Contemporary Contractors, Inc. v. WILC/MVL, LLP and Settlement Investments Management Corp.

• Court: Court of Appeals of Texas
• Decided: May 28, 2015
• Docket: 05-14-00411-CV
• Status: Published

Opinion

Affirmed and Opinion Filed May 28, 2015

S In The Court of Appeals Fifth District of Texas at Dallas No. 05-14-00411-CV

CONTEMPORARY CONTRACTORS, INC., Appellant V. WILC/MVL, LLP AND SETTLEMENT INVESTMENTS MANAGEMENT CORP., Appellees

On Appeal from the 68th Judicial District Court Dallas County, Texas Trial Court Cause No. DC-12-14470-C

MEMORANDUM OPINION Before Justices Francis, Lang-Miers, and Whitehill Opinion by Justice Whitehill This appeal from a bench trial on a breach of express warranty claim arises out of a

contract to paint an apartment complex. The trial court found that Contemporary Contractors,

Inc. (“Contractor”) breached the express warranty in its contract with WILC/MVL, LLP and

Settlement Investment Management Corp. (“WILC”). The Contractor brings six issues

challenging the legal and factual sufficiency of the evidence to support the trial court’s findings

concerning liability and reasonable repair costs. Concluding that the Contractor’s arguments

lack merit, we affirm the trial court’s judgment.

I. Background

On January 19, 2009, the parties entered into a contract for the Contractor to replace and

repair exterior wood on and to paint the exterior of the Marina Del Ray apartment complex in Grapevine, Texas. The contract warranted that the work would be free of defects and would

perform as intended for five years after completion.

WILC began to notice issues with the exterior paint about a year after the work was

completed, and asked the Contractor to repaint the property. When the Contractor refused,

WILC sued the Contractor for breach of the express warranty.

The trial court found that the Contractor breached the contract’s express warranty and

entered judgment in WILC’s favor for $92,000 and attorney’s fees. The trial court made

findings of fact and conclusions of law to support the judgment. This appeal followed.

II. Issues on Appeal and Standard of Review

In its first, second, third, and fourth issues, the Contractor challenges the legal and factual

sufficiency of the evidence to support the trial court’s findings that (i) the paint job failed, (ii) the

Contractor is liable to WILC for breach of the contract’s express warranty and (iii) the

reasonable and necessary cost of repair is $92,000.1 In its fifth and sixth issues, the Contractor

globally asserts that “the trial court’s findings are so contrary to the evidence as to be clearly

wrong and unjust” and “there are no findings of fact or evidence to support the Trial Court’s

judgment.”

Because, as discussed below, the evidence is factually sufficient to support the trial

court’s findings that the warranty was breached and that $92,000 was a reasonable and necessary

repair cost, we need not and do not discuss the legal sufficiency issues. See British Am. Ins. Co.

v. Howarton, 877 S.W.2d 347, 352 (Tex. App.—Houston [1st Dist.] 1994, writ dism’d by agmt.).

In an appeal from a bench trial, we review a trial court’s fact findings under the same

sufficiency of the evidence standards used regarding jury findings. Ortiz v. Jones, 917 S.W.2d

770, 772 (Tex. 1996). When a party attacks the factual sufficiency of an adverse finding on an

1 These issues challenge the trial court’s conclusions of law numbered 2 and 3 and the court’s findings of fact numbered 10 and 11.

–2– issue on which it did not have the burden of proof at trial, it must show that there is factually

insufficient evidence to support the adverse finding. Vongontard v. Tippit, 137 S.W.3d 109, 112

(Tex. App.—Houston [1st Dist.] 2004, no pet.). To conduct this review, we examine the entire

record and consider and weigh all the evidence, both in support of, and contrary to, the

challenged finding. See Plas–Tex, Inc. v. U.S. Steel Corp., 772 S.W.2d 442, 445 (Tex. 1989).

We must uphold the finding unless the evidence that supports it is so weak as to be clearly wrong

or manifestly unjust. Id. The trier of fact is the sole judge of the witnesses’ credibility and the

weight given to their testimony. Helping Hands Home Care, Inc. v. Home Health of Tarrant

County, Inc., 393 S.W.3d 492, 505–06 (Tex. App.—Dallas 2013, pet. denied). As such, the trial

court may choose to believe one witness and disbelieve another. City of Keller v. Wilson, 168

S.W.3d 802, 819 (Tex. 2005). We will not substitute our judgment for the trial court’s merely

because we might reach a different conclusion. Maritime Overseas Corp. v. Ellis, 971 S.W.2d

402, 407 (Tex. 1998).

We review the trial court’s conclusions of law de novo. Fulgham v. Fischer, 349 S.W.3d

153, 157 (Tex. App.—Dallas 2011, no pet.).

III. Analysis

A. Is the Evidence Factually Sufficient to Support Contractor’s Liability?

The Liability Dispute

The Contractor’s liability depends on whether the evidence was sufficient to establish a

breach of the express warranty included in the parties’ contract. To recover for breach of an

express warranty, a plaintiff must prove: (1) an express affirmation of fact or promise by the

seller relating to the goods; (2) that such affirmation of fact or promise became a part of the basis

of the bargain; (3) that the plaintiff relied upon said affirmation of fact or promise; (4) that the

goods failed to comply with the affirmation of fact or promise; (5) that the plaintiff was injured

–3– by such failure of the product to comply with the express warranty; and (6) that such failure was

the proximate cause of the plaintiff’s injury. Am. Eurocopter Corp. v. CJ Sys. Aviation Grp., 407

S.W.3d 274, 292 (Tex. App.—Dallas 2013, pet. denied); see also Paragon Contractors, Inc. v.

Larco Const., Inc., 227 S.W.3d 876, 886 (Tex. App.—Dallas 2007, no pet.) (breach of express

services warranty).

Here, the first three elements are undisputed. The Contractor’s liability issues instead

challenge the court’s determination that the paint job failed, that is, that the five year

performance warranty failed. Specifically, the Contractor challenges the court’s findings and

conclusions that (i) by early spring 2012, the exterior areas of the apartments showed evidence

that the painting had failed and that the paint job had faded and was peeling throughout the entire

exterior of the complex, and (ii) the Contractor is liable to WILC for breaching the parties’

express warranty. We examine these findings given the express warranty and the evidence

adduced at trial. As discussed below, the primary liability dispute turns on the nature of the

warranty at issue.

The Warranty

The express warranty provides:

All work described herein shall be warranted and guaranteed to be free of defects and failure and to perform as intended for a period of five years from completion.

This warranty has two parts: (i) to be free from defects and failure and (ii) to perform as

intended for five years. A breach of either part breaches the warranty.

The Contractor, however, relies on Melody Home Mfg. Co. v. Barnes, 741 S.W.2d 349,

351 (Tex. 1987), to argue that in a breach of warranty case, the only requirement is that the work

be performed in a good and workmanlike manner. According to the Contractor, the trial court

“only found that the paint had failed,” not that the Contractor failed to perform the work in a

–4– good and workmanlike manner. The Contractor argues that the evidence is uncontroverted that

the work was performed in accordance with the specifications (and that the paint used was equal

to or better than the specified paint). It is thus presumed that the work was done in a good and

workmanlike manner.

The Contractor’s reliance on Melody Homes is misplaced. Melody Homes involved an

implied warranty under the Deceptive Trade Practices Act, but the warranty here is a contractual

express warranty. Whether the work was performed in a good and workmanlike manner is not at

issue here. We instead consider whether the Contractor met the express warranty terms.

Generally, a warranty describes the character, quality, or title of the thing being sold.

See Chilton Ins. Co. v. Pate & Pate Enters, Inc., 930 S.W.2d 877, 890–91 (Tex. App.—San

Antonio 1996, writ denied). An express warranty is a definitive affirmation of fact or a promise

that becomes part of the basis of the bargain and on which the parties rely. Id. at 891. Express

warranties arise out of the parties’ agreed terms and result from a negotiated exchange. See Med.

City Dallas, Ltd. v. Carlisle Corp., 251 S.W.3d 55, 60 (Tex. 2008) (citations omitted). Here, the

Contractor expressly promised that, at a minimum, the paint job would perform as intended for

five years. That was an allocated risk that became part of the parties’ bargain.

Breach

George Martin, WILC’s president, identified the January 19, 2009 contract between

WILC and the Contractor for repainting and repairing the apartment complex. The contract

required the Contractor to replace exterior wood, make repairs, and paint the entire complex

exterior for $87,899. It completed the work about two to three months later.

Martin began to notice issues with the apartments’ exterior paint in one particular area on

the back side of the property about a year after the Contractor finished the work. The issues

continued in that area, and then Martin began to notice other areas where the paint appeared to be

–5– “sloughing off or sagging,” and other areas where it was peeling badly. Martin identified these

issues, as well as fading paint, in photographs that were admitted into evidence. Martin

explained that he considered 100% of the property to be affected because the peeling, fading, and

sloughing off was throughout the property.

In 2012, Martin hired architect Shannon Pearcey to review the contract and inspect the

premises to determine whether the Contractor complied with the contract. Pearcey photographed

the property and testified that the paint conditions shown in the photographs affected every

building on the property except the new leasing office. Pearcey prepared a property condition

report that was admitted into evidence without objection. That report included the site visit

pictures, which she said show “failing paint on the siding, trim, fascia, etc.” Pearcey opined that

the paint was failing throughout the entire apartment complex.

The Contractor, however, argues the evidence is uncontroverted that “the paint itself did

not fail.” In this regard, the Contractor relies on the testimony of Christopher Heath. Heath, an

employee of the paint supplier, testified that, although the paint used for the project was not the

paint specified in the contract, the paint used was of equal or better quality. The company

checked its retained paint sample and determined that it was manufactured within specifications.

After WILC complained, the Contractor asked Heath to inspect the property to evaluate

what areas were affected by white staining on the siding. He determined that twenty to twenty-

five percent of the property was affected. The white substance was a white cellulose-based

material that was on top of the paint film. Heath opined that the white stains resulted from

deteriorating siding. A report discussing Heath’s evaluation was admitted into evidence. Heath

acknowledged that one of the photographs of the property showed peeling paint, but he could not

state whether that was caused by the siding. At one point, Heath said that “the paint didn’t fail,”

but he also said “it [the paint job] didn’t last five years. It just didn’t.”

–6– Marion Whittington, a paint company sales representative, also testified for the

Contractor. At the Contractor’s request, Whittington inspected the property to “see if there [was]

something going on with the paint.” Whittington determined that wax was leaching out and off

of the masonite material to the siding below, and “it was not a matter of the paint.” Whittington

said that, although the area could be repainted, the issue would just occur again because of the

siding. On cross-examination, Whittington acknowledged that the “wax bleed” he described

could come through the primer. When asked if the wax bleed would occur faster with a weaker

primer, Whittington replied, “perhaps so.”

The Contractor’s president admitted that there were defects and that the paint was peeling

and sloughing as shown on the photographs admitted into evidence. The Contractor’s

superintendent testified that he never checked to determine whether the paint and primer that

were used complied with the contract specifications.

That the Contractor offered evidence suggesting that the paint itself was not defective and

that the issues were caused by the siding does not mean WILC’s evidence was insufficient.

Instead, given the warranty requirement that the work would last for at least five years, we

conclude that the trial court’s determination that the warranty was breached is not so against the

great weight of the evidence as to be manifestly unjust and to warrant a new trial. See Cain v.

Bain, 709 S.W.2d 175, 176 (Tex. 1986).

For the above reasons, we decide the Contractor’s first, second, fifth, and sixth issue

liability challenges against it. We consequently also decide the Contractor’s legal sufficiency

liability challenges in issues three, four, and six against it.

B. Is the Evidence Factually Sufficient to Support the Damages?

Part of the Contractor’s second issue challenges the factual sufficiency of the trial court’s

damages findings. In particular, the Contractor contends that the evidence is insufficient to

–7– support the trial court’s findings that $92,000 is the reasonable and necessary cost to replace the

defective, peeling, and faded paint work.

Martin testified he has been in the multifamily property management business for more

than thirty years, he was currently managing nine multifamily properties, and from that

experience he is familiar with the cost of repair and repainting multifamily projects. He also said

that it is something he does on a monthly and annual basis.

Martin asked the Contractor and its paint supplier to repaint the property. When they did

not do so, he hired Five Star Contractors to repaint the property. After the Five Star contract was

admitted into evidence over the Contractor’s hearsay objection, Martin testified that (i) the paint

cost needed to repaint the property was $26,000, (ii) the labor cost was $66,200, and (iii) based

on his experience, these costs were reasonable and were paid.

The Contractor argues that the Five Star contract should not have been admitted into

evidence and without that contract there is no evidence of the cost of labor for repainting.

Contractor further asserts that Martin was not qualified to testify about the cost of repair, and his

lay testimony contrasts with the Contractor’s experts’ testimony that the problem areas alone

could have been repainted.

The Five Star contract was properly admitted into evidence. The Contractor argues that

the estimate was hearsay because Five Star was not present to authenticate it. Hearsay and

authenticity are distinct objections and the Contractor’s argument in substance challenges only

the exhibit’s authenticity. Authenticity is a condition precedent to its admissibility. TEX. R.

EVID. 901(a). Evidence sufficient to support a finding that the matter in question is what its

proponent claims satisfies this requirement. Id. The testimony of a witness with knowledge of

the relevant facts is one way to authenticate evidence. Id. 901(b)(1). Martin, who had such

knowledge, authenticated the contract which bears his signature. The trial court did not abuse its

–8– discretion by overruling the Contractor’s objection. See Bay Area Healthcare Grp, Ltd. v.

McShane, 239 S.W.3d 231, 234 (Tex. 2007) (stating evidentiary rulings committed to trial

court’s sound discretion).

Although the Contractor also complains that Martin was not qualified to testify about

reasonable repair costs, this objection was not asserted at trial. Moreover, even had the issue

been preserved, his testimony together with the Five Star contract were sufficient to support the

damages. See Bernstein v. Thomas, 298 S.W.3d 817, 826 (Tex. App.—Dallas 2009, no pet.).

Contractor’s argument about conflicting testimony regarding damages is similarly

unpersuasive. Such conflicts involve weight and credibility determinations. An appellate court

cannot pass upon a witness’s credibility or substitute its judgment for the fact-finder’s, even if

there is conflicting evidence that would support a different conclusion. See Cain v. Bain 709

S.W.2d 175, 176 (Tex. 1986). The trial court, as the factfinder, was free to believe Martin and

Pearcey’s testimony that the entire property needed to be repainted, and Martin’s testimony that

the reasonable cost to do so was $92,000. We thus overrule the Contractor’s third issue. See

British Am. Ins. Co., 877 S.W.2d at 352.

IV. Conclusion

Having resolved all of the Contractor’s issues against it, we affirm the trial court’s

judgment.

140411F.P05

/Bill Whitehill/ BILL WHITEHILL JUSTICE

–9– S Court of Appeals Fifth District of Texas at Dallas JUDGMENT

CONTEMPORARY CONTRACTORS, On Appeal from the 68th Judicial District INC., Appellant Court, Dallas County, Texas Trial Court Cause No. DC-12-14470-C. No. 05-14-00411-CV V. Opinion delivered by Justice Whitehill. Justices Francis and Lang-Miers WILC/MVL, LLP AND SETTLEMENT participating. INVESTMENTS MANAGEMENT CORP., Appellees

In accordance with this Court’s opinion of this date, the judgment of the trial court is AFFIRMED.

It is ORDERED that appellees WILC/MVL, LLP AND SETTLEMENT INVESTMENTS MANAGEMENT CORP. recover their costs of this appeal from appellant CONTEMPORARY CONTRACTORS, INC..

Judgment entered May 28, 2015.

–10–