the New AAA Apartment Plumbers Inc D/B/A AAA Plumbers v. DPMC-Briarcliff L.P.

• Court: Court of Appeals of Texas
• Decided: October 5, 2006
• Docket: 14-05-00485-CV
• Status: Published

Opinion

Affirmed and Memorandum Opinion filed October 5, 2006

Affirmed and Memorandum Opinion filed October 5, 2006.

In The

Fourteenth Court of Appeals

____________

NO. 14-05-00485-CV

NEW AAA APARTMENT PLUMBERS, INC., D/B/A  AAA PLUMBERS,  Appellant

V.

DPMC-BRIARCLIFF, L.P., Appellee

On Appeal from the 113th District Court

Harris County, Texas

Trial Court Cause No. 01-58725

M E M O R A N D U M   O P I N I O N

Appellant New AAA Apartment Plumbers, Inc. d/b/a AAA Plumbers (AAAA Plumbers@) appeals from a summary judgment rendered in favor of appellee, DPMC-Briarcliff, L.P.  We affirm.

I. Factual and Procedural Background

Westbrook Construction, Inc. contracted with AAA Plumbers to perform services in connection with the renovation of an apartment complex owned by Briarcliff Housing Development Associates, Inc. (ABriarcliff Housing@).  Under this agreement, AAA Plumbers was to receive a total of $361,487.48.  Briarcliff Housing allegedly never paid Westbrook $36,148.75 in retainage regarding AAA Plumbers= work.  AAA Plumbers completed the work under the contract, but Briarcliff Housing refused to release the $36,148.75.  AAA Plumbers then filed a lien affidavit and claim against the real property for the unpaid amount.  Subsequently, Briarcliff Housing sold the property to appellee DPMC-Briarcliff, L.P. (ABriarcliff, L.P.@).  AAA Plumbers brought suit against both Briarcliff Housing and Briarcliff, L.P. for the $36,148.75. 

Briarcliff, L.P. filed a no-evidence motion for summary judgment.  The trial court denied the motion.  At trial, Briarcliff, L.P. argued that AAA Plumbers failed to give Briarcliff, L.P. proper notice of the claim or the filed affidavit.  Following a bench trial, the trial court agreed and rendered a take-nothing judgment against AAA Plumbers, discharging the lien. On appeal, the Corpus Christi Court of Appeals held that the mechanics= lien was perfected.  New AAA Apartment Plumbers, Inc. v. DPMC‑Briarcliff, L.P., 145 S.W.3d 728, 730 (Tex. App.BCorpus Christi 2004, no pet.).  That court also held that the evidence supporting the  trial court=s finding that AAA Plumbers did not give proper notice factually insufficient, and reversed the judgment of the trial court, remanding the case.  Id.

On remand, Briarcliff, L.P. discovered that a payment bond had been filed in connection with the renovation project.  Without objection, Briarcliff, L.P. amended its answer to include the affirmative defense that AAA Plumbers= claim was barred based on the posting of a statutory payment bond (the ABond@).  Briarcliff, L.P. then filed a traditional motion for summary judgment on this ground, citing the Texas payment bond statute.  To support its motion, Briarcliff, L.P. attached a certified copy of the Bond and the affidavit of Dan Darilek, the president of Briarcliff L.P.=s general partner.  The trial court granted summary judgment in Briarcliff, L.P.=s favor and later denied AAA Plumbers= motion to reconsider, and motion for new trial.

II.  Issues Presented

AAA Plumbers asserts that the trial court erred in granting Briarcliff, L.P.=s motion for summary judgment for the following reasons:

(1)     The affidavit in support of Briarcliff, L.P.=s motion is defective as it does not state it is based on the affiant=s personal knowledge, nor does it contain a statement that all facts are true and correct.

(2)     The Bond was not filed in compliance or attempted compliance with the requirements of the Texas Property Code and therefore did not afford Briarcliff, L.P.  the statutory protections.

(3)     Briarcliff, L.P. is judicially estopped from asserting the existence of the Bond.

III. Standard of Review

In reviewing a traditional motion for summary judgment, we take as true all evidence favorable to the nonmovant, and we make all reasonable inferences in the nonmovant=s favor.  Dolcefino v. Randolph, 19 S.W.3d 906, 916 (Tex. App.CHouston [14th Dist.] 2000, pet. denied).  If the movant=s motion and summary‑judgment evidence facially establish its right to judgment as a matter of law, the burden shifts to the nonmovant to raise a genuine, material fact issue sufficient to defeat summary judgment.  Id.

IV.  Analysis

A.      Is the affidavit attached to Briarcliff, L.P.=s motion for summary judgment defective?

In its first issue, AAA Plumbers contends that the trial court erred by granting Briarcliff, L.P.=s motion for summary judgment because the affidavit of Dan Darilek filed in support of Briarcliff, L.P.=s motion does not state that it is based on the affiant=s personal knowledge, or that the facts are true and correct.  Briarcliff, L.P. responds that AAA Plumbers waived this complaint on appeal because it lodged no objection at trial.

Objections to defects in the form of an affidavit must be made in the trial court, and the opposing party must have the opportunity to amend the affidavit. Tex. R. Civ. P. 166a(f).  The failure to obtain a ruling on an objection to the form of the affidavit waives the objection.  Thompson v. Curtis, 127 S.W.3d 446, 450 (Tex. App.CDallas 2004, no pet.).  Conversely, defects in the substance of an affidavit are not waived by the failure to object or obtain a ruling, and these objections may be raised for the first time on appeal.  McMahan v. Greenwood, 108 S.W.3d 467, 498 (Tex. App.CHouston [14th Dist.] 2003, pet. denied).  AAA Plumbers= complaint on appeal goes to the form, rather than the substance of the affidavit.  See Coastal Terminal Operators v. Essex Crane Rental Corp., No. 14-02-00627-CV, 2004 WL 1795355, at *8  (Tex. App.CHouston [14 Dist.] Aug. 12, 2004, pet. denied) (mem. op.) (concluding that failure to object that an affidavit fails to set forth that the facts therein are true and correct waives any error on appeal).  Failure to object at the trial‑court level that an affidavit does not state that it is based on the affiant=s personal knowledge and obtain a ruling waives the objection on appeal.  Id.  Thus, by failing to timely assert its objection in the trial court and obtain a ruling, AAA Plumbers waived any complaint that the affidavit fails to state that it is based on personal knowledge.  See id. , at *8; see also Youngblood v. U.S. Silica Co., 130 S.W.3d 461, 468‑69 (Tex. App.CTexarkana 2004, pet. filed) (holding objection based on affidavit's failure to explicitly state that statements therein were Atrue and correct@ and within affiant=s personal knowledge was waived by failure to object and obtain ruling in the trial court).^[1]  We overrule AAA Plumbers= first issue.^[2]

B.      Was the payment bond filed in compliance or attempted compliance with the requirements of section 53.202 of the Texas Property Code?

In its second issue, AAA Plumbers contends that the trial court erred in granting summary judgment because the Bond was not a valid statutory payment bond as it was not filed in compliance or attempted compliance with the requirements set forth in the Texas Property Code. See Tex. Prop. Code Ann. ' 53.202 (Vernon 2005) (setting forth the statutory requirements for a valid bond).

In Texas, all payment bonds obtained for private construction projects must conform with the criteria set forth in section 53.202 of the Texas Property Code. See Laughlin Envir., Inc. v. Premier Towers, L.P., 126 S.W.3d 668, 671 (Tex. App.CHouston [14th Dist.] 2004,  no pet.).  Under this section, a statutory payment bond must have the following features:

(1)     It must be in a penal sum at least equal to the total of the original contract amount;

(2)     It must be in favor of the owner;

(3)     It must have the written approval of the owner endorsed on it;

(4)     It must be executed by:

(A)     the original contractor as principal; and

(B)     a corporate surety authorized and admitted to do business in this state and licensed by this state to execute bonds as surety; and

(5)     It must be conditioned on prompt payment for all labor, subcontracts, materials, specially fabricated materials, and normal and usual extras not exceeding 15 percent of the contract price.

See Tex. Prop. Code ' 53.202.  If a payment bond meets the statutory requirements, a claimant may not file lien claims against the property owner or seek foreclosure of the claimant=s lien on the owner=s property.  See Tex. Prop.Code ' 53.201.  Instead of looking to the property, claimants must look to the payment bond.  See id. at ' 53.201(b).  AAA Plumbers contends that the Bond is invalid because it was not filed in compliance with the fifth requirement above in that it fails to state that it is Aconditioned on prompt payment for all labor, subcontracts, materials, specially fabricated materials, normal and usual extras not exceeding 15 percent of the contract price.@ See  Tex. Prop. Code ' 53.202 (5).

Although the requirements of section 53.202 are mandatory for a statutory payment bond, the Texas Property Code does not require perfect compliance.  See id. at ' 53.211 (allowing for a nonconforming payment bond to be treated as a conforming one as long as there is Aattempted compliance with [subchapter I of Chapter 53 of the Texas Property Code]@ or the bond evidences by its terms an Aintent to comply with [subchapter I of Chapter 53 of the Texas Property Code]@); see also Laughlin, 126 S.W.3d at 671. Section 53.211(a) of the Property Code, entitled AAttempted Compliance,@ states as follows:

A bond shall be construed to comply with this subchapter, and the rights and remedies on the bond are enforceable in the same manner as on other bonds under this subchapter, if the bond:

(1) is furnished and filed in attempted compliance with this subchapter; or

(2) evidences by its terms intent to comply with this subchapter

Tex. Prop. Code Ann. ' 53.211 (Vernon 2005).  For a property owner to reap the benefits of section 53.211 and thereby enjoy the protections it affords, there must be a bona fide attempt to comply with the statute=s requirements. See Sherwin‑Williams Co. v. American Indem. Co., 504 S.W.2d 400, 402‑03 (Tex. 1973) (holding bond was not entitled to the benefit of predecessor statute to section 53.211, even though bond explicitly stated that the parties intended to comply with the Hardeman Act); Staff Indus., Inc. v. Hallmark Contracting, Inc., 846 S.W.2d 542, 550‑51 (Tex. App.CCorpus Christi 1993, no writ) (holding party could not obtain benefits of section 53.211 because terms of bond indicated intent to comply with McGregor Act, rather than with Hardeman Act); Sentry Ins. Co. v. Radcliff Materials of Texas, Inc., 687 S.W.2d 437, 440‑41 (Tex. App.CHouston [14th Dist.] 1985, no writ) (holding terms of bond showed no attempt or intent to comply with section 53.202 of the Texas Property Code).   In civil cases, an Aattempt@ ordinarily means Aan intent combined with an act falling short of the thing intended.@  See Laughlin, 126 S.W.3d at 671.

 In this case, the only evidence attached to Briarcliff, L.P.=s motion for summary judgment is the Bond, the contract between DPMC-Briarcliff Housing Development Associates, Inc. and Westbrook (which is incorporated into the Bond), and an affidavit in support of the payment bond.  The Bond itself is the only summaryBjudgment evidence that is material to the issue of facial compliance with the statutory requirements set forth in section 53.202.  Therefore, the proper inquiry is whether the Bond, by its terms, evidences an intent to comply with the statutory payment‑bond provisions.

In this case the Bond=s penal sum is: (1) equal to the total of the original contract amount; and the bond is: (2) in favor of the owner; (3) endorsed by the owner; (4) executed by the original contractor (Westbrook) as principal; (5) executed by a surety licensed by Texas to execute bonds; and (6) conditioned on prompt payment for all labor and material used or reasonably required for use in the performance of the original contract.  See Fondren Const. Co., Inc. v. Briarcliff Housing Development Assoc., Inc., DPMC-Briarcliff, L.P., 196 S.W.3d 210, 212B13 (Tex. App.CHouston [1st Dist.] 2006, no pet.).  The only terminology that the Bond is missing is the language in section 53.202(5), which states that the bond must be Aconditioned on prompt payment . . . not exceeding 15 percent of the contract price.@  

This omission notwithstanding, the Bond contains certain recitations one would expect to see if it were intended to be construed as a statutory payment bond.  For example, the Bond specifically includes the following language: AApproved for filing in compliance with Sections 53.201 et seq (sic) of the Texas Real Property Code, added by acts of the Regular Session of the 68^th Legislature, 1983.@  Cf. Laughlin, 126 S.W.3d at 673 (concluding that one of the reasons that the bond in question did not reflect proper attempted compliance was because it did not recite that it was issued under sections 53.20-53.211).  A bond tends to show an intent to comply when, as in this case, the face of the bond makes reference to the statute and displays compliance with the requirements of section 53.202 of the Texas Property Code.  Likewise, it is reasonable to expect that a bond intended to fall within the statutory payment‑bond provision would use statutory terminology, such as Aprompt payment@ or make reference to the A15 percent@ in section 53.202(5).  See Laughlin, 126 S.W.3d at 673.  In this case, the Bond uses the statutory terminology of Aprompt payment@ in section 53.202(5).  Id. at 673 (finding that one of the reasons that the bond at issue did not attempt to comply is because it failed to use statutory language such as Aprompt payment@ or make reference to the A15 percent@ in section 53.202(5)).

We conclude that the Bond does not contain a substantial defect, and the record demonstrates that there was attempted compliance with the payment‑bond provisions in section 53.202.  Therefore, section 53.211 may be invoked to enforce the Bond just as with any other valid payment bond.  See Tex. Prop.Code ' 53.211 (stating a bond shall be construed to comply if it is furnished and filed in attempted compliance; or evidences by its terms intent to comply); Sherwin‑Williams Co., 504 S.W.2d at 402B03 (holding that a Asubstantial@ defect in the penal sum of the bond conclusively rebuts any argument that the bond was furnished and filed in attempted compliance with section 53.202).  Briarcliff, L.P. is entitled to enforce the protections afforded by the filing of a statutory bond.  The trial court properly granted summary judgment on this basis.  Thus, we overrule AAA Plumbers= second issue.

C.      Is Briarcliff, L.P. judicially estopped from asserting the payment bond defense?

In its third issue, AAA Plumbers contends that the trial court erred in granting summary judgment because Briarcliff, L.P. is judicially estopped from asserting the payment bond defense.  AAA Plumbers misapplies the doctrine of judicial estoppel.

The elements of judicial estoppel under Texas law are (1) a sworn, prior inconsistent statement made in a judicial proceeding; (2) which was successfully maintained in the prior proceeding; (3) not made inadvertently or by mistake, or pursuant to fraud or duress; and (4) which is deliberate, clear, and unequivocal.  Long v. Knox, 291 S.W.2d 292, 295 (Tex. 1956); Huckin v. Joseph P. Connor and Stern, Flanz, Carnley and Wilson, P.C., 928 S.W.2d 180, 182‑83 (Tex. App.CHouston [14th Dist.] 1996, no writ).  The essential function and justification of judicial estoppel is to prevent the use of intentional self‑contradiction as a means of obtaining an unfair advantage.  The primary purpose of the doctrine is not to protect litigants, but rather to safeguard the integrity of the judiciary.  Brandon v. Interfirst Corp., 858 F.2d 266, 268 (5th Cir.1988).

 First, judicial estoppel could not apply in this case because no statement upon which  AAA Plumbers relied was sworn. In support of its argument that Briarcliff, L.P. made a sworn, prior inconsistent statement, AAA Plumbers directs the court to Briarcliff, L.P.=s answer and amended answer.  These pleadings were not sworn.  Second, even if a sworn pleading were not required, Briarcliff, L.P. did not successfully maintain an inconsistent position in a prior proceeding.  In the first trial, Briarcliff, L.P. asserted lack of adequate notice.  Although Briarcliff, L.P.  prevailed in the trial court, the Corpus Christi Court of Appeals reversed this judgment based on factual insufficiency.  See New AAA Apartment Plumbers, Inc., 145 S.W.3d at 730.  On remand, Briarcliff, L.P. asserted a payment bond defense.  At that point, Briarcliff, L.P., had not yet succeeded on any position, much less an inconsistent one.

For AAA Plumbers to prevail on a judicial estoppel theory, the record must demonstrate that Briarcliff, L.P. successfully maintained an inconsistent position in a prior proceeding.  Because estoppel bars a party from adopting an inconsistent position at a judicial proceeding if it has successfully maintained a position in a prior judicial proceeding, the doctrine applies only in a subsequent action or proceeding, and does not apply to a contrary position taken within the same proceeding.  An appeal from a prior or former proceeding is not a Asubsequent action.@  Vinson & Elkins v. Moran, 946 S.W.2d 381, 396B97 (Tex. App.CHouston [14th Dist.] 1997, writ dism=d by agr.); see Steffan v. Steffan, 29 S.W.3d 627, 631B32 (Tex. App.CHouston [14 Dist.] 2000, pet. denied).  The action before this court is not a Asubsequent action;@ it is merely part of the same proceeding that was before the Corpus Christi Court of Appeals when it remanded the case back to the trial court for a new trial.  Finally, Briarcliff, L.P.=s payment bond defense is not an inconsistent position, but merely an alternative position taken in response to AAA Plumbers= claim.

The elements of judicial estoppel simply are not established.  Briarcliff, L.P. was not judicially estopped from asserting the payment bond as an affirmative defense in this proceeding.  Accordingly, we overrule AAA Plumbers= third issue.^[3]

Having overruled all of AAA Plumbers= issues on appeal, we affirm the trial court=s judgment.

/s/      Kem Thompson Frost

Justice

Judgment rendered and Memorandum Opinion filed October 5, 2006.

Panel consists of Justices Anderson, Edelman, and Frost.

---

^[1]  We note that the first time AAA Plumbers raised this issue was in its AMotion to Reconsider Summary Judgment, or in the Alternative, Motion for New Trial.@  This issue was not raised in AAA Plumbers= response to Briarcliff, L.P.=s motion for summary judgment.  Although the trial court denied AAA Plumbers= motion, there was no separate ruling made as to the sufficiency of the affidavit attached to Briarcliff, L.P.=s motion.

^[2]  However, even if this issue were preserved, no extrinsic evidence of authenticity of the Bond was necessary as a condition precedent to admissibility.  See Tex. R. Evid. 902 (4) (stating that extrinsic evidence of authenticity as a condition precedent to admissibility is not required as to certified copies of public records).  Regardless of whether the affidavit is defective, the Bond was properly before the trial court as summary judgment evidence.

^[3]  The only argument that AAA Plumbers raises is that Briarcliff, L.P. is judicially estopped from asserting the existence of the Bond. This argument is also the only one that AAA Plumbers raised in its summary judgment response.  AAA Plumbers did not raise a waiver argument in the trial court nor assert waiver as a bar to Briarcliff, L.P.=s  assertion of the payment bond defense, nor has AAA Plumbers asserted or argued waiver in its appellate brief. Thus, the only issue before us is whether AAA Plumbers was Ajudicially estopped@ from adding, on remand, the affirmative defense of a statutory payment bond.