Opinion issued March = 29,=20 2007
In=20 The
For=20 The
GCC =
CONSTRUCTORS,=20
INC., AND MANUEL A. GARCIA, Appellants AMERICAN =
HORIZON=20
CONCRETE, INC., Appellee
On =
Appeal from the=20
County Civil Court at Law No. 2 Harris =
County,=20
Texas Trial =
Court Cause=20
No. 785443
MEMORANDUM=20
OPINION This case involves competing claims for breach of =
a=20
construction subcontract. The subcontractor appellee, American =
Horizon=20
Concrete, Inc. (American Horizon), sued appellant, GCC =
Construction, Inc.=20
(GCC), claiming breach of the contract for insufficient payment =
and fraud,=20
whereupon GCC asserted a counterclaim for damages arising out of =
American=20
Horizon's having abandoned the project. The case was tried to the =
court,=20
which entered a judgment awarding damages and attorney's fees to =
American=20
Horizon and ordered that GCC take nothing on its counterclaim, but =
did not=20
file and was not asked to file findings of fact and conclusions of =
law.=20
GCC brings three issues that present legal and factual challenges =
to the=20
sufficiency of the evidence to support the judgment.
The general contractor for a =
construction=20
project at the Clear Creek Community Church in League City entered =
into a=20
subcontract with GCC for the project. On April 2, 2001, GCC =
entered into a=20
$175,000 subcontract (the agreement) with American Horizon for =
"concrete=20
work" that included both materials and manpower. Principals of =
American=20
Horizon and GCC signed the agreement and each of its three =
exhibits, which=20
detailed specifications for the project. Under the payment system =
between the=20
parties, GCC received American Horizon's monthly invoices, which =
indicated=20
work done, with degree of completion indicated by percentages. GCC =
would=20
then submit its own invoices, which also indicated work done and=20
percentage of completion, to the general contractor. The agreement =
specified that payment to American Horizon was "due within ten =
(10)=20
working days following receipt of payment" from the general =
contractor to=20
GCC. The agreement provided that time was of the essence for the =
project,=20
but the same provision envisioned that GCC could "reasonably" =
amend the=20
work schedule from time to time. The agreement did not specify a=20
completion date or impose a work schedule. It is undisputed that =
American=20
Horizon abandoned the project on November 5, 2001, and that rain =
impeded=20
progress on the concrete work. American Horizon's verified =
pleadings=20
against GCC and its president, Manuel A. Garcia, GCC filed a verified denial of =
the=20
account, a general denial, and a counterclaim asserting that =
American=20
Horizon had breached the agreement by performing only partially =
and had=20
provided defective performance by not providing adequate manpower, =
not=20
performing the work properly and timely, and by voluntarily =
abandoning the=20
project. GCC claimed that it had to hire others to complete =
American=20
Horizon's work and incurred additional overhead, which warranted =
damages=20
of $93,539.21. GCC also sought $5,000 in attorney's fees. =
At midpoint during the trial, =
the trial=20
court ruled that GCC had breached the agreement with American =
Horizon and=20
that American Horizon had not incurred any liability for damages =
to GCC=20
for breach of the agreement when it abandoned the project. But, =
the trial=20
court also ruled that GCC was entitled to more offsets and credits =
than=20
American Horizon had acknowledged in its pleadings. The remainder =
of the=20
trial concerned calculation of the offsets, based on testimony by =
both=20
parties' principals and argument by counsel. The record confirms =
that=20
determination of the offsets and credits was complicated by =
American=20
Horizon's and GCC's accounting measures, which differed widely.=20
In rendering judgment in favor =
of=20
American Horizon, the trial court awarded $40,000 as damages, =
which=20
accounts for approximately $30,000 in offsets and credits due to =
GCC,=20
$10,000 for trial-court attorney's fees, and contingent attorney's =
fees=20
for appeal.
The record=20
on appeal contains the reporter's record of the bench trial, but =
no party=20
requested or proposed postjudgment findings under rule 296, =
despite the=20
trial court's offer to comply with any request. A request for =
findings of=20
fact and conclusions of law is not required to question the =
sufficiency of=20
the evidence. Pruet v. Coastal States Trading, Inc., 715 =
S.W.2d=20
702, 704 (Tex. App.--Houston [1st Dist.] 1986, no writ). When =
there are no=20
findings of fact and conclusions of law, however, we may infer =
that the=20
trial court made all the findings necessary to support its =
judgment.=20
BMC Software Belg., N.V. v. Marchand, 83 S.W.3d 789, 795 =
(Tex.=20
2002); Worford v. Stamper, 801 S.W.2d 108, 109 (Tex. =
1990). We=20
presume, therefore, that the trial court found all questions of =
fact in=20
support of the judgment, and we must affirm the judgment if it can =
be=20
upheld on any legal basis supported by the pleadings and the =
evidence.=20
See Point Lookout W., Inc. v. Whorton, 742 S.W.2d 277, =
278 (Tex.=20
1987); Worford, 801 S.W.2d at 109; Fair Deal Auto =
Sales v.=20
Brantley, 24 S.W.3d 543, 546 (Tex. App.--Houston [1st Dist.] =
2000, no=20
pet.). Because the record includes the reporter's record, the =
trial=20
court's implied findings of fact may be challenged in this Court =
for legal=20
and factual sufficiency, BMC Software Belgium, 83 S.W.3d =
at 795,=20
under the same standards that govern challenges to a jury's =
findings, but=20
must show that the judgment of the court below cannot be sustained =
by any=20
theory raised by the evidence. See Under the legal-sufficiency =
standard, we=20
must credit evidence that supports the judgment if reasonable =
jurors could=20
and disregard contrary evidence unless reasonable jurors could =
not.=20
See City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex. =
2005). If=20
the evidence falls within the zone of reasonable disagreement, we =
may not=20
invade the fact-finding role of the trial court, who alone =
determines the=20
credibility of the witnesses, the weight to give their testimony, =
and=20
whether to accept or reject all or any part of that testimony. =
See=20
id. at 822. Unless "there is no favorable evidence . . . or =
if=20
contrary evidence renders supporting evidence incompetent . . . or =
conclusively establishes the opposite," we must affirm. See =
id.=20
810-11.
By rejecting GCC's counterclaim =
and=20
awarding damages of $40,000 and attorney's fees to American =
Horizon, the=20
trial court concluded, as a matter of law, that GCC breached the =
agreement=20
with American Horizon and found, as a matter of fact, that $40,000 =
in=20
damages was due to American Horizon for concrete and labor =
provided on the=20
project until American Horizon stopped performance in November =
2002. By=20
awarding only $40,000, however, as apposed to the $70,051.49 that =
American=20
Horizon requested as damages, the trial court made the factual =
calculation=20
that GCC was entitled to $30,051.49 as credits or offsets to =
American=20
Horizon's damages. In its first two issues, GCC =
contends=20
that the evidence "overwhelmingly establishes" that (1) GCC paid =
American=20
Horizon in accordance with the agreement and that (2) American =
Horizon=20
abandoned the construction project and failed to complete =
performance.=20
These issues present challenges to the trial court's failure to =
rule in=20
GCC's favor on its counterclaim that American Horizon, and not =
GCC,=20
breached the agreement. In a third issue, GCC contends that it =
established=20
its right to recover on the counterclaim as a matter of law. GCC =
thus=20
contends that it did not breach the agreement, but that American =
Horizon=20
did. Whether a party to a contract =
has=20
breached the contract is a question of law for the court, which =
determines=20
as a matter of law what the contract requires of the parties. =
See Meek=20
v. Bishop Peterson & Sharp, P.C., 919 S.W.2d 805, 808 =
(Tex.=20
App.--Houston [14th Dist.] 1996, writ denied). When the terms of a =
contract are clear and unambiguous, and the =
facts=20
concerning breach or performance are undisputed or conclusively=20
established, the trial court decides, as a matter of law, whether =
the=20
facts show performance or breach. Id. Resolution by the=20
fact-finder is appropriate only to resolve underlying factual =
disputes=20
that pertain to the alleged breach, but not the breach itself. =
See=20
id. Material breach by one party to a contract can excuse the =
other=20
party from any obligation to perform and is generally a question =
of fact.=20
See Mustang Pipeline Co. v. Driver Pipeline Co., 134 =
S.W.3d 195,=20
196 (Tex. 2004) (adopting factors of Restatement (Second) of =
Contracts =A7=20
241(a) (1981), relating to materiality of breach); see =
also 2=20
Comm. on Pattern Jury Charges, State Bar of Tex., Tex. Pattern =
Jury=20
Charges PJC 101.2 (2005-2006 ed.) (tracking Restatement factors =
adopted by=20
supreme court in Mustang Pipeline to guide fact finder in =
determining materiality of breach). In its=20
second issue, GCC contends that the evidence overwhelmingly =
establishes=20
that American Horizon abandoned the work project without =
completing=20
performance. In its third issue, GCC contends that the supreme =
court's=20
interpretation of the construction contract in Mustang =
Pipeline=20
compels the conclusion that American Horizon (1) breached the =
agreement in=20
this case, which (2) excused GCC from any financial obligation to =
American=20
Horizon. We address these issues together. In=20
Mustang Pipeline, a pipeline owner, Mustang, had =
contracted with=20
Driver to construct 100 miles of a 200-mile pipeline. As with the=20
agreement at issue in this case, Driver and Mustang contemplated =
that time=20
was of the essence. In contrast to this case, however, timely =
completion=20
of the pipeline by a certain date was crucial in Mustang=20
Pipeline. See id., 134 S.W.3d at 196. Though Driver claimed that =
extensive=20
rains caused delay and attempted to renegotiate the contract to =
obtain=20
additional time, the specifics of the contract addressed means of=20
protecting not only crews working in the rain, but also the =
pipeline=20
welds, and thus contemplated that at least some work be done in =
inclement,=20
rainy weather. Id. at 197. When Driver stopped work after =
fifty-eight days and later indicated that it was not ready to =
resume work,=20
Mustang declared Driver in default. Id. at 196. Because =
Driver's=20
timely performance was "essential," and Driver undisputedly did =
not=20
perform timely, the supreme court ruled that the materiality of =
Driver's=20
breach was a question of law that did not require resolution by =
the trier=20
of fact. See id., 134 S.W.3d at 196, 199. The circumstances of this case=20
demonstrate that American Horizon's timeliness was but one of =
several=20
factors that the parties disputed. Despite the stated requirement =
in=20
Article 8 of the agreement that time was "of the essence," the =
same=20
provision envisioned that GCC would set and, if need be, revise =
the work=20
schedule. The agreement neither stated a completion date, nor =
imposed a=20
work schedule. At trial, American Horizon's principal acknowledged =
GCC's=20
complaints about slow progress in August, but explained that GCC =
wanted=20
American Horizon to continue on the project. On that basis, he =
agreed to=20
hire and did hire more workers, but noted that this increased his=20
expenses. Of the many problems associated =
with=20
project, GCC attributed only 30 percent to American Horizon, =
faulted the=20
general contractor for the remainder, agreed that rain shut down =
work on=20
31 days between June and October, and stipulated that the general=20
contractor--not GCC or American Horizon--made the decision to =
close the=20
worksite. Though American Horizon's principal conceded that his =
company=20
left the job on November 6, 2001, his reason given was that he was =
either=20
not being paid or was underpaid. And though he provided the =
additional=20
manpower that GCC requested, the principal stated that GCC still =
wanted=20
expedited work, despite not paying American Horizon for "two =
draws," that=20
he had to pay his workers, and that he did not want to "throw good =
money=20
after bad." In contrast to the undisputed =
factors=20
that warranted determination of materiality of breach as a matter =
of law=20
in Mustang Pipeline, the contentions of the parties in =
this case=20
and the evidence they submitted to the trial court required that =
the court=20
resolve their factually disputed allegations concerning the degree =
to=20
which GCC actually required timely completion of the project, in =
addition=20
to the degree to which delay could be attributed to American =
Horizon.=20
See id., 134 S.W.3d at 196-97; Herndandez, 875 =
S.W.2d at=20
693 & n.2. Having reviewed the record of this case and =
contrasted it=20
with the circumstances that warranted the supreme court's ruling =
in=20
Mustang Pipeline, we hold that the record did not permit =
the=20
trial court to determine, as a matter of law, the materiality of =
American=20
Horizon's failure to complete the work on a timely basis as a =
matter of=20
law. We overrule GCC's third issue.=20
After inferring all facts =
needed to=20
support the trial court's judgment in favor of American Horizon, =
in=20
accordance with BMC Software Belgium, 83 S.W.3d at 795 =
and=20
City of Keller, 168 S.W.3d at 810-11, 822, 827, we =
conclude that=20
the evidence falls within the zone of reasonable disagreement and =
supports=20
the trial court's resolution of the conflicting evidence by =
impliedly=20
finding that GCC, and not American Horizon, materially breached =
the=20
parties' agreement. We further conclude, after reviewing all the =
evidence,=20
that the great weight of the evidence is not so contrary to the =
trial=20
court's implied findings favoring American Horizon Accordingly, we reject GCC's =
contention,=20
in its second issue, that the evidence "overwhelming establishes" =
that=20
American Horizon materially breached the agreement with GCC, such =
that GCC=20
would be excused from the performance required by the judgment =
granting=20
$40,000 in damages to American Horizon. We overrule GCC's second issue. =
The same reasoning applies to =
defeat=20
GCC's first issue, in which it contends that the evidence =
overwhelming=20
establishes that GCC paid American Horizon in accordance with the=20
agreement. Viewed in accordance with BMC Software =
Belgium, 83=20
S.W.3d at 795 and City of Keller, 168 S.W.3d at 810-11, =
822, 827,=20
the record shows that, at GCC's request, American Horizon added =
personnel,=20
which increased its expenses while GCC was either not paying or =
was=20
underpaying American Horizon, and that American Horizon abandoned =
the=20
construction project for that reason. We defer to the trial =
court's=20
decision to credit this version of the disputed facts of this case =
as=20
presented by American Horizon. Because this evidence supports the =
judgment=20
and falls within the zone of reasonable disagreement, we cannot =
say that=20
the evidence overwhelming establishes the contrary proposition =
presented=20
by GCC's issue. We further hold, after reviewing all the evidence, =
that=20
the great weight of the evidence is not so contrary to the trial =
court's=20
implied findings favoring American Horizon We overrule GCC's first issue.=20
We affirm the judgment of the =
trial=20
court. Chief Justice Panel consists of Chief Justice =
Radack=20
and Justices Jennings and Bland. 1. American Horizon has not filed an =
appellee's brief.=20
2. On June 23, 2005, this Court granted the =
voluntary=20
motion to dismiss filed by appellant, Manuel A Garcia, who is =
president of=20
GCC.=20
3. In addition, the trial court ordered that =
American=20
Horizon take nothing by its counterclaim against GCC's president, =
Manuel=20
Garcia, and that GCC take nothing by its counterclaim against =
American=20
Horizon.