Chappell Hill Bank v. Lane Bank Equipment Co.

38 S.W.3d 237, 2001 Tex. App. LEXIS 512, 2001 WL 59577
CourtCourt of Appeals of Texas
DecidedJanuary 25, 2001
Docket06-99-00137-CV
StatusPublished
Cited by19 cases

This text of 38 S.W.3d 237 (Chappell Hill Bank v. Lane Bank Equipment Co.) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Chappell Hill Bank v. Lane Bank Equipment Co., 38 S.W.3d 237, 2001 Tex. App. LEXIS 512, 2001 WL 59577 (Tex. Ct. App. 2001).

Opinion

OPINION

Opinion by Justice GRANT.

Chappell Hill Bank (the Bank) appeals the judgment of the district court in favor of Lane Bank Equipment Company (Lane Equipment), in the amount of $6,743.55; attorney’s fees of $9,000; additional attorney’s fees in the amount of $2,500 if an appeal is taken to the court of appeals; additional attorney’s fees in the amount of $1,500 if an appeal is sought from the court of appeals to the Texas Supreme Court; prejudgment interest in the amount of six percent per annum from April 5, 1998 until entry of judgment; and post-judgment interest at the maximum legal rate allowed by law.

The dispute leading to this lawsuit involved the construction of a small building just off U.S. Highway 290 in Washington County, which was to house an ATM for the Bank. Evidence presented at this jury trial showed the following.

The Bank was a small business and, until this time, never had an ATM. John Scott, a salesman for Lane Equipment, persuaded Edward Smith, president of the Bank, to use Lane Equipment to construct the building and install and service the ATM. The Bank, through Smith, entered into an agreement with Lane Equipment for a “COMPLETE JOB COST OF A BUILDING, ATM, SERVICE CONTRACT, AWNING, SIGNAGE, ARCHITECTURAL FEES, SIGHT [sic] WORK AND ELECTRICAL ETC.” Initially, the electrical connection work was not to be done by Lane Equipment, but it later orally agreed to do this also. The total amount of the contract was $37,905, to be paid fifty percent down, twenty-five percent upon delivery and set-up, and twenty-five percent upon completion. The agreement dated November 13, 1996, was signed by both parties.

Although Smith testified that he had presumed that the security system for the ATM was included in the contract price, he later was given a proposal by Lane Equipment to install a security system at the facility. Lane Equipment’s witness testified that while almost all ATM facilities have security systems and Lane Equipment was certainly capable of installing them, they are not included in the basic ATM price because some parties wish to contract for security from a different source.

Lane Equipment sent a proposal to the Bank setting forth the price of the alarm system and camera system. On May 12, 1997, Smith responded on behalf of the Bank by countering the offer in writing at the bottom of the offer sheet, “$200.00 per month for at least 24 months pays for all the above.” This notation was initialed by Smith. Lane Equipment installed the security system, and the Bank began using the system. The Bank later removed the system, put it in a box, and, at a pretrial deposition, invited Lane Equipment to come and pick up the security system.

The testimony presented at trial shows that the Bank and Lane Equipment had a business relationship separate and apart from the ATM building agreement. Evidence shows that certain equipment was purchased by the Bank from Lane Equipment and that one piece of equipment was sent by the Bank to Lane Equipment for *241 repairs. The evidence also showed that the canopy over the ATM building was damaged, on several occasions, at least once by a U-Haul truck. Lane Equipment repaired the canopy twice and testified that the Bank did not pay for the last repair.

As construction of the ATM building approached completion, the Bank, through Smith, began to voice dissatisfaction with the outcome of the project. The major areas of concern were expressed by Smith in a letter addressed to Herb Pike, a Lane Equipment employee, dated September 9, 1997. The letter, and testimony at trial, indicate there were two major areas of concern: the proper painting of the door to the ATM building, and the problem of insects getting into the building, in view of its isolated and rural location. In Smith’s letter, he identifies reasons for the insect problem, including the fact that fight from the inside of the building is shining through to the outside and attracting them (Smith does acknowledge that the building could not be “hermetically sealed”), and the presence of an approximately one-inch gap between the interior wall and the floor, which exposes the outer wall, and the entry of insects through the air-conditioning drain.

J.C. Vaughn, president of Lane Equipment, and Herb Pike testified they made every effort to alleviate Smith’s concerns by repainting the door twice and by attempting to stop insects from coming in by sealing off portions of the building with duct tape. They testified that they never refused to attempt to deal with Smith’s stated concerns, but they felt that Smith was never satisfied and, in their opinion, would never be satisfied with their efforts. Eventually, the Bank stopped paying on the construction contract and this, along with the refusal of the Bank to pay on the lease of the security agreement, led to Lane Equipment fifing a lien against the property on which the ATM building was located. Vaughn testified that he had completed the building as much as he could have done.

Regarding the amount of the payments, Lane Equipment charged sales tax on the payments and, in the payments that were made by the Bank, it paid, without objection or question, invoices which clearly included sales tax without objection or question. Part of the amount alleged by Vaughn to be due and owing by the Bank to Lane Equipment was an amount of sales tax, testified to be $396. In addition, the testimony was basically undisputed that the security system was in fact installed by Lane Equipment and used by the Bank for a period of time, but with the Bank making no payments to Lane Equipment. The witnesses also testified that the awning on the building was damaged on several occasions, and that Lane Equipment repaired the awning at least twice, but was paid for its services only once.

Vaughn testified that Lane Equipment was requesting payment of $1,385 for one awning; $4,800 for the security system; sales tax of $396; and $5,303.02 the balance due on the construction contract. Because Lane Equipment and the Bank had engaged in other transactions during the time period in which the ATM building was being constructed, there was conflicting testimony regarding some payments admittedly made by the Bank to Lane Equipment, and whether or not they should be credited to the ATM building project.

The Bank raises six points on appeal contending 1) that Lane Equipment was not entitled, as a matter of law, to more than seventy-five percent of the contract price of $37,905 for construction of the ATM building when the building was not completed; 2) that the contractor was not entitled to charge sales tax on the construction of the ATM building when the contract called for a complete turn-key job for the set price of $37,905; 3) that the trial court erred in rendering judgment in favor of Lane Equipment for $1,943.35 for breach of the construction contract when *242

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Cite This Page — Counsel Stack

Bluebook (online)
38 S.W.3d 237, 2001 Tex. App. LEXIS 512, 2001 WL 59577, Counsel Stack Legal Research, https://law.counselstack.com/opinion/chappell-hill-bank-v-lane-bank-equipment-co-texapp-2001.