City of Wolfe City v. Am. Safety Cas. Ins. Co.

557 S.W.3d 699
CourtCourt of Appeals of Texas
DecidedFebruary 9, 2018
DocketNo. 06-17-00075-CV
StatusPublished
Cited by5 cases

This text of 557 S.W.3d 699 (City of Wolfe City v. Am. Safety Cas. Ins. 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
City of Wolfe City v. Am. Safety Cas. Ins. Co., 557 S.W.3d 699 (Tex. Ct. App. 2018).

Opinion

Opinion by Justice Moseley *701When McKinney and McMillen, LLC (M&M), allegedly defaulted on its contract with the City of Wolfe City (the City) to provide it with a fully functioning, enhanced water distribution system with a fixed-base, automatic, meter-reading system, the City made demand on American Safety Casualty Insurance Company (American Safety), the issuer of M&M's performance bond, to complete the project. After American Safety refused to complete the project, the City filed suit against it, M&M, and others,1 alleging breach of contract and promissory estoppel. After an adequate time for discovery, American Safety filed traditional and no-evidence motions for summary judgment on the City's contract and promissory estoppel claims, which were granted by the trial court. On appeal, the City complains that the trial court erred in granting both the traditional and no-evidence motions for summary judgment on its contract claims2 and that it abused its discretion in denying the City's motion for reconsideration. We agree that the trial court erred in granting the motions for summary judgment.

I. Background

In December 2011, the City entered into a contract (the Contract) with M&M to enhance its water distribution and treatment system. After change orders, the total value of the Contract was $839,665.30. American Safety issued a performance bond in favor of the City guaranteeing M&M's performance under the Contract. As part of its work under the Contract, M&M was required to install 722 remote read water meters (meters) that would enable the City's employees to read the meters from their vehicles, rather than visually reading each individual meter. In May 2012, the first change order was entered into by the City and M&M that required M&M to change the automatic meter-reader (AMR) system from a drive-by system to a fixed-base system in which a meter interface unit (MIU) attached to the meters would electronically transmit information from the meters to the City's computer system. Under the Contract, any meter in this fixed-based AMR system was required to be compatible with the Datamatic Firefly MIU. M&M subcontracted with HD Supply Waterworks, Ltd., and/or HD Supply, Inc. (HD Supply), to supply the meters and the Datamatic MIUs. Apparently, HD Supply subcontracted with Datamatic, Ltd. (Datamatic), to supply and install the MIUs on the meters.

By March 27, 2013, most of the work under the Contract had been completed. On that date, Michael Tibbets, an engineer with Hayter Engineering (Hayter), the City's engineer on the project, signed a certificate of substantial completion affirming that the work under the Contract was substantially complete. Attached to the certificate of substantial completion was a pre-final inspection punch list of items that needed to be corrected or completed within thirty days, including a requirement to "[b]ring the Datamatic remote read water meter system up to full functional status." On that date, at least eighty-five MIUs had not been installed. Tibbets testified that although not all of the MIUs had been *702installed, the part of the system that had been completely installed was functioning properly. Since the system was supposed to be expandable, and the City was not experiencing any problems, he believed he could say it was fully functional at that time. On April 17, 2013, Change Order No. 2 was executed by M&M, Hayter, and the City to add the installation of approximately eighty more meters and MIUs to the Contract and to extend the time for completing the project.

Shortly afterward, the City began experiencing significant problems with the system, including meters failing to correctly register the amount of water being used, meters running backwards, and meters randomly sending error messages. It is uncontested that a portion of the meter register heads and MIUs failed. The City worked with M&M and its subcontractors for several months in an attempt to resolve the ongoing problems, but the system was never fully functional. On November 4, 2013, the City made demand on American Safety under its performance bond. After M&M ceased working to resolve the problems with the AMR system, the City filed this suit on March 20, 2014.

After an adequate time for discovery, American Safety filed both traditional and no-evidence motions for summary judgment. In its no-evidence motion, American Safety asserted that there was no evidence that M&M breached the Contract and that there was no evidence that the problems experienced by the City were the result of a construction defect. In its traditional motion, American Safety argued that it was entitled to rely on Hayter's certificate of substantial completion such that American Safety owed no further obligation to the City under its performance bond. After the City filed its responses and the trial court heard the arguments of counsel, the trial court entered its order granting both of American Safety's motions.

II. Standard of Review

The grant of a trial court's summary judgment is subject to de novo review by appellate courts. Provident Life & Accident Ins. Co. v. Knott , 128 S.W.3d 211, 215 (Tex. 2003). In making the required review, we deem as true all evidence which is favorable to the nonmovant, we indulge every reasonable inference to be drawn from the evidence, and we resolve any doubts in the nonmovant's favor. Valence Operating Co. v. Dorsett , 164 S.W.3d 656, 661 (Tex. 2005). When the trial court does not specify the basis for its ruling, we must affirm a summary judgment if any of the grounds on which judgment was sought are meritorious. Merriman v. XTO Energy, Inc. , 407 S.W.3d 244, 248 (Tex. 2013).

"When a party moves for both traditional and no-evidence summary judgments, we first consider the no-evidence motion." First United Pentecostal Church of Beaumont, d/b/a the Anchor of Beaumont v. Parker , 514 S.W.3d 214, 219 (Tex. 2017) (citing Ford Motor Co. v. Ridgway , 135 S.W.3d 598, 600 (Tex. 2004) ). "If the non-movant fails to meet its burden under the no-evidence motion, there is no need to address the challenge to the traditional motion as it necessarily fails." Id. (citing Merriman , 407 S.W.3d at 248 ).

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Cite This Page — Counsel Stack

Bluebook (online)
557 S.W.3d 699, Counsel Stack Legal Research, https://law.counselstack.com/opinion/city-of-wolfe-city-v-am-safety-cas-ins-co-texapp-2018.