Heldenfels Bros. v. City of Corpus Christi

832 S.W.2d 39, 1992 WL 117315
CourtTexas Supreme Court
DecidedJune 24, 1992
DocketD-0816
StatusPublished
Cited by488 cases

This text of 832 S.W.2d 39 (Heldenfels Bros. v. City of Corpus Christi) is published on Counsel Stack Legal Research, covering Texas Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Heldenfels Bros. v. City of Corpus Christi, 832 S.W.2d 39, 1992 WL 117315 (Tex. 1992).

Opinions

OPINION

GONZALEZ, Justice.

This case involves the issue of whether a municipality owed a duty to a subcontractor of requiring the general contractor to provide a “proper” bond on work performed for the municipality. The trial court rendered judgment for the subcontractor, but the court of appeals reversed and rendered. 802 S.W.2d 35. We affirm. The City of Corpus Christi employed La-Man Constructors, Inc., to build a recreation center on the City’s park land. The general contract provided for payment to La-Man of $267,748. La-Man agreed to provide the standard performance and payment bonds as required by former Tex.Rev. Civ.Stat. art. 5160.1 La-Man prepared documents which facially appeared to meet the statutory requirements and the City accepted these bonds.

La-Man hired Heldenfels Brothers, Inc., as a subcontractor, to furnish concrete T-beams to support the roof covering the recreation center. Heldenfels constructed the T-beams and delivered them to the project site.

During the course of construction, the City made monthly payments to La-Man for the work completed, less a 10% retain-age which would be paid upon completion. The City authorized a payment of $29,250 (less $3,250 retainage) to La-Man for the T-beams supplied by Heldenfels. La-Man contracted to pay Heldenfels $26,000 for its work.

A city inspector noticed cracks in the T-beams provided by Heldenfels. The City subsequently retained $20,000 from La-Man’s periodic payment to protect itself against the possibility of defective T-beams. Several reports were prepared by experts regarding the alleged defects in the T-beams. These reports exonerated Heldenfels. Thereafter, La-Man abandoned the project and subsequently filed for bankruptcy, leaving the subcontractors unpaid. Following La-Man’s abandonment of the project, the City discovered that the bonds were fraudulent. A new general contractor was hired to complete the project.

Heldenfels filed suit against the City for payment. Following a bench trial, the trial court found for Heldenfels under several theories of recovery including unjust enrichment, quantum meruit, and negligence. The negligence recovery was based upon the acts committed by the City in fulfilling its duty to obtain valid bonds as required by former article 5160.2 The trial court rendered a $23,250 judgment for Helden-fels plus attorney fees and interest. The court of appeals reversed the trial court’s judgment and held that Heldenfels should take nothing. The court of appeals concluded that there was no evidence to support recovery under unjust enrichment or quantum meruit. It also held that former article 5160 did not impose liability on a [41]*41city in the event that accepted bonds were invalid. 802 S.W.2d at 41.3

The trial court held that Heldenfels was entitled to recover under the quantum meruit doctrine. Quantum meruit is an equitable theory of recovery which is based on an implied agreement to pay for benefits received. Vortt Exploration Co., Inc. v. Chevron U.S.A., Inc., 787 S.W.2d 942, 944 (Tex.1990). To recover under the doctrine of quantum meruit, a plaintiff must establish that: 1) valuable services and/or materials were furnished, 2) to the party sought to be charged, 3) which were accepted by the party sought to be charged, and 4) under such circumstances as reasonably notified the recipient that the plaintiff, in performing, expected to be paid by the recipient. Id.

The court of appeals denied recovery under this doctrine because it held that there was no evidence which established that Heldenfels, in rendering services to the City, reasonably notified the City that it expected to be paid by the City. 802 S.W.2d at 39.

The correct standard for review of a no evidence point is that the reviewing court must consider only the evidence and inferences from evidence which supports the trial court’s findings, and disregard all evidence and inferences to the contrary. Responsive Terminal Sys., Inc. v. Boy Scouts of Am., 774 S.W.2d 666, 668 (Tex. 1989).

Heldenfels never actually informed the City that it expected to be paid by it prior to La-Man’s abandonment of the project. Heldenfels relied, however, upon the testimony of two witnesses to show that the City knew, before Heldenfels provided the T-beams, that Heldenfels would look to the City for payment.

Kurt Schriefer, an employee of Helden-fels, testified that the City accepted, used, and enjoyed the T-beams “under such circumstances as Heldenfels ... reasonably notified the City that they expected the City to pay for the work.” However, Schriefer never revealed those circumstances. In addition, H.C. Heldenfels testified that it is normal to approach the owner for payment when neither the contractor nor the bonding company make payment, and that he would be “greatly surprised” if the City was not aware of Heldenfels’ expectations before it began work on the project. “When the evidence offered to prove a vital fact is so weak as to do no more than create a mere surmise or suspicion of its existence, the evidence is no more than a scintilla and, in legal effect, is no evidence.” Kindred v. Con/Chem, Inc., 650 S.W.2d 61, 63 (Tex.1983). We agree with the court of appeals that this testimony provides no evidence that the City had notice that Heldenfels anticipated payment from the City before Heldenfels delivered the T-beams.4

The trial court also held that Hel-denfels was entitled to recovery under the theory of unjust enrichment. A party may recover under the unjust enrichment theory when one person has obtained a benefit from another by fraud, duress, or the taking of an undue advantage. See Pope v. Garrett, 147 Tex. 18, 211 S.W.2d 559, 560, 562 (1948); Austin v. Duval, 735 S.W.2d 647, 649 (Tex.App.-Austin 1987, writ denied). We agree with the court of appeals that Heldenfels is not entitled to recovery under the theory of unjust enrichment.

[42]*42The trial court awarded recovery to Heldenfels based upon the City’s retention of funds under the general contract. Because the retention was due to the alleged defects in the T-beams, Heldenfels claimed a right to trace the retained funds to its own entitlement to payment from La-Man for the T-beams. Unjust enrichment is not a proper remedy merely because it “might appear expedient or generally fair that some recompense be afforded for an unfortunate loss” to the claimant, or because the benefits to the person sought to be charged amount to a windfall.5 Id.

Finally, the trial court held that the City was liable to Heldenfels because it negligently performed its duty pursuant to former article 5160. Former article 5160 A provided:

Any ... corporation ... entering into a formal contract in excess of $25,000 with any ... municipality of this State ... shall be required before commencing such work to execute to the [municipality] the statutory bonds....

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Cite This Page — Counsel Stack

Bluebook (online)
832 S.W.2d 39, 1992 WL 117315, Counsel Stack Legal Research, https://law.counselstack.com/opinion/heldenfels-bros-v-city-of-corpus-christi-tex-1992.