City of Corpus Christi v. Acme Mechanical Contractors, Inc.

736 S.W.2d 890
CourtCourt of Appeals of Texas
DecidedAugust 28, 1987
DocketNos. 13-86-417-CV, 13-86-418-CV
StatusPublished

This text of 736 S.W.2d 890 (City of Corpus Christi v. Acme Mechanical Contractors, Inc.) 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
City of Corpus Christi v. Acme Mechanical Contractors, Inc., 736 S.W.2d 890 (Tex. Ct. App. 1987).

Opinion

OPINION

NYE, Chief Justice.

Appellees, Amber Electric Company (Amber) and Acme Mechanical Contractors, Incorporated (Acme), brought separate suits as subcontractors against appellant, City of Corpus Christi (City) as owner; La Man Construction (La Man) as prime contractor; and Royal Indemnity Company as surety on La Man’s payment bond, in connection with the construction of a public building.1 The pleadings and judgment in both suits were virtually the same. Because the issues, briefs and evidence in both cases are similar, we have consolidated the cases for disposition.

These suits arose out of a construction contract between La Man and the City for the improvement and expansion of the Meadow Park Recreation Center, owned by the City. During the pendency of the suits below, La Man, the contractor, filed for bankruptcy relief and was dismissed from the suits. Apparently, Royal Indemnity Co. was a fictitious company and was never served with notice of the suits, so is not a party in this appeal in either case. Recovery was had in each suit against the City alone. The cases were consolidated for a trial before the court. The judgments merely recite that Amber and Acme are entitled to recover certain amounts from the City. The findings of fact and conclusion of law filed by the trial court are so vague it is difficult for us to determine which theory or theories the trial court found would be the basis upon which appel-lee could recover.

In each case, the subcontractors sought recovery from the City owner for nonpayment of services and materials furnished in the construction of a public facility. In effect, these cases were tried on three theories: (1) quantum meruit; (2) a governmental taking without compensation in violation of Article I, § 17, of the Texas Constitution; and (3) the City’s breach of a statutory duty imposed by Tex.Rev.Civ.Stat. Ann. art. 5160 (Vernon 1987), by negligently approving a bogus payment bond which left the subcontractors with no statutory remedy. The City now challenges appel-lees’ recoveries on each theory. After reviewing all of the. evidence and the law, we find that we must reverse each case and remand each of them for a new trial.

In 1983, the City advertised for construction bids for the expansion and improvement of the Meadow Park Recreation Center. The plans and specifications were designed by the architect and approved by the City. Section A of the specifications consisted of a “Notice to Bidders” which stated in part:

The City requires that the successful bidder furnish a satisfactory payment and performance bond in the amount of 100% of the total contract price, both duly executed by such bidder as principal and by a corporate surety duly authorized so to act under the laws of the State of Texas as surety (emphasis ours).

The specifications provided a payment bond form to be used by the successful bidder.

[893]*893Acme and Amber saw the advertisement, obtained copies of the plans and specifications, and submitted bids to several of the prime contractors bidding the project, including La Man. La Man was low bidder and was awarded the contract by the City. La Man submitted a purported payment bond in the amount of the total contract price of $267,748.00. The payment bond was approved by the City. Amber entered into a subcontract with La Man for the electrical work on the project in the amount of $15,500.00. Acme entered into a subcontract with La Man for the air conditioning and plumbing work on the project in the amount of $46,103.00. In late November or early December 1983, after both subcontractors had expended substantial amounts of labor and material, La Man abandoned the project owing each subcontractor some money. The City subsequently discovered La Man’s payment bond was fraudulent and worthless.

A subcontractor on a public building is prohibited from asserting a mechanic’s lien which is normally the remedy available to him on private construction projects. Instead, Tex.Rev.Civ.Stat.Ann. art. 5160 provides in relevant part:

A. Any ... firm, or corporation, hereinafter referred to as “prime contractor,” entering into a formal contract in excess of $25,000 with ... any municipality of this State, ... or any municipality of this state ... shall be required before commencing such work to execute to the aforementioned governmental authority .. the statutory bonds as hereinafter prescribed ... Each such bond shall be executed by a corporate surety or corporate sureties duly authorized to do business in this State ... [T]he bonds shall be payable to the governmental awarding authority concerned, and shall be approved by it as to form. Any bond furnished by any prime contractor in an attempted compliance with this Act shall be treated and construed as in conformity with the requirements of this Act as to rights created, limitations thereon, and remedies provided.
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(b) A Payment Bond, in the amount of the contract, solely for the protection of all claimants supplying labor and material ... in the prosecution of the work provided for in said contract, for the use of each such claimant.
B. Every claimant who has furnished labor or material in the prosecution of work provided for in such contract in which a Payment Bond is furnished as required thereinabove, and who has not been paid in full thereof, shall have the right, if his claim remains unpaid after the expiration of sixty (60) days after the filing of the claim as herein required, to sue the principal and the surety or sureties on the Payment Bond jointly or severally for the amount due on the balance thereof unpaid at the time of filing the claim or of the institution of the suit plus reasonable attorneys’ fees....

QUANTUM MERUIT

In its first three points of error in both cases, the City asserts that the trial court erred in rendering judgment against the City on quantum meruit. The City complains that the trial court failed to make a finding of fact on at least one of the essential elements of quantum merit, and that there is no evidence or insufficient evidence to support an implied finding in that regard.

The trial court’s findings of fact and conclusion of law which relate to Amber’s recovery on quantum meruit are as follows:

[Findings of Fact:]
3. The City of Corpus Christi, Texas advertised for bids on a project known as Meadow Park Recreation Center.
4. The City ... was the owner of the Meadow Park Recreation Center at all times material to this cause.
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9. There was a balance due and owing to [Amber] in the amount of $13,351.71.
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[894]*89413. That the electrical labor and materials supplied by [Amber] were for [the] benefit and use of the [City] as used and placed in the Meadow Park Recreation Center.
13. [sic] [Amber] has not been paid for labor and materials in the amount of $13,351.71.
14. All work and materials furnished were reasonable and necessary to the use and enjoyment of [the] Meadow Park Recreation Center by the [City].

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Bluebook (online)
736 S.W.2d 890, Counsel Stack Legal Research, https://law.counselstack.com/opinion/city-of-corpus-christi-v-acme-mechanical-contractors-inc-texapp-1987.