Jones v. Republic Waste Services of Texas, Ltd.

236 S.W.3d 390, 2007 WL 2214949
CourtCourt of Appeals of Texas
DecidedAugust 30, 2007
Docket01-04-00566-CV
StatusPublished
Cited by17 cases

This text of 236 S.W.3d 390 (Jones v. Republic Waste Services of Texas, Ltd.) 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
Jones v. Republic Waste Services of Texas, Ltd., 236 S.W.3d 390, 2007 WL 2214949 (Tex. Ct. App. 2007).

Opinions

OPINION

GEORGE C. HANKS, JR., Justice.

This is an appeal from a final judgment rendered on a jury verdict in favor of appellees, Republic Waste Services of Texas, Ltd. (“Republic”)1 and Rustin Transportation Company, L.P. (“Rustin”), in a breach of contract and fraud action brought by appellants, R.C. Jones, Superi- or Waste Management Services, Inc. (“Superior”), and JTI Contractors, Inc. (“JTI”). In two issues, appellants contend that (1) as a matter of law, the evidence is insufficient to support the jury’s verdict that Rustin, Republic’s subcontractor, did not breach its subcontracts with them by failing to pay them certain rate increases for hauling trash and (2) the trial court erred in denying their motion for new trial on the ground that Rustin’s trial counsel engaged in improper and incurable jury argument. We affirm.

Background

In 1999, the City of Houston began soliciting bids for a long-term contract for disposal of its trash. The proposed 20-year project called for: (1) the construction and operation of two City-owned transfer stations, one in southwest Houston (the Westpark transfer station) and another in southeast Houston (the Lawn-dale transfer station) and (2) the hauling of trash from these transfer stations to a landfill for disposal. Republic was the low bidder on the City of Houston waste disposal contract. The City estimated Republic’s bid amount for the 20-year contract to be $295 million.

All city contracts up for bid must comply with the City’s Minority and Women Business Enterprises (“MWBE”) Program. Before being awarded a contract, a city contractor must submit an MWBE participation plan, along with either executed subcontracts or letters of intent for each MWBE subcontractor. For the proposed City contract at issue, the City set the MWBE participation requirement as follows: “at least 30% of the total value of all construction subcontracts or supply agreements” and “contracts or supply agreements in at least 20% of the remaining value of this Agreement.”

Republic subcontracted all transfer station waste loading and hauling to Rustin, which operates every transfer station in the City of Houston. Ted Meyer, Repub-[394]*394lie’s area president, and Donald Poarch, Rustin’s owner, agreed that Rustin, which is not an MWBE, would subcontract with MWBEs to meet the MWBE requirement. Superior, which is owned by R.C. Jones, an African-American, and JTI, which is owned by Jesse Valeriano, an Hispanic, agreed with Rustin to haul waste to Republic’s landfill. Both Jones and Valeriano signed blank letters of intent. They understood that the letters of intent were not themselves the agreements, but merely precursors for more extensive and complete agreements.

Once City Council approved the contract with Republic (the “City Contract”), Republic entered into a subcontract with Rustin. The Republic subcontract provided for yearly rate adjustments pursuant to a formula set forth in the City Contract.

JTI and Superior each signed a set of three subcontracts (the “Rustin subcontracts”) to perform hauling work at the two City of Houston transfer stations, Westpark and Lawndale. The Rustin subcontracts also provided for yearly rate adjustments “for the applicable year” but did not define that term.

Westpark and Lawndale were scheduled to open in July 2000. However, Westpark did not open until March 9, 2001, and Lawndale did not open until October of that year. Until the Westpark and Lawn-dale transfer stations opened, JTI and Superior agreed with Rustin to perform hauling work out of other privately-owned transfer stations operated by Rustin including the Sommermeyer/290, Sam Houston, and Friendswood transfer stations.

When the Westpark transfer station opened, Superior took both of its trailers there, and JTI also began hauling from Westpark, although it hauled mostly from the Sommermeyer transfer station. The Rustin subcontracts paid Superior and JTI an initial rate of $5.25 per ton to work out of Westpark and Lawndale. However, at Westpark, Superior’s costs were $6.06 per ton and JTI’s costs were $6.78 per ton. At the contracted rate of $5.25 per ton, Superior and JTI were losing money working at Westpark and Lawndale.

Jones recognized that Superior was losing money at Westpark, and he requested a contract directly from Republic’s president, Bill Linthicum. Linthicum testified that Jones complained that “his drivers weren’t being treated fairly to be allowed to get the same number of loads that the ... Rustin drivers were.” Rustin allowed Superior to send one of its trailers back to the more profitable Friendswood transfer station. Both Linthicum and Jones exchanged proposed contracts that proved unacceptable to the other. Jones took his concerns to the Mayor’s Office of Affirmative Action and Contract Compliance. Jones was told by the City that, once the Lawndale transfer station opened, he needed to have both of his trucks running from the Lawndale and Westpark transfer stations.

Faced with this dissatisfaction from Superior, Republic and Rustin reviewed their records and discovered that JTI had been overpaid $1.81 per ton for the first four months that Westpark was open, from March 2001 through June 2001. After the overpayment was discovered, Poarch, Rus-tin’s owner, asked Valeriano, JTI’s owner, to meet Republic’s new area president, Linthicum, to discuss JTI’s profitability. Valeriano told them that he was making money. On July 1, 2001, Rustin adjusted the rate that JTI was paid to conform with the figures in the Rustin subcontracts.

When the Lawndale transfer station opened in October 2001, Superior realized that it could not make money hauling from there, either. By the end of the next month, Superior ceased operations and [395]*395sued Republic asserting a number of legal theories, all based on a purported contractual and/or partnership relationship arising out of the letters of intent.

While the litigation was ongoing between Superior and Republic, Republic and Rustin asked Valeriano to prepare a profit and loss statement for the individual transfer stations. Valeriano responded that he could not separate it by transfer station. Instead, he spent 10 minutes preparing a profit and loss statement and determined that he was making money on the Rustin work.2

One month later, Superior’s counsel deposed Valeriano in conjunction with the Superior case against Republic and questioned him at length about the financial statement that he had prepared. Based on the questions he answered during his deposition, Valeriano “felt like [his] price increases hadn’t been paid; and in going through that financial statement that [he] had produced, [he] realized that maybe [he] wasn’t making money at Westpark like [he] had originally thought [he] was.” Valeriano’s CPA discovered that JTI was losing money at Westpark and had been underpaid approximately $160,000 in Consumer Price Index (“CPI”) rate increases. Valeriano also discovered that he was not getting a 10% participation in the MWBE contract. After an investigation by Rustin in response to JTI’s claims, Rustin issued two checks totaling more than $65,000 to one of Valeriano’s trucking entities. Because Valeriano cashed the checks and stopped hauling from the City transfer stations, Rustin believed that the matter was settled. Valeriano notified Rustin that he was terminating his performance under the Rustin subcontracts, but would continue to haul from Sommermeyer.

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Jones v. Republic Waste Services of Texas, Ltd.
236 S.W.3d 390 (Court of Appeals of Texas, 2007)

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Bluebook (online)
236 S.W.3d 390, 2007 WL 2214949, Counsel Stack Legal Research, https://law.counselstack.com/opinion/jones-v-republic-waste-services-of-texas-ltd-texapp-2007.