Staff Industries, Inc. v. Hallmark Contracting, Inc.

846 S.W.2d 542, 1993 WL 5043
CourtCourt of Appeals of Texas
DecidedFebruary 18, 1993
Docket13-91-437-CV
StatusPublished
Cited by47 cases

This text of 846 S.W.2d 542 (Staff Industries, Inc. v. Hallmark Contracting, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Staff Industries, Inc. v. Hallmark Contracting, Inc., 846 S.W.2d 542, 1993 WL 5043 (Tex. Ct. App. 1993).

Opinion

OPINION

GILBERTO HINOJOSA, Justice.

Staff Industries, Inc., filed suit against Hallmark Contracting, Inc., for breach of a construction contract, and against King Construction Co. and United States Fidelity & Guaranty Co., for liability as principal and surety, respectively, under a Harde-man Act payment bond. 1 After a bench trial, the court rendered a take-nothing judgment against Staff on all of its causes of action, but also entered a declaratory judgment that Hallmark owed Staff $55,-619.71. Staff brings five points of error. Hallmark brings one cross-point.

The primary issue in the present case is whether a contract for the production and installation of an indeterminate amount of material at a unit price entitled the subcontractor to be paid for the amount of materials provided to the job site or only that amount actually used in construction without regard to excess material discarded as waste.

Hallmark and King together undertook a construction project to build a fish hatchery for the Gulf Coast Conservation Association (GCCA), with King being awarded the contract and furnishing the performance and payment bond, issued by USF & G, and Hallmark acting in all other respects as the general contractor. Staff, a subcontractor in the present case, contracted with Hallmark to produce and install a material, Hypalon, which was used to line the ponds at the fish hatchery. Staff produced and delivered over a million square feet of Hy-palon to the job site for installation in the ponds by another subcontractor, Midessa Industrial Vinyl Company, hired by Staff.

For the entire project Staff billed Hallmark a total of $598,001.11. Hallmark paid Staff only $498,496.66, claiming that the remaining amount due Staff was being held as retainage. The amount being retained and due Staff is the primary controversy in the present suit. Staff claims the balance of $99,504.45 of the amount it billed, which was based on the amount of Hypalon delivered to the job site. Hallmark claims that Staff is due only $53,-119.71, based on the amount of Hypalon actually installed in the ponds without regard to the excess material trimmed off and discarded as waste.

After a bench trial, the trial court entered a judgment which ordered that both Staff and Hallmark take nothing by their claims, but purported to render a declaratory judgment that Hallmark owed Staff $53,119.71 plus 10% pre-judgment interest from May 11, 1989, and $2,500 plus 10% pre-judgment interest from May 10, 1990.

By its fifth point of error, Staff complains that the trial court erred in failing to award Staff a contract balance of $99,-504.45, since the contract and the evidence showed as a matter of law or, alternatively, by the overwhelming weight of the evidence, that Staff was entitled to be paid based on material delivered to the job site, rather than on material actually installed in the ponds.

In considering a “no evidence,” “insufficient evidence” or “against the great weight and preponderance of the evidence” point of error, we will follow the well-established tests set forth in Pool v. Ford Motor Co., 715 S.W.2d 629 (Tex.1986); Dyson v. Olin Corp., 692 S.W.2d 456 (Tex.1985); Glover v. Texas General Indemnity Co., 619 S.W.2d 400 (Tex.1981); Garza v. Alviar, 395 S.W.2d 821 (Tex.1965); Allied Finance Co. v. Garza, 626 S.W.2d 120 (Tex.App.-Corpus Christi 1981, writ ref’d n.r.e.); and Calvert, No Evidence and Insufficient Evidence Points of Error, 38 Texas L.Rev. 361 (1960).

The present dispute involves a matter of contract interpretation. If a written contract is so worded that it can be given a certain or definite legal meaning or interpretation, then it is not ambiguous and *546 the court will construe the contract as a matter of law. A contract, however, is ambiguous when its meaning is uncertain and doubtful or it is reasonably susceptible to more than one meaning. Whether a contract is ambiguous is a question of law for the court to decide by looking at the contract as a whole in light of circumstances present when the contract was entered. When the contract contains an ambiguity, its interpretation becomes a question of fact based on the intention of the parties to it. Reilly v. Rangers Management, Inc., 121 S.W.2d 527, 529 (Tex.1987); Coker v. Coker, 650 S.W.2d 391, 393-94 (Tex.1983).

The intention of the parties is to be ascertained to the extent possible from the language of the contract itself, construed in connection with the circumstances surrounding the execution of the contract. Sun Oil Co. (Del.) v. Madeley, 626 S.W.2d 726, 731 (Tex.1981); Richard Gill Co. v. Jackson’s Landing Owners’ Association, 758 S.W.2d 921, 925 (Tex.App.—Corpus Christi 1988, writ denied). These surrounding circumstances include what the particular industry considered to be the norm or reasonable and prudent at the time. KMI Continental Offshore Production Co. v. ACF Petroleum Co., 746 S.W.2d 238, 241 (Tex.App.-Houston [1st Dist.] 1987, writ denied). In addition, the conduct of the parties which indicates the construction they themselves placed on the contract may be considered in determining the parties’ true intent with regard to an ambiguous provision. Consolidated Engineering Co. v. Southern Steel Co., 699 S.W.2d 188, 192-93 (Tex.1985); Richard Gill Co., 758 S.W.2d at 925.

In the present case, the purchase order under which Staff supplied Hypalon to Hallmark specified in pertinent part as follows:

For Furnishing all labor, materials, equipment, supervision, insurance, performance and payment bond, and appurtenances to complete the “Hypalon” Liner, all in strict accordance with the contract plans and specifications on the above mentioned project.
******
As quoted $.5179 per square foot Not to exceed $610,061.00.

Hallmark contends that the provision for performance “in strict accordance with the contract plans and specifications” implies that the area specified in those plans and specifications to be covered with Hypalon is the amount for which Staff should be paid. Staff, however, points to a clause in the contract specifications concerning measurement and payment based on estimated quantities as follows:

It is understood and agreed that the actual amount of work to be done and material to be furnished under this contract may differ somewhat from these estimates, and that where the basis for payment under this contract is the unit price method, payment shall be for the actual amount of such work done and the material furnished.

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Cite This Page — Counsel Stack

Bluebook (online)
846 S.W.2d 542, 1993 WL 5043, Counsel Stack Legal Research, https://law.counselstack.com/opinion/staff-industries-inc-v-hallmark-contracting-inc-texapp-1993.