WALKER & ASSOCIATES SURVEYING v. Roberts

• Court: Texas Court of Appeals
• Writing for the Court: CARTER
• Citation: Walker & Assocs. Surveying, Inc. v. Roberts, 306 S.W.3d 839 (Tex. App. 2010)
• Decision Date: 26 February 2010
• Docket Number: No. 06-09-00009-CV.,06-09-00009-CV.
• Parties: WALKER & ASSOCIATES SURVEYING, INC., and Dennis Walker, d/b/a Walker and Associates Construction, Appellants, v. Royce ROBERTS, Appellee.

306 S.W.3d 839

WALKER & ASSOCIATES SURVEYING, INC., and Dennis Walker, d/b/a Walker and Associates Construction, Appellants, v. Royce ROBERTS, Appellee.

No. 06-09-00009-CV.

Court of Appeals of Texas, Texarkana.

Submitted: January 13, 2010.

Decided: February 26, 2010.

J. Bennett White, Christopher T. Massey, J. Bennett White, PC, Tyler, for Appellants.

M. Keith Dollahite, M. Keith Dollahite, PC, Tyler, for Appellee.

Before MORRISS, C.J., CARTER and MOSELEY, JJ.

OPINION

Opinion by Justice CARTER.

Royce Roberts hired Walker & Associates Surveying, Inc. (WAS) and Dennis Walker (Walker) d/b/a Walker and Associates Construction (WAC) (collectively the Walker Group) to extend a horse training racetrack on his property. A dispute arose as to how to build the racetrack, workers were instructed to leave the job, and WAS filed a mechanic's lien affidavit on Roberts' property. WAS filed suit on sworn account and later WAC joined the suit and sought quantum meruit for the value of services performed. Roberts counterclaimed and was awarded partial summary judgment in his favor against WAS for a fraudulent lien and usurious interest charged by WAS. The remaining claims by the Walker Group were tried to a jury who found that WAC breached the agreement and did not substantially perform under the contract, but found Roberts suffered no damage as a result of the breach. The jury assessed a monetary value for the services performed by WAC, and the trial court awarded a recovery based on quantum meruit grounds. While WAS actually did some survey work before the contract was entered with WAC, the bulk of the work to the track was by WAC. The fact that Walker did not initially accurately designate the entity making the claim has raised many of the legal issues.¹

All parties presented points of error to this Court. The Walker Group appeals the trial court's partial summary judgment. As to the portion of the judgment against WAS, it is alleged: Specifically, (1) the elements of usury were not proved as a matter of law; (2) the rate of interest charged was not illegal; (3) late fees were not "interest" under the usury statutes; (4) any usury violation was cured; (5) the trial court erred in awarding additional sums for the usury violation because more than twice the legal rate of interest was not received by WAS; and (6) Walker and WAS did not knowingly file a fraudulent lien. They also challenge the jury's findings for legal and factual sufficiency and claim the trial court erred when it admitted written statements made by WAC employees over hearsay objections, failed to include a requested instruction, and refused to award eighteen percent interest on the quantum meruit award. Roberts appeals the trial court award of quantum meruit to WAC, arguing that such an award should not be recoverable where the jury found WAC breached its contract and did not substantially perform.

We find that Roberts failed to prove as a matter of law that WAS intended to cause financial harm when it filed the fraudulent lien. Because WAS received no interest as required under Section 305.004 of the Texas Finance Code, we find the trial court erred in awarding summary judgment and additional sums for the usury violation based on that statute. Although we conclude the trial court properly determined the interest charged by WAS was usurious under Section 305.003 of the Texas Finance Code, we note that the amount of damage awarded presented an issue of fact. Thus, we affirm the summary judgment in part and reverse and remand in part for trial on the merits.

However, we affirm the trial court's remaining portions of the judgment because we find that legally and factually sufficient evidence supported the jury's findings, the Thacker statements were nonhearsay, the instruction the Walker Group sought to include was improper, quantum meruit was properly awarded, and the argument that eighteen percent interest should have been awarded on the quantum meruit recovery was not preserved.

I. Factual and Procedural History

A. The Three-Foot Clay Base Requirement

Roberts wanted to extend his half-mile horse training racetrack to seven-eighths of a mile. Roberts and farm manager/trainer Tony Richey met with Walker to discuss how the track was to be rotated and extended. Roberts wanted to expand a pond area and use the clay from the pond to build the track. According to Roberts, they discussed with Walker that it was important for the track to have three feet of clay in order to support the 44,000-pound water truck and other equipment used to maintain the track. Without a three-foot base, "the equipment wouldn't hold up. The horses would dig into it and it will be a catastrophe." Richey also stated "there was supposed to be a three-foot minimum. And that's base—that's what was discussed on the base" with Walker. Walker made sure Roberts "understood we were going to need ... several thousand yards of dirt." A field survey was conducted,² the property was staked, and a test dig determined there was clay on-site that was sufficient to use. A second meeting evaluating the track's positioning resulted in a contract providing that Roberts would pay the lump sum price of $57,250.00

to construct a 7/8 mile Horse Track ... as per Roberts' instructions along with Walker's site visit on Saturday August 28, 2004 and on Saturday October 2, 2004. Included in this cost will be all surveying for construction, rotovating, bladeing, excavating and compaction of material to be used from the pond area (around trees) in order to have the clay and sod to construct the race track.... Lake around trees will need to be a minimum of 140ft wide × 8ft deep with a 4 to 1 slope on the sides in order to have enough material to construct the track.

WAC's crews started working two weeks after the contract was signed on October 4, 2004. The crew first pulled off the sod, used a rotovator to till the clay, compacted it, and made a road base. WAC sent the first bill of $5,735.00, ten percent of the lump sum, on October 25, 2004, and was paid in full. However, because vegetation was tilled into the soil, preventing proper compaction, the soil had to be removed from the track. This caused the track to fall "below grade," meaning that the lower elevation of the track caused the south end of the track to retain water and it became dangerous for the horses to train on.

B. Walker Decides to Forego the Three-Foot Clay Base and Pulls the Crew from the Job

Walker, who never built a racetrack, and had never used a three-foot clay base, asked WAC's supervisor and foreman, David Thacker, to confirm the three-foot requirement with Richey. Thacker conveyed to Walker over the telephone that Richey said, "If you don't put three foot of clay, you're not going to get paid." Walker told Thacker to "load everything and get out. We're not—I'm not spending no more on something that somebody is making a decision like this." Walker justified his actions by telling the jury, "We don't put three foot of clay on anything," "that's just absurd to have three foot of clay on a project with a 1,200 pound horse," and "if you're going to put three foot of clay on this, it takes an area the width of a football field and three-and-a-half football fields and eight-foot deep." Walker also told the jury he was instructed by Roberts and Richey "to put some one foot of clay, max, because if you get it too hard—whatever it does."

Roberts testified WAC did not finish even forty percent of the work contracted for, and, because it had to be redone, WAC's work was of no use. To finish the job, Roberts had to purchase a scraper, rent a blade, compactor, and dozer, and had to hire another contractor.³

C. Walker's Employees Convey Their Understanding of the Three-Foot Requirement

Walker hung up the telephone with Thacker. Thacker, and his son Allen, who was the equipment operator, both immediately conveyed to Richey "we understood we were supposed to put three foot." Richey asked the Thackers to put their understanding in writing. They agreed, and each signed a document stating they were

told on different occasions to put three feet of clay base on the racetrack located at 12751 Highway 110 North, Tyler, Texas, by Dennis Walker. This is what was agreed to by Dennis Walker and Royce Roberts. On 11-4-04, was told to pick up equipment and leave by Dennis Walker, that he was not putting over one foot of clay on track.

D. Actions Taken After the Crew Abandons the Job

Because Walker believed fifty percent of the work was done in the nine and a half days after the first invoice was sent, WAC sent a November 4, 2004, invoice for $22,940.00. The same day, WAS filed a mechanic's lien in volume 7650, page 474 of the county clerk's official public records. The affidavit for mechanic's lien, which Walker signed under penalty of perjury, stated WAS "performed labor and furnished material to improve Roberts' real property" and that "the amount of $29,133.10 ... remained unpaid and was due and owing to claimant, Walker & Associates Surveying, Inc." Walker admitted his affidavit was incorrect because WAC, not WAS, was the correct claimant.⁴

After nonpayment by Roberts, WAS filed a suit on sworn account stating it sold Roberts a service and that he "accepted each item and became bound to pay Plaintiff its designated price." The affidavit in support of the suit on sworn account, signed by Walker, listed the principal balance on the account as $25,148.73, contrary to both the final invoice and affidavit in support of the mechanic's lien. Although the contract between Roberts and WAC was not signed until October 4, 2004, and work by WAC on the project did not begin until two weeks after, the affidavit stated the date the debt became payable was May 3, 2004.⁵ Produced records show that WAS was charging Roberts $35.00 per month as a late fee, and Walker stated in his deposition that 1.5 percent interest per month (eighteen percent interest per...