United Plaza-Midland v. First Service Air Conditioning Contractors, Inc.

CourtCourt of Appeals of Texas
DecidedDecember 20, 2007
Docket11-05-00382-CV
StatusPublished

This text of United Plaza-Midland v. First Service Air Conditioning Contractors, Inc. (United Plaza-Midland v. First Service Air Conditioning Contractors, 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
United Plaza-Midland v. First Service Air Conditioning Contractors, Inc., (Tex. Ct. App. 2007).

Opinion

Opinion filed December 20, 2007

Opinion filed December 20, 2007

                                                                        In The

    Eleventh Court of Appeals

                                                                   __________

                                                          No. 11-05-00382-CV

                         UNITED PLAZA-MIDLAND, L.L.C., Appellant

                                                             V.

                               FIRST SERVICE AIR CONDITIONING

CONTRACTORS, INC., Appellee

On Appeal from the County Court at Law

Midland County, Texas

Trial Court Cause No. CC-12,073

  M E M O R A N D U M  O P I N I O N


First Service Air Conditioning Contractors, Inc., (First Service), entered into a contract with United Plaza-Midland, L.L.C. in 1999 to install new equipment and lighting and to provide maintenance for five years.  The purpose was to provide a system that would save United money on its electrical bills.  First Service financed the equipment and its installation.  United was to pay for the equipment and its installation over time through the energy savings.  The parties agreed that a portion of the payments from United would be based on energy savings that the new equipment and system would achieve.  United experienced difficulty in making the monthly payments, and the parties modified their contract in 2001.  Under the contract as modified, United agreed to pay $2,500 each month; the $2,500 fixed payment was to include $1,600 for the maintenance service and $900 for the balance owed on the equipment.

After approximately eighteen months of paying $2,500 per month, United decided to reduce the payments to $900 per month.  First Service filed suit for breach of contract in February 2004.   United then counterclaimed for breach of contract, conversion, and fraud.  At the end of the jury trial, the trial court granted directed verdicts to First Service on United=s counterclaims.  Based on the jury verdict, the trial court entered a final judgment awarding damages to First Service of $98,155.51 and attorneys= fees of $70,000.  We affirm.

 Background Facts

United was formed to acquire the United Plaza Building in Midland.  The building was United Plaza-Midland=s only asset, and both will be referred to as United.  Yigal Bosch, the corporate representative of United, was also the chief executive officer of a company in Houston that located investors to purchase buildings, apartments, and condominiums.  United acquired the Midland building in 1998.

Gilbert Guzman, a salesman with First Service, contacted Carol Hastings with United shortly after the acquisition.  Hastings was the building=s office manager from 1995 to 2002.  Through  Hastings, Guzman called Bosch and explained to him how First Service could save United money by changing the lighting system and other equipment and by providing a maintenance agreement.  Bosch subsequently came to Midland and, on behalf of United, executed an agreement with First Service on April 29, 1999.


The contract set forth the maintenance service that First Service would provide and the equipment that First Service would purchase and install as part of a new energy management system.  The agreement allowed United to have  the new equipment installed without any up-front payment.  To finance the purchase and installation of the equipment, First Service borrowed $55,000 from Bank United in Midland.  United was to pay $900 monthly for five years and pay 100% of the actual savings in its energy costs each month to First Service.  First Service was to recoup the cost of the equipment and its installation costs through the monthly energy savings that the parties anticipated that United would achieve.  As shown in the agreement, First Service estimated that the annual savings would be $12,932.88. 

The monthly savings were to be calculated using the Faser Energy Accounting Software referred to under Article III, section B of the Energy Saving Agreement section of the overall contract.  David Grosse of First Service testified that, for the Faser software to work properly, First Service needed five years of United=s monthly electric bills.  Bosch wrote a letter dated February 17, 2000, to TXU Electric requesting electrical bills from January of 1991 to 1999.  Receiving no response, Bosch wrote another letter to TXU Electric dated April 26, 2000, requesting the bills for the years 1994 through May 1999.  Again, he received no response from TXU Electric.  Bosch provided First Service with United=s 1998 and 1999 electric bills.  Instead of using the Faser software to calculate the monthly savings, First Service could only compare the 1998 and 1999 monthly bills to the monthly bills after installation of the new equipment.  Grosse acknowledged that this latter method was not as accurate as using the Faser software.  Bosch, however, acknowledged that the new system did reduce United=s monthly electrical bills.  United paid the $900 monthly fee plus the calculated monthly savings amount to First Service for a number of months.

Bosch admitted that United had breached the agreement by early 2001 because it had failed to make the monthly payments.  Bosch testified that the purchase of the United building had been a bad investment and that the rental income had been insufficient to pay the bills.  Under the agreement, First Service had the right upon default to declare the entire amount owed by United under the contract immediately due and payable.  To avoid First Service=s exercise of that right, Bosch met with Grosse and Mike Perkins of First Service.  After the meeting, Bosch wrote Grosse on February 19, 2001, proposing that they modify their agreement to eliminate the energy savings payment and, instead, agree that United would pay $2,300 each month to cover both the service portion and the installation-of-equipment portion for the remaining term of the contract.


By letter dated March 14, 2001, Grosse presented a counteroffer.  He first explained that the energy savings payments had included both repayment for the installation of lights and the new control system and A$700 of the $1,600@

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