Ken-Do Contracting, L.P. v. F.A. Brown's Construction, LLC D/B/A Brown Construction and Brown's Concrete Construction

• Court: Court of Appeals of Texas
• Decided: March 5, 2020
• Docket: 05-19-00228-CV
• Status: Published

Opinion

REVERSED AND REMANDED; Opinion Filed March 5, 2020

In The Court of Appeals Fifth District of Texas at Dallas No. 05-19-00228-CV

KEN-DO CONTRACTING, L.P., Appellant V. F.A. BROWN’S CONSTRUCTION, LLC D/B/A BROWN CONSTRUCTION AND BROWN’S CONCRETE CONSTRUCTION, Appellee

On Appeal from the 134th Judicial District Court Dallas County, Texas Trial Court Cause No. DC-13-09249

MEMORANDUM OPINION Before Justices Myers, Schenck, and Carlyle Opinion by Justice Schenck Appellant Ken-Do Contracting, L.P. (“Ken-Do”) appeals a judgment in favor

of F.A. Brown’s Construction, L.L.C. d/b/a Brown Construction and Brown’s

Concrete Construction (“Brown”). In its first of eleven issues, Ken-Do asserts the

trial court erred in failing to transfer venue from Dallas County to Ellis County.

Because we conclude the trial court erred in failing to transfer venue to Ellis County,

we reverse the trial court’s judgment and remand the case with instructions to

transfer the case to Ellis County. Because all issues are settled in the law, we issue

this memorandum opinion. TEX. R. APP. P. 47.4. BACKGROUND Ken-Do was the general contractor on a Texas Department of Transportation

construction project in Johnson County. In 2012, Ken-Do and Brown entered into a

subcontract agreement for Brown to perform concrete work related to the project.

Brown subsequently sued Ken-Do in Dallas County for breach of contract. Brown

alleged venue was proper in Dallas County because Ken-Do had a principal office

in Dallas County.

Ken-Do filed a motion to transfer venue denying it had a principal office in

Dallas County and requesting the trial court transfer venue to Ellis County, where it

maintained a principal office. Brown filed a response to Ken-Do’s motion,

supported by the affidavit of its Vice President Thomas Brown. In his affidavit,

Thomas Brown stated that Ken-Do had a principal office in Dallas County. To

support the allegation, Thomas Brown relied on various documents attached to his

affidavit that showed Ken-Do used a Dallas County post office box to conduct

business. The trial court denied Ken-Do’s motion. Following a jury trial, the trial

court rendered judgment in favor of Brown, awarding it damages and fees. Ken-Do

appealed that final judgment to this court in Ken-Do Contracting, L.P. v. F.A.

Brown’s Constr., L.L.C., No. 05-16-00373-CV, 2017 WL 3381105, at *1 (Tex.

App.—Dallas Aug. 7, 2017, pet. denied) (mem. op.).

In our prior panel opinion, we reviewed the evidence in the record to

determine whether venue was proper in Dallas County as asserted by Brown. See

–2– id. at *2. We concluded Brown failed to show venue was proper in Dallas County,

and we examined whether there was any probative evidence in the record at that

stage to show venue was proper in Ellis County, the county to which Ken-Do sought

transfer. See id. at *3. We concluded there was no probative evidence in the record

to show venue was proper in Ellis County. See id. Because neither party had made

the necessary venue showing, we reversed the trial court’s judgment and remanded

the case to the trial court to conduct further proceedings on the issue of venue. See

id. at *4.

The day following the issuance of our mandate in our prior opinion, the trial

court ordered that “this matter is TRANSFERRED to Johnson County, Texas,

pursuant to the Court of Appeals, Fifth District of Texas at Dallas’s Opinion of

August 7, 2017.” Brown filed a motion to reconsider in which it argued this Court

did not order the trial court to transfer venue to Johnson County or any other county

and that venue was proper in Dallas County because the parties’ contract was made

in Dallas County and Brown performed the contract in part in Dallas County. In

support of its motion, Brown submitted an affidavit in which its Vice President

described events relating to the contract that occurred in Dallas County. The trial

court denied that motion and signed an order dismissing the case for lack of

jurisdiction.

Brown petitioned this Court for mandamus relief, which we granted. See In

re F.A. Brown’s Constr., LLC, No. 05-18-00804-CV, 2018 WL 4443281, at *1 (Tex. –3– App.—Dallas Sept. 18, 2018, orig. proceeding). In our mandamus opinion, we

concluded the trial court acted outside the scope of our mandate and improperly

exercised its discretion by failing to conduct further proceedings and ordering

transfer to Johnson County. See id. We then ordered the trial court to issue an order

vacating its order transferring the case to Johnson County and further ordered the

trial court to conduct further proceedings on the issue of venue. See id. at *4.

After this Court’s mandamus opinion issued, Ken-Do filed a supplemental

brief in support of its motion to transfer venue, to which it attached the affidavit of

Ken Halverson, owner of Ken-Do. The trial court conducted a hearing at which it

concluded venue was proper in Dallas County and reinstated the prior jury verdict.

Ken-Do filed this appeal.

DISCUSSION In its first issue, Ken-Do asserts the trial court erred in failing to transfer venue

from Dallas County to Ellis County. Ken-Do argues this Court has already

considered and rejected Dallas County as a proper venue in its prior opinion and that

none of the additional evidence offered in the additional venue proceedings

subsequent to the prior appeal would support a finding that venue was proper in

Dallas County. Ken-Do urges Ellis County is proper because it is the county where

Ken-Do’s principal office is located and where a substantial part of the events or

omissions giving rise to the claim occurred.

–4– In our prior panel opinion, we set forth the standard of review we apply to a

trial court’s venue determination:

Section 15.064 requires that we consider the entire record, including the trial on the merits, to determine whether venue was or was not proper in the county of suit. TEX. CIV. PRAC. & REM. CODE ANN. § 15.064(b). If there is no probative evidence to show venue was proper in the county of suit, we must then determine whether there is any probative evidence in the record to show venue was proper in the county to which transfer was sought. Id; Ruiz, 868 S.W.2d at 757. If there is any probative evidence to show venue was proper in that county, we remand with instructions to the trial court to transfer to that county. Ruiz, 868 S.W.2d at 757. If there is no probative evidence to show venue was proper in either the county of suit or the county to which transfer was sought, we must remand to the trial court for further proceedings on the venue issue. Id.

See Ken-Do Contracting, L.P., 2017 WL 3381105, at *2 (citing Ruiz v. Connoco,

868 S.W.2d 752, 757 (Tex. 1993)). Further, when determining venue for a breach

of contract claim, we consider where the contract was made, where it was performed,

and where it was breached. See id. at *3 (citing In re Red Dot Bldg. Sys., Inc., 504

S.W.3d 320, 323 (Tex. 2016) (orig. proceeding)).

In our prior panel opinion, we concluded there was no probative evidence in

the record that venue was proper in Dallas County. See id. Despite this Court’s

holding, Brown continued to argue in the trial court that venue was proper in Dallas

County, claiming Brown performed in part the contract at issue and breaches of the

contract occurred in Dallas County. In support of this argument, Brown submitted

an affidavit in which its Vice President described events relating to the contract that

occurred in Dallas County. In addition to Brown’s affidavit, the record contains one

–5– other piece of evidence submitted after this Court’s prior panel opinion: the affidavit

of Ken Halverson, owner of Ken-Do, which was attached to Ken-Do’s supplemental

brief in support of its motion to transfer venue. The trial court considered this

evidence and ultimately found venue to be proper in Dallas County despite our

earlier opinion in which we concluded there was no evidence in the trial court to

show venue was proper in Dallas County. See id.

The trial court’s final judgment reinstating the jury verdict included its

findings on venue as follows:

After reviewing the pleadings of the parties, reviewing the evidence on file herein and hearing the arguments of counsel the Court finds that [Ken-Do] solicited [Brown] to bid the contract at issue herein in Dallas County, the contract at issue herein was then made and entered into in Dallas County, performed in part in Dallas County and part of [Ken- Do]’s breaches occurred in Dallas County. Therefore, the Court finds Dallas County is a proper venue for this cause and the verdict returned on December 18, 2015 of the 12 duly qualified men and women who were selected and sworn in as the Jury in the cause should be reinstated as the verdict of this Court. The foregoing findings indicate the trial court found venue was proper in Dallas

County because all or a substantial part of the events or omissions giving rise to its

claim occurred in Dallas County. See TEX. CIV. PRAC. & REM. CODE ANN.

§ 15.002(a)(1).

–6– Even assuming without deciding the trial court properly considered Dallas

County as a proper venue in light of this Court’s prior opinion,1 we cannot conclude

the additional evidence supports a finding that venue is proper in Dallas County.

I. Where the contract was made In Thomas Brown’s affidavit, he alleged that he “negotiated, agreed to and

entered into” the contract at issue at a jobsite in Dallas County with Ken-Do’s

superintendent. As Ken-Do points out, this testimony contradicts Thomas Brown’s

testimony at trial that he signed the contract at Ken-Do’s office with Ken-Do’s

employee Amy Jo Ray. In Halverson’s affidavit, he testified Ken-Do had one office,

located in Waxahachie, Ellis County, Texas. Halverson further averred that Ken-

Do’s employee Amy Jo Ray worked exclusively in Ken-Do’s office and never at a

jobsite.

II. Where the contract was performed In his affidavit, Thomas Brown further alleged Brown performed the contract

in Dallas County at least in part by “[a]cquiring, picking-up and transporting”

various components and materials that were part of the contract at issue at locations

in Dallas County. The contract at issue in this case is for Brown to perform concrete

Arguably, this Court’s prior opinion necessarily and affirmatively established that venue is not proper 1

in Dallas County such that the law of the case doctrine applies to exclude Dallas County as a proper venue in any subsequent proceeding. As the supreme court has explained, “[b]y narrowing the issues in successive appeals, the law-of-the-case doctrine further seeks to promote efficiency and uniformity in the decision- making process. Requiring a party to reargue issues previously lost in the court of appeals as a predicate to this Court’s review would obviously work at cross-purposes to the doctrine.” See Paradigm Oil, Inc. v. Retamco Operating, Inc., 372 S.W.3d 177, 182 (Tex. 2012) (under law-of-the-case doctrine, decision rendered in former appeal of case generally binding in later appeal of same case). –7– work related to a construction project in Johnson County. More specifically, Brown

contracted to furnish all material and necessary equipment and perform all labor

necessary to “remov[e] and install[] inlets box culverts and RCP pipe.” In In re Red

Dot Building System, Inc., the supreme court found that in a breach of contract action

involving a contract for the sale of custom-made goods, the performance occurred

in the county where the goods were fabricated. See In re Red Dot Bldg. Sys., Inc.,

504 S.W.3d at 323. In contrast, in this case, the contract specifically stated Brown

was to perform concrete services in connection with a project located in Johnson

County. See id.; see also TEX. CIV. PRAC. & REM. CODE ANN. § 15.035(a) (“ . . . if

a person has contracted to perform an obligation in a particular county, expressly

naming the county . . ., suit on or by reason of the obligation may be brought against

him . . . in that county . . . .”).

III. Where the contract was breached

In his affidavit, Thomas Brown also argued Dallas County was where Ken-

Do breached the contract, asserting Dallas County was where Ken-Do made verbal

changes to the contract by insisting Ken-Do order and pay for materials from vendors

located in Dallas County and by then failing to order or pay for materials supplied

by a vendor located in Dallas County. At trial, Thomas Brown testified that Ken

Halverson insisted the materials be ordered through Ken-Do’s office. But the only

evidence of where Ken-Do’s office is located is (1) the post office box address used

by Ken-Do, which we have already concluded is not a business office, see Ken-Do

–8– Contracting, L.P., 2017 WL 3381105, at *2, (2) Ken-Do’s registered office in

Waxahachie, Ellis County, and (3) Halverson’s affidavit in which he testified Ken-

Do’s only office was located in Waxahachie, Ellis County, Texas. Thus, even if

Thomas Brown’s affidavit established Ken-Do’s breaches for failure to make

payments, those breaches occurred in Ellis County.

We conclude the trial court erred by finding venue proper in Dallas County

because there is no probative evidence to support such a finding. Accordingly, we

sustain Ken-Do’s first issue.

As part of its first issue, Ken-Do argues the trial court should have transferred

venue to the county to which Ken-Do sought transfer. We agree. A lawsuit may be

brought “in the county of the defendant’s principal office of this state, if the

defendant is not a natural person.” TEX. CIV. PRAC. & REM. CODE ANN.

§ 15.002(a)(3). Principal office is defined as an office of a corporation “in which

the decision makers for the organization within this state conduct the daily affairs of

the organization.” Id. In his affidavit, Halverson states “all business decisions are

made in[,] . . . [a]ll orders for materials for projects are placed[,] . . . [and] all

materials payments are made out of . . .” Ken-Do’s sole office located in

Waxahachie, Ellis County. Accordingly, the additional evidence filed by the parties

after this Court’s prior opinion establishes Ken-Do’s principal office is located in

Waxahachie, Ellis County, Texas.

–9– CONCLUSION Because we conclude there is probative evidence to show venue is proper in

Ellis County, the county to which Ken-Do sought transfer, we reverse the trial

court’s judgment and remand the case with instructions to transfer the case to Ellis

County.

/David J. Schenck/ DAVID J. SCHENCK JUSTICE

190228F.P05

–10– Court of Appeals Fifth District of Texas at Dallas JUDGMENT

KEN-DO CONTRACTING, L.P., On Appeal from the 134th Judicial District Appellant Court, Dallas County, Texas Trial Court Cause No. DC-13-09249. No. 05-19-00228-CV V. Opinion delivered by Justice Schenck. Justices Myers and Carlyle participating. F.A. BROWN’S CONSTRUCTION, LLC D/B/A BROWN CONSTRUCTION AND BROWN’S CONCRETE CONSTRUCTION, Appellee

In accordance with this Court’s opinion of this date, the judgment of the trial court is REVERSED and this cause is REMANDED to the trial court with instructions to transfer the case to Ellis County.

It is ORDERED that appellant KEN-DO CONTRACTING, L.P. recover its costs of this appeal from appellee F.A. BROWN’S CONSTRUCTION, LLC D/B/A BROWN CONSTRUCTION AND BROWN’S CONCRETE CONSTRUCTION.

Judgment entered this 5th day of March, 2020.

–11–