Paul Smith v. Colonial Group, Inc.

IN THE TENTH COURT OF APPEALS No. 10-05-00354-CV Paul Smith, Appellant v. Colonial Group, Inc., Appellee From the County Court at Law Ellis County, Texas Trial Court No. 03-C-3499 MEMORANDUM Opinion Paul Smith and Colonial Group, Inc. entered into a contract for the repair and renovation of an historic home owned by Smith. After additions and change orders, the project’s total cost was $43,832.77. Colonial Group began the work, but after several months passed, Smith ordered Colonial Group off the project and attempted to terminate the contract before its completion. Colonial Group sued Smith for the balance due ($23,524.60) and attorney’s fees, and Smith counterclaimed for damages and offsets. Colonial Group inspected the home and offered a $4,648 offset against the balance. After a bench trial, the trial court largely found for Colonial Group, entering judgment against Smith for $17,037.84. Smith appeals the judgment, asserting four issues. We will reform the judgment in part and affirm the judgment as reformed. Smith’s first and second issues assert that the trial court erred in finding an ambiguity in the contract relating to the home’s brick-pier foundation, in concluding that the parties’ true intent was to incorporate but not exclusively use the existing antique brick piers, and in failing to award Smith $13,188 in damages for Colonial Group’s failure to use the existing brick. In leveling the foundation, Colonial Group removed many of the existing brick piers and installed numerous block and pad supports without Smith’s express approval. The construction of a written contract, including whether the contract is ambiguous and the parties’ true intent, are questions of law reviewed de novo. Fox v. Parker, 98 S.W.3d 713, 719 (Tex. App.—Waco 2003, pet. denied). The court also views the contract in light of the circumstances present when the contract was entered. See National Union Fire Ins. Co. v. CBI Indus., Inc., 907 S.W.2d 517, 520 (Tex. 1995). Each part of the contract is considered against all other parts to determine its meaning, and we presume the parties intended every part to have some effect. Heritage Resources, Inc. v. NationsBank, 939 S.W.2d 118, 121 (Tex. 1996). If express wording in the contract is subject to two or more reasonable interpretations, the contract is ambiguous. Fox, 98 S.W.3d at 719. If the court finds the contract ambiguous, it determines the true intentions of the parties to resolve the ambiguity. Id. This determination involves fact issues, and parol evidence may be introduced to discern the parties’ intent. Id. at 719-20. In the contract’s “Foundation” section, the first two items are: 1) Use existing brick foundation and owner assumes liability. 2) Leveling of foundation. Additionally, the payment schedule in another part of the contract provides: “3) Leveling with new pads and beams as needed.” We agree with Colonial Group that the contract’s provisions on repairing and leveling the foundation are ambiguous. Colonial Group could not have exclusively used the existing brick piers to level the foundation and used new pads and beams as needed for leveling. We overrule Smith’s first issue. Legally and factually sufficient evidence supports the trial court’s finding[1] that the true intent of the parties—and the most reasonable interpretation of the contract—was for Colonial Group to incorporate the existing brick piers as was reasonable and practicable in leveling the foundation.[2] That evidence, which includes reasonable inferences therefrom, is: (1) Smith could easily have written the contract to provide for exclusive use of the existing brick; (2) there was no separate pricing for additional antique bricks, nor was there testimony about discussions on refurbishing the brick piers or procuring special brick; (3) the cost to level the foundation would have been much higher if the existing brick piers were to be used exclusively; (4) Brad Yates of Colonial Group, who crawled under the house and inspected and photographed the foundation work, said that using block and pad supports was the best way to level the foundation; (5) Yates disputed Smith’s claim that 74 of the original 77 brick piers had been removed and pointed out Smith’s inaccurate measurements and assumptions about the bricks; (6) while Smith said he told Yates to use only the existing brick, there was no testimony of substantive discussions between Smith and Yates on this, nor was there corroborating evidence; (7) Smith never personally inspected the interior brick piers; and (8) Smith waited until two years after Colonial had left the job site to raise the issue. We overrule issue two. In issue three, Smith complains that ten of the trial court’s findings or non-findings (failures to find) are erroneous as a matter of law or are against the great weight and preponderance of the evidence, or that they are not supported by legally and factually sufficient evidence.[3] We address the ten findings or non-findings as follows: 1. Bathroom wall sconce: Smith claims that he was entitled to a $252 offset ($225 plus 12% overhead and profit) because he was charged for the installation of a wall sconce, but it was not done. Smith testified that he asked for a quote for a sconce, but Colonial Group did not install it. Colonial Group did not offer any evidence on this point. Smith conclusively established that he is entitled to this $252 offset. 2. Installation of tin around foundation: Smith claims that he is entitled to a $655 offset ($585 plus 12% overhead and profit) because Colonial Group did not fully install new tin on the south side or replace the tin on the west side. Colonial Group refused to give an offset for this complaint, stating that it completed the south side, Smith would not allow completion of the west side, and it had a cost of $340 plus labor. This evidence is legally and factually sufficient to support the trial court’s refusal to award this offset. 3. 32-foot girder: Smith claims that he was entitled to a $580 offset ($518 plus 12% overhead and profit) because he was charged for the installation of two 32-foot girders, but he said one of them was not installed; it was left in the front yard. Colonial Group did not offer any evidence on this point. Smith conclusively established that he is entitled to this $580 offset. 4. Unapproved plumbing to the attic: Smith claims that he was entitled to a $560 offset ($500 plus 12% overhead and profit) because he was charged for running plumbing to the attic. Smith said he had asked for, but was never given, a quote for this work, yet Colonial Group did it without his approval. Colonial Group did not offer any evidence on this point. Smith conclusively established that he is entitled to this $560 offset. 5. Buckled flooring: Smith claims that he was entitled to a $750 credit (an offset) for correcting the buckled floors in three rooms. Smith and his expert testified that four rooms had buckled floors, which his expert attributed to the foundation-leveling work. Colonial Group had offered a $250 credit for buckling in only one room. Colonial Group did not offer any evidence on this point. Smith conclusively established that he is entitled to this $750 credit for the other three rooms. 6. Re-hanging three doors: Smith claims that he was entitled to a $560 total credit (an offset) for re-hanging four doors. Colonial Group, which had removed one door but had not re-hung it, had credited Smith $140 ($125 plus 12% overhead and profit) for one door that it had not re-hung. Smith claimed that three other doors had not been properly re-hung by Colonial Group and needed re-hanging. Colonial Group inspected the three doors and found them to be plumb. The evidence does not conclusively establish that they needed re-hanging, and the evidence supporting this implied finding is not against the great weight and preponderance of the evidence. 7. Improper glazing of windows: Smith claims that the trial court erred in awarding only $330 as an offset for damages caused by Colonial Group’s improper glazing of windows. Colonial Group admitted that it had not completed the glazing, yet it charged Smith for the entire job. Also, there was testimony that glazing was improperly performed by using caulk instead of putty. Colonial Group had given a $575 offset, but Smith said that twenty-two of the windows needed to be re-glazed at $30 per window, for a total of $660. Colonial Group does not contest Smith’s version of the evidence. The trial court awarded only half of that amount ($330). Because Smith conclusively established his entitlement to all of the $660, he is entitled to an additional $330 offset for glazing. 8. Unauthorized removal of siding: Smith claims that Colonial Group removed approximately 320 sq. ft. of siding from the back porch without authorization. Yates confirmed that this siding was removed to do the plumbing to the attic that is discussed in item 4 above. Smith presented evidence that the cost of this siding was $499. Having held that Smith conclusively established that he was entitled to an offset for the unauthorized plumbing to the attic, we likewise hold that Smith conclusively established that he is entitled to a $499 offset for the siding. 9. Failure to install drywall on back porch: Smith claims that he was entitled to a $372 offset (rather than Colonial Group’s offer of $150, which the trial court credited to Smith) because Colonial Group failed to install 210 sq. ft. of drywall on the back porch. Smith offered evidence that the reasonable estimate for the cost of this drywall was $372, and Colonial Group points to no controverting evidence. Because Smith conclusively established his entitlement to a $372 offset, he is entitled to an additional offset of $222. 10. Offset for failure to level the house: Smith asserts that, if he does not recover on his claim that the antique brick piers should have been used to level the foundation (which he does not), he should recover the cost to re-level the foundation (which he asserts is $4,250) to correct damage caused by Colonial Group’s leveling. Smith’s expert, Allen, testified without objection that Colonial Group’s foundation leveling had damaged the house in a few respects and that he had repaired that damage, but he did not say that the foundation needed to be re-leveled, which is Smith’s complaint on appeal. Smith points to no other evidence that the foundation needs to be re-leveled. Smith has thus not conclusively established that the foundation needs re-leveling and that he is entitled to an offset for the cost of re-leveling, and the evidence supporting the trial court’s implied finding that the foundation does not need re-leveling is not against the great weight and preponderance of the evidence. In summary, we hold that Smith is entitled to additional offsets totaling $3,193 from the balance sued for by Colonial Group. We will thus reduce the amount of Colonial Group’s actual damages of $10,269.77 as found by the trial court (after offsets awarded by the trial court) by $3,193 and hold that Colonial Group shall recover actual damages from Smith in the amount of $7,076.77.[4] Smith’s fourth issue is that the trial court’s award of attorney’s fees to Colonial Group should be proportionately reduced in light of any offsets awarded on appeal. We agree. The trial court awarded Colonial Group its attorney’s fees in proportion to its recovery at trial ($10,269.77) against the amount it had originally sued for ($18,876.60). We will use that method to recalculate Colonial Group’s attorney’s fees, and we find that it should recover 37.5% ($7,076.77 divided by $18,876.60) of its attorney’s fees. Colonial Group’s attorney’s fees in the trial court were $10,188. We therefore find that Colonial Group is entitled to 37.5% of that amount, which is $3,820.50. The trial court also awarded Colonial Group $2,500 in attorney’s fees in the event of an appeal, and we award Colonial Group that amount. In conclusion, we modify the trial court’s judgment to find that Colonial Group shall recover from Smith the sum of $7,076.77 in actual damages, prejudgment interest thereon in the amount of $1,927.41,[5] $3,820.50 for attorney’s fees in the trial court, and $2,500 for attorney’s fees on appeal. As modified, the judgment is affirmed. BILL VANCE Justice Before Justice Vance, Justice Reyna, and Judge Stephen Ellis[6] Affirmed as modified Opinion delivered and filed October 25, 2006 [CV06] [1] We agree with Smith that the trial court’s written “ruling” was its findings of fact and conclusions of law. The trial court and both parties treated the ruling as such in the trial court; we likewise will. [2] In reviewing the legal sufficiency of the evidence, we view the evidence in the light favorable to the trial court’s finding, crediting favorable evidence if a reasonable factfinder could, and disregarding contrary evidence unless a reasonable factfinder could not. City of Keller v. Wilson, 168 S.W.3d 802, 807, 822 (Tex. 2005). There is legally insufficient evidence or “no evidence” of a vital fact when (a) there is a complete absence of evidence of a vital fact; (b) the court is barred by rules of law or of evidence from giving weight to the only evidence offered to prove a vital fact; (c) the evidence offered to prove a vital fact is no more than a mere scintilla; or (d) the evidence conclusively establishes the opposite of the vital fact. Merrell Dow Pharms., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997). More than a scintilla of evidence exists when the evidence supporting the finding, as a whole, “rises to a level that would enable reasonable and fair-minded people to differ in their conclusions.” Id. (quoting Burroughs Wellcome Co. v. Crye, 907 S.W.2d 497, 499 (Tex. 1995)). When the party without the burden of proof at trial complains of the factual sufficiency of the evidence to support an adverse express or implied finding, we must consider and weigh all of the evidence, not just the evidence that supports the verdict. Maritime Overseas Corp. v. Ellis, 971 S.W.2d 402, 406-07 (Tex. 1998); Checker Bag Co. v. Washington, 27 S.W.3d 625, 633 (Tex. App.—Waco 2000, pet. denied). We will set aside the finding only if it is so contrary to the overwhelming weight of the evidence that the finding is clearly wrong and unjust. Ellis, 971 S.W.2d at 407. Reversal can occur because the finding was based on weak or insufficient evidence or because the proponent's proof, although adequate if taken alone, is overwhelmed by the opponent's contrary proof. Checker Bag, 27 S.W.3d at 633. [3] When the party that had the burden of proof at trial complains of legal insufficiency of an adverse finding, that party must demonstrate that the evidence establishes conclusively, i.e., as a matter of law, all vital facts in support of the finding sought. Dow Chem. Co. v. Francis, 46 S.W.3d 237, 241 (Tex. 2001). We first examine the record for evidence supporting the adverse finding, ignoring all evidence to the contrary. Id. If more than a scintilla of evidence supports the adverse finding, our inquiry ends. Id. “More than a scintilla of evidence exists where the evidence supporting the finding, as a whole, rises to a level that would enable reasonable and fair-minded people to differ in their conclusions.” Burroughs Wellcome Co. v. Crye, 907 S.W.2d 497, 499 (Tex. 1995) (citations omitted). When the party complaining of the factual sufficiency of the evidence had the burden of proof at trial, it must demonstrate that the adverse finding is contrary to the great weight and preponderance of the evidence. Francis, 46 S.W.3d at 242. We weigh all the evidence, and we can set aside the adverse finding only if it is so against the great weight and preponderance of the evidence that it is clearly wrong and unjust. Id. In doing so, we must detail the evidence and state in what regard the contrary evidence greatly outweighs the evidence in support of the adverse finding. Id. [4] Based on the total monetary amount that Smith seeks in the appeal and the additional offsets that we have found he is entitled to, we find that Colonial Group is the prevailing party in this appeal. [5] We calculate prejudgment interest under section 304.104 of the Texas Finance Code and award prejudgment interest from the date suit was filed (July 8, 2003) to the date of our judgment (October 25, 2006). See Tex. Fin. Code Ann. § 304.104 (Vernon 2006). The current judgment interest rate is 8.25%. (See http://www.occc.state.tx.us/pages/int_rates/Index.html) (last visited Oct. 17, 2006). Prejudgment interest is calculated by the formula P x R x T = I, where P is the amount of actual damages ($7,076.77), R is the interest rate (.0825), T is the time (1,205 days divided by 365 days = 3.3013 years), and I ($1,927.41) is the prejudgment interest award. See Texas Farmers Ins. Co. v. Cameron, 24 S.W.3d 386, 400 & n.5 (Tex. App.—Dallas 2000, pet. denied). [6] Judge of the 35th District Court of Brown and Mills Counties, sitting by assignment of the Chief Justice of the Texas Supreme Court pursuant to section 74.003(h) of the Government Code. See Tex. Gov't Code Ann. § 74.003(h) (Vernon 2005).