Edifika Investments, LLC D/B/A Military Village Apartments v. Chain & Chain Construction, LLC

Opinion

Fourth Court of Appeals San Antonio, Texas MEMORANDUM OPINION

No. 04-21-00568-CV

EDIFIKA INVESTMENTS, LLC d/b/a Military Village Apartments, Appellant

v.

CHAIN & CHAIN CONSTRUCTION, LLC, Appellee

From the 438th Judicial District Court, Bexar County, Texas Trial Court No. 2021-CI-14175 Honorable Nicole Garza, Judge Presiding

Opinion by: Beth Watkins, Justice

Sitting: Luz Elena D. Chapa, Justice Beth Watkins, Justice Liza A. Rodriguez, Justice

Delivered and Filed: May 17, 2023

REVERSED AND REMANDED

Appellant Edifika Investments, LLC d/b/a Military Village Apartments challenges a

judgment in favor of appellee Chain & Chain Construction, LLC. We reverse the trial court’s

judgment and remand this cause for further proceedings.

BACKGROUND

Edifika and Chain entered into a written contract for Chain to design and construct an

apartment complex on land Edifika owned in San Antonio. Edifika ultimately sued Chain under

various tort and contract theories, alleging that Chain’s work on the project was defective and that 04-21-00568-CV

Chain demanded payment not contemplated by the contract. Chain filed counterclaims for breach

of contract, quantum meruit, statutory interest under Chapter 28 of the Texas Property Code, and

attorney’s fees, alleging that Edifika requested and agreed to additional work outside the scope of

the contract. Chain further alleged that Edifika barred Chain from the premises before the

construction was finished. Chain also filed third-party actions against several entities that are not

party to this appeal.

Chain filed a motion for partial summary judgment on its counterclaims against Edifika,

and Edifika responded. Chain filed a reply in support of its motion and objected to two of Edifika’s

summary judgment exhibits. On April 19, 2021, the trial court signed an order granting Chain’s

motion. The partial summary judgment awarded Chain monetary damages on its breach of contract

and quantum meruit claims, interest under Chapter 28 of the Texas Property Code, and post-

judgment interest. The trial court also sustained Chain’s objections to Edifika’s summary judgment

evidence.

After the partial summary judgment, Chain moved to sever its counterclaims, including its

unresolved claim for attorney’s fees, from the remaining issues in the case. On July 15, 2021, the

trial court signed an order granting the motion to sever and assigning a new cause number to

Chain’s counterclaims. The trial court’s order noted, “The parties have agreed to severance” and

provided that Chain’s severed counterclaims “may be pursued to final resolution as a separate

matter.”

In the new cause number, Chain filed a motion for summary judgment on its claim for

attorney’s fees. On September 21, 2021, the trial court signed a final judgment in the new cause

number that incorporated the April 19, 2021 partial summary judgment and awarded trial and

contingent appellate attorney’s fees to Chain. Edifika timely appealed the trial court’s judgment.

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ANALYSIS

Edifika raises eight issues on appeal. In its first five issues, Edifika argues: (1) Chain’s

motion for summary judgment was not sufficient to shift the evidentiary burden to Edifika; and

(2) Chain did not conclusively establish that it was entitled to judgment on its breach of contract,

quantum meruit, Chapter 28, and attorney’s fee counterclaims. Edifika’s final three issues, which

it presents in the alternative, challenge the trial court’s exclusion of Edifika’s summary judgment

evidence, the amount of damages awarded to Chain, and the severance order. We address only

those issues that are necessary to the disposition of this appeal. TEX. R. APP. P. 47.1.

Standard of Review

Chain moved for traditional summary judgment on its breach of contract, quantum meruit,

Chapter 28, and attorney’s fee counterclaims. See TEX. R. CIV. P. 166a(c). A party is entitled to

traditional summary judgment on its own affirmative claim if it conclusively proves all essential

elements of that claim. Compass Bank v. Durant, 516 S.W.3d 557, 565 (Tex. App.—Fort Worth

2017, pet. denied). As the summary judgment movant, Chain bore the burden to establish that there

were no genuine issues as to any material facts and it was therefore entitled to judgment as a matter

of law. TEX. R. CIV. P. 166a(c); Lightning Oil Co. v. Anadarko E&P Onshore, LLC, 520 S.W.3d

39, 45 (Tex. 2017). A motion for summary judgment must stand or fall on its own merits, and a

summary judgment may only be granted or affirmed on grounds expressly presented in the motion

itself. See, e.g., Weekley Homes, LLC v. Paniagua, 646 S.W.3d 821, 826 (Tex. 2022) (per curiam);

Hardaway v. Nixon, 544 S.W.3d 402, 412 (Tex. App.—San Antonio 2017, pet. denied).

As the nonmovant, Edifika was not required to respond to Chain’s motion or present any

controverting evidence unless and until Chain established its entitlement to judgment as a matter

of law. Energen Res. Corp. v. Wallace, 642 S.W.3d 502, 509 (Tex. 2022). We review a summary

judgment de novo, “taking as true all evidence favorable to the nonmovant, and indulging every

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reasonable inference and resolving any doubts in the nonmovant’s favor.” Id. (internal quotation

marks omitted).

Breach of Contract

Applicable Law

To be entitled to summary judgment on its breach of contract counterclaim, Chain was

required to establish as a matter of law: (1) the existence of a valid contract; (2) Chain performed

or tendered performance under the contract; (3) Edifika breached the contract; and (4) Chain was

damaged by Edifika’s breach. See, e.g., Brooks v. Excellence Mortg., Ltd., 486 S.W.3d 29, 36

(Tex. App.—San Antonio 2015, pet. denied); see also TEX. R. CIV. P. 166a(c).

Application

A party that moves for summary judgment on its own breach of contract claim has “the

burden to establish, as a matter of law, what performance was required under the [contract] and

that it fulfilled those requirements.” Tribble & Stephens Co. v. RGM Constructors, L.P., 154

S.W.3d 639, 652 (Tex. App.—Houston [14th Dist.] 2004, pet. denied) (plurality op.). Chain’s

motion for partial summary judgment argued the parties “had a contractual agreement . . . wherein

[Edifika] agreed to pay a specific price for the work performed by” Chain; that Chain and Edifika

“entered into a construction contract for a new multi-family residential apartment complex called

‘Military Villages’”; and that “[t]he agreed contract price was $7,620,000.00.” However, Chain

did not include a copy of the parties’ written contract or quote any excerpts from that contract with

its motion for partial summary judgment. We must therefore begin by determining whether

Chain’s summary judgment evidence was sufficient to conclusively establish Chain’s contractual

obligations. 1 See id.; TEX. R. CIV. P. 166a(c).

1 Edifika attached a copy of the parties’ contract to both its original petition and its response to Chain’s motion for summary judgment. But the copies of the contract Edifika provided indicated that the “Plans and Specifications” to

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Chain’s summary judgment evidence included Certificates of Occupancy for two buildings

identified as “Bldg 3” and “Bldg 4.” Chain also presented an affidavit from its president, Eduardo

Cadena, in which Cadena averred that the issuance of the certificates “meant that Edifika could

begin renting out and earning income.” But these exhibits did not show what obligations Chain

owed under the contract or that the completion of Buildings 3 and 4 satisfied those obligations.

See Tribble & Stephens, 154 S.W.3d at 652; Brooks, 486 S.W.3d at 36. The motion and its exhibits

did not establish, for example, how many buildings or apartments the parties agreed Chain would

construct, which portions of the design and construction Chain was wholly or primarily responsible

for, or whether the construction was to have been completed by a specific date. Moreover, Chain’s

own summary judgment evidence showed Chain performed work on at least two other buildings

for which it did not present a Certificate of Occupancy. Under the appropriate standard of review,

we must infer that Chain was required to complete those buildings but did not do so. See, e.g.,

Townsend v. Hindes, 619 S.W.3d 763, 770 (Tex. App.—San Antonio 2020, no pet.) (summary

judgment evidence must be viewed in light most favorable to nonmovant); see also Gilbert v.

Kalman, 650 S.W.3d 135, 145–46 (Tex. App.—El Paso 2021, no pet.) (reversing summary

judgment because movant’s own evidence raised a fact issue).

In its reply in support of its motion for summary judgment, Chain argued the two

Certificates of Occupancy were “clear evidence of substantial performance.” Substantial

performance is “an equitable doctrine that was adopted to allow a contractor who has substantially

completed a construction contract to sue on the contract rather than being relegated to his cause of

action for quantum meruit.” Vance v. My Apartment Steak House of San Antonio, Inc., 677 S.W.2d

which the parties agreed appear in a separate “Exhibit A.” Neither Exhibit A nor any other plans or specifications appear in the appellate record. Accordingly, even if we were to consider the copies of the contract Edifika presented, we cannot say those documents are sufficient to conclusively establish Chain’s contractual obligations. See Tribble & Stephens, 154 S.W.3d at 652.

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480, 482 (Tex. 1984). But Chain’s motion for summary judgment did not expressly seek recovery

under a theory of substantial performance; instead, Chain sought to recover the full contract price

with no deductions. See id. (“When a contractor has substantially performed a building contract,

he is entitled to recover the full contract price less the cost of remedying those defects that are

remediable.”). As a result, we may not affirm the summary judgment on grounds of substantial

performance. See Hardaway, 544 S.W.3d at 412. In any event, because Chain’s motion for

summary judgment did not establish Chain’s contractual obligations, the motion offered no basis

upon which to conclude that Chain “did substantially perform in accordance with the agreement.”

Smith v. Smith, 112 S.W.3d 275, 279 (Tex. App.—Corpus Christi–Edinburg 2003, pet. denied);

see also Turner v. Ewing, 625 S.W.3d 510, 518 (Tex. App.—Houston [14th Dist.] 2020, pet.

denied) (reviewing authority defining substantial compliance with construction contract).

Chain’s motion for summary judgment also argued that Edifika breached the contract by

excluding Chain from the premises and by failing to pay amounts owed under the contract. A

party’s material breach of a contract can excuse the other party’s future performance. See Earth

Power A/C & Heat, Inc. v. Page, 604 S.W.3d 519, 524 (Tex. App.—Houston [14th Dist.] 2020,

no pet.); but see Bartush-Schnitzius Foods Co. v. Cimco Refrigeration, Inc., 518 S.W.3d 432, 436

(Tex. 2017) (per curiam) (nonmaterial breach will support a claim for damages but will not excuse

non-breaching party from performing). Additionally, this court has held that “[a] contractor can

recover on a contract when the failure to substantially perform is the fault of the other party.” Tips

v. Hartland Devs., Inc., 961 S.W.2d 618, 623 (Tex. App.—San Antonio 1998, no pet.). Chain’s

motion therefore appeared to argue that Chain was entitled to recover the entire contract price

because its failure to fully perform was excused by Edifika’s breaches.

As explained above, however, Chain did not present a copy of the parties’ contract or

otherwise conclusively establish its terms. While Chain’s motion asserted that Chain “considered

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[its exclusion from the premises] a breach of contract by Edifika,” it did not present evidence

showing that the exclusion constituted a breach of Edifika’s contractual obligations as a matter of

law. The motion did not conclusively establish, for example, that Edifika lacked a contractual right

to bar Chain from the premises under these circumstances. See Villarreal v. Chesapeake Zapata,

L.P., No. 04-08-00171-CV, 2009 WL 1956387, at *6 (Tex. App.—San Antonio July 8, 2009, pet.

denied) (mem. op.) (noting summary judgment standard of review does not permit reviewing court

to make inferences in movant’s favor). Chain therefore did not conclusively establish that Edifika

breached the contract or that Chain’s failure to perform was Edifika’s fault. See Brooks, 486

S.W.3d at 36.

For these reasons, Chain’s motion for summary judgment did not establish that Chain was

entitled to judgment as a matter of law on all required elements of its breach of contract claim. See

id.; TEX. R. CIV. P. 166a(c). As a result, it did not trigger Edifika’s burden to present controverting

evidence on that claim. See TEX. R. CIV. P. 166a(c); Energen, 642 S.W.3d at 509. We therefore

sustain Edifika’s challenge to the summary judgment on Chain’s breach of contract claim.

Quantum Meruit

“Quantum meruit is an equitable remedy that is based upon the promise implied by law to

pay for beneficial services rendered and knowingly accepted.” Hill v. Shamoun & Norman, LLP,

544 S.W.3d 724, 732 (Tex. 2018) (internal quotation marks omitted). To be entitled to summary

judgment on its quantum meruit claim, Chain was required to conclusively establish: (1) Chain

rendered valuable services or furnished materials to Edifika; (2) Edifika accepted, used, and

enjoyed those services and materials; and (3) Edifika was reasonably notified that Chain expected

to be paid for the services and materials. See id. at 732–33; E-Learning LLC v. AT&T Corp., 517

S.W.3d 849, 860 (Tex. App.—San Antonio 2017, no pet.). “A party generally cannot recover under

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a quantum-meruit claim when there is a valid contract covering the services or materials

furnished.” Hill, 544 S.W.3d at 733.

Chain’s motion for summary judgment argued that Edifika requested and agreed to pay for

“change order” work that went beyond the scope of the parties’ contract. The motion listed some

of the purported change order work, and an exhibit to the motion included “a line-by-line

accounting of the requested and performed changes.” Again, however, Chain’s motion did not

establish the terms of the parties’ contract. Consequently, the motion did not conclusively show

that the change order work fell outside of Chain’s express contractual obligations. See San Antonio

Masonry & Tool Supply, Inc. v. Epstein & Sons Int’l, Inc., 281 S.W.3d 441, 445–46 (Tex. App.—

San Antonio 2005, no pet.) (holding existence of an express contract barred recovery in quantum

meruit).

Under certain circumstances, such as construction contracts, “recovery in quantum meruit

is permitted despite the existence of an express contract that covers the subject matter of the claim.”

STR Constructors, Ltd. v. Newman Tile, Inc., 395 S.W.3d 383, 391 (Tex. App.—El Paso 2013, no

pet.) (internal quotation marks omitted). But under those circumstances, the claimant must show

that the owner of the land accepted and retained “benefits arising as a direct result of the

contractor’s partial performance.” Truly v. Austin, 744 S.W.2d 934, 937 (Tex. 1988). Here, Chain’s

motion showed that Edifika: (1) “made and approved” requests for change order work; and (2)

used “permits issued in the name of Chain & Chain Construction, LLC” to continue construction

after Chain was excluded from the premises. But Chain’s evidence did not establish as a matter of

law that Edifika accepted, used, and enjoyed all of the materials and services for which Chain

sought to recover in quantum meruit. See Hill, 544 S.W.3d at 733; Truly, 744 S.W.2d at 937. For

this additional reason, Chain did not conclusively establish all the required elements of its quantum

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meruit claim and, as a result, did not trigger Edifika’s burden to present controverting evidence.

TEX. R. CIV. P. 166a(c); Energen, 642 S.W.3d at 509.

We therefore sustain Edifika’s challenge to the summary judgment on Chain’s quantum

meruit claim.

Chapter 28

Chapter 28 of the Texas Property Code, entitled “Prompt Payment to Contractors and

Subcontractors,” provides:

If an owner or a person authorized to act on behalf of the owner receives a written payment request from a contractor for an amount that is allowed to the contractor under the contract for properly performed work or suitably stored or specially fabricated materials, the owner shall pay the amount to the contractor, less any amount withheld as authorized by statute, not later than the 35th day after the date the owner receives the request.

TEX. PROP. CODE ANN. § 28.002(a). If a property owner fails to pay a contractor’s invoice as

required by section 28.002, the “unpaid amount bears interest at the rate of 1 ½ percent each

month.” TEX. PROP. CODE ANN. § 28.004(b).

Chain’s motion for summary judgment identified three exhibits that ostensibly supported

its claim under Chapter 28. The first exhibit, Cadena’s affidavit, averred that Edifika failed to pay

outstanding amounts under both the contract and the change orders. The second, a spreadsheet

attached to Cadena’s affidavit, itemized those amounts and appeared to show the dates those

amounts accrued. However, neither the affidavit nor the spreadsheet indicated when Edifika

received “a written payment request from [Chain]” for those amounts. See TEX. PROP. CODE

§ 28.002(a). Accordingly, those exhibits did not conclusively show Chain was entitled to judgment

on its claim under Chapter 28. See id.; TEX. R. CIV. P. 166a(c).

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The third exhibit upon which Chain relied for its Chapter 28 claim was an excerpt from

Chain’s fourth supplemental disclosure responses. That document purported to identify the unpaid

amounts in question, the “35 day due date” for those amounts, and a total “Penalty under Chapter

28” as of the date of that document. However, a party generally may not rely on its own discovery

responses as summary judgment evidence. See Morgan v. Anthony, 27 S.W.3d 928, 929 (Tex.

2000) (per curiam); Sprague v. James River Ins. Co., No. 03-19-00859-CV, 2021 WL 5457217, at

*3 (Tex. App.—Austin Nov. 18, 2021, no pet.) (mem op.). We note, moreover, that the “[t]otal

contract portion unpaid amount” listed in this exhibit was $267,390.07, while Cadena’s affidavit

identified the “original contract price . . . unpaid to date” as $267,367.07. See Sadeghian v. Wright,

No. 06-18-00062-CV, 2019 WL 255741, at *8 (Tex. App.—Texarkana Jan. 8, 2019, pet. denied)

(mem. op.) (concluding “summary judgment was improper” where movants’ “own summary

judgment evidence created fact issues”).

Finally, as noted above, Chain’s motion for summary judgment did not conclusively

establish either the terms of the contract or the extent of Chain’s performance of those terms. The

motion therefore did not show as a matter of law that the amounts Chain sought were “allowed to

the contractor under the contract for properly performed work[.]” See TEX. PROP. CODE

§ 28.002(a).

For these reasons, Chain’s motion for summary judgment did not conclusively establish

that Chain was entitled to judgment as a matter of law on its claim under Chapter 28 or shift the

evidentiary burden to Edifika. TEX. R. CIV. P. 166a(c); Energen, 642 S.W.3d at 509. We sustain

Edifika’s challenge to the summary judgment on Chain’s Chapter 28 claim.

Attorney’s Fees

In addition to the partial summary judgment on Chain’s substantive claims, the trial court

granted Chain a separate summary judgment on its claim for attorney’s fees. Chain sought

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attorney’s fees under section 38.001 of the Texas Civil Practice and Remedies Code and section

28.005 of the Texas Property Code. See TEX. CIV. PRAC. & REM. CODE ANN. § 38.001(b)(1), (2),

(8); TEX. PROP. CODE ANN. § 28.005(b).

“To obtain an award of attorney’s fees under Section 38.001, ‘a party must (1) prevail on

a cause of action for which attorney’s fees are recoverable, and (2) recover damages.’” Peterson

Grp., Inc. v. PLTQ Lotus Grp., L.P., 417 S.W.3d 46, 60 (Tex. App.—Houston [1st Dist.] 2013,

pet. denied) (quoting Green Int’l, Inc. v. Solis, 951 S.W.2d 384, 390 (Tex. 1997)). Because we

have held that Chain was not entitled to summary judgment on its breach of contract and quantum

meruit claims, it was not entitled to attorney’s fees under section 38.001. See id.; Harley Rogers

P’ship, Ltd. v. Quick Roofing, LLC, No. 04-21-00030-CV, 2022 WL 2230954, at *2 (Tex. App.—

San Antonio June 22, 2022, no pet.) (mem. op.).

In a claim under Chapter 28 of the Property Code, a trial court “may award costs and

reasonable attorney’s fees as the court determines equitable and just.” TEX. PROP. CODE

§ 28.005(b). In light of our disposition of Chain’s Chapter 28 claim, the trial court could, in its

discretion, conclude that a fee award to Chain is not “equitable and just.” See id.; cf. Lemus v.

Aguilar, 491 S.W.3d 51, 61–62 (Tex. App.—San Antonio 2016, no pet.) (applying similarly

worded attorney’s fee statute). For that reason, we hold Chain did not conclusively establish its

entitlement to attorney’s fees under Chapter 28. See Vast Constr., LLC v. CTC Contractors, LLC,

526 S.W.3d 709, 726 (Tex. App.—Houston [14th Dist.] 2017, no pet.).

We sustain Edifika’s challenge to the fee award. Because our resolution of Edifika’s first

five issues is dispositive, we need not consider its remaining issues. TEX. R. APP. P. 47.1.

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CONCLUSION

We reverse the trial court’s September 21, 2021 final judgment and remand this cause to

the trial court for further proceedings consistent with this opinion.

Beth Watkins, Justice

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