Dudley Construction, LTD. v. Cross Roads Concrete Services, INC.

Opinion

Court of Appeals Tenth Appellate District of Texas

10-24-00225-CV

Dudley Construction, Ltd., Appellant

v.

Cross Roads Concrete Services, Inc., Appellee

On appeal from the 272nd District Court of Brazos County, Texas Judge John L. Brick, presiding Trial Court Cause No. 22-000952-CV-272

JUSTICE SMITH delivered the opinion of the Court.

MEMORANDUM OPINION ON REHEARING

On October 2, 2025, this Court issued a memorandum opinion and

judgment in this cause. See Dudley Constr., Ltd. v. Cross Roads Concrete

Servs., Inc., No. 10-24-00225-CV, 2025 WL 2801392 (Tex. App.—Waco October

2, 2025, no pet. h.) (mem. op.). In that opinion, we determined that Dudley

Construction, Ltd.’s issue number five was waived due to inadequate briefing.

Dudley filed a motion for rehearing complaining of our disposition of issue number five. After reviewing the motion for rehearing and response thereto,

we grant the motion for rehearing solely with respect to Dudley’s request for

this Court to review its issue number five on the merits. We deny Dudley’s

motion for rehearing in all other respects. Accordingly, we withdraw this

Court’s opinion and judgment dated October 2, 2025 and substitute this

opinion and its associated judgment in their place.

Dudley Construction, Ltd. appeals from the trial court’s judgment,

rendered after a trial before the court, in this breach of contract suit brought

by Cross Roads Concrete Services, Inc. In six issues, Dudley complains of the

trial court’s findings of fact and conclusions of law, the award of prejudgment

interest, and the trial court’s failure to properly interpret Dudley’s contractual

rights and to incorporate the terms of the parties’ Rule 11 Agreement into the

judgment. Because we agree the award of prejudgment interest is erroneous,

we modify the judgment to delete that award. We affirm as modified.

BACKGROUND

Dudley, as general contractor, contracted with the City of College Station

on a project to build an athletic complex. Cross Roads, a subcontractor on the

project, did not construct box culverts in accordance with the requirements for

the project. Rather than removal and replacement of the defective box

culverts, the City accepted an alternative repair technique. However, the City

Dudley Constr., Ltd. v. Cross Roads Concrete Servs., Inc. Page 2 initially wanted Dudley to furnish an eight-year extended warranty to correct

any future issues, backed up with a bond. Dudley demanded that Cross Roads

provide the warranty and bond. Cross Roads completed the alternative repairs

but did not provide a warranty secured by a bond.

Concerned about Dudley’s potential liability to the City, Dudley withheld

payment to Cross Roads, waiting for Cross Roads to obtain a bond. Cross

Roads filed suit against Dudley for breach of contract and breach of fiduciary

duty due to nonpayment of amounts owed to Cross Roads. Dudley filed a

counterclaim for breach of contract.

A trial before the court was held in January 2023. The parties signed a

Rule 11 Agreement in February 2023 addressing Dudley’s concerns about

potential liability to the City. In the Agreement, Dudley agreed to provide

Cross Roads and the City a video of Dudley’s inspection of the culverts, and

Cross Roads agreed to obtain specified documents from the City. Cross Roads

was also to submit a maintenance agreement to the City for its approval. The

maintenance agreement was to be secured by a bond and was to end on June

2, 2027, eight years after the box culvert was completed. The Rule 11

Agreement provided that, if the City failed to execute all of the documents

and/or did not accept the maintenance agreement, the parties would provide

the trial court with a report on the documents and any arrangements on the

Dudley Constr., Ltd. v. Cross Roads Concrete Servs., Inc. Page 3 maintenance agreement. Finally, the Rule 11 Agreement provided that “[t]he

Court will consider this written report in its ruling for judgment.”

In October 2023, the trial court granted Cross Roads’s motion to sever

and rendered an order severing all of Dudley’s claims and causes of action

asserted in this matter against Cross Roads.

On January 8, 2024, the trial court signed a judgment in favor of Cross

Roads, ordering that Cross Roads recover from Dudley a total of $85,504.44

owed pursuant to the contract, prejudgment interest of 1.5% each month from

the date each of three payments was due until the date of the judgment,

attorney’s fees of $54,332.00, plus court costs, postjudgment interest, and

conditional attorney’s fees on appeal.

On January 11, 2024, Dudley filed a proposed final judgment, which the

court signed on January 31, 2024. In that judgment, the court again found in

Cross Roads’s favor and awarded it $85,504.44 pursuant to the contract but

awarded attorney’s fees of $35,792.00. This judgment awarded prejudgment

interest at the rate of 8.5%, beginning September 21, 2022, court costs, and

postjudgment interest at 8.5%, as well as conditional appellate attorney’s fees.

On February 5, 2024, the trial court signed an order setting aside the January

8, 2024 judgment.

Dudley Constr., Ltd. v. Cross Roads Concrete Servs., Inc. Page 4 On March 15, 2024, the trial court signed its Findings of Fact and

Conclusions of Law. The court found and concluded that Dudley breached the

contract by failing to pay $10,025.93, $33,163.93, and $42,315.60, totaling

$85,505.46, and that Cross Roads is entitled to recover attorney’s fees in the

amount of $54,330.00, prejudgment interest at the rate of 1.5% pursuant to

Texas Property Code Chapter 28, and conditional appellate attorney’s fees.

The court also concluded that Dudley’s actions violated Texas Property Code

Sections 162.001 and 162.003.

On March 25, 2024, Dudley filed a request for amended and additional

findings of fact and conclusions of law complaining that the March 15 findings

and conclusions did not support the January 31 judgment. Although the

January 31 judgment finds in favor of Cross Roads, Dudley’s amended and

additional findings and conclusions would support a judgment finding Dudley

did not breach the contract; is not liable for breach of fiduciary duty; Chapter

28 does not apply to its project with the City; and Cross Roads failed to

adequately plead for prejudgment interest.

On April 18, 2024, the trial court signed an order setting aside the

January 31, 2024 judgment, noting in the order that the March 15, 2024

findings of fact and conclusions of law do not support the January 31 judgment.

Dudley Constr., Ltd. v. Cross Roads Concrete Servs., Inc. Page 5 The order also stated that the court will “sign the revised Judgment consistent

with the Court’s Findings of Fact and Conclusions of Law.”

Also on April 18, 2024, the trial court signed a judgment ordering that

Cross Roads recover from Dudley amounts totaling $85,504.44, accruing

prejudgment interest at the rate of 1.5% per month, attorney’s fees of

$35,792.00, court costs, postjudgment interest, and conditional appellate

attorney’s fees.

Finally, also on April 18, 2024, the trial court signed the Amended and

Additional Findings of Fact and Conclusions of Law submitted by Dudley on

March 25. As set out above, those findings and conclusions were in favor of

Dudley and therefore conflicted with the judgment of April 18.

Cross Roads filed a motion to vacate the Amended and Additional

Findings of Fact and Conclusions of Law because they do not support the relief

granted in the judgment. Similarly, on May 8, 2024, Dudley filed a request for

findings of fact and conclusions of law. About a week later, Dudley filed its

motion for new trial asserting that “the repeated procedural defects and

process in handling these postjudgment submissions have prejudiced Dudley’s

appellate rights.” Dudley asked the court to vacate the April 18, 2024

judgment and enter a new judgment that comports with the Amended and

Dudley Constr., Ltd. v. Cross Roads Concrete Servs., Inc. Page 6 Additional Findings of Fact and Conclusions of Law. The trial court rendered

no further orders, and Dudley filed its notice of appeal.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

In its first issue, Dudley asserts that the judgment must be reformed or

reversed because it does not conform to the Amended and Additional Findings

of Fact and Conclusions of Law signed on the same day. In its second issue,

Dudley contends alternatively that if this Court interprets the trial court’s

actions as having failed to make findings of fact and conclusions of law

applicable to the April 18 judgment, that failure is error.

Dudley cites to the general rule that findings of fact and conclusions of

law filed after a judgment are controlling if there is any conflict between them

and the judgment, if there is any evidence in the record to support the findings.

See City of Laredo v. R. Vela Exxon, Inc., 966 S.W.2d 673, 678 (Tex. App.—San

Antonio 1998, pet. denied). Dudley therefore asserts the April 18 Amended

and Additional findings and conclusions are controlling. The general rule

notwithstanding, due to the procedural history of this case, the question

requires further scrutiny.

In Waters v. Yockey, 192 S.W.2d 769 (Tex. 1946), the trial court filed two

conflicting sets of findings and conclusions after rendition of a single judgment.

The Supreme Court had to determine which set controlled before it could

Dudley Constr., Ltd. v. Cross Roads Concrete Servs., Inc. Page 7 determine if there was a conflict between the findings and judgment. The

Court explained that if the trial judge intended the second set to supplement

the first set, to be construed together, then no judgment could be based on the

findings because they “are materially in conflict.” Id. at 769. But if the trial

court intended the second set of findings to be substituted for the first set of

findings, then the first set of findings must be disregarded, and judgment

should be based on the second set of findings. Id. In reviewing the trial court’s

findings and conclusions in this case, we determine, as did the Waters court,

that “[t]he problem presented involves merely the ascertainment of the

intention of the trial judge.” Id.

Procedurally, the case before us traveled a more erratic path than

Waters. There, two sets of conflicting findings and conclusions were filed after

a single judgment. Here, a judgment was rendered, a second judgment was

rendered, the first judgment was set aside, findings and conclusions were

signed, the second judgment was set aside, then a third judgment was

rendered, and finally, a second set of findings and conclusions was signed. The

trial court’s April 18 order setting aside the second judgment indicated the trial

court’s intention to sign a revised judgment consistent with the March 15

findings and conclusions. Therefore, that order is tantamount to a

reaffirmance of the March 15 findings and conclusions. Yet, on the same date,

Dudley Constr., Ltd. v. Cross Roads Concrete Servs., Inc. Page 8 the trial court signed Dudley’s Amended and Additional findings and

conclusions, creating a conflict between the two sets of findings. We apply the

Waters rationale to determine which set of findings and conclusions the trial

court intended to rely on in support of the judgment.

In each of the three judgments, the trial court found that Dudley

breached its contract with Cross Roads. The April 18 order setting aside the

January 31 judgment indicates that the March 15 findings of fact and

conclusions of law favoring Cross Roads were correct. Moreover, with the

exception of dollar amounts awarded, there is no difference between the March

15 findings of fact and conclusions of law and the April 18 judgment, which

favors Cross Roads. In contrast, Dudley’s Amended and Additional Findings

of Fact and Conclusions of Law, which when filed addressed the January 31

judgment, would not support a judgment in favor of Cross Roads. In the April

18 order setting aside the January 31 judgment, the trial court indicated its

intention to sign a judgment that accurately reflected the findings of fact and

conclusions of law signed on March 15. We cannot conclude that the trial court

intended the second set of findings should be substituted for the first set of

findings, and that the second set should control in the disposition of the case.

Instead, we conclude that the trial court’s April 18 Amended and Additional

Findings of Fact and Conclusions of Law were the result of a mistake.

Dudley Constr., Ltd. v. Cross Roads Concrete Servs., Inc. Page 9 Therefore, the April 18 Amended and Additional Findings of Fact and

Conclusions of Law must be disregarded. See id. The April 18 judgment

conforms to the March 15 findings of fact and conclusions of law as intended

by the trial court. We overrule Dudley’s first and second issues.

PREJUDGMENT INTEREST

In its third issue, Dudley asserts the trial court erred by awarding

prejudgment interest according to the Texas Property Code’s Prompt Payment

Act. Dudley argues that statute does not apply to a public works project

pursuant to a government contract. Furthermore, Dudley asserts that Cross

Roads failed to properly plead for statutory prejudgment interest. In its fourth

issue, Dudley asserts that Cross Roads may not recover equitable prejudgment

interest because Cross Roads did not plead for such interest.

An appellate court reviews a trial court’s prejudgment interest award

under an abuse of discretion standard. See Bufkin v. Bufkin, 259 S.W.3d 343,

356 (Tex. App.—Dallas 2008, pet. denied). To determine if there was an abuse

of discretion, we must decide if the lower court acted without reference to any

guiding rules or principles. Id.

Prejudgment interest may be awarded pursuant to an enabling statute

or general principles of equity. See Johnson & Higgins of Tex., Inc. v. Kenneco

Energy, Inc., 962 S.W.2d 507, 528 (Tex. 1998). Where a breach of contract

Dudley Constr., Ltd. v. Cross Roads Concrete Servs., Inc. Page 10 claim does not fall within any enabling statute, equitable principles govern the

award of prejudgment interest. See Trevino v. City of Pearland, 531 S.W.3d

290, 297 (Tex. App.—Houston [14th Dist.] 2017, no pet.). Statutory interest

may be predicated on a prayer for general damages. Benavidez v. Isles Constr.

Co., 726 S.W.2d 23, 25 (Tex. 1987). Where prejudgment interest is sought at

common law as an element of the damages, a plaintiff must plead for it. Id.

In its petition, Cross Roads presented claims for breach of contract and

breach of fiduciary duty. In addition to a request for damages, it pleaded for

“interest as allowed by law.” In its March 15 conclusions of law, the trial court

concluded that “[p]ursuant to Prompt Payment Act, Texas Property Code

Chapter 28, Cross Roads is entitled to recover prejudgment interest at the rate

of 1.5% each month which accrues from the date that each draw was due until

entry of the judgment.” The April 18 judgment applied the prejudgment

interest scheme set out in the Prompt Payment Act, ordering that Cross Roads

recover from Dudley prejudgment interest of 1.5% each month from the date

three separate payments were due until the date of the judgment.

Cross Roads did not plead a cause of action based on the Texas Property

Code’s Prompt Payment Act. See TEX. PROP. CODE ANN. §§ 28.001-28.010.

After rendition of the January 31, 2024 judgment, Cross Roads filed a “Motion

to Reconsider and Reform the Judgment Dated January 31, 2024 or

Dudley Constr., Ltd. v. Cross Roads Concrete Servs., Inc. Page 11 Alternatively a New Trial” in which it argued that the Act applied and it was

entitled to prejudgment interest pursuant to that Act. We disagree.

Section 28.002 requires an “owner” to promptly pay a contractor for work

performed pursuant to a contract, and it requires contractors to promptly pay

subcontractors for their work upon receipt of payment from the owner. Id.

§ 28.002(a), (b). The Act defines “owner” as a person or entity, other than a

governmental entity, with an interest in real property that is improved, for

whom an improvement is made, and who ordered the improvement to be made.

Id. § 28.001(4). Dudley, as general contractor, contracted with the City of

College Station, a governmental entity. Therefore, the property code’s Prompt

Payment Act does not apply.

Cross Roads pleaded a breach of contract claim but has not asserted, in

its petition or briefing, that the contract at issue contains a provision allowing

it to recover prejudgment interest or that it is entitled to prejudgment interest

on the basis of equity. See Benavidez, 726 S.W.2d at 25. We conclude that the

trial court abused its discretion in awarding prejudgment interest to Cross

Roads. See Bufkin, 259 S.W.3d at 356. Accordingly, we delete the award from

the trial court’s judgment. We sustain Dudley’s third and fourth issues.

Dudley Constr., Ltd. v. Cross Roads Concrete Servs., Inc. Page 12 DUDLEY’S CONTRACTUAL RIGHTS

In its fifth issue, Dudley asserts that, pursuant to its contract with Cross

Roads, Dudley has the right to withhold funds as necessary to protect Dudley

from loss due to Cross Roads’s defective work, to remedy claims made, and to

effectuate potential repairs. Dudley contends it had to withhold funds in order

to protect itself from potential costs that could be incurred during the eight-

year warranty period proposed by the City. Dudley concludes that the evidence

is legally and factually insufficient to support a finding that Dudley breached

its agreement by failing to make the payments demanded by Cross Roads.

Standard of Review

In an appeal of a judgment rendered after a bench trial, the trial court’s

findings of fact have the same weight as a jury’s verdict, and we review the

legal and factual sufficiency of the evidence used to support them just as we

would review a jury’s findings. In re Doe, 19 S.W.3d 249, 253 (Tex. 2000). We

review the trial court’s conclusions of law de novo; that is, we review the trial

court’s legal conclusions drawn from the facts to determine their correctness.

See BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 794 (Tex. 2002).

A party who challenges the legal sufficiency of the evidence to support

an issue upon which it did not have the burden of proof at trial must

demonstrate on appeal that there is no evidence to support the adverse finding.

Dudley Constr., Ltd. v. Cross Roads Concrete Servs., Inc. Page 13 Exxon Corp. v. Emerald Oil & Gas Co., 348 S.W.3d 194, 215 (Tex. 2011).

Evidence is legally sufficient if it would enable reasonable and fair-minded

people to reach the verdict under review. Id. We credit favorable evidence if

a reasonable finder of fact could, and disregard contrary evidence unless a

reasonable finder of fact could not. Id. If there is any evidence of probative

force to support the finding, i.e. more than a scintilla, we will overrule the

issue. Haggar Clothing Co. v. Hernandez, 164 S.W.3d 386, 388 (Tex. 2005) (per

curiam).

If a party is attacking the factual sufficiency of the evidence to support

an adverse finding on an issue on which the other party had the burden of

proof, the attacking party must demonstrate that there is insufficient evidence

to support the adverse finding. Capps v. Nexion Health at Southwood, Inc.,

349 S.W.3d 849, 855 (Tex. App.—Tyler 2011, no pet.). The verdict should be

set aside only if it is so contrary to the overwhelming weight of the evidence as

to be clearly wrong and unjust. Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986)

(per curiam). In reviewing the factual sufficiency of the evidence, we must

examine the entire record, considering both the evidence in favor of, and

contrary to, the challenged findings. See Mar. Overseas Corp. v. Ellis, 971

S.W.2d 402, 406-07 (Tex. 1998); Cain, 709 S.W.2d at 176. The reviewing court

may not substitute its opinion for that of the trier of fact, as it is the factfinder’s

Dudley Constr., Ltd. v. Cross Roads Concrete Servs., Inc. Page 14 role to judge the credibility of witnesses, to assign the weight afforded their

testimony, and to resolve inconsistencies within or conflicts among the

witnesses’ testimony. Golden Eagle Archery, Inc. v. Jackson, 116 S.W.3d 757,

761 (Tex. 2003); Ford v. Panhandle & Santa Fe Ry. Co., 252 S.W.2d 561, 563

(Tex. 1952).

Applicable Law

Contract construction presents questions of law we review de novo.

Sundown Energy LP v. HJSA No. 3, Ltd. P’ship, 622 S.W.3d 884, 888 (Tex.

2021) (per curiam). When construing a contract, the court’s primary concern

is to give effect to the written expression of the parties’ intent. Id. We interpret

contract language according to its plain, ordinary, and generally accepted

meaning unless the instrument directs otherwise. URI, Inc. v. Kleburg Cty.,

543 S.W.3d 755, 764 (Tex. 2018). Words must be construed in the context in

which they are used. Sundown Energy LP, 622 S.W.3d at 888. We must

consider the entire writing, harmonizing and giving effect to all the contract

provisions so that none will be rendered meaningless. Plains Exploration &

Prod. Co. v. Torch Energy Advisors Inc., 473 S.W.3d 296, 305 (Tex. 2015).

The elements of a breach of contract claim are (1) the existence of a valid

contract; (2) performance or tendered performance by the plaintiff; (3) breach

by the defendant; and (4) damages as a result of the breach. Levco Constr., Inc.

Dudley Constr., Ltd. v. Cross Roads Concrete Servs., Inc. Page 15 v. Whole Foods Mkt. Rocky Mountain/Sw. L.P., 549 S.W.3d 618, 638 (Tex.

App.—Houston [1st Dist.] 2017, no pet.). Whether a party has breached a

contract is a question of law for the court when the facts of the parties’ conduct

are undisputed or conclusively established. Grohman v. Kahlig, 318 S.W.3d

882, 887 (Tex. 2010).

Discussion

Dudley does not dispute that it failed to pay funds it owed Cross Roads

under their contract, the amount of those funds, the validity of the contract, or

performance by Cross Roads.1 Thus, our understanding of Dudley’s argument

is that it is only attacking one element of Cross Roads’s breach of contract

claim, that is, whether Dudley breached the contract. Without providing us

with a roadmap of its legal analysis, Dudley points to one provision in the

parties’ contract and concludes that the evidence is insufficient to prove Dudley

breached the contract. Apparently, Dudley believes that provision justifies its

failure to pay the money owed to Cross Roads. This assertion requires us to

construe the parties’ contract.

In Section 16 of the contract between the City and Dudley, which is

entitled “Payment,” the parties specified the terms regarding progress

payment applications, progress payments, retainage, suspension of payments,

1 Dudley filed a counterclaim for breach of contract which was severed by the trial court and not a part

of this appeal.

Dudley Constr., Ltd. v. Cross Roads Concrete Servs., Inc. Page 16 and withholding funds. Dudley was to submit progress payment applications

“showing as completely as practicable the total value of the actual work

performed by the Contractor and accepted by the City up to and including the

last day of the preceding month.” The contract further provides that, on or

before the thirtieth calendar day following the City’s receipt of a progress

payment application from Dudley, the City shall pay Dudley the approved

amount of the progress payments. Upon Final Completion and acceptance of

the work, the City shall pay the remainder of the balance due, less any

retainage, which shall be retained for thirty days from the date of Final

Completion.

Pursuant to Paragraph 16.11, the City may, on account of subsequently

discovered evidence and in addition to the retainage withheld, withhold funds

to such extent as may be necessary to protect itself from loss on account of,

inter alia, defective work, claims made or reasonable evidence indicating

claims will be made for damage to another by the contractor, or claims made

or reasonable evidence indicating claims will be made for damage to third

parties.

Section 20 of the contract is entitled “Final Completion.” It provides that

if the City deems the work Finally Complete, certificates of completion and

acceptance shall be issued, and the City shall pay the balance due within thirty

Dudley Constr., Ltd. v. Cross Roads Concrete Servs., Inc. Page 17 days. Neither final payment nor any acceptance nor certificate shall relieve

Dudley of any responsibility for faulty workmanship or materials. Paragraph

25.01 provides that Dudley warrants that all work will be free from faults and

defects for one year after issuance of a certificate of Final Completion.

Attachment A to the subcontract between Dudley and Cross Roads

provides that the contract between the City and Dudley is incorporated into

the Subcontract; payments to Cross Roads shall be made monthly; final

payment will be made within fifteen days of acceptance of and payment by the

City for the entire contract; and Cross Roads shall reimburse Dudley for any

loss or damage which may become due to the City. Paragraph 20 of

Attachment A of the subcontract provides that the subcontractor shall

reimburse the contractor for any loss or damages which is due to the

subcontractor’s failure to perform properly.

According to its plain language, the contract anticipates that Dudley and

its subcontractors will be paid regularly during the course of the work on the

project. The City was to pay Dudley in full within thirty days after the City

determines the work is complete. Pursuant to the subcontract, final payment

to Cross Roads was due in full within fifteen days of the date Dudley received

final payment from the City. Reading these provisions together, Section

16.11’s permission to withhold funds worked as a mechanism to address

Dudley Constr., Ltd. v. Cross Roads Concrete Servs., Inc. Page 18 problems such as defective work and damages to others that may arise during

the course of the work on the project. Although the contract allows the City

and Dudley to withhold payments in certain circumstances, it is not reasonable

to interpret that provision to mean that the payments can be withheld past the

contractual due dates for final payments.

Thus, harmonizing and giving effect to all the contract provisions, the

option to withhold funds can only be exercised during the work on the project

and up until the contractually agreed upon time for final payment to Cross

Roads. See Plains Exploration & Prod. Co., 473 S.W.3d at 305.

The date of substantial completion of the project was May 3, 2019. Final

completion was due June 2, 2019 but that deadline was not met. Dudley

provided an “All Bills Paid Affidavit” to the City, signed on April 7, 2021,

although the affidavit noted that Cross Roads and one other subcontractor had

not been paid in full. Final approval of the payment and acceptance of the

project occurred on April 7, 2021. Although the City never issued a Certificate

of Final Completion, Dudley received full and final payment from the City in

April 2021. Therefore, pursuant to the terms of the contract, Cross Roads

should have been paid in May 2021.

Edward McDonald, the City’s project manager on this project, testified

that the effect of paying the full contract amount was to close out their contract

Dudley Constr., Ltd. v. Cross Roads Concrete Servs., Inc. Page 19 with Dudley. The City accepted the project with no conditions. Although in

2018 the City had asked Dudley for an eight-year warranty due to the flaws in

the box culvert, the City later waived that requirement and unconditionally

accepted the project. McDonald testified that the City is not requiring

anything of Dudley that would prevent Dudley from paying Cross Roads.

Michael Ham, Dudley’s senior project manager, testified that the City

closed the project out and paid Dudley. He testified that Dudley has not

suffered any loss from Cross Roads’s actions. He explained that Dudley is

concerned about loss that may occur in the future and what he termed Dudley’s

outstanding risk on the project. Ham testified that he

withheld enough funds that [he] felt like . . . would limit [Dudley’s] exposure as much as possible which is pretty much what he had left in the contract. At that point he wasn’t producing anything that was giving me an assurance that he would take care of his issues. So we withheld funds to limit our exposure on the amount of cost that it would take to repair the issue.

In two separate emails, both dated June 21, 2019, Ham told Rick Siegert, the

owner of Cross Roads, that funding would be withheld until the bond issue was

resolved to ensure damages from the box culvert spalling issue are covered.

Richard Dudley, owner of Dudley Construction, Ltd., indicated that his

concern is a potential, future problem. He testified that “[t]he problem that I

think is going to present itself more likely is the ongoing spalling and repairs

of those spalls within the concrete tunnel.” Mr. Dudley claimed the liability

Dudley Constr., Ltd. v. Cross Roads Concrete Servs., Inc. Page 20 continues on because the City never provided a release of liability associated

with Cross Roads’s repairs of the spalled areas. He wanted either

acknowledgment that the work performed was compliant with the contract or

assurance that the City will not seek anything further from Dudley related to

liability on that issue. Because the City initially requested an eight-year

warranty, Dudley wanted protection from loss through that proposed extended

warranty period.

Shortly before the trial began in 2023, Dudley inspected the box culvert

and determined that some spalling has occurred and repairs are necessary.

Mr. Dudley testified that the damages they experienced to date are the costs

to perform the two tests in 2023 and the future costs of repairing existing

damaged areas.

Section 16.11, which Dudley relies on to justify withholding funds,

applies to loss and damage arising before the City determines the job is

complete. That provision does not apply to potential damages that might arise

in the future, after the City determines the work is complete. The record shows

that no loss or damages had been identified as of May 2021, when final

payment to Cross Roads was due. Even if the City had not waived its proposed

eight-year warranty requirement, Dudley cannot bootstrap the proposed

warranty period to Section 16.11.

Dudley Constr., Ltd. v. Cross Roads Concrete Servs., Inc. Page 21 There is no contractual basis for Dudley to withhold funds from Cross

Roads to protect Dudley from potential costs that could be incurred after May

2021. Accordingly, Dudley’s justification argument fails. The record

conclusively shows, and Dudley does not deny, that Dudley did not pay

$85,505.46 to Cross Roads that it was owed under the contract. The evidence

is legally and factually sufficient to show Dudley breached the contract. See

Hernandez, 164 S.W.3d at 388; Cain, 709 S.W.2d at 176. We overrule Dudley’s

fifth issue.

THE RULE 11 AGREEMENT

In its sixth issue, Dudley contends the trial court abused its discretion

by failing to incorporate the protections contemplated in the parties’ Rule 11

Agreement. It asserts that its proposed remedy was for Dudley to continue to

withhold payment to secure against necessary repairs until June 2, 2027, or

until Cross Roads provided a warranty secured by a bond. Dudley argues that

the trial court’s failure to adopt Dudley’s proposed remedy constituted a

fundamental change in the contractual positions of the parties.

In the Agreement, Dudley agreed to provide the City and Cross Roads

with a video of its January 23, 2020 inspection of the culverts, and Cross Roads

agreed it would obtain certain documents from the City. The Agreement

further provided that if the City fails or refuses to execute all of the documents

Dudley Constr., Ltd. v. Cross Roads Concrete Servs., Inc. Page 22 and/or the City does not accept the maintenance agreement and bond provided

by Cross Roads by a specified date, “the attorneys will provide the Court with

a written report on the documents executed by the City and any arrangements

on the Cross Roads’ maintenance agreement with bond. The Court will

consider this written report in its ruling for judgment.” The Agreement was

signed on February 10, 2023.

A trial court has a ministerial duty to enforce a valid Rule 11 Agreement.

See Shamrock Psychiatric Clinic, P.A. v. Tex. Dep’t of Health and Human

Servs., 540 S.W.3d 553, 560 (Tex. 2018) (per curiam). A trial court’s decision

regarding enforcement of a Rule 11 Agreement is reviewed for abuse of

discretion. See Mantas v. Fifth Ct. of Appeals, 925 S.W.2d 656, 659 (Tex. 1996)

(orig. proceeding) (per curiam).

Here, the City did not agree to execute any of the documents referenced

in the Agreement. The City was not a party in this case and could not be forced

to execute any of the documents presented to it. Under the terms of the

Agreement, the trial court was to “consider” the report provided by the parties’

attorneys. The trial court was under no obligation to render a judgment that

would adopt Dudley’s proposed remedy. Based on the wording of the

Agreement, the trial court did not fail to enforce it. Dudley has shown no abuse

Dudley Constr., Ltd. v. Cross Roads Concrete Servs., Inc. Page 23 of discretion regarding the Rule 11 Agreement. See id. We overrule Dudley’s

sixth issue.

CONCLUSION

Because we determine that the Amended and Additional Findings of

Fact and Conclusions of Law must be disregarded, the trial court’s judgment

need not be reformed to conform with those findings and conclusions. The

evidence is legally and factually sufficient to support the trial court’s finding

that Dudley breached the contract. Further, the trial court did not abuse its

discretion regarding enforcement of the parties’ Rule 11 Agreement. However,

because the trial court erred in awarding prejudgment interest to Cross Roads,

we delete the portions of the April 18, 2024 judgment awarding accrued

prejudgment interest of 1.5% each month from the date each of three payments

were due until the date of the judgment. As modified, we affirm the trial court’s

judgment.

STEVE SMITH Justice

OPINION DELIVERED and FILED: December 23, 2025 Before Chief Justice Johnson, Justice Smith, and Justice Harris Affirmed as Modified CV06

Dudley Constr., Ltd. v. Cross Roads Concrete Servs., Inc. Page 24