sought and obtained by

the Overbys were increased by their failure to allow Vision to complete the work

and by their failure to accept the mitigation proposals.

Vision was prevented from accomplishing what the RCLA contemplates—

that the repair work will be done instead of the homeowner seeking an award of

money damages and attorneys’ fees resulting from litigation. The result was years

of litigation. All the while, even counsel for the Overbys admitted on the record

that “the jury is going to have to determine whether or not we unreasonably failed

to mitigate our damages and what damages were caused from the failure to

mitigate.” 3 RR 12. The jury should have been given the ability to make this

determination, and the trial court improperly removed that ability from the jury.

II. The Overbys are incorrect that simply the existence of a defect is sufficient—instead, the true test is whether Vision failed to live up to its warranty by not trying to cure the defect.

The Overbys’ proposition in support of the judgment is “the fact [that

defects] exist is evidence of a breach of warranty, breach of contract and

-11- negligence.” Appellees’ Brief at 16. But, such an argument wholly ignores the

number of cases Vision relied upon that clearly hold that a construction defect does

not by itself equate to liability without more. Appellants’ Brief at 18 (citing

Whitecotton v. Silverlake Homes, L.L.C., No. 09-08-00065-CV, 2009 WL

2045224, at * 7 (Tex. App.—Beaumont July 16, 2009, no pet.) (mem. op.)

(holding the mere existence of damage is not enough to impose liability on a

builder); see also Jones v. Pesak Bros. Constr., Inc., 416 S.W.3d 618, 624 (Tex.

App.—Houston [1st Dist.] 2013, no pet.) (holding, “the existence of a construction

defect does not have the same meaning as the existence of a defendant’s liability

for a construction defect.”); Sanders v. Constr. Equity, Inc., 45 S.W.3d 802, 803

(Tex. App.—Beaumont 2001, pet. denied)(rejecting appellee’s argument that the

Court “impose strict liability for any construction defect, whether or not, for

example, the defect...constitutes a breach of contract” and finding “nothing in the

statute that imposes strict liability for a construction defect”).

The contractor must have failed by not attempting to live up to its warranty

by trying to cure the defect. See TEX. PROP. CODE ANN. § 27.006; Whitecotton,

2009 WL 2045224, at *7. When the evidence demonstrates the contractor is

willing to repair the defect, but the homeowner prevents the contractor from

remedying the defect and conducting repair work, then the contractor is not liable

for any damages that might be a consequence of the unrepaired construction defect.

-12- Whitecotton, 2009 WL 2045224, at *7. While the conduct of the Overbys is not as

extreme as it was in Whitecotton, here the evidence is clear that Vision made

ongoing and repeated efforts to make the remaining repairs, but Vision was

constantly delayed or thwarted in those efforts. Appellant’s Brief at 19-21.

A homeowner cannot avoid the clear directives of the RCLA by making a

claim for repairs and then not allowing the repairs to be made. See TEX. PROP.

CODE ANN. § 27.006; Whitecotton, 2009 WL 2045224, at *7. Therefore, the

damages relating to the remaining repairs were not attributable to Vision after it

was denied the ability to cure the problems, but instead were attributable to the

Overbys. While Vision requests a take-nothing judgment, at a minimum, the

evidence in support of the finding is so against the great weight and preponderance

of the evidence, that it is clearly wrong and unjust, and, therefore, warrants a new

trial. Maritime Overseas Corp. v. Ellis, 971 S.W.2d 402, 406–07 (Tex. 1998).

III. At a minimum, the suit must be remanded for a new trial because the Overbys’ evidence to support the lump sum award for cost of repair is legally and factually insufficient.

The Overbys recognize their burden at trial was to establish both that the

damages are (1) reasonable, and (2) necessary. Appellees’ Brief at 17-23. Yet, in

responding to Vision’s complaint, they ignore what evidence was required to meet

the two-fold test.

-13- This Court’s analysis is guided by McGinty v. Hennen, 372 S.W.3d 625,

628-29 (Tex. 2012). The Supreme Court has been clear that a damage award for

cost of repairs cannot be upheld unless there is evidence in the record establishing

the repair costs are “reasonable” and “necessary.” McGinty, 372 S.W.3d at 627. In

McGinty, the Supreme Court was confronted with an expert’s testimony on repair

costs where the expert used the “Exactimate” program “that’s used widely in the

insurance industry.” Id. at 627. The expert gave specific testimony that “[t]he

program had a Houston price guide, which he compared with Corpus Christi and

found to be ‘within a percent or two difference.’” Id. He gave further testimony

that “because not every price issued by the program is right, ‘we have to cross-

reference and double check all our pricing,’” and that “some of the other costs

came from subcontractors or historical data or jobs.” Id. While the court of

appeals found this evidence legally sufficient that the repair costs were

“reasonable,” the Supreme Court disagreed. Id.

The plaintiff argued that the expert’s testimony was sufficient because he

testified extensively about how he derived his pricing estimate. Id. at 628. But the

Court concluded that while that may explain how the figure for the repair damages

was derived, it did not make the figure “reasonable.” Id. The Court equated the

evidence to that which was found insufficient in Mustang Pipeline. Id. at 627

(citing Mustang Pipeline Co. v. Driver Pipeline Co., 134 S.W.3d 194, 200 (Tex.

-14- 2004)). The McGinty Court held, “[e]stimated out-of-pocket expenses, like paid

out-of-pocket expenses, do not establish that the cost of repair was reasonable.

Some other evidence is necessary.” Id. There must be evidence of the actual

“reasonableness” of the estimated cost. Id.

The rule enunciated in McGinty is clear: to establish costs of repair damages,

“the plaintiff must show more than simply ‘the nature of the injuries, the character

of and need for the services rendered, and the amounts charged therefor.’” Id. at

627. “[S]ome other ‘evidence showing that the charges are reasonable’ is

required.” Id.

Further, Mustang Pipeline made it clear that evidence of out-of-pocket costs

alone “[do] not establish that the damages were reasonable and necessary.”

Mustang Pipeline, 134 S.W.3d at 201. The Court found it “well settled that proof

of the amounts charged or paid does not raise an issue of reasonableness, and

recovery of such expenses will be denied in the absence of evidence showing that

the charges are reasonable.” Id.

It was the Overbys’ burden at trial to prove that the damages sought are

reasonable and necessary. Id. at 200; McGinty, 372 S.W.3d at 627. “Evidence of

the amounts charged and paid, standing alone, is no evidence that such payment

was reasonable and necessary.” Mustang Pipeline, 134 S.W.3d at 200-01.

-15- Furthermore, estimated costs to repair without more do not establish the estimate is

reasonable. McGinty, 372 S.W.3d at 627.

As fully detailed in Appellant’s Brief, the Overbys failed to meet their

burden at trial to support the lump sum award. And, in their Brief on appeal, the

Overbys simply ignore the burden that the Supreme Court has made clear must be

met in order to recover cost of repair damages.

1. Foundation Estimate: $18,969.00

Vision challenged this estimate on both grounds that it was not reasonable or

necessary. Appellant’s Brief at 23, 28.

The Overbys’ sole response to the “reasonableness” challenge is to argue

that the cost of foundation repair was supported by the testimony of Adolfo

Rodriguez. Appellee’s Brief at 19. Yet, as Vision pointed out in its brief,

Rodriguez was questioned as follows:

Q. And the total cost for this, if it was $18,969, I’m going to guess if you pay it promptly, you get a discount to 17,000. Was that the fair and reasonable and necessary cost to repair the foundation that existed on this home as of this date?

A. Yes.

5RR14; RR Part1, Exh. 42, pg. 468. The Overbys make no effort to show how this

brief testimony amounts to establishing “reasonableness” of the estimated cost of

repair. Instead, they ignore the Supreme Court’s clear mandate that it was their

burden to prove reasonableness, not Vision’s burden to contradict the testimony.

-16- Appellees’ Brief at 19; McGinty, 372 S.W.3d at 627 (holding it is plaintiff’s burden

to establish cost of repair damages sought are reasonable and necessary.)

And, in fact, Rodriguez testified on cross-examination that “I don’t do the

calculations, I’m sorry.” 5 RR 13. And, he agreed that he was unsure whether the

$18,969.00 amount was for option 2 or the grand total of option 1 and option 2

since the estimate gave two options. 5 RR 28-29. This further supports the

argument that the reasonableness of the $18,969.00 was never established as

Rodriguez did not even know where the amount came from.

The only testimony regarding the estimate—testimony from Rodriguez—is

in clear violation of McGinty since it provides no more than “‘the nature of the

injuries, the character of and need for the services rendered, and the amounts

charged therefor,’” and in fact does not even rise to that level. McGinty, 372

S.W.3d at 627. It is simply counsel’s statement of the cost and a conclusory

statement that the cost is reasonable and necessary, that is then responded to by an

employee of the foundation company as simply “Yes.” 5RR14. There was no

other evidence “showing that the charges are reasonable” as required. Id. And,

the evidence, if any, falls far below even the evidence the Supreme Court held in

McGinty was not sufficient. See McGinty, 372 S.W.3d at 627.

Vision also challenged the evidence as not being sufficient because it was

not established that the work was “necessary.” Appellant’s Brief at 31.

-17- Astonishingly, in an attempt to establish there was a necessity for foundation

repairs that existed at the time of trial to support the $18,969.00 estimate for future

repairs, the Overbys briefly refer this Court to three exhibits—all of which are

letters written years before trial and in no way establish repairs were necessary at

the time of trial. Appellees’ Brief at 23.

Exhibit 56 is the October 5, 2009 letter written by Louis Faraklas to Vision,

which provides absolutely no evidence of the necessity of further foundation

repairs as of late 2014. RR Part 1, Plaintiffs’ Exh. 56, pg. 546. Likewise, Exhibit

44 is the March 15, 2010 letter written by Louis Faraklas to the City, and also

provides no evidence of the necessity of further foundation repairs as of the time of

trial. RR Part 1, Plaintiffs’ Exh. 44, pg. 473. And, astoundingly, the Overbys rely

on the Blake Engineering Report from August of 2007, over seven years before

trial. RR Part 1, Plaintiffs’ Exh. 48, pg. 482.

Finally, the Overbys briefly rely on the purported testimony of Mr.

Rodriguez without any citation to the record. Appellees’ Brief at 22. In fact, his

testimony in no way established that further foundation repairs were necessary, as

he admitted that he did not do his calculations in accordance with the necessary

standards (referred to as ASCE). 5 RR 20-23.

At the time of trial, the only evidence presented was that of Phil King that

established that at that point there were no more foundation repairs needed, as

-18- repairs had already been made, in order to meet the TRCC standards. 7 RR 123-25.

None of the evidence the Overbys briefly referred to in their Brief, and many

without any citation to the record, establishes that at the time of trial there were

foundation repairs that were “necessary.”

2. Landscaping Out-of-Pocket: $8,987.38

Vision challenged the Overbys’ request for $8,987.38 for out-of-pocket

landscaping costs that Mr. Overby testified he incurred based on the cost not being

established as reasonable or necessary. Appellant’s Brief at 23.

The Overbys ignore Visions’ complaint that the cost was not proven to be

reasonable, and wholly ignore the case law relied on by Vision that out-of-pocket

expenses alone do not establish the damages were reasonable and necessary.

Mustang Pipeline, 134 S.W.3d at 201; McGinty, 372 S.W.3d at 627-28. Instead,

the Overbys’ sole response is that the cost was “necessary” because of the failure

of Vision to properly grade the home. Appellees’ Brief at 20. But, once again, the

Overbys give no citation to the record to support this assertion, and instead simply

cite to the invoice itself. Id. Under McGinty and Mustang Pipeline, the evidence

is insufficient to support out-of-pocket expenses of $8,987.38 for landscaping

costs.

3. Exterior Work Out-of-Pocket: $5,000

Vision challenged the request for $5,000 for exterior work by Countywide

-19- Exteriors that Mr. Overby testified he incurred based on the cost not being

established as reasonable. Appellant’s Brief at 24. The invoice was never admitted

into evidence, and Mr. Overby simply testified that “I paid about $5100, 5200,

somewhere around there.” 4 RR 115.

In response, the Overbys now argue that in fact the invoice was admitted

into evidence, but again fail to cite any part of the record that establishes it was

admitted. Appellees’ Brief at 19. To the contrary, in its Brief, Vision cited to 1 RR

9, which provides this Court with a list of those exhibits that were in fact admitted

into the record. Appellant’s Brief at 24 (citing 1 RR 9). Nowhere in the list of

admitted exhibits is Exhibit 43.

Additionally, as previously addressed, out-of-pocket expenses alone do not

establish the damages were reasonable and necessary. Mustang Pipeline, 134

S.W.3d at 201; McGinty, 372 S.W.3d at 627-28. Again, the evidence is

insufficient to support out-of-pocket expenses of $5,000 for purported exterior

work.

4. Plumbing Estimate: $5,750.00

Vision challenged the request for $5,750.00 for the plumbing estimate by

Quartermoon Plumbing based on the cost not being established as reasonable or

necessary. Appellant’s Brief at 24, 30.

-20- The very estimate that the Overbys sought cost of repair damages for is

nowhere in the record. Appellant’s Brief at 24. While the Overbys appear to

acknowledge they failed to produce or admit a written plumbing estimate, they

instead turn to the testimony of Dario Armendariz. Appellees’ Brief at 20. But, as

specifically addressed in Appellant’s Brief, the conclusory and very brief

testimony of Dario Armendariz in no way established the estimated cost of repair

is reasonable and necessary. Appellant’s Brief at 24. And again, the evidence the

Overbys rely on falls far short of what was present in McGinty and the Supreme

Court still held it was insufficient to support the damage award. McGinty, 372

S.W.3d at 627. It was the Overbys’ burden to establish the estimate for the cost of

repair for the plumbing work was “reasonable.” Mustang Pipeline, 134 S.W.3d at

201.

The Overbys respond to Vision’s challenge that they did not establish the

plumbing work was necessary by simply arguing that “[t]he damage award is

supported by this breach of contract claim regardless of warranty provisions.”

Appellees’ Brief at 21. While providing absolutely no citations to the record, they

argue some of the plumbing couplings had been recalled. Id. But nowhere do they

point this Court to any evidence in the record that establishes that the alleged

$5,750.00 in plumbing work was necessary.

-21- 5. Bathroom Estimate: $8,178.00

Vision challenged the request for $8,178.00 for the bathroom estimate based

on the cost not being established as necessary. Appellant’s Brief at 28.

The Overbys respond that there was evidence of a shower pan leak in 2006,

and because the alleged defect was discovered within the warranty period (which

Vision disagrees), it is a recoverable damage. Appellees’ Brief at 29. But again,

this does not establish the estimate for the cost of repair is necessary. As detailed

in Vision’s Brief, Mr. Overby admitted that as of 2009 (well outside the one-year

warranty period), there was no leak at that time. Id. (citing 5 RR 93-94). The

Overbys fail to respond to this argument in their brief.

The jury award of $72,884.00 in a lump sum award for cost of repair is not

supported by evidence that the costs were reasonable and necessary. The Overbys

fail to address how at least two of the amounts relied on for cost of repair damages

that Mr. Overby testified were his out-of-pocket expenses ($8,987.38 for

landscaping and $5,000 for Countywide exteriors= total of $13,987.38) can support

the damage award when the Supreme Court has been very clear that such evidence

is in no way sufficient. Mustang Pipeline, 134 S.W.3d at 201. And, two of the

estimates ($5,000 for Countywide exteriors and $5,750 for plumbing= $10,750.00)

-22- were not even a part of the record. Not to mention the other amounts that were not

proven to be reasonable or necessary.

The Overbys contend Vision challenges only $38,206.38, but, in fact, Vision

challenged $46,884.38 of the damages. Compare Appellant’s Brief at 21-32, with

Appellees’ Brief at 18. The Overbys sought a lump sum for cost of repair damages

in the amount of $82,571.38, yet the jury awarded them $72,884.00. It is unclear

how the jury even arrived at the amount it awarded, and the Overbys provide no

explanation for how the jury could have arrived at that number. Smith testified

that there are at most $17,400.00 left in TRCC repairs if he was in fact responsible

for those repairs. 6 RR 208-09; RR Part 2, Defendant’s Exh. 61, pg. 346.

It is clear the cost of repair damage award is legally insufficient as a matter

of law and cannot be upheld. See McGinty, 372 S.W.3d at 627; Smith-Reagan &

Associates, Inc. v. Fort Ringgold Limited, No. 04-13-00608-CV, 2015 WL

1120398, at *3 (Tex. App.—San Antonio Mar. 11, 2015, pet. filed); Cal-Tex

Lumber Co., Inc. v. Owens Handle Co., Inc., 989 S.W.2d 802, 821 (Tex. App.—

Tyler 1999, no pet.) (remanding for a new trial when lump sum damage award was

not supported by legally sufficient evidence); First State Bank v. Keilman, 851

S.W.2d 914, 931 (Tex. App.—Austin 1993, writ denied) (holding that “a jury may

not ‘pull figures out of a hat,’” and when there is no rational basis for the jury’s

calculation except that it falls between the Plaintiff’s and the Defendant’s figure, it

-23- is unsupportable and must be remanded). While Vision maintains its request for a

take-nothing judgment, it alternatively asks the Court to remand for a new trial or a

remittitur if the Court finds that feasible based on the structure of the award. See

TEX. R. APP. P. 44.1(b) (“The court may not order a separate trial solely on

unliquidated damages if liability is contested.”).

IV. Attorneys’ fees must be reversed or reduced.

Again, the Overbys ignore the clear mandates of the RCLA in their response

to Vision’s challenge to the attorneys’ fees. Section 27.004(e), limits the

attorneys’ fees that are recoverable if the Plaintiff “does not permit the contractor

or independent contractor a reasonable opportunity to inspect or repair the defect

pursuant to an accepted offer of settlement.” TEX. PROP. CODE ANN.

§ 27.004(e)(2). The Overbys accepted Vision’s offer of repair on March 30, 2009,

and immediately turned around and filed suit the next day. RR Part 2, Defendant’s

Exh. 48, pg. 195; CR 671.

An incredibly large portion of the Overbys’ attorneys’ fees were incurred

just before and at trial:

-24- Plaintiffs’ Exh. 58. In fact, $28,875.00 alone were attributable to preparing for and

attending trial (45+60= 105 hours @ $275= $28,875.00). Id.

The record is clear that the Overbys accepted Vision’s offer of repair, yet

immediately filed suit—which violates the procedures set out in the RCLA. See

TEX. PROP. CODE ANN. § 27.004(e)(2). The Overbys actions therefore limit the

amount of attorneys’ fees they can recover.

Additionally, Vision asked this Court for either a full reversal or at a

minimum a remand of the attorneys’ fees if this Court reversed all or part of the

damage award. The Overbys do not dispute that if this Court were to enter a take-

nothing judgment on damages, then the award of the attorneys’ fees must also be

reversed. But, even if this Court were to reduce the damages via remittitur or

remand for a new trial, the attorneys’ fees award must be remanded to the trial

court. Courts have been abundantly clear that a substantial reduction in the amount

of damages warrants a reconsideration by the trial court of the amount of attorney's

-25- fees awarded. See Hulcher Services, Inc. v. Emmert Indus. Corp., No. 02-14-

00110-CV, 2016 WL 368180, at *24 (Tex. App.—Fort Worth Jan. 28, 2016, no

pet. h.); Lone Starr Multi-Theatres, Ltd. v. Max Interests, Ltd., 365 S.W.3d 688,

705 (Tex. App.—Houston [1st Dist.] 2011, no pet.); Headington Oil Co., L.P. v.

White, 287 S.W.3d 204, 216 (Tex. App.—Houston [14th Dist.] 2009, no

pet.)(citing Barker v. Eckman, 213 S.W.3d 306, 314 (Tex. 2006)). Most recently,

the Fort Worth Court of Appeals succinctly held:

The judgment awards $572,148.89 in attorney's fees (as incurred in the trial court) to Emmert. Hulcher challenges this award on the basis, in part, that it must be “remanded for recalculation based on the reduced award of damages.” The precedent of our supreme court compels us to agree. See Bossier ChryslerDodge II, Inc. v. Rauschenberg, 238 S.W.3d 376, 376 (Tex. 2007); Barker v. Eckman, 213 S.W.3d 306, 314–15 (Tex. 2006); see also Arthur Andersen & Co., 945 S.W.2d at 818 (reciting the factors of the reasonableness of an attorney's fee award under the DTPA, including the “results obtained”); Acadia Healthcare Co., 472 S.W.3d at 104 (remanding a trial court's attorney’s fee award for new trial when compensatory and exemplary damages were reduced on appeal); Powell Elec. Sys., Inc. v. Hewlett Packard Co., 356 S.W.3d 113, 129 (Tex. App.— Houston [1st Dist.] 2011, no pet.) (“Because we have meaningfully reduced the amount of HP’s damages on appeal, we must reverse the attorney's fees award and remand for a determination of attorney's fees.”). We sustain Hulcher's second issue to the extent that we reverse the award of attorney's fees.

-26- Hulcher Services, Inc., 2016 WL 368180, at *24 (emphasis added). Therefore, if

this Court reduces the damage award, the attorneys’ fees award must be remanded

to the trial court.

V. The Overbys fail to respond to Vision’s complaint regarding the error on the face of the judgment.

By failing to respond to Vision’s Sixth Issue—that the final judgment

improperly calculated the total sum awarded—the Overbys implicitly agree there is

error in the judgment.

CONCLUSION & PRAYER

The RCLA was put in place for a specific purpose—to require parties to

navigate their dispute by first allowing the builder to make repairs before

instituting costly litigation. Vision made every effort to make the repairs, although

time and time again it was thwarted by the Overbys. And, even after the parties

agreed to the repairs, the Overbys immediately filed suit rather than seeing the

process through. By doing so, they obtained a lump sum damage award that the

Supreme Court has been abundantly clear is not supportable by the evidence the

Overbys put forth. A damage award obtained in violation of the clear requirements

and obtained without appropriate jury questions and instructions cannot stand.

Vision again respectfully requests this Court enter a take nothing judgment, or at a

minimum, order a new trial or suggest a remittitur.

-27- Respectfully submitted,

/s/Lorien Whyte POZZA & WHYTE, PLLC Dan Pozza State Bar No. 16224800 Lorien Whyte State Bar No. 24042440 239 E. Commerce Street San Antonio, TX 78205 (210) 226-8888 – Phone (210) 222-8477 – Fax danpozza@pozzaandwhyte.com lorienwhyte@pozzaandwhyte.com

THORNTON BIECHLIN REYNOLDS & GUERRA Marcella A. Della Casa State Bar No. 24009862 100 N.E. Loop 410, Suite 500 San Antonio, Texas 78216 (210) 581-0288 – Phone (210) 525-0666 – Fax MDellaCasa@thorntonfirm.com

Attorneys for Bryan Smith d/b/a Vision Design and Build

-28- CERTIFICATE OF SERVICE

I hereby certify that a true copy of the above and foregoing Reply Brief of Appellant was served via electronic transmission, on this the 9th day of May, 2016, to:

Robert P. Wilson THOMAS J. HENRY INJURY ATTORNEYS 4715 Fredericksburg Road, Suite 507 San Antonio, TX 78229 rwilson@tjhlaw.com

Attorney for Appellees, Robert Overby and Teresa Overby

/s/Lorien Whyte

-29- CERTIFICATE OF COMPLIANCE

1. The undersigned certifies that this Reply Brief of Appellant complies with the type-volume limitation of Tex. R. App. P. 9.4(i)(2)(D) because this brief contains 6,175 words, excluding parts of the brief exempted by Tex. R. App. P. 9.4(i)(1). 2. This brief complies with the typeface requirement of Tex. R. App. P. 9.4(e) because this brief has been prepared in a conventional typeface of 14-point font in the text.

/s/ Lorien Whyte

-30-