Rhino Contractors, LLC v. Vulcan Construction Materials, LP

Opinion

ACCEPTED 04-15-00117-CV FOURTH COURT OF APPEALS SAN ANTONIO, TEXAS 4/2/2015 2:57:19 PM KEITH HOTTLE CLERK

NO. 04–15–00117–CV IN THE COURT OF APPEALS FILED IN FOR THE FOURTH DISTRICT OF TEXAS4th COURT OF APPEALS AT SAN ANTONIO SAN ANTONIO, TEXAS 04/2/2015 2:57:19 PM KEITH E. HOTTLE RHINO CONTRACTORS, LLC, Clerk

APPELLANT, V. VULCAN CONSTRUCTION MATERIALS, LP, APPELLEE.

On Appeal from the 288th District Court Bexar County, Texas

BRIEF OF APPELLANT

EDWARD F. VALDESPINO State Bar No. 20424700 edward.valdespino@strasburger.com Judith R. Blakeway State Bar No. 02434400 Judith.Blakeway@strasburger.com STRASBURGER & PRICE, LLP 2301 Broadway San Antonio, Texas 78215 Telephone: (210) 250-6000 Facsimile: (210) 250-6100

ATTORNEYS FOR APPELLANT RHINO CONTRACTORS, LLC

1785604.1/SPSA/36984/0101/040215 Identity of Parties and Counsel

In accordance with Rule 38.1(a) of the Texas Rules of Appellate Procedure,

Appellees provide the following complete list of all parties and counsel to the trial

court’s order that forms the basis of this appeal.

Party Counsel RHINO CONTRACTORS, LLC EDWARD F. VALDESPINO Appellant State Bar No. 20424700 edward.valdespino@strasburger.com Judith R. Blakeway State Bar No. 02434400 Judith.Blakeway@strasburger.com STRASBURGER & PRICE, LLP 2301 Broadway San Antonio, Texas 78215 Telephone: (210) 250-6000 Facsimile: (210) 250-6100

VULCAN CONSTRUCTION Robert W. Wachsmuth MATERIALS, LP State Bar No. 20626000 Appellees bob@rwwattorneys.com Zachary J. Fanucchi State Bar No. 24028548 zach@rwwattorneys.com Robert Wachsmuth & Associates, PC 9311 San Pedro Ave., Suite 707 San Antonio, Texas 78216 Telephone: (210) 342–2707 Facsimile: (210) 342–2701

ii 1785604.1/SPSA/36984/0101/040215 Statement Regarding Oral Argument

This case involves the straightforward application of well–established law to

undisputed facts. Therefore, oral argument is unlikely to significantly aid the court

in its disposition.

iii 1785604.1/SPSA/36984/0101/040215 Table of Contents

Identity of Parties and Counsel ................................................................................. ii Statement Regarding Oral Argument ...................................................................... iii Table of Contents ......................................................................................................iv Table of Authorities ..................................................................................................vi Statement of the Case................................................................................................. 1 Issues Presented ......................................................................................................... 2 Statement of Facts ...................................................................................................... 3 Summary of Argument .............................................................................................. 5 Standard of Review .................................................................................................... 7 Argument and Authorities.......................................................................................... 7 I. The trial court erred in denying the motion for new trial because Rhino did not receive notice of the suit. ............................................... 7 II. The trial court erred in failing to grant the motion for new trial because Rhino established the Craddock factors. ................................. 9 A. Rhino’s failure to appear was not intentional or the result of conscious indifference. ........................................................... 9 B. Rhino had a meritorious defense. ............................................. 10 C. Granting the motion for new trial would not prejudice Vulcan. ...................................................................................... 11 III. The evidence is legally and factually insufficient to support the judgment. ............................................................................................. 12 A. The actual damages awarded by the trial court are not supported by legally or factually sufficient evidence. .............. 13 B. The award of prejudgment interest is not supported by legally or factually sufficient evidence. .................................... 16 C. The award of attorney’s fees is not supported by legally or factually sufficient evidence. ................................................ 17

iv 1785604.1/SPSA/36984/0101/040215 Conclusion ............................................................................................................... 18 Certificate of Compliance ........................................................................................ 19 Certificate of Service ............................................................................................... 20 Appendix .................................................................................................................. 21 1. Default Judgment

2. Original Petition

3. Motion for Entry of Default Judgment

4. First Amended Motion to Set Aside Default Judgment

v 1785604.1/SPSA/36984/0101/040215 Table of Authorities Page(s) CASES Andrews v. East Tex. Medical Ctr.–Athens, 885 S.W.2d 264 (Tex. App.–Tyler 1994, no writ) ............................................. 13 Arenivar v. Providian Nat’l Bank, 23 S.W.3d 496 (Tex. App.–Amarillo 2000, no pet.) .......................................... 12 Arthur Andersen & Co. v. Perry Equip Corp., 945 S.W.2d 812 (Tex. 1997) ......................................................................2, 6, 17

Barnes v. Stone Way Ltd. Partnership, 330 S.W.3d 925 (Tex. App.–Beaumont 2011, no pet.) ...................................... 10 Brown Electric. Contractors, Inc. v. Kelly, 595 S.W.2d 610 (Tex. Civ. App.–Austin 1980, no writ) ................................... 14 Caldwell v. Barnes, 154 S.W.3d 93 (Tex. 2004)................................................................................... 8

Central Tex. Micrographics v. Leal, 98 S.W.2d 292 (Tex. App.–San Antonio 1995, no writ) .................................... 18

Craddock v. Sunshine Bus Lines, Inc., 133 S.W.2d 124 (Tex. 1939) ..................................................2, 6, 8, 9, 10, 11, 18 Dibco Underground, Inc. v. JCF Bridge & Concrete Inc., No. 03–09–00255–CV, 2010 Tex. App. LEXIS 2531 (Tex. App.–Austin 2010, no pet.) ...................................................................................................... 14

Dolgencorp of Tex., Inc. v. Lerma, 288 S.W.3d 922 (Tex. 2009) ........................................................................10, 11

El Apple I, Ltd. v. Olivas, 370 S.W.3d 757 (Tex. 2012) .............................................................................. 18

Enernational Corp. v. Exploitation Eng’rs, Inc., 705 S.W.2d 749 (Tex. App.–Houston [1st Dist.] 1986, writ ref’d n.r.e.) .......... 15 Estate of Pollack v. McMurrey, 858 S.W.2d 388 (Tex. 1993) ....................................................................7, 10, 11

vi 1785604.1/SPSA/36984/0101/040215 Fidelity & Guar. Ins. Co. v. Drewery Constr. Co., 186 S.W.3d 571 (Tex. 2006) ............................................................................ 7, 8

Gause v. Roden, 66 S.W.2d 400 (Tex. App.–Amarillo 1933, no writ).......................................... 15

Griswold v. Carlson, 249 S.W.2d 58 (Tex. 1952)................................................................................. 15

Holt Atherton Indus., Inc. v. Heine, 835 S.W.2d 80 (Tex. 1992)................................................................................. 12

In re R.R., 209 S.W.3d 112 (Tex. 2006) .............................................................................. 11

Johnson & Higgins of Texas, Inc. v. Kenneco Energy, Inc., 962 S.W.2d 507 (Tex. 1998) .............................................................................. 16

Jones v. Ben Maines Air Conditioning, Inc., 621 S.W.2d 437 (Tex. Civ. App.–Texarkana 1979, no writ) .......................14, 15 L’Arte De La Mode, Inc. v. Neiman Marcus Group, 395 S.W.3d 291 (Tex. App.–Dallas 2013, no pet.) ............................................ 10

Mathis v. Lockwood, 166 S.W.3d 743 (Tex. 2005) ................................................................................ 8 Mega Builders, Inc. v. Am. Door Prods. Inc., No. 01–12–00196–CV, 2013 Tex. App. LEXIS 2831 (Tex. App.– Houston [1st Dist.] 2013, no pet.)....................................................................... 14

Milestone Operating, Inc. v. Exxon Mobile Corp., 388 S.W.3d 307 (Tex. 2012) ......................................................................7, 8, 10

Mobilevision Imaging Svcs., L.L.C. v. Lifecare Hosp. of N. Tex., 260 S.W.3d 561 (Tex. App.–Dallas 2008, no pet.) .............................................. 8

Nguyen v. Short, How, Frels & Heitz, P.C., 108 S.W.3d 558 (Tex. App.–Dallas 2003, pet. denied)...................................... 14

Otis Elevator Co. v. Parmelee, 850 S.W.2d 179 (Tex. 1993) .............................................................................. 12

vii 1785604.1/SPSA/36984/0101/040215 Panditi v. Apostle, 180 S.W.3d 924 (Tex. App.–Dallas 2006, no pet.) ......................................14, 15

Peralta v. Heights Medical Ctr., Inc., 485 U.S. 80, 108 S.Ct. 896 (1988).................................................................... 7, 8

Powers v. Adams, 2 S.W.3d 496 (Tex. App.–Houston [14th Dist.] 1999, no pet.) ......................... 13

Red Hot Enter., LLC v. Yellow Book Sales & Distrib. Co., No. 04–11–00686–CV, 2012 Tex. App. LEXIS 5967 (Tex. App.–San Antonio 2012, no pet.) ........................................................................................ 16

San Antonio Water Sys. v. McKnight, No. 04–02–00239–CV, 2003 Tex. App. LEXIS 548, 2003 WL 141047 (Tex. App.–San Antonio Jan. 22, 2003, no pet.) .................................................. 9

Sutherland v. Spencer, 376 S.W.3d 752 (Tex. 2012) ......................................................................7, 8, 10 Texas Commerce Bank, Nat’l Ass’n v. New, 3 S.W.3d 515 (Tex. 1999)................................................................................... 12 Texas Sting Ltd. v. RB Foods Inc., 82 S.W.3d 644 (Tex. App.–San Antonio 2002, no pet.) ...................................... 9 Tips v. Heartland Dev., Inc., 961 S.W.2d 618 (Tex. App.–San Antonio 1998, no pet.) .................................. 16 Titan Indem. Co. v. Old South Ins. Group, Inc., 221 S.W.3d 703 (Tex. App.–San Antonio 2006, no pet.) .................................. 11

Williamsburg Nursing Home, Inc. v. Paramedics, Inc., 460 S.W.3d 168 (Tex. App.–Houston [1st Dist.] 1970, no writ) ....................... 15

Woollett v. Matyastik, 23 S.W.3d 48 (Tex. App.–Austin 2000, pet. denied) ......................................... 18

STATUTES TEX. CIV. PRAC. & REM. CODE § 38.001(7) and (8)................................................. 17

viii 1785604.1/SPSA/36984/0101/040215 RULES TEX. R. CIV. P. 185 .......................................................................................13, 14, 15

TEX. R. CIV. P. 241 ................................................................................................... 12

TEX. R. CIV. P. 243 ................................................................................................... 12

ix 1785604.1/SPSA/36984/0101/040215 Statement of the Case

Nature of the Case This is an appeal from a no–answer default judgment on a suit for breach of contract or, in the alternative, on a sworn account.

Trial Court The Honorable David Canales 73rd Judicial District Court The Honorable Stephanie Walsh 45th Judicial District Court Bexar County, Texas Cause No. 2014–CI–15870

Trial Court Disposition Judge Canales granted Plaintiff’s motion for default judgment. Judge Walsh denied Defendant’s motion for new trial.

1785604.1/SPSA/36984/0101/040215 Issues Presented

1. Did the trial court err in overruling Defendant’s motion for new trial when Defendant’s agent for service’s testimony that she did not receive notice of suit before a default was entered was uncontroverted.

2. Did the trial court err in denying Defendant’s motion for new trial when Defendant established the Craddock factors, namely ● Defendant’s failure to appear was not intentional or the result of conscious indifference;

● Defendant had a meritorious defense; ● granting the motion for new trial would not prejudice Plaintiff. 3. Did the trial court err in refusing to grant a new trial when ● damages were unliquidated and the affidavit to prove damages stated that the outstanding principal balance of the attached account was due and unpaid, but no account was attached so that there was no evidence of the items sold, date, or charge for each item, or any details of how the amount was computed; ● the default judgment included prejudgment interest in the amount of $12,561.36 when the petition sought prejudgment interest at the rate of 18%, but the attached contract, which was the source for interest, provided for only a late fee of 1% per month on the unpaid balance, and there was no evidence of the rate of interest used, the accrual date, the unpaid balance to which interest was applied, or any other information about the interest calculation;

● the default judgment awarded $60,484.68 in attorney’s fees, but the attorney’s fee affidavit failed to state that the fees were reasonable or necessary, or any of the other Arthur Andersen factors, or to attach any billing records.

2 1785604.1/SPSA/36984/0101/040215 Statement of Facts

Vulcan Construction Materials, LP (“Vulcan”) sued Rhino Contractors, LLC

(“Rhino”) for breach of contract or, in the alternative, on a sworn account. C.R. 1–

4. Vulcan pleaded that it had provided materials to Rhino for use in Rhino’s

construction business, that Rhino had failed and refused to pay amounts due and

owing to Vulcan, and that Vulcan was owed a total of $454,846.76. C.R. 2. Vulcan

requested attorney’s fees and prejudgment interest at the rate of 18%. C.R. 2–3.

Attached to the petition was an affidavit stating that “the outstanding principal

balance of the attached account . . . the sum of $454,846.76 is . . . just and true, due

and unpaid and that all just and lawful offsets, payments and credits have been

allowed.” C.R. 5. However, no account was attached.

Also attached to the petition was a commercial credit application which

provided for a monthly late charge equal to “the lesser of one percent (1%) per

month or the maximum amount permitted by State Law on outstanding balances on

Applicant’s account unpaid after thirty (30) days from the billing date.” C.R. 7. It

further provided that terms of each individual sale were set forth on each invoice.

Id. But no invoices were attached.

After attempts at personal service were unsuccessful, Vulcan filed a motion

for substituted service and obtained an order for substituted service, by leaving a

copy of the petition and citation on the front door of Defendant’s registered agent’s

3 1785604.1/SPSA/36984/0101/040215 residence. C.R. 28–32. After Rhino failed to answer, Vulcan filed a motion for

default judgment. C.R. 12. No additional evidence was introduced when the default

was signed by Judge Canales. Instead, Vulcan relied upon the affidavit attached to

its petition

In connection with its motion for default, Vulcan submitted an affidavit from

its attorney. The attorney’s fee affidavit merely stated that “usual and customary

fees in this cause are $60,484.68,” and contained no information about what was

done, by whom, how long it took, at what hourly rate, the experience or

qualifications of the attorney performing the services, or that the fees were

reasonable or necessary. C.R. 15. No billing records or other documentation were

attached. Id.

Nevertheless, Vulcan obtained a default judgment that awarded it damages

of $454,846.76, prejudgment interest in the amount of $12,561.36, and $60,484.68

in attorney’s fees.

Rhino filed a timely motion for new trial arguing that its failure to answer

was not due to conscious indifference, but because it never received notice of the

lawsuit. C.R. 18–21. Rhino further alleged a meritorious defense to Vulcan’s

claim, namely that there was a dispute as to the invoices underlying the alleged

debt. C.R. 21–22. Rhino agreed to go to trial promptly and reimburse Vulcan for

its costs in taking the default judgment. C.R. 18.

4 1785604.1/SPSA/36984/0101/040215 After the deadline for filing the motion for new trial, but while the trial court

still had plenary jurisdiction, Rhino filed a first amended motion for new trial

attaching affidavits from Nancy Russell, the registered agent for service of Rhino,

stating that Rhino never received a copy of the petition until after the default

judgment was issued. C.R. 55–94. Russell also stated that Vulcan’s invoices

contained numerous billing errors and that the amount sought by Vulcan was

“substantially in excess of any outstanding balance to which Vulcan may

ultimately be entitled.” C.R. 63. A second affidavit from Russell attached a listing

of outstanding balances of all transactions with Vulcan and payments made to

Vulcan, and internal emails and notes regarding the disagreement with Vulcan over

improper crediting of Rhino’s accounts, demonstrating a bona fide dispute over the

allowance of lawful payments, credits and offsets. C.R. 64–94.

The trial court granted leave to file Rhino’s amended motion for new trial

with the attached affidavits, C.R. 144, but denied Rhino’s motion for new trial.

C.R. 146. Rhino timely appealed. C.R. 155.

Summary of Argument

The trial court erred in overruling Rhino’s motion for new trial because

Rhino’s agent for service’s testimony that she did not receive notice of suit before

a default was entered was uncontroverted.

5 1785604.1/SPSA/36984/0101/040215 The trial court also erred in denying Rhino’s motion for new trial because

Rhino established the Craddock factors––Rhino’s failure to appear was not

intentional or the result of conscious indifference, Rhino had a meritorious defense,

and granting the motion for new trial would not prejudice Vulcan.

Alternatively, assuming that Rhino is not entitled to a new trial on liability, it

nevertheless is entitled to a new trial on damages because Vulcan’s damages were

unliquidated and not proved by legally or factually sufficient evidence. The

affidavit Vulcan submitted to prove damages stated that the outstanding principal

balance of the attached account was due and unpaid, but no account was attached

so that there was no evidence of the items sold, date, or charge for each item, or

any details of how the amount was computed. Similarly, the default judgment

included prejudgment interest in the amount of $12,561.36 when the petition

sought prejudgment interest at the rate of 18%, but the attached contract, which

was the source for interest, provided for only a late fee of 1% per month, and there

was no evidence of the rate of interest used, the billing date, the outstanding

balance to which interest was applied, or any other information sufficient to allow

the trial court to calculate pre–judgment interest. The attorney’s fee affidavit was

likewise defective, failing to state that the fees were reasonable or necessary, or

any of the other Arthur Andersen factors, or to attach any billing records.

6 1785604.1/SPSA/36984/0101/040215 The judgment should be reversed and the case remanded for a new trial. In

the alternative, the portions of the judgment assessing damages, attorney’s fees and

interest should be reversed and remanded for a new trial of those awards.

Standard of Review

A trial court’s ruling on a motion for new trial is reviewed for abuse of

discretion. But if a defendant asserts that it did not file an answer because it never

received notice, the default generally must be set aside. Sutherland v. Spencer,

376 S.W.3d 752 (Tex. 2012). Not receiving the citation is always a sufficient

excuse for not answering. Fidelity & Guaranty Ins. Co. v. Drewery Constr. Co.,

186 S.W.3d 571, 574 (Tex. 2006); Estate of Pollack v. McMurrey, 858 S.W.2d

388, 391 (Tex. 1993). It is also an abuse of discretion to deny a new trial if “(1) the

failure of the defendant to answer before judgment was not intentional, or the

result of conscious indifference on his part but was due to a mistake or accident;

(2) the motion for new trial sets up a meritorious defense; and (3) granting the

motion will occasion no delay or otherwise work an injury to plaintiff.” Milestone

Operating, Inc. v. Exxon Mobile Corp., 388 S.W.3d 307, 309 (Tex. 2012).

Argument and Authorities

I. The trial court erred in denying the motion for new trial because Rhino did not receive notice of the suit. In Peralta v. Heights Medical Ctr., Inc., 485 U.S. 80, 86, 108 S.Ct. 896,

899–900 (1988), the United States Supreme Court held that a defendant who has

7 1785604.1/SPSA/36984/0101/040215 never received notice of the pending litigation is not required to comply with

Craddock’s meritorious defense requirement. Mathis v. Lockwood, 166 S.W.3d

743, 744 (Tex. 2005); Mobilevision Imaging Svcs., L.L.C. v. Lifecare Hosp. of N.

Tex., 260 S.W.3d 561, 564 (Tex. App.–Dallas 2008, no pet.). If a defendant does

not appear because he did not receive the suit papers, “the default generally must

be set aside.” Fidelity & Guar. Ins. Co. v. Drewery Constr. Co., 186 S.W.3d 571,

574 (Tex. 2006); Caldwell v. Barnes, 154 S.W.3d 93, 96–97 (Tex. 2004);

Sutherland v. Spencer, 376 S.W.3d 752, 757 (Tex. 2012)(Jefferson J.

dissenting)(“Not receiving the citation is always a sufficient excuse for not

answering.”)

Here, the uncontroverted testimony1 of Nancy Russell, Defendant’s agent for

service, that she did not receive a copy of the petition posted on the front door of

her home is sufficient to entitle Rhino to a new trial. Milestone Operating, Inc. v.

Exxon Mobile Corp., 388 S.W.3d 307, 309 (Tex. 2012)(Defendant’s agent’s

testimony that he did not recall being served sufficed even when eyewitness

testified she saw process server hand him the suit papers). When, as here, a party

receives no notice, she satisfies the first prong of Craddock and does not have to

meet the remaining prongs of the test to be entitled to a new trial. Peralta v.

1 The trial court granted leave to file Ms. Russell’s affidavits, which were attached to the amended motion for new trial, on the day of the hearing on the motion for new trial. C.R. 144.

8 1785604.1/SPSA/36984/0101/040215 Heights Med. Ctr., Inc., 485 U.S. 80, 84 (1998); Texas Sting Ltd. v. RB Foods Inc.,

82 S.W.3d 644, 649 (Tex. App.–San Antonio 2002, no pet.).

II. The trial court erred in failing to grant the motion for new trial because Rhino established the Craddock factors.

A. Rhino’s failure to appear was not intentional or the result of conscious indifference. More than 75 years ago, the Texas Supreme Court enunciated the standard

that courts follow today in examining no answer default judgments. Craddock v.

Sunshine Bus Lines, Inc., 133 S.W.2d 124, 126 (Tex. 1939). Under Craddock, a

trial court must set a default judgment if (1) the failure of the defendant to answer

before judgment was not intentional or the result of conscious indifference, but was

due to a mistake or accident; (2) the motion for new trial sets up a meritorious

defense; and (3) a new trial will cause neither delay nor undue prejudice to the

plaintiff. Id; see also San Antonio Water Sys. v. McKnight, No. 04–02–00239–CV,

2003 Tex. App. LEXIS 548, 2003 WL 141047, at *1 (Tex. App.–San Antonio Jan.

22, 2003, no pet.); Tex. Sting Ltd. v. R.B. Foods, Inc., 82 S.W.3d 644, 650 (Tex.

App.–San Antonio 2002, pet. denied). Thus, where the elements of the Craddock

test are satisfied, a trial court abuses its discretion in denying a motion for new

trial. Tex. Sting, Ltd., 82 S.W.3d at 650.

Because Rhino never received the suit papers, it need not establish the

Craddock factors. Nevertheless, Rhino did establish that its failure to appear was

9 1785604.1/SPSA/36984/0101/040215 not intentional or the result of conscious indifference. Nancy Russell testified that

“because Rhino never received the petition prior to the entry of default judgment,

Rhino’s failure to answer the Petition was neither intentional nor due to conscious

indifference.” C.R. 62–93. This suffices to satisfy the first Craddock factor.

Milestone Operating, Inc. v. Exxon Mobile Corp., 388 S.W.3d 307 (Tex.

2012)(failure to recall being served sufficient); Sutherland v. Spencer, 376 S.W.3d

752 (Tex. 2012)(forgetting about suit because of weather and holidays sufficient

excuse to negate intentional or consciously indifferent conduct); Estate of Pollack

v. McMurrey, 858 S.W.2d 388, 391 (Tex. 1993)(lack of evidence that defense

attorney knew his client had been served was enough to show failure to answer

“could not have been intentional or the result of conscious indifference.”)

B. Rhino had a meritorious defense. A motion sets up a meritorious defense if it alleges facts which in law would

constitute a defense to plaintiff’s cause of action and is supported by affidavits or

other evidence providing prima facie proof that the defendant has such a defense.

Dolgencorp of Tex., Inc. v. Lerma, 288 S.W.3d 922 (Tex. 2009); L’Arte De La

Mode, Inc. v. Neiman Marcus Group, 395 S.W.3d 291, 294 (Tex. App.–Dallas

2013, no pet.); Barnes v. Stone Way Ltd. Partnership, 330 S.W.3d 925 (Tex. App.–

Beaumont 2011, no pet.) Once evidence of a meritorious defense is established,

the allegations supporting it must be taken as true in spite of controverting

10 1785604.1/SPSA/36984/0101/040215 evidence. Dolgencorp of Tex., Inc. v. Lerma, 288 S.W.3d 922 (Tex. 2009); In re

R.R., 209 S.W.3d 112, 116 (Tex. 2006); Titan Indem. Co. v. Old South Ins. Group,

Inc., 221 S.W.3d 703, 709 (Tex. App.–San Antonio 2006, no pet.)

Rhino established that the debt alleged by Vulcan was disputed, setting up a

meritorious defense to Vulcan’s claims for both sworn account and breach of

contract. C.R. 63–94. Russell’s affidavit established that Rhino had been double–

billed and not properly credited with payments, offsets, and credits. Id. Rhino thus

satisfied the second element of the Craddock standard.

C. Granting the motion for new trial would not prejudice Vulcan. Rhino also satisfied the third Craddock factor by stating that Vulcan would

not be prejudiced by granting the motion and by agreeing to go to trial promptly

and reimburse Vulcan for its costs in taking the default judgment. C.R. 18–22.

Once Rhino alleged that granting a new trial would not injure Vulcan, the burden

of proof shifted to Vulcan to prove injury. Dolgencorp v. Lerma, 288 S.W.3d 922

(Tex. 2009); Estate of Pollack v. McMurrey, 858 S.W.2d 388, 393 (Tex. 1993).

Vulcan did not meet its burden. It did not allege or prove a specific injury such as

loss of witnesses or evidence, that would negate Rhino’s claim of no undue delay

or injury. Because Vulcan did not prove such harm or injury as would preclude the

granting of a new trial, Rhino satisfied the third prong of the Craddock test.

11 1785604.1/SPSA/36984/0101/040215 III. The evidence is legally and factually insufficient to support the judgment. Once a default judgment is taken against an non–answering defendant on an

unliquidated claim, all allegations of fact set forth in the petition are deemed

admitted, except for the amount of damages. Texas Commerce Bank, Nat’l Ass’n v.

New, 3 S.W.3d 515, 516 (Tex. 1999). If the claim is liquidated and proved by an

instrument in writing, the damages shall be assessed by the court. TEX. R. CIV.

P. 241. A claim is liquidated if the amount of damages caused by the defendant can

be accurately calculated from (1) the factual, as opposed to conclusory, allegations

in the petition, and (2) an instrument in writing. Arenivar v. Providian Nat’l Bank,

23 S.W.3d 496, 497 (Tex. App.–Amarillo 2000, no pet.) If the damages being

claimed are unliquidated, the court rendering a default judgment must hear

evidence as to damages. TEX. R. CIV. P. 243; Holt Atherton Indus., Inc. v. Heine,

835 S.W.2d 80, 83 (Tex. 1992). The legal and factual sufficiency of evidentiary

support for the amount of unliquidated damages may be challenged on appeal. Otis

Elevator Co. v. Parmelee, 850 S.W.2d 179, 180–81 (Tex. 1993); Heine,

835 S.W.2d at 86. If a no evidence point is sustained as to unliquidated damages

resulting from an uncontested, no–answer default judgment, the appropriate

disposition is remand for a new trial on the issue of unliquidated damages. See Id.

Assuming without conceding that by its default, Rhino admitted the

allegations in Vulcan’s pleading that it agreed to pay some amount to Vulcan, and

12 1785604.1/SPSA/36984/0101/040215 that it did not do so, the amount owed remained unliquidated. Vulcan’s claims for

attorney’s fees and prejudgment interest were also unliquidated. Vulcan’s

affidavits are insufficient to support the awards for damages, attorney’s fees and

interest.

A. The actual damages awarded by the trial court are not supported by legally or factually sufficient evidence. Vulcan sued for breach of contract and, in the alternative, a sworn account.

The only contract attached to its pleadings is a commercial credit application

which does not reflect the sale of any goods, their price, or quantity or when they

were sold. C.R. 7. It simply sets forth terms of Rhino purchases on credit from

Vulcan but does not reflect any actual purchases. So it does not prove any

damages.

In the alternative, Vulcan sued on a sworn account. To establish a prima

facie case in a suit on a sworn account, Vulcan must have strictly adhered to Rule

185, which governs suits on sworn accounts. See TEX. R. CIV. P. 185; Powers v.

Adams, 2 S.W.3d 496, 498 (Tex. App.–Houston [14th Dist.] 1999, no pet.);

Andrews v. East Tex. Medical Ctr.–Athens, 885 S.W.2d 264, 267 (Tex. App.–Tyler

1994, no writ). Under this rule, a plaintiff’s petition on a sworn account must

contain “a systematic, itemized statement of the goods or services sold, . . . reveal

offsets made to the account, and [ ] be supported by an affidavit stating the claim is

within the affiant’s knowledge, and that it is ‘just and true.’” Andrews, 885 S.W.2d

13 1785604.1/SPSA/36984/0101/040215 at 267; Mega Builders, Inc. v. Am. Door Prods. Inc., No. 01–12–00196–CV, 2013

Tex. App. LEXIS 2831 *19 (Tex. App.–Houston [1st Dist.] 2013, no

pet.)(testimony that account was “just and true” did not constitute prima facie

evidence of debt in absence of itemized record); Dibco Underground, Inc. v. JCF

Bridge & Concrete Inc., No. 03–09–00255–CV, 2010 Tex. App. LEXIS 2531, *16

(Tex. App.–Austin 2010, no pet.)(affidavit that did not include systematic record

was insufficient under Rule 185); Panditi v. Apostle, 180 S.W.3d 924, 926 (Tex.

App.–Dallas 2006, no pet.)(stating requirements for sworn account petition and

accompanying affidavit, including requirement that account “show with reasonable

certainty the name, date, and charge for each item, and provide specifics or details

as to how the figures were arrived at”); Nguyen v. Short, How, Frels & Heitz, P.C.,

108 S.W.3d 558, 562 (Tex. App.–Dallas 2003, pet. denied)(same). The systematic

record of labor or materials furnished must clearly identify “the amount or nature

of the labor done or of the materials furnished, the date that such labor was

performed or materials furnished, the charge for the labor, and the charge for

materials.” Jones v. Ben Maines Air Conditioning, Inc., 621 S.W.2d 437, 438 (Tex.

Civ. App.–Texarkana 1979, no writ); see also Brown Electric. Contractors, Inc. v.

Kelly, 595 S.W.2d 610, 611 (Tex. Civ. App.–Austin 1980, no writ). “The account

must show with reasonable certainty the name, date, and charge for each item, and

provide specifics or details as to how the figures were arrived at.” Panditi, 180

14 1785604.1/SPSA/36984/0101/040215 S.W.3d at 926. “General statements . . . without description of specific items are

insufficient to comply with Rule 185.” Jones v. Ben Maines Air Conditioning, Inc.,

621 S.W.2d 437, 439 (Tex. Civ. App.–Texarkana 1981, no writ). If there is a

deficiency in the plaintiff’s sworn account, the account will not constitute prima

facie evidence of the debt. Enernational Corp. v. Exploitation Eng’rs, Inc., 705

S.W.2d 749, 750 (Tex. App.–Houston [1st Dist.] 1986, writ ref’d n.r.e.).

Vulcan’s evidence did not comply with the requirements of Rule 185

because, although Vulcan’s credit manager verified that the “attached account”

was within his knowledge and was “just and true,” no account was attached.

Vulcan did not include any systematic or itemized record of the parties’

transactions. Thus, Vulcan’s affidavit did not constitute prima facie evidence of

Rhino’s debt. See Panditi, 180 S.W.3d at 927. (“If there is a deficiency in the

plaintiff’s sworn account, the account will not constitute prima facie evidence of

the debt.”); see also Enernational Corp., 705 S.W.2d at 750.

An account insufficient on its face as a verified account under Rule 185 will

not support a default judgment. Griswold v. Carlson, 249 S.W.2d 58, 60 (Tex.

1952); Williamsburg Nursing Home, Inc. v. Paramedics, Inc., 460 S.W.3d 168,

169 (Tex. App.–Houston [1st Dist.] 1970, no writ); Gause v. Roden, 66 S.W.2d

400, 401 (Tex. App.–Amarillo 1933, no writ).

15 1785604.1/SPSA/36984/0101/040215 Because there was no itemized account attached to the affidavit, Vulcan’s

evidence was inadequate to support the judgment for $454,846.76. The judgment

must be reversed and remanded for a trial on damages.

B. The award of prejudgment interest is not supported by legally or factually sufficient evidence. Vulcan requested interest at 18% per annum. C.R. 2. However, the credit

agreement attached to the petition did not specify an interest rate, but only a

monthly late charge “equal to the lesser of one percent (1%) per month or the

maximum amount permitted by State Law on outstanding balances on Applicant’s

account that are unpaid after thirty (30) days from the billing date.” C.R. 7.

The default judgment awarded prejudgment interest in the amount of

$12,561.36. There is no evidence in the record from which the trial court could

calculate prejudgment interest. There is no evidence of what rate was used, on

what outstanding balance, from what billing date.

The applicable post–judgment interest rate on the date the default judgment

was signed was 5% per annum, and the prejudgment rate is computed at the same

statutory rate. See Johnson & Higgins of Texas, Inc. v. Kenneco Energy, Inc.,

962 S.W.2d 507, 528 (Tex. 1998); Tips v. Heartland Dev., Inc., 961 S.W.2d 618,

624 (Tex. App.–San Antonio 1998, no pet.); Red Hot Enter., LLC v. Yellow Book

Sales & Distrib. Co., No. 04–11–00686–CV, 2012 Tex. App. LEXIS 5967 (Tex.

App.–San Antonio 2012, no pet.). But because no invoices are attached, there is no

16 1785604.1/SPSA/36984/0101/040215 way to tell what amounts should bear interest and from which dates. Accordingly,

the interest award must be reversed and remanded for trial.

C. The award of attorney’s fees is not supported by legally or factually sufficient evidence. Vulcan sought to recover attorney’s fees under Tex. Civ. Prac. & Rem. Code

§38.001(7) and (8) and pursuant to the contract. In support of its claim, its attorney

submitted an affidavit stating “usual and customary fees in this cause are

$60,484.68.” C.R. 15. He testified he was an attorney licensed to practice law in

Texas and familiar with attorney’s fees customarily charged in Bexar and adjacent

Texas counties. Id.

The affidavit is not legally sufficient to support the trial court’s judgment. It

provides no information from which the trial court could compute attorney’s fees.

It contains no information about the Arthur Andersen factors. Arthur Andersen &

Co. v. Perry Equip Corp., 945 S.W.2d 812, 818–19 (Tex. 1997). The affidavit

supplies no detail about what services were rendered, by whom, the hours

expended, the attorney’s usual billing rate, the amount and time involved, the

novelty and difficulty of the questions involved, the skill required to perform the

legal service properly, preclusion of other employment, time limitations, nature

and length of professional relationship, experience, reputation or ability of the

attorney performing the services, whether the fee was fixed or contingent, or any

other information about whether the services were necessary and the fee was

17 1785604.1/SPSA/36984/0101/040215 reasonable. El Apple I, Ltd. v. Olivas, 370 S.W.3d 757, 761 (Tex. 2012)(“[P]roof

should include . . . (1) the nature of the work, (2) who performed the service and

their rate, (3) approximately when the services were performed, and (4) the number

of hours worked.”); Woollett v. Matyastik, 23 S.W.3d 48, 52–53 (Tex. App.–Austin

2000, pet. denied)(evidence of fees insufficient: failed to detail work completed,

state attorney’s hourly fees or hours expended); cf. Central Tex. Micrographics v.

Leal, 98 S.W.2d 292, 299 (Tex. App.–San Antonio 1995, no writ)(attorney’s fees

evidence should include hourly rate and hours expended). Accordingly, the award

of attorney’s fees was erroneous and the judgment must be reversed and remanded

for further proceedings to calculate proper attorney’s fees.

Conclusion

Because Rhino received no notice of suit before the default judgment was

entered, and because it established the Craddock factors, the trial court erred in

overruling Rhino’s motion for new trial. Accordingly, the judgment should be

reversed and remanded for trial. In the alternative, because there is no legally

sufficient evidence to support the damages, interest and attorney’s fees awarded by

the trial court, the judgment should be reversed and remanded for trial on those

awards.

18 1785604.1/SPSA/36984/0101/040215 Respectfully submitted,

/s/ Judith R. Blakeway EDWARD F. VALDESPINO State Bar No. 20424700 edward.valdespino@strasburger.com Judith R. Blakeway State Bar No. 02434400 Judith.Blakeway@strasburger.com STRASBURGER & PRICE, LLP 2301 Broadway San Antonio, Texas 78215 Telephone: (210) 250-6000 Facsimile: (210) 250-6100

CERTIFICATE OF COMPLIANCE

In accordance with Tex. R. App. P. 9.4(i)(1), I hereby certify that this Brief

of Appellant contains no more than 3,928 words.

/s/ Judith R. Blakeway JUDITH R. BLAKEWAY

19 1785604.1/SPSA/36984/0101/040215 CERTIFICATE OF SERVICE

Pursuant to E-Filing Standing Order, I certify that on April 2, 2015, I

electronically filed the foregoing with the Clerk of Court using the

EFile.TXCourts.gov electronic filing system which will send notification of such

filing to the following:

Robert W. Wachsmuth bob@rwwattorneys.com Zachary J. Fanucchi zach@rwwattorneys.com Robert Wachsmuth & Associates, PC 9311 San Pedro Ave., Suite 707 San Antonio, Texas 78216 Telephone: (210) 342–2707 Facsimile: (210) 342–2701

Attorneys for Appellee Vulcan Construction Materials, LP

20 1785604.1/SPSA/36984/0101/040215 NO. 04–15–00117–CV IN THE COURT OF APPEALS FOR THE FOURTH DISTRICT OF TEXAS AT SAN ANTONIO

RHINO CONTRACTORS, LLC, APPELLANT, V. VULCAN CONSTRUCTION MATERIALS, LP, APPELLEE.

APPENDIX

1. Default Judgment

21 1785604.1/SPSA/36984/0101/040215 APPENDIX 1 DOCUMENT SCANNED AS FILED t-llim v.~~~m111\Q ~ 2014CI15870 -0288

CAUSE NO. 2014-CI-15870

VULCAN CONSTRUCTION ~ IN THE DISTRJCT COURT MATERIALS, LP, § Plaintiff § § V. § 288TH JUDICIAL DISTRJCT § RHINO CONTRACTORS, LLC § Defendant ~ BEXAR COUNTY, TEXAS

DEFAULT JUDGMENT On the~ day of December, 2014, came to be heard the above numbered and styled cause wherein VULCAN CONSTRUCTION MATERJALS, LP is the Plaintiff, and RHJNO CONTRACTORS, LLC is the Defendant. Plaintiff appeared through its attorney of record. Defendant, although duly cited to appear and answer herein, has failed to file an answer within the time allowed by law. The Court has considered the pleadings and records on file in this cause and the evidence and is of the opinion that judgment should be rendered for Plaintiff. It is accordingly ADJUDGED that VULCAN CONSTRUCTION MATERIALS, LP, Plaintiff, recover from RHINO CONTRACTORS, LLC, Defendant, judgment for: 1. Unpaid principal in the amount of $454,846. 76;

~l 2. Prejudgment interest in the amount of$12,561.36; 3. Postjudgment interest at a rate of 5% on the total amount of the judgment, from 'l 0 the date of judgment until paid; / 2 4. $60,484.68 as attorney's fees; and ~i~ 5. Couti costs in the amount of $429.1 0. It is ORDERED that Plaintiff shall have all writs of execution and other process v 0 necessary to enforce this judgment. L All relief not expressly granted herein is denied. a SIGNED on DEC- .e 2014 f2. g JUDGE PRESIDING

16 DOCUMENT SCANNED AS FILED

I .. APPROVED AS TO FORM:

Robert Wachsmuth & Associates, PC 9311 San Pedro Ave., Suite 707 San Antonio, Texas 78216 210-342-2707 210-342-2701 (fax)

~~.!ittf RObertW~ Wachsmuth State Bar No. 20626000 bob@rwwattorneys.com Zachary J. Fanucchi State Bar No. 24028548 zach@rwwattorneys.com

ATTORNEY FOR PLAINTIFF

17 APPENDIX 2 FILED 10/6/2014 11:39:40 AM Donna Kay McKinney Bexar County District Clerk CIT PPS - SAC2 Accepted By: Marc Garcia

2014CI15870

288TH

1 substantial part of the events or omissions giving rise to the claim occurred.

4. Jurisdiction

4.1 Damages sought in this matter are within the jurisdictional limits of this Court.

Plaintiff seeks monetary relief of more than $200,000.00 but less than $1 ,000,000.00. Tex. R.

Civ. P. 47. Plaintiff demands judgment for all other reliefto which it is justly entitled.ld.

5. Facts

5.1 In or about August 2013, September 2013, November 2013, January 2014,

February 2014, and March 2014, VULCAN provided materials to RHINO for use in RHINO's

construction business.

5.2 RHINO agreed to pay VULCAN the sums due and owing.

5.3 Despite the fact that VULCAN provided goods to RHINO, it has failed and

refused to pay the amounts due and owing to VULCAN, despite proper demands by VULCAN

for the payment of same. VULCAN is owed a total of $454,846.76, exclusive of interest, which

accrues at the rate of 18% per annum.

6. COUNT 1-Breach of Contract

6.1 VULCAN and RHINO had a valid, enforceable Contract. See Exhibit "B."

RIIINO agreed to pay for the goods provided it by VULCAN. furthermore, VULCAN has

standing in that it is a patty to the Contract. RJ UNO breached the contract by refusing to pay the

amount owed to VULCAN. VULCAN has been injured due to the loss inflicted upon it. The

breach of contract was a material breach that goes to the essence of the Contract. These foregoing

facts were the proximate cause of VULCAN' s injuries. The amount of damages sustained by

VULCAN is $454,846.76. Interest accrues daily at the rate of 18% per annum.

2 7. COUNT 2-Suit on a Sworn Account

7.1 In the alternative to count I , VULCAN provided RHINO goods on an open

account. RH INO accepted the goods and became bound to pay VULCAN its designated charges,

which were according to the terms of the parties' agreement. The amounts charged for said goods

are reasonable and customary.

7.2 VULCAN attaches a record of the account and the required affidavit as Exhibit

"A" to this petition, and incorporates it by reference. The account accurately sets forth that goods

were provided by VULCAN to RJ-IINO, the dates of delivery and the costs of the goods sold.

The account represents a record of the transactions that is similar to records VULCAN

systematically keeps in the ordinary course of its business.

7.3 The date and amount of RHINO 's payment is fully accounted for and credited to

the account. The claim is just and true, is due, and all just and lawful offsets, payments and

credits have been allowed. The principle amount due and owing is $454,846.76.

8. Attorney Fees

8.1 Pursuant to Texas Civil Practice & Remedies Code § 38.001(7) & (8), VULCAN

is entitled to recover attorney fees. VULCAN is also entitled to recover attomey fees pmsuant to

the Agreement. See Exhibit "B."

9. Conditions Precedent

9.1 All conditions precedent to VULCAN's claims have been performed or have

occurred.

10. Request for Disclosure

10.1 Pursuant to Texas Rule of Civil Procedure 194, VULCAN requests that Defendant

3 RHINO disclose, within 50 days of the service of this request, the information of material

described in T.R.C.P. 194.2.

WHEREFORE, PREMISES CONSIDERED, Plaintiff respectfully requests that this

Court award VULCAN CONSTRUCTION MATERIALS, LP, a judgment against RHINO

CONTRACTORS, LLC for actual damages, as well as attorney fees and costs of cowt, interest

(both pre-judgment and post-judgment), and any other relief, in law or equity, to which it is

entitled.

RESPECTFULLY SUBMITTED,

Robert Wachsmuth & Associates, PC 93 11 San Pedro Ave., Suite 707 San Antonio, Texas 78216 210-342-2707 210-342-2701 (fax)

attorneys.com Zachary J. Fanucchi State Bar No. 24028548 zach@rwwattorneys.com

4 AFFIDAVIT

STATE OF TEXAS § § COUNTY OF BEXAR §

BEFORE ME, the undersigned Notary Public in and for said County and State, on this day

personally appeared Lee McCarty, known to me, and, after being duly sworn, stated on oath that the

outstanding principal balance of the attached account of VULCAN CONSTRUCTION

MATERIALS, LP is the sum of $454,846.76, is within the knowledge of affiant, just and true, that

it is due and unpaid, and that all just and lawful offsets, payments and credits have been allowed.

Lee cCarty Corporate Credit Manager Vulcan Construction Materials, LP

SWORN AND SUBSCRIBED TO BEFORE ME on this the I day of

a~ '2014.

~t~ Notary Public, State ofTexas

,,,,~~"11(!,,, ADELA WHITE ll~':·····-~.}~ Notary Puollc. State ot _Texas ~ : .:.. ~ My commission Expnes <:.,'J;; ····:~+$~ ~,,r os ,,,, October 20. 2016 '''""''\

EXHIBIT

i A 5 / Me1 28 1310:07e p.2

Uul[on Materials Company Ito $uboldl•rloo ond Afllllalu South Region • Commercial Credit AppllcaUon Fax: 1·904-7.79-6527 or Ern oil: VMC-Credil-App·Sovth@vmcmall.com

Business Name Rhino Coolr.acto""""rs..._. LL,.,C...._ ..., _ _ _ _ _ _ _ _ __ FOR INTERNAL USE ONLY Slroet Address 26163 Altas Palmas Soles Rcpro:senla11ve or Plant Ma1ing Address, if different:.......------------- -- Date Received.,------- City Harlingen State TX Zip_7:....:8:.:::5c=.5.::..2_ __ Date Compleled --~--­ Approved: By_ _ Denied: _ ____ __ By_ _ _ Telephone No. 956.364.1737 Fax No. 956.412.6240 Date: __i _ /_ _ _ _ __

Contact Email_ _..,!!a.!.!durn!!!in.u:@~rhJJ;io~oo£.:·J.lrg;l.lv~,c.a.ol!.rnu___ _ _ _ _ _ _ _ _ __

Check one: Corporation/LLC ~Partnership_ Sole Proprietor_ FEIN orSS#_ _ _ _ _ _ __ Date Established 8.2003 If Corporation, Date and State Incorporated Texas 2003 Contraclor's l icense# 760741296 Are you taxable? .:..N:.:o'--.,------""'='"--,---,..,...- (lf non-taxable, :a tax a >

Wc:uld you llke to receive monthly statemenls? Yes It you would like statements via Email, please provide Email adcress: nancy@rhino-rgv.com : admin@rliliiQ:fQv.com

Name and Address of Principal Owners, Owners or Partners: Name Nancy W. Russell Title PresidenVCEO Address: 26163 Altas Palmas Harlingen TW.5.5.__ _ __ ______ _ __ __ _ _ __ Name ________________________________________ TtUe_________________ Address: ___________________________________________

If you have ever had an account with Vulcan Materials or Its affiliated companies before, please advlso when and where: Please furnish at least three (3) TRADE REFERENCES with phone end fo.x number: Name Martinez Drywall & PalnUng, Inc Phone No.__956._4_25_._53_3_2_ _ _ _ _ __ Fax No 956.425.903 5 Email Addre~ ------------------------- Name __w_rig,;;,.h_t_E_x,;. p_re_s_:._ _ _ _ _ _ _ __ __ Phone No. 1.800.492,0669 Fax No. 1.800.395.0809 Email Address ------------------------- Name ___c_o_m __m_e_rc_e_B_a_n_k_____________.Phone No. 1 eon 692 7104 Fax No. _ _ _ _ _ _ _ Email Address_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __

Please turni!;h ono bank reference with phone number and tax number: Gank Frost Bank (Debe Wright) Account# _al.llo.,.o....,3....3:>-~3""75~11,.__ __ __ Phone No. 956.430.6523 Fax No. _ __,9.,5.,6""4'""3..,.0""6""5""3LJ1...__ _ _ _ _ _ _ _ __

Page 1 of 2 ·Application is not complete without Clfl pogcs and applicant signature.

6 I :0 .v1ar 231310 :07a p.3

Application for Business Credit Applicant's Name Rhino Contractors, LLC

TERMS AND CONDITIONS OF BUSINESS CREDrr Thl$ Avplicolion, incluclng oil olthl) lnlonn8tlon contalncu h~reln, Is a requ~~t/or one or more ell tensions ollluclnass crodlt to defer paymont for purch~~:<~ or corGtruc!lnn moterial• by AppEcarlt loom VuiCWl Cons\lucUon Mote~als. lP oii()IOr Its alriii:JIC$ (i ndil.idunlly ar-d colletlivoly, 'Vulcan"). By ~ubmltUng I his AppllcAIIon to VII can, Applies rot hereby agrees to these TCliTlls anu Cordttiof!S.

AppGeort hemby egroua to P"Y Vulcan lor eo~h purchnse made hercunuer, ;,s lolbws: Net 16th prox. (1 Sill calendor day or the monlh fcDowing tho montnd,..;ng which shlpmenlls ""'de. ) APIJicalllllg•ces to pay Vulc4n e monthly tate ch3tgo equal to tho l-=sser orono percent (1~~~ per mo.-.h or tho mold mum omourt ponnllted by Sl.llle Low on al oULstanding bal,ncC5 on AppDC

Applc:~nl and Gu.,..antor oulhorlzo Vulcan from limo to ~me lo oblain ono or more cro.:dllr~pons from any rePQnln!) a~~tncy and lo obtain inlormoli<>l\rcgaoding Ap!Jiconl and Guarantorfrorn eny"edi!orol.-,pp5conl81ll Ou;:orontor,lncludlng, but not l mr!nd to, each or the credit rolorof'\Coo fioted on pog o 1. App~cont 11nd Guur;m tor turlhar aU1hooizo each ol the cre~ilurs to givo lo Vulcan from Umo to ~me any and oil necu o11ry lnlorm ~llon th::lt will illd Vulcan in 11:1 crodil imestigellon. Applicant ond Gu:rontor rurUter oulhurt..:e Vulcon co reJfl'/estlgate credll st:lluc fru1n limo to lime 3& Vulcan deems nccesoory. Vulo;:.e n ""3orves the nghiiO IL-nlt. terminate, ur cnangn rheltlrma or any I!XIen.,lon credt or to Appl eant at ils &Ole tll &c...lion. Appfic:~" ;,uthori:too Vu!eon to eel ns a c:redil reference lor ,a.ppl canl uy n:spcndln;~to I nquiries !rom otiW uf!eilors or potential - dito,.. or Appfi""'nt r11no1'111ng lrt~n,ocllonu or o~poricncos wilt> AppGcarlt.

Far:k olll'e undersigned er ;...-oomotlon wWch may alleel ablfit)IIO pay, ant! undl such tln>o. V Ulcan m:ly co...,nue to roly on I hi~ lriOtlon A"'f chango• ln lapal a~.>tus or the inlormalion provldnd on page 1 must be communicated to Vulcan •lleaetlon (10) buslnoo:~ days in odvonco bycertillodmail. Tho origiMI 1\pplcanl. wiU remain Ueble until auch lime •• Vuk:.en hM hROin given n """ ionoblot poriod olllmo to rue pond to ony noUco rcyurcl1ng chsngllsln (ogalstall.l!l und h.,~ a (Teed to auch change. Appllcan l lurther atycn lhatlhosc Torma 'lnd CondilioM are yoverned by the laws ollhe Sto te or Te~

1\ppUcant shan P~s ~nd Applicant ~pcciOc:slly con;onte to tho oxttrcic" ol roo-exclusive porson:.JI jurisdiction over Applicant and to GXIralerriloriDI service or proCAJss, if reOP.ssary.

V ulcan uses vi deo to verily acquis1Uon and quanel ty o( pnooucl purchased Irom Vulcan. AI the time a vetocle enlers Vulcan's scal e, a piclure wiH be l:lkonollhe vorlcle and fi~ense pl;,te -Mih lhu lime :~nd date sl3mped on the picture . This is Vulcan's pnool of receipl nnd der.vary. Tho llnver vnllrccclva a bill nllalllng (velliclo tlck.el )lhRt Stijltls tho quar~lty ol prodUt.1 and location of delivery, No So w;,ived unk.'Ss wrilt~n noijco ol such claim sh;:,l he dulivered le Vulcan. lly conilltld rnall ut Hie Mdri!Ss on liS Invoice, 'MII1n ssven (7) d~y~ ol mcelpt or such onoducls by Applicarl.,

Vulcan 11'\dY at ony ~mil, usrgn 1111 rlghllor payment horcu~ ~~ Nancy W. Russell Wu.{.Q ) ~ PresidenUCEo Prinl Namo u l Person SIQAnQ '-¥l'lul~i~..::,ri~:te >:::d:.qJI,.Aa~t" t.re ..K:..lr:l'o..:¥-:..~r<::>Sf.---- Tlllu

Print N~mo ol Por'!lon Signing Aull'orizad Slgm~\ure Tide

PERSONAL GUARANTY OF BUSINESS CREDIT For value rcc~ivad, each of the undurslyned hero by p11rsor.al~ an:J individually ouaranln~~s paymr.nl whe~ du" nf 11U l nd,.biol\ill guir3nly is unlmlted in iln\OUr~ and shaJ apply lo all blllanc"~ arising from soles to Appl•ca nl. Euch ol Uto unucrsignnd VI

Dille S igned S lonolure olln

Data Signod Print Narre or Pe1rson Stgri na Slqnaturo of lndividuol Guarvntor Social Sceuoily II

(A fc.cslmlle ve~lon uf I hie nppHcallon 1>ill be con,ldered os lhe or1glnul)

Page 2 of 2 -Application is no\ complete without all poges and applicant signature.

---·--·--- -..............----·--·--- -·--·--"- ---- ····- -- -- - - ---- - - -··- - - - 7 Cause Number : - - - - -- -

District Court : ------- Donna Kay MtKinney Bexar County District Clerk Request for Process Style : VULCAN CONSTRUCTION MATERIALS. LP Vs. RHINO CONTRACTORS, LLC

Request the following process: (I' lease check all II• a• Apply) liJ C itation 0 Notice 0 Tempor·ary Restraining Order 0 Notice of Temporary Protective Or·der 0 Tcmporar·y Pr·otective Order 0 Pr·ecept with hearing 0 Precept without a hearing Owrit of Attachment O writ of Habeas Corpus D Writ of Ga rnishment 0Writ of Sequestration 0Capias 0 Other: - - - - - - - -

1. Name: RHINO CONSTRUCTION. LLC Regi s~ redAgen UByServin g: _N_a_ oc~y_R_u_ ~_e_ " ~~~~~~~~~~~~~~~~~~~~~~~~~~­ Add ress 26123 Atlas Palmas. Harlingen. Texas 78552 Ser vice Type: (Check One) [i]Private Process 0Sfler!ff 0 Publicatiou (Cheek One) Ocommercial Recortfcr Onart Beat Ocourtlrousc Door O cert{fied Mail 0 Registered Mail Oout ofCmmty O s ecretary of State Ocommissioner of Jn.w rance 2. Na Jn e= -~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~-- RegisteredAgenUByServing: ~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Address __~~~~~~~~~~~~~~~~~~~--~~~~~~~~~~~~~~- Service Type: (Ch«k One) 0 Private Process O S!ter!ff 0Publication (Check One) O commercial Recorder Ounrt Beat Ocourtlrouse Door Ocertifietl Mail 0 Registered Mail O out of County Osecretary of State Ocommissioner of Insurance 3. Name: ~~----~------~~----~~----~~----~~----~~~----~~~--------~~--- Registered Agent/By Servin g :-~~~~~~~~~~~~~~~~~~~~~~~~~~-- Address _~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~- Service TXJle: (Check One) 0 Private Process OS!ter!ff 0Publicalion (Cheek One) Ocommercial Recorder 0Hart Beat O courtlrouse Door 0Cert(fier/ Mail 0 Regi.Hered Mail Oout of County 0Secretary ofState Dcommissioner of lnsurtmce 4. Name=-------~----~------~~--~~~~--~~------------~--------~--~~--- RegisteredAgen UBySe~ in g: __~~~~~~~~~~~~~~~~~~~~~~~~~~- Address ~~----~~~--~~~------------------~~--~~~----~~~----~------ Service Type: (Check One) 0 Private Process 0Siter!ff 0 Publication (Cheek On•) Ocommercint Recorder 0 Hnrt Bent Ocourtllouse Door Ocertified Mail 0 Registered Mail O out of County Osecretary ofState Ocommissioner of Insurance

Title of Document/Pleading to be Attached to Process: _________________~--------------------

Name of Attorney/Prose: ZACHARYFANUCCHI Bar Number: _2_ 40_2_ 85_4_8~~~~~~~~­ Address: 931 1 SAN PEDRO, STE. 707, SATX 78216 Phone N umber: _2_1o_.J_4_2_ -2_ 7o_7~-~~~~-

xx____~- Defendant -~~- Other -~~~~ Attorney for P laintiff_x_

****IF SERVICE IS NOT PICKED UP WITHIN 14 BUS INESS DAYS, SERVICE WILL BE DESTROYED****

8 APPENDIX 3 FILED 12/1/2014 3:52:30 PM Donna Kay McKinney Bexar County District Clerk Accepted By: Eddie Pichardo

VULCAN CONSTRUCTION § IN THE DISTRICT COURT MATERIALS, LP, § Plaintiff § § v. § 288TH JUDICIAL DISTRICT § RHINO CONTRACTORS, LLC § Defendant § BEXAR COUNTY, TEXAS

MOTION FOR ENTRY OF DEFAULT JUDGMENT TO THE HONORABLE JUDGE OF SAID COURT: COMES NOW, Movant Vulcan Construction Materials, LP, ("Plaintiff') who moves the Court to enter a default judgment against Rl1ino Contractors, LLC ("Defendant") pursuant to rule 239 of the Texas Rules of Civil Procedure. I. GROUNDS Plaintiff is entitled to be granted a default judgment against Defendant and as grounds would show the Court the following: a. Defendant continues to be indebted to Plaintiff as specifically pleaded m Plaintiff's Original Petition on file in this case. b. Defendant has been duly served with citation in this cause, and the citation with the officer's retw·n thereon has been on file with the clerk of this Court for ten days, exclusive of the day of filing and the day of judgment. c. Defendant has neither answered nor appeared within the time allowed by law and has wholly defaulted. n. ATTACHMENTS Plaintiff has attached the following documents to this motion: a. Plaintiffs Certificate of Last Known Mailing Address. b. Plaintiffs Attorney Fee Affidavit.

12 IV. PRAYER Plaintiff prays that the Court enter a default judgment in Plaintiffs favor against RHINO CONTRACTORS, LLC, for the relief prayed for in Plaintiff's original petition and for all further rei ief to which Plaintiff may be entitled. RESPECTFULLY SUBMITTED,

Robert Wachsmuth & Associates, PC 9311 San Pedro Ave., Suite 707 San Antonio, Texas 78216 210-342-2707 210-342-270 1 (fax)

bob@rwwattorneys.com Zachary J. Fanucchi State Bar No. 24028548 zach@ rwwattorneys.com

ATIORNEY FO R PLAINTIFF

13 CAUSE NO. 2014-Cl-15870

VULCAN CONSTRUCTION § IN THE DISTRICT COURT MATERIALS, LP, § Plaintiff § § V. § 288TH JUDICIAL DISTRICT § RHINO CONTRACTORS, LLC s ~ Defendant § BEXAR COUNTY, TEXAS

CERTIFICATE OF LAST KNOWN ADDRESS TO THE HONORABLE JUDGE: Plaintiff, Vulcan Construction Materials, LP, certifies that the last known mailing address of Defendant, RHINO CONTRACTORS, LLC is: RHINO CONTRACTORS, LLC Registered Agent: Nancy Russell 26123 Altas Palmas Harlingen, Texas 78552

Robert Wachsmuth & Associates, PC 9311 San Pedro Ave. , Suite 707 San Antonio, Texas 78216 210-342-2707 210-342-2701 (fax)

~~~'-'*'::# IROIJertW:WaChsmuth State Bar No. 20626000 bob@rwwattorneys.com Zachary .J. Fanucchi State Bar No. 24028548 zach@rwwattorneys.com

14 CAUSE NO. 2014-CI-15870

VULCAN CONSTRUCTION § IN THE DISTRICT COURT MATERIALS, LP, § Plaintiff § § V. § 288TH JUDICIAL DISTRICT § RHINO CONTRACTORS, LLC § Defendant § BEXAR COUNTY, TEXAS

ATTORNEY FEE AFFIDAVIT

The undersigned Affiant appeared before me, was sworn, and stated:

"I am the Plaintiffs counsel in this cause, licensed to practice law in Texas and fam iliar with attorneys' fees customarily charged in Bexar and adjacent Texas counties. Pursuant to §38.003 and §38.004 of the Civi l Practice and Remedies Code, usual and customary fees in tllis cause are $60,484.68 with additional fees of $20,000.00 in event of appeal and with additional fees of $40,000.00 in event of appeal from the court of appeals to the Supreme Court of Texas.

To date, the Plaintiff incurred attorney fees in the amount of $60,484.68 in prosecution of this matter against Defendant. In addition to the $60,484.68 in attorney fees, Plaintiff incurred $429.10 in court costs and service fees.

Demand for payment was made upon Defendant more than thirty days prior to filing suit and the just amount owed was not paid or tendered. Affiant has personal knowledge of the matters stated herein."

~~~.-:w OBERT W. WACHSMUTH

NOTARY PUBLICi~~ for the State ofTexas

15 APPENDIX 4 FILED 1/30/2015 9:15:09 AM Donna Kay McKinney Bexar County District Clerk Accepted By: Maria Abilez

CA SE NO. 2014-CI-15870

VULCAN CONSTRUCTION § IN THE DISTRICT COURT MATERIALS, LP, § P aintiff, § § vs. § 288TH JUDICIAL DISTRICT § RHINO CONTRACTORS, LLC § Defendant. § BEXAR COUNTY, TEXAS

DEFENDANT'S FIRST AMENDED MOTION TO SET ASIDE DEFAULT JUDGMENT AND FOR NEW TRIAL AND BRIEF IN SUPPORT THEREOF

Defendant Rhino Contractors, LLC ("Rhino") respectfully moves this honorab e Court to

set aside the default judgment in this matter for a new trial, stating as follows:

Legal Ground for New Trial

Defendant was not properly served with citation. Although Plaintiff's motion for

substituted service alleges that the citation was placed on Defendant's door, the citation was

never received by Defendant. Consequently, Defendant did not receive notice of the lawsuit in

order to timely file an answer.

Equitable Grounds for New Trial

Rhino ' s failure to timely file an answer in this matter was not intentional or the result of

conscious indifference, but instead was the product of accident, mistake, or inadvertence.

Rhino has meritorious defenses to Plaintiff's claims. Specifically, (1) there is a d'spute as

to the invoices underlying the alleged debt owed to Plaintiff; (2) there is evidence from which a

jury could find that Rhino did not breach any contract, because the amounts all eged were in

dispute~ and (3) Based upon the evidence, P aintiff failed to allow all just and lawful offsets,

credits and payments to the account of Defendant as required by Tex. R. Civ. P. 185 .

l7H 255 2 SPSA1369M'OIOI 012915

55 A new trial in this matter will neither occasion delay nor prejudice Plaintiff. Rhino is

ready, willing, and able to go to trial promptly, and will reimburse Plaintiff for its costs in taking

the default judgment.

Evidence

In support of this Amended Motion to Set Aside Default Judgment and For New Trial,

Defendant files attached Exhibits A and B and incorporates them herein for all purposes.

I. A NEW TRIAL MUST BE GRANTED BECAUSE THE DEFENDANT WAS NOT PROPERLY SERVED WITH CITATION.

Whenever a motion for new trial seeks to reverse a no-answer default judgment the

question before the court is "[w]hy did the defendant not appear?" Fid. & Guar. Ins. Co. v.

Drewery Constr. Co., 186 S.W.3d 571, 573-74 (Tex. 2006). The Texas Supreme Court has

made clear that if the answer is "(b]ecause I didn't get the suit papers," the default judgment

"generally must be set aside." Id.

"For well over a century the rule has been firmly established in this state that a default

judgment cannot withstand direct attack by a defendant who complains that he was not served in

strict compliance with applicable requirements." Wilson v. Dunn, 800 S.W.2d 833, 836 (Tex.

1990); accord, e.g., Uvalde Country Club v. Martin Linen Supply Co., 690 S.W.2d 884, 885

(Tex. 1985). In such a case, there are no presumptions in favor of valid issuance, service, and

return of citation. E.g., Wilson, 800 S.W.2d at 836; Uvalde, 690 S.W.2d at 885 . Instead, all such

matters must affirmative y appear of record . E.g., Primate Construction, Inc. v. Silver, 884

S.W.2d 151, 152 (Tex. 1994).

1734255 2/S PSA/36984/01 01!012915

56 "[T]he slightest defect in a citation may be fatal, for Texas courts traditionally have been

quick to find errors in a citation sufficient to set aside a default judgment." Michae A. Pohl &

Stephen R. Kirklin, Judgments by Default - A Survey of Texas Law, 31 Sw. L.J. 465, 471 (1977).

In this case, Rhino never received notice of the lawsuit unti after the default judgment

was rendered, thereby depriving Defendant the opportunity to defend the lawsuit. The failure to

properly serve citation deprived Defendant of due process rights.

A NEW TRIAL SHOULD BE GRANTED UNDER THE CRADDOCK DOCTRINE.

The standard for evaluating an equhable motion for new trial following a default

judgment is a fami liar one:

[A] default judgment should be set aside and a new trial granted when the defau ting party estab lishes that (1) the failure to appear was not intentiona or the result of conscious indifference, but was the result of an accident or mistake, (2) the motion for new trial sets up a meritorious defense, and (3) granting the motion will occasion no delay or otherwise injure the plaintiff.

Dolgencorp ojTex., Inc. v. Lerma, 288 S.W.3d 922, 925 (Tex. 2009); Director, State Employees

Workers' Compensation Division v. Evans, 889 S.W.2d 266, 268 (Tex. 1994) (quoting Craddock I v. Sunshine Bus Lines, Inc., 133 S. W.2d 124, 126 (1939)).

"A [Craddock] motion for new trial is addressed to the trial court's discretion and the

court's ruling will no be disturbed on appeal in the absence of a showing of an abuse of

discretion." Evans, 889 S.W.2d at 268. "That discretion, however, is 'not an unbridled

discretion ffor trial courts] to decide cases as they might."' Old Republic Insurance Co. v. Scott,

873 S.W.2d 381, 382 (Tex. 1994) (quoting Craddock, 133 S.W.2d at 126). "[A] trial court

1 Accord, e.g., Old Rep11hlic Insurance Co. v Scott, 873 S.W.2d 381, 382 (Tex. 1994); Esrare of Pollack v McMurray, 8 8 S.W.2d 388, 390 (Tex. 1993); Bank One Texas, N.A . v. Moody, 830 S.W.2d 81, 82-83 (Tex. I992). 3

1734255 2/SPSA/36984101 011012915

57 abuses its discretion by not granting a new trial when all three elements of the Craddock test are 2 met." Evans, 889 S.W.2d at 268 .

Cases holding that the Craddock requirements are to be applied iberal y, to the end that

cases are decided on their merits rather than by default, are legion. For a small sample, see, e.g.,

In the Intere 1 of A. P. P., 74 S.W.3d 570, 573 (Tex. App.- Corpus Christi 2002) ("Courts have

appl ied the first Craddock prong liberally, and each case depends on its own facts."); Rabie v.

Sonilrol, Inc., 982 S.W.2d 194, 196-97 (Tex. App.-Houston [1st Dist.] 1998, no pet.); Norton v.

Martinez, 935 S.W.2d 898, 901 (Tex. App.-San Antonio 1996, no writ); Miller v. Miller, 903

S.W.2d 45, 47 ( ex. App.-Tyler 1995, no writ); McCarthy v. Jesperson, 527 S.W.2d 825, 827

(Tex. Civ. App.-El Paso 1975, no writ).

Rhino's Failure to Answer Was Not Intentional or the Result of Conscious Indifference.

Rhino did not receive notice of the lawsuit unti after the default judgment, therefore, its

failure to timely file an answer was not intentional or the result of conscious indifference.

"Failing to file an answer intentionally or due to conscious indifference means 'the

defendant knew it was sued but did not care."' In re R.R., 209 S.W.3d 112, 115 (Tex. 2006)

(quoting Fidelity, 186 S.W.3d at 576). Negligence is not the correct standard . E.g., Ivy v.

Carrell, 407 S.W.2d 212, 213 (Tex. 1966); In re Adams, 416 S.W.3d 556, 561 (Tex. App.-

Tyler 2013, no pet.) ("Under Craddock, conscious indifference must amount to m re than mere

negligence to preclude the setting aside of a de fault judgment"); Custom-Crete, inc. v. K-Bar

Servs., 82 S.W.3d 655, 660 (Tex. App.-San Antonio 2002, no pet.). "In fact, the defendant's

' -Accord, e.g., Old Republic Insurance Co v. colt, 873 S.W.2d at 382 ; Bank One Texas, N.A. v. Moody, 830 S.W.2d at 85. 4

1734255 2/SPSN369B4/01 01/012915

58 burden of demonstrating the accidental or mistaken nature of his fai ure to answer may often

result in an admission of negligence." Michael A. Pohl & David Hittner, Judgments by Default

in Texas, 37 Sw. L.J. 421,443 (1983).

The Supreme Court has made clear that "some excuse, although not necessarily a good

one," suffices to negate conscious indifference. In re R.R., 209 S.W.3d at 115; accord, Fidelity,

186 S.W.3d at 576; Craddock, 133 S.W.2d at 125. Indeed, "[o]nly a slight excuse is required."

Europa, 809 S.W.2d at 785; accord, e.g., In reMarriage of Parker, 20 S.W.3d 812, 819 (Tex.

App.- Texarkana 2000, no pet.). Rhino's failure to answer was the result of the fact that it did

not receive the citation, rather than conscious indifference on anyone's part to the requirement

that an answer be filed.

The Defendant Has Meritorious Defenses.

The defendant's burden in a Craddock motion is to allege a meritorious defense and

provide prima fade proof of that defense; once that is done, the trial court may not try the

defensive issues in deciding whether to set aside the default judgment, and should not consider

counteraffidavits or conflicting testimony offered to refute the movant's factual allegations. E.g.,

Estate of Pollack v. McMurray, 858 S.W.2d 388, 392 (Tex. 1993); Guaranty Bank v. Thompson,

632 S.W.2d 338,340 (Tex. 1982).

A meritorious defen e is one that would produce a different result. E.g., Norton v.

Martinez, 935 S.W.2d 898, 902 (Tex. App.-San Antonio 1996, no writ); Burgess v. Burgess,

834 S.W.2d 538, 539 (Tex. App.-Houston [l 5t Dist.] 1992, no \wit; Stein v. Meachum, 748

S.W.2d 516, 518 (Tex . App.-Dallas 988, no writ. This result need not, however, be a totally

opposite result. Jackson v. Mares, 802 S.W.2d 48, 51 (Tex. App.-Corpus Christi 1990, writ

denied; Harfen v. Pfeffer, 693 S.W.2d 543, 546 (Tex. App.-San Antonio 1985, no writ).

1734255. 2/SPSA/36984101 01 /0129 15

59 Here, Rhino asserts a meritorious defense to the judgment. Specifically, that it did not

breach its contract with Vulcan because the amounts alleged to be owed are in dispute.

Hence Plaintiff is not entitled to recover against Rhino on any cause of action for breach

of contract. 3 Alternatively, there exists a bona fide dispute as to any amounts allegedly owed to

Vulcan. Based upon the evidence, Plaintiff failed to allow all just and lawful offsets, credits and

payments to the account of Defendant as required by Tex. R. Civ. P. 85.

The Granting of this Motion Will Not Cause Prejudice or Undue Delav to the Plaintiff.

The final Craddock requirement, that the motion for new trial be filed at a time when its

granting wiJI not delay or injure the plaintiff, is satisfied by the defendant's allegation to this

effect coup ed with an offer to reimburse the p aintiff for the reasonable costs incurred in taking

the default judgment; the burden then shifts to the plaintiff to offer proof of prejudice. E.g.,

Do/gencorp, 288 S.W.3d at 929; l!stare of Pollock v. McMurray, 858 S.W.2d 388, 393 (Tex.

1993); Angelo v. Champion Restaurant Equipment Co., 713 S.W.2d 76 78 (Tex. 1986). There

can be no such proof here.

Prayer

Defendant Rhino Contractors, LLC, respectfully prays: ( 1) that the judgment against it in

this matter be set aside; (2) that a new trial be granted as to all issues; and (3) for such other and

further re lief to which it may be entitled at law or in equity.

3 The default judgment in this case is based at least in part on breach of contract, inasmuch as it awards attorneys' fees. 6

1734255 2/SPSN36984/01 011012915

60 Respectful ly submitted,

S RASBURGER & PRICE, LLP 2301 Broadway San Antonio, Texas 78215 Telephone: (210) 250-6000 Facsimile: (2 10) 25 0-6100

A TTO ENDANT 1

RHINO CONSTRUCTION, LLC

CERTIFICATE OF SERVICE

On the~~ of January, 2015, a true and correct copy of the foregoing document has been served in accordance with the Texas Rules of Civil Procedure upon the following:

Robert Wachsmuth Robert Wachsmuth & Associates PC 9311 San Pedro Ave., Suite 707 San Antonio, Texas 78229-4252 Attorney for Plailltiff

7 1734255 2/SPSA/36984/0 1011012915

61 CAUSE NO. 2-14-CI-15870

VULCAN CONSTRUCTION § IN THE DISTRICT COURT MATERIALS, LP, § Plaintiff § § v. § 288TH ruDICIAL DISTRICT § RHINO CONTRACTORS, LLC § Defendant § BEXAR COUNTY, TEXAS

AFFIDAVIT OF NANcy RUSSELL IN SUPPORT OF MOTION TO SET ASIDE DEFAULT JUDGMENT AND FOR NEW TRIAL

STATE OF TEXAS § CAMERON COUNTY §

BEFORE :ME, the undersigned authority, on this day personally appeared Nancy W. Russell, who being duly sworn, deposed as follows:

I. "My name is Nancy W. Russell. I am the President of Rhino Contractors, LLC ("Rhino"), Defendant in this action. I am authorized to make this Affidavit. I am over eighteen years of age, of sound mind, and capable of making this Affidavit. I have never been convicted of a felony of moral turpitude. The matters stated herein are of my personal knowledge and are true and correct.

2. Rhino's failure to answer the Original Petition filed by Plaintiff Vulcan Materials, LP (''Vulcan") in this matter was neither intentional nor due to conscious indifference. Instead, Rhino never received a copy of the Petition until it was obtained by my attorney after the Court had already entered default judgment against Rhino. On none of the occasions mentioned in the affidavit of the process server where he purportedly attempted to deliver the Petition to me personally was I present at my personal residence. Instead, I was at Rhino's business premises, which is located directly behind my personal residence and is where deliveries related to Rhino are customarily received. In fact, I maintain a sign near the entrance of my personal residence instructing persons attempting to make deliveries of any documents or packages directed to Rhino to the office behind the house. I believe the process server ignored these instructions in trying to serve me with the Petition.

3. I likewise did not receive the Petition when it was posted to the front door of my personal residence. I also did not receive any of the business cards left by the process server. My personal residence is located in a very rural and open area and is subject to excessive winds. It is likely that the excessive wind displaced the Petition. Further, it is unlikely that the Petition could have been adequately secured to the front door. Regardless, I did not receive the Petition that was posted to the front door of my personal residence. As a result, because Rhino never received

EXHIBIT A 62 r

the Petition prior to the entiy of default judgment, Rhino's failure to answer the Petition was neither intentional nor due to conscious indifference.

4. Rhino has a meritorious defense to Vulcan's claim in this matter. Rhino has made known to Vulcan that there were numerous instances of multiple billing where Vulcan charged Rhino two or more times for the same items. In addition, Rhino has attempted to work with Vulcan since July 2013 to correct these billing errors. Specifically, on August 24, 2013, October 23, 2013, January 14, 2014, I requested that Vulcan send Rhino revised invoices to correct the billing errors, but the majority of the billing errors remained unchanged. In early May 2014, Vulcan even appointed a new account services individual to assist with the corrections to Rhino's bills. Despite Rhino being in continuing contact with Vulcan throughout May 2014, the errors on the bills remained. The amount sought by Vulcan and the amount of the default judgment is premised upon these billing enors and is substantially in excess of any outstanding balance to which Vulcan may ultimately be entitled.''

STATE OF TEXAS § § COUNTY OF CRAWFORD §

My Gommissi.oo Expires: 1.0~ ,,

3074065.1 S2~006

63 CAUSE NO. 2-14-CI-15870

VULCAN CONSTRUCTION § IN THE DISTRICT COURT MATERIALS, LP, § Plaintiff § § v. § 288-m JUDICIAL DISTRICT § RHINO CONTRACTORS, LLC § Defendant § BEXAR COUNTY, TEXAS

AFFIDAVIT OF NANCY RUSSELL IN SUPPORT OF MOTION TO SET ASIDE DEFAULT JUDGMENT AND FOR NEW TRIAL

BEFORE ME, the undersigned authority, on this day personally appeared Nancy W. Russell, who being duly sworn, deposed as follows:

1. "My name is Nancy W. Russell. I am the President of Rhino Contractors, LLC ("Rhino"), Defendant in this action. I am authorized to make this Affidavit. I am over eighteen years of age, of sound mind, and capable of making this Affidavit. I have never been convicted of a felony of moral turpitude. The matters stated herein are of my personal knowledge and are true and correct.

2. As President of Rhino, I am also the custodian of records for the company. Attached to this affidavit, marked Rhino 0001-0029, are records kept by me in the regular course of business, and it was the regular course of business of Rhino for a representative of Rhino, with knowledge of the services provided and the payments made for the services provided, to make a record or transmit infonnation to be included in the record. The records were made in the regular course of business at or near the time or reasonably soon after the time the service was provided and the payments were made. The records are the original or duplicates of the original.

3. Rhino 0001 is a listing of the outstanding balance, to date, of all transactions with vendor, Vulcan Materials. Rhino 0002 is a listing of all payments made to vendor Vulcan Materials. Rhino 0003-0029 are internal notes and emails regarding the disagreement with Vulcan over the improper crediting ofRhino's accounts with Vulcan. These records demonstrate that there was, and still is, a bona fide dispute over the allowance of lawful payments, credits and offsets for the account of Rhino. Based upon the records attached, the amount claimed and awarded in Vulcan's judgment is incorrect as it is far in excess of the amounts indicated in the records.

EXHIBIT~ 64 STATE OF TEXAS § § COUNTY OF CRAWFORD §

BEFORE ME, the undersigned authority, on this day personally appeared N~W.-a,~e.t\ , known to me, who being by me duly swom upon oath deposes and states that xx is over the age of eighteen (18), that he/she is of sound mind, that he/she is fully competent to make this affidavit and acknowledgement, that he/she has personal knowledge of every statement contained herein, that the statements contained in the above instrument are true and correct, and that he/she executed the above instrument for the purposes and consideration therein expressed. SUBSCRIBED AND SWORN TO BEFORE ME, and given under my hand and sea] of office this~ day of ..J"'CUUJtVlj , 2015.

Notary Public in and for Said County and State My Commission Expires:

1749893 IISPSA/36984!01011012915

65 5:39PM Rhino Contractors, LLC 01/19/16 Accrual Basis Vendor Open Balance All Transactions Num Memo Open Balance VULCAN CONSTRUCTION MATERIALS 61011923 Vulcan Lost Check 21,127.12 61049571 Bahia Grande SO: 11.12, 13, 14, 2014 79,223.62 61049570 Bahia Grande SO: 11.12.13 3,626.93 61049573 Bahia Grande S0:11.18, 19,20,21,22 2 87,998.81 61053866 Laguna B S0:2.4-5.2014 13,684.16 61057777 Laguna B S0:2.19 and 2.20.14 14,672.69 61049215 Laguna B S0:1.16.14 12,95&.&7 61050846 Laguna B SO: 1.21 ,22,23 2014 34,490.71 61052480 Laguna B SO: 1.27.14 8,370.50 61055500 Laguna B SO: 2.1 0,13 2014 11,504.08 61057778 Laguna B SO: 2.17,18,19 2014 9,874.20 TOTAL 297,529.49

Page 1 of 1 66 RHINO 0001 5:47PM Rhino Contractors, LLC 01/15/16 Bill Payments for VULCAN CONSTRUCTION MATERIALS All Transactions

Type Num Date Amount Open Balance Memo

Bill Pmt -Check 13600 07/16/2014 3,174.78 93988.212961 Bill Pmt -Check 13558 06/1512014 718.69 93988.212961 Bill Pmt -Check 13523 05/0812014 9,706.48 Laguna B JO... Bill Pmt -Check 13445 04/0112014 58,797.05 JOB 1246 La... Bill Pmt -Check 13387 0211712014 21,129.65 JOB 1246 La... Bill Pmt -Check 13309 01/1212014 1,026.08 JOB 1246 Lag ... Bill Pmt -Check 13317 01/10/2014 23,666.69 JOB 1246 Lag ... Bill Pmt -Check 13282 12/2312013 38,741.50 JOB 1246Lag... Bill Pmt -Check 13224 12102/2013 66,193.75 JOB 1246 Lag ... Bill Pmt -Check 13121 10/24/2013 0.00 VOID: 93988 .... Bill Pmt -Check 13120 10/23/2013 19,821.27 JOB 1238 La ... Bill Pmt -Check 13117 1012112013 6,607.09 JOB 1238La... Bill Pmt -Check 13058 10/01/2013 35,311.50 JOB 1238 La... Bill Pmt -Check 13059 10/01/2013 0.00 VOID: $26428 ... Bill Pmt -Check 13060 09/1712013 348.88 Job 1238 Lat.. Bill Pmt -Check 13028 09/1512013 2,098.65 Job 1238 Lag ... Bill Pmt -Check 12928 07/24/2013 18,228.70 Job 1238 Lag ... Bill Pmt -Check 12899 07/16/2013 58,242.80 Job 1238 Lag ... Total 363,813.66 0.00

Page 1

67 RHINO 0002 6.15.14 QeiMiiY I..Oc:iltlon ~ ~~~ ~Hi! aana lXiCi. 1 FWS Laguna Alaacosa NWR: F 8.27.2013 9.15.2013 61011923 21.127.12 see enclosed Paid by ck# 13121 $21127.12 FED EX802457937474 ReceiPt TreCI Lynner • Need explanetJon for Government on what happened to the check 2 FWS Laguna Atascosa NWR 9.23.2013 10.15.2013 61019776 ($348.83) 3 LaiB Chalge 9.30.2013 10.15.2013 33690 311.88 s 311.88 Rhino wiU pay•• We did not maD the chsck unt1110.23.14 dus to Govsmmant Shutdown clc#13558 4 FWS Laguna Alaacosa NWR 9.30.2013 10.15.2013 61022340 501.77 0 As per email dated 12.6 13. ticket# 57000633 Is not Rhano 5 Late Chelflll 10.31.2013 11.15.2013 36298 1,089.80 0 REVIEW & FWS Laguna Alaacosa NWR 11.11.2013 12.15.2013 61033533 31,365.05 VOID:ThiS lnvotee was perUy on lnv 61049568; Need to reinvolce for the remaining not biDed 7 Late Chelfle 11.30.2013 12.15.2013 39490 1,893.23 s 407.01 See BeiDW(OWe $407.01)c:k#13558 8 FWS Laguna Ala!IIXlSa NWR 12.20.2013 01.15.2014 81042888 8,127.00 Incorrect: Rhino does not have ticket# 57004615· pending revised anvoace 9 Late Ch81fl8 12.31.2013 01.15.2014 43151 5,251 .84 REVIEW 10 Bahia Grande Wildlife 01.24.2014 02.15.2014 61049569 55,459.58 see enclosed REBILL requested on in 61033535 end on 61049569 due to 57002063is not our receipt 2.12.14 3.15.2014 61054012 316.82 see enclosed See note on Invoice

1 I'm attaching the documents sent along with Fed Ex Receipt.. Did Vulcan not find the package. Need a statement whether It was lost? 3 Paid by Rhino •• We were late In payment due to Government shut down 4 Need a revised Invoice because the noted ticket was not Rhino; This was on the previous request 11&,892.20 •• On tnv 6W22340, there was one weight ticket that was not ours; I never received the reblllso I paid the Invoice less that receipt. David, I think I gave you a copy when I made the payment.M I can look up the lnfonnatlon 6 See notes, need for It to be rebnted. I talked previously with the assistant Angel and explained the error. I never received the revised Invoice 7 Rhino paid partiaL L£E this was on the previous correspondence and I don't have the explanation 8 see notes by Invoice

• I mailed the check to clear 113 and 111 so I can validate everything with the government clcfl13558 • I will start making payment next week on the January lnvolces;can we get these last few things corrected. 61049215 61049568 61050846 61049571 61052480 61049570 61052481 61049574 ::::0 I 61052481 61049572 z 0 0 0 0 (..)

68 TIMELINE OF COMMUNICATIONS/EMAIL$

7.2.13 *emalled David Farrar[Vulcan Rep] that Invoices were incorrect: Cost/ton was incorrect *Payment were not being applied to accounts due to their billing systems 8.13.13 Emalled that revised Invoices had not been sent to Rhino Emalled that payments were not reflected on Vulcan's Statement 8.24.13 RC received the revised invoices for deliveries on 7.3.13 Requested corrected Vulcan Statement w. RC payments reflected on Statement 8.31.13 RC received Statement with NO CORRECTIONS/No late charges removed 9.15.13 RC emailed various Individuals at Vulcan's Corporate offices requesting assistance 9.16.13 same 9.17.13 same 10.1.13 thru 10.23.13 GOVERNMENT SHUT DOWN 10.20.13 RC emailed David that I had a check ready because David wanted to pick them up; NO SHOV 10.22.13 RC emalled Vulcan requesting correction to statement and Invoices; 10.23.13 RC overnlghted payment to Vulcan Office .•. Vulcan could not find it even though RC has trac number and signature from Vulcan office ** Requested corrections to invoices along with revised statement/invoices.. 10.25.13 Vulcan shut down RHINO's account •• even though no action was taken to correct account *** NOTE: US FISH had agreed to continue payments for deliveries however commitment...., not honored at the last minute due to accounting requirements of us Fish; thus RC had to void payment on one check **** CONTINUED REQUESTING CORRECTIONS TO INVOICES 12.16.13 Emalled David Farrar that none of RC invoices had been corrected Ill Stated that I had been working on this since July 2013 with no progress 1.14.14 RC meet with David Farrar at Jack in the Box.. Requested revised documents 1.2014 RC received some of the revised invoices but the majority remained incorrect 4.29.14 Vulcan appointed new account services individual to assist with correction: NO PROGRESS 5.1.14 RC em ailed errors on statements/ invoices 5.6.14 thru 5.23.14 RC In constant communications with Vulcan; requesting revisions 6.15.14 RC emalled errors on statements/ invoices 6.20.14 RC emalled to Vulcan support documents to Illustrate corrections needed on invoices/state• 8.3.14 RC spoke with a local attorney: Jason Mann and asked for their help to rectify the invoices/s

69 RHINO 0004 Nlincy Russell LO 0 Fnxn: Nancy Russel (nancy@rhlno-rgv.cam) 0 0 Sant: Sunday, May 11, 2014 7:20 PM To: 'While, Adela' 0 Cc: 'Lee Russelr z Subject: RE: RHINO CONTRACTORS emall22 I 0:::

Vulcan Materials Inc 1200 Urban Ctr Dr Binningharn AL 35242

It appears that most of the Fed Ex shipping labels were addressed to Traci Lynch. Someone must have given me her name in all of this mess. The check has not cleared. I did notice that the check for $58,000+ did clear ..

I am going to be flying all day tomorrow so will be out oftouch. I have finished one more ofthe group of invoices. I need to have an updated statement showing all of the items corrected that were to be correct and/or cleared done. I have to submit this to US Fish and SBA I will be sending another batch of checks. I will be in a conference most of the week but just email me and I will respond late at night.

Nancy W Russell CEO/President Rhino Contractors, LLC SBA 8AIW08BIIIUB Certlfled 26163 Altaa Palmu Road Harlingen T•-• 78852 OfRce:9!18.384.1737 Fax:956.412.82AO Celldt5&.S3S.4900

From: White, Adela [malltD:whitead@vmcmall.com] Sent: Tuesday, May 06, 2014 2:06PM To: Nancy Russell Subject: Re: RHINO CONTRACfORS email 22

Nancy, rm needing the address where ck#13121 was sent, and date it cleared your bank.

Thank you,

70 On Fri, May 2, 2014 at 9:27AM, Nancy Russell wrote: co 0 I am finishing those today and will have a response. Lee , I appreciate you helping. 0 0 0 z I et:: As I stated in my emails, Vulcan has put me in a difficult situation with the SBA because I wasn't able to comply with the reports that I requested in July. If you will read my emai~ you will see where I request the "urgency" to my account. Rhino is an SBA SA company and this has caused me a lot of problems. I was told in January 2014 by David Farrar that everything would be taken care of... and I would have someone to work with. Again, nothing happened.

Nancy W Russell

CEGIPraaldant

Rhino Contractors, LLC

SBA 8AIWOSBIHUB Cartlftad

26163 Altas Palma• Raacl

Harlingen Taxa T85!12

Offlce:9S&.364.1737

Fax:956A12.6240

Call:95&.535.4900

From: McCarty lr, Lee [mallto:mccartvl®vmcmall.coml Sent: Friday, May 02,2014 9:08AM To: Nancy Russell Subject: Re: RHINO CONTRACTORS email 22

2 71 1'- 0 We will remove the late charges. Adela will be emailing soon. Lots of January invoices due, any problems on them? 0 0 0 z J: 0:::: On Thu, May 1, 2014 at 6:23PM, Nancy Russell wrote:

Lee, Attached are the a few request for copies of the late charges. I am having to go back to all my emails to your company to verify everything. But I will be finished. Here is the initial half I await for the copies and corrections.

CEOIPruldeat

88A 8AIWOSBIHUB Certlftad

28163 Alta• Palma• Road

Harlingen T..- 78552

Offlc:e:9!16.364.1737

Fax:9S8.412.6240

Ce01956.535.4900

From: McCarty Jr, Lee [mallto:mccartvl@vmcmail.coml 5ent: Wednesday, April 30, 2014 1:35 PM To: Nancy Russell Subject: Re: Scan from a Xerox WorkCentre

3 72 Thank you co 0 0 0 0 On Wed, Apr 30, 2014 at 1:23PM. Nancy Russell wrote: z I 0::: I am preparing a spreadsheet of every invoice that is incorrect and will have this to you by tomorrow or Friday morning at the latest.

CEO,...._Ident

Rhlna Cantractars1 LLC

SBA 8A/WOS8fHU8 Certlfted

26183 Altas Palma• Road

HarUngen Texas 78552

Offtce:956.384.1737

FaJa956A12.6240

CeiL-956.535.4900

From: McCarty Jr, Lee [mailto:mccartyl@vmcmal!.comJ Sent: Wednesday, April30, 2014 8:27AM To: Nancy Russell Subject: Re: Scan from a Xerox WorkCentre

Confused, the note you sent Adela is prior August 27 and taken care of. I need to know about the 26 invoices still due. How can we help? Once paid I can remove the late fee's. 4

73 0) 0 On Tue, Apr 29, 2014 at 3:31 PM, Nancy Russell wrote: 0 0 0 I have them finished on my side. The penalties have to be removed starting with 7.31.2013. I sent correspondence to Adela so there is a clean z explanation of the errors. I am working on your account right now as well ... because I want to clear this now that I have someone to work with. I 0::: Thank you for assigning someone. I would appreciate there being actions taken on the issues address in my email from 7.31.13.

CEOIPrasldant

SBA 8AIWOS8/HU8 Certified

28183 Altlls Palmas Road

Harlingen Texas 78552

Offlce:958,364.1737

Fa1C1956.412.624D

Ceii:956.535.49DD

From: McCarty Jr, Lee [malltn:mccarM@vmcmail.com] Sent: Tuesday, Aprfl29, 2014 3:18PM To: Nancy Russell Cc: Farrar, David Subject: Re: Scan from a Xerox WorkCentre

I can have Adela send you all the 26 invoices, you mark what is wrong and we will get them corrected. Would that work for you? 5 74 0 ....... On Tue, Apr 29,2014 at 3:10PM, Nancy Russell wrote: 0 0 0 Lee, As I have stated since July 2013, I am required to have ALL the errors corrected on the statement. Secondly, the invoices that were rebilled are z INCORRECT. I was told on 1.14.14 at 10:00 am that I would have contact person and everything would be cleared IMMEDIATELY .. £ received a I 0::: phone call from David on 4.22.14 with my contact person so I can start all over again. I have sent over 20 request and no one has corrected any of the invoices nor errors. The attached statement clearly shows that ALL of my correspondence has been ignored so WHO do I go to ask for assistance? Just let me know. Do I go thru Adela or Linda Trimpe?

CEOIPraeldant

Rhino Contractors1 LLC

S8A 8A/WOSBIHUB Certified

26163 Alta• Palm- Road

Hlllllngan Texas 78852

Offh:e:956.364.1737

FaxJ956.412.6240

Call:956.535.4900

From: McCarty Jr, Lee [malltD:mccartvl@vmgnail.coml Sent: Tuesday, April29, 2014 2:43PM To: lee@rhlno-rov.com Cc: nancy@rhjno-rov.com; Kenny Warr; David Farrar, Adela White Subject: Fwd: Scan from a Xerox WorkCentre

6 75 I have reviewed your email that you sent Adela today. It looks like all invoices prior to August 27 have been taking care of. We now need to address ....... the 26 invoices forward that total $490k and are seriously past due. Please review the attached statement with invoices that are checked. Please ....... 0 respond on David picking up a check tomorrow 0 0 ---Forwarded message--- z I From: <4thFloorXEROX@vmcmail.com> 0::: Date: Tue, Apr 29, 2014 at 2:40PM Subject: Scan from a Xerox WorkCentre To: Lee McCarty

Please open the attached document. It was scanned and sent to you using a Xerox WorkCentre.

Sent by: Guest (4thFioorXEROX@vmcmail.com] Attachment File Type: PDF

WorkCentre Location: 4th Floor Sales Isom Rd Device Name: XRXOOOOAADDE31F

For more information on Xerox products and solutions, please visit http://www.xerox.com

Lu McCarty I Credit Manager I Vulcan Materials Company 800 Isom Road, Ste. 300 •SaJl Antonio, Texas 78216 W: (210) 52-1-3524 1 F: (210) 524-3555

email: mccartyl@.vmcmail.com

7 76 N ..... 0 0 0 z IG B This email is free from viruses and malware because avast! Antivirus protection is active. :::r: 0::::

Lee McCtuty I Credit Manager I Vulcan Materials Company 800 /som Road, Ste. 300 •San Antonio, Texas 782/6 W: (2/0) 52-1-352-1 F: {2/0) 52-1-3555

email: mccartylriV.vmcmail.com

10--------------------------------------------------- a ------------------------------------------ This email is free from viruses and malware because avast I Antivirus protection is active.

8 77 ('t) ...... 0 0 0 z J: 0::::

Lee McCarty I Credit Manager I Vulcan Materials Company 800 lmm Road Ste. 300 •San Antonio, Texas 782161 W: (2/0J 52-1-3524 F: (210) 52-1-3555

email: mccarty/fa.vmcmail.com

j0 j This email is free from viruses and malware because avast I Antivirus protection is active.

Lee McCtuty I Credit Manager I Vulcan Materials Company 800 Isom Road, Ste. 300 •San Antonio, Texas 782161 W: (210) 52-1-352-11 F: (210) 52-1-3555

9 78 email: mccarty/fq'.l'mcnuul. cam ~ ..... 0 0 0 z J: ~

I[!I a This email is free from viruses and malware because avast! Antivirus protection is active.

Lee McCarty I Credit Manager I Vulcan Materials Company 800 lsom Road, Ste. 300 •San Antonio, Texas 782161 W: (2/0) 52-1-352-1 ! F: (2/0) 52-1-3555

email: mccartyta:vmcmail. com

Il!J Q This email is free from viruses and malware because avast! Antivirus protection is active.

10 79 10 ...... 0 0 0 z Adela White I Credit and AR I SOR- Texas I Vulcan Materials Company I Website: l1)www.vulcanmaterials.com J: 0::: 800 Isom Rd. Ste. 300 San Antonio, TX 78216 I W 'iil: (210)524-3503 I F'm': (210) 524-35551 (J):whitead!c(-,vmcmail.com

j0 ~ This email is free from viruses and malware because avast! Antivirus protection is active.

11 80 co ~

0 Nancr Russell 0 0 From: Nancy Ruaell (nancyGfhN.rgu:om} z Sent: WedneSday, bclabet 23, 2013 5:01 PM J: To: 'Fanat. David' 0:.:: Bt.lb)ectl Payment AttaaJwnenta: SPREADSHEET.xtr.x

David, I overnighted(Lona Star overnight) a payment to your office in BI'Ownsvllle Texas in the amount of $21127.12. Here is the updated spreadsheet. There was a payment made in the amount of $348.88 that need!> to he applied to the late fee that was due on 10.15.13 for tnvoice 33690 in the amount of 311.68. Thus I have a remaining 31.97 that can be applied to invoice 6109776.

•nvoice 61022340 has a ticket that was applied incorrectly #57000633. I will need the invoice correct and resubm;ued. Alf of these Invoices go to the government along wit 1 Wetght tickets and they want everything exact.

Nancy W Russell CEO(Presldent Rhino Contractors, LLC SBA BA/WOSBIHUB CertJO&d 26183 AJtas Palmas Ro<~d Harllltgon Tescns 78552 Offlt;o:91&,364.1737 fa»u9S6.412,6240 CoRc9!16,S35,4900

81 ----- - - - -

October 24.2013

Dear Customer: llle following Ja the proof-okielivel for tradring number 802457937474.

Stalu8: Delivered ReceplianlatiFront Desk Sfgnad 1br by: V.WARO 1200 URBAN CENTER DR AL35242 Oct 23. 2013 09:16

Shipping fnfarmatian: TJZidng number. 802457937474 Oct22, 2013

Redplent Shipper. TRACIE LYNCH NANCY RUSSELL VULIAN MATERIALS CO RHINO CONTRACTORS.I.LC 1200 URBAN CTR DR 28183 ALTAS PALMAS RD AL35242US HARLINGEN, lX 785526285 US

Thank you for choosing FedEle.

82 RHINO 0017 fed, Pac:l\fiiJH i .~ ,ftir!Ji/i 8024 5793 7474 r:; 0215 I , ; of-.. . . .. I' ' ,11

0 ... ...

;. ... ,."'.,•· ,,"' "

.::0 .J: 2 0 0 0 ...... 00 I I 83 I N~ncy Russell Fram: Nancy R11118111 [IIIIICYCirhhH'gv.ccm) Sent: Sll"lday, May 11,2014 7:20PM To: 'White.~ Cc: 'Lee Ru88811' Subject: RE: RHINO CONTRACTORS emall22

Vulcan Materials Inc 1200 Urban Ctr Dr Birmingham AL 35242

It appears that most of the Fed Ex shipping labels were addressed to Traci Lynch. Someone must have given me her name in all of this mess. The check has not cleared. I did notice that the check for $58,000+ did clear ..

I am going to be flying all day tomorrow so will be out oftouch. I have finished one more of the group of invoices. I need to have an updated statement showing all of the items corrected that were to be correct and/or cleared done. I have to submit this to US Fish and SBA I will be sending another batch of checks. I will be in a conference most of the week but just email me and I will respond late at night.

Nancy W Ruaell CEOIPrealdent Rhino Contractors, LLC 8BA 8AIW0811111UB Certified 28183 Altaa Palm-.._. Harlingen TeXM 781112 Olllcml!l8.384.1737 FIIJIIIHI8.412.82AO CIIIIIIILIH.4100

Fram: White, Adela [mallto:whltead@vrncman.com] Sent: Tuesday, May 06, 2014 2:06 PM To: Nancy Russell SUbject: Re: RHINO CONTRACTORS email 22

:::0 Nancy, :::r: rm needing the address where ck#13121 was sent, and date it cleared your bank. z 0 0 0 Thank you, ~

co

84 On Fri, May 2, 2014 at 9:27AM, Nancy Russell wrote:

I am finishing those today and will have a response. Lee , I appreciate you helping.

As I stated in my emails, Vulcan has put me in a difficult situation with the SBA because I wasn't able to comply with the reports that I requested in July. If you will read my email, you will see where I request the "urgency" to my account. Rhino is an SBA SA company and this has caused me a lot of problems. I was told in January 2014 by David Farrar that everything would be taken care of... and I would have someone to work with. Again, nothing happened.

Nancy W Ruuall

Rhino Contractora1 LLC

BBA 8AIW08BIHUB C.atled

28183 Ale.• P.a..... RCIIId

lllull....a T . . . . '70!12

FU18!18,412.1240

C.U1918.!1311.4BOO

:::0 I z 0 Frvm: McCarty Jr, Lee [malltD:mccarM®vmcmall.com] 0 Sent: Friday, May 02, 2014 9:08 AM 0 IV To: Nancy Russell 0 Subject: Re: RHINO CONTRACTORS email 22 2

85 We will remove the late charges. Adela will be emailing soon. Lots of January invoices due, any problems on them?

On Thu, May 1, 2014 at 6:23PM, Nancy Russell wrote:

Lee, Attached are the a few request for copies of the late charges. I am having to go back to all my emails to your company to verify everything. But I will be finished. Here is the initial half. I await for the copies and corrections.

Nancy W Runell

CEOIPIUkltlnt

Rlllno Contracton, LLC

88A 8AIW08111H. . Certified

28183 Allaa ....._ Road

Harllna-T.... 78112

ClffiC8IBH.364.1737

FIUIIB58.412.6240

c.tla858.531.49GO

:::0 From: McCarty Jr, Lee [mallto:mccartyl®vmcmal!.coml :::r: Sent: Wednesday, April 30, 2014 1:35 PM z To: Nancy Russell 0 0 SUbJect: Re: Scan from a Xerox WorkCentre 0 N ~

86 Thank you

On Wed, Apr 30, 2014 at 1:23PM, Nancy Russell wrote:

I am preparing a spreadsheet of every invoice that is incorrect and will have this to you by tomorrow or Friday morning at the latest.

Nancy W Ru-11

CEOIPrwaldeat

Rhino Contracton, LLC

8BA 8AIW088/HU8 C.rllfted

281UAita8Palmu._.

FaaM6.41Z.6240

CelldiS&.!S3!1.4800

From: McCarty Jr, Lee [rnallto:mccartvl®ymcmal!.com] Sent: Wednesday, Aprll30, 2014 8:27AM To: Nancy Russell :::0 Subject: Re: Scan from a Xerox WorkCentre I z 0 0 0 1\) Confused, the note you sent Adela is prior August 27 and taken care of. I need to know about the 26 invoices still due. How can we help? Once paid I 1\) can remove the late fee's. 4

87 On Tue, Apr 29,2014 at 3:31PM, Nancy Russell wrote:

I have them finished on my side. The penalties have to be removed starting with 7.31.2013. I sent correspondence to Adela so there is a clean explanation of the errors. I am working on your account right now as well ... because I want to clear this now that I have someone to work with. Thank you for assigning someone. I would appreciate there being actions taken on the issues address in my email from 7.31.13.

NancyWRuaall

CEOIPraald...t

8BA 8AIWD8BIHUB Certified

28183 Alta him•• Road

Harllllgen T - - 78182

Olllcea818.384.1 T3T

F111C1188.41Z.U40

c....,sa.sasAaoo

From: McCarty lr, Lee [maRto:mccarty!@yrrcmail.com] Sent: Tuesday, Aprll29, 2014 3:18PM To: Nancy Russell :::o Cc: Farrar, David :::r: SUbject: Re: Scan from a Xerox WorkCentre z 0 0 0 1\,) w I can have Adela send you all the 26 invoices, you mark what is wrong and we will get them corrected. Would that work for you? 5

88 On Tue, Apr 29, 2014 at 3:10PM, Nancy Russell wrote:

Lee, As I have stated since July 2013, I am required to have ALL the errors correc::ted on the statement. Secondly, the invoices that were rebilled are INCORRECf. I was told on 1.14.14 at 10:00 am that I would have contact person and everything would be cleared IM:MEDIATELY.. I received a phone call from David on 4.22.14 with my contact person so I can start all over again. I have sent over 20 request and no one has corrected any of the invoices nor errors. The attached statement clearly shows that ALL of my correspondence has been ignored so WHO do I go to ask for assistance? Just let me know. Do I go thru Adela or Linda Trimpe?

CEGIP,...._at

88A 8AIWD8BIHU8 Certified

21183 Allll• Pal. . . Road

.......... T.... 781S2

Offlce;H8.314.173T

FUJ888A12.8240

Celh911.13B.4100

:::0 From: McCarty Jr, lee [mailto:mccartvl@vmgnai!.comJ :::r: Sent: Tuesday, Aprtl29, 2014 2:43 PM z To: !ee@rhiDo-roy.mm 0 Cc: nancv!Dlrhino-rgy.com: Kenny Warr; David Farrar; Adela White 0 Subject: Fwd: Scan from a Xerox WorkCentre 0 N ~

89 I have reviewed your email that you sent Adela today. It looks like all invoices prior to August 27 have been taking care of. We now need to address the 26 invoices forward that total $490k and are seriously past due. Please review the attached statement with invoices that are checked. Please respond on David picking up a check tomorrow.

---Forwarded message--- From: <4thFloorXEROX@ymcmail.com> Date: Tue, Apr 29, 2014 at 2:40PM Subject: Scan from a Xerox WorkCentre To: Lee McCarty

Please open the attached document. It was scanned and sent to you using a Xerox WorkCentre.

Sent by: Guest [4thFloorXEROX@vmcmail.com] Attachment File Type: PDF

WorkCentre Location: 4th Floor Sales Isom Rd Device Name: XRXOOOOAADDE31F

For more information on Xerox products and solutions, please visit http://www.xerox.com

Lee McCtrrty I Credit Mt~~~ager I V11kt111 Materia/r Conrpt111y ~ 800 /som Road, Ste. 300 • Sa11A11tonio, Texas 78216 1W.· (210) 524-352-1 1F: (2 10) 52-1-3555 z 0 email: mccarty/Ciilvmcmail.com 0 0 N 01

90 Il!l ij This email is free from viruses and malware because avast! Antivirus protection is active.

Lee McCtuty I Credit MaiUiger I Jl•klm Materials Company 800 /som Road. Ste. 300 • San Antonio, Texas 78216 ! W:· (2/ 0) 524-3524 1F: (210) 52-1-3555

email: mccartyl@vmcmail.com

:::0 10 B This email is free from viruses and malware because avast I Antivirus protection Is active. I z 0 0 0 N 0)

91 Lee McCarty I Credit MtUUJger I VldCllll Mlllerillls Company 800 lsom Road. Ste. 300 • Sail Anto11io, Teras 78216 1W: (210) 52-1-3524 1F: (210) 52-1-3555

email: mccartylrmvmcmqil.com

Il!l j This email is free from viruses and malware because avast I Antivirus protection Is active.

:::0 I z 0 g Lee McCorty I Credit M1111ager I Vulc1111 M11terltds Comp1111y ~ 800 /som Road. Ste. 300 • Sa11 Antonio, Texas 78216 1 W: {2/0) 52-1-352-1 1F: (210) 52-1-3555

92 email: mccartylriV.vmcmail.com

II!] ij This email is free from viruses and malware because avast! Antivirus protection is active.

Lee McCtuty I Credit MtuUJger I Vulcan Mtlterials Company 800 Jsom Road. Ste. 300 • San Antonio, Texas 78216 1 W:· (210) 524-3524 ! F: (2/0J 524-3555

email: mccartylrfJ)vmcmailcom

:::0 ::r: z 0 0 0 N j [!) i This email is free from viruses and malware because avast! Antivirus protection is active. co 10

93 Adela White I Credit ancl AR I SOR- Texu I Vulcan Materials Company I Website: tJ' www.vulc.;mmaterials.com 800 lsom Rd. Ste. 300 San Antonio, TX 78216 I W : (210)524-3503 I F if : (210) 524-35551 1):whitead@ymcmajl.com

IE1 j This email is free from viruses and malware because avast! Antivirus protection is active.

:::0 I z 0 0 0 1\) <.0