All Seasons Window and Door v. Red Dot

• Decision Date: 29 November 2005
• Docket Number: No. 06-04-00084-CV.,06-04-00084-CV.
• Citation: 181 S.W.3d 490
• Parties: ALL SEASONS WINDOW AND DOOR MANUFACTURING, INC., and William Kent Akins, Appellants, v. RED DOT CORPORATION, Appellee.
• Court: Texas Supreme Court

181 S.W.3d 490

ALL SEASONS WINDOW AND DOOR MANUFACTURING, INC., and William Kent Akins, Appellants, v. RED DOT CORPORATION, Appellee.

No. 06-04-00084-CV.

Court of Appeals of Texas, Texarkana.

Submitted October 5, 2005.

Decided November 29, 2005.

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John R. Mercy, Mercy & Carter & Tidwell, LLP, Texarkana, Frank M. Mason, Frank Mason, PC, Longview, for appellants.

D. Todd Smith, Fulbright & Jaworski LLP, Austin, Jeffrey W. Kemp, Fulbright & Jaworski LLP, Dallas, for appellee.

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

OPINION

Opinion by Justice CARTER.

All Seasons Window and Door Manufacturing, Inc., and William Kent Akins appeal the final judgment of the trial court following a bench trial. Akins, the president of All Seasons, hired Red Dot Corporation to construct a metal building so All Seasons could expand its operations. A dispute arose due to Akins' belief that the construction was unnecessarily delayed and was slipshod. While the dispute only concerned approximately $5,000.00, Akins withheld the entire final payment. Following a bench trial, the trial court found that Akins breached the contract and that he owed Red Dot $143,800.44, plus interest for approximately three years, and $105,369.95 in attorney's fees. All Seasons and Akins appeal the judgment of the trial court, and Red Dot has filed a cross-appeal. We affirm in part, reverse in part, and modify in part.

All Seasons and Akins raise fifteen points of error on appeal. Red Dot responded with six reply points and raises two cross-points of error. We have consolidated the issues as follows: (1) Does All Seasons have standing to bring this appeal? (2) Did the trial court err in finding the contract interest rate was ten percent rather than eighteen percent? (3) Did the trial court err in concluding that interest should begin to accrue December 11, 2001? (4) Did the trial court err in refusing to find the contract usurious? (5) Did the trial court err in offsetting the judgment against Akins with All Seasons' $38.56 counterclaim? (6) Is the evidence sufficient to support the amount of the attorney's fees awarded?

While All Seasons lacks standing to bring a claim for usury, it does have standing to pursue its counterclaim for $38.56. The trial court erred in finding the contractual interest rate was ten percent. The contract authorized interest at the maximum rate allowed by law, and the law allows interest up to eighteen percent. Therefore, the contractual interest rate should have been eighteen percent. Although legally and factually sufficient evidence supports the trial court's finding that construction was completed October 24, 2001, the trial court erred in holding that interest should accrue from December 11, 2004. Interest should accrue from October 24, 2001, because the final payment was due on completion of erection. Red Dot did not commit usury. Last, there is sufficient evidence to support the attorney's fees award except for the award of paralegal fees and expenses.

I. Facts

This case concerns a dispute over the construction of an industrial metal building. Akins, the president of All Seasons, owned the property on which the building was constructed. All Seasons, which was in the window manufacturing business, leased the property from Akins. Due to an increase in business, All Seasons needed additional room for its manufacturing facility. Akins contracted with Red Dot to erect a metal building in order to expand the space being used by All Seasons. Red Dot was responsible for the construction of the metal building, while Akins retained responsibility for the remainder of the project, including concrete, electrical, plumbing, and finishing out the interior.

On March 5, 2001, Akins signed a contract with Red Dot. With the "change orders," the contract price totaled $400,771.00. The contract included provisions detailing each party's duties, a payment schedule, and provided for payment of reasonable attorney's fees in the event of a dispute. Construction was to begin August 14, 2001. Due to rain delays, construction actually began one week later. Red Dot failed to deliver sufficient anchor bolts to be incorporated into the concrete. All Seasons had to purchase the additional bolts, which forms the basis of the $38.56 counterclaim by All Seasons. During the construction, there were various problems, including column placement, loose bolts, delays in delivery of materials, understaffing by the erection subcontractor, and defects in the insulation.

Akins alleges the building should have been completed in August. Red Dot completed the erection of the building October 24, 2001. However, Red Dot returned to tighten bolts, fix insulation, incorporate an additional beam, and address other issues at the request of Akins and/or All Seasons. On December 11, 2001, the final walk-through with a punch list was conducted and Akins agreed to accept the project, with the understanding that additional repairs were to be made. Some repairs were completed December 11. Red Dot agreed to make the additional repairs, but never has.

Pursuant to the contract, Akins paid ten percent of the contract price on signing the contract. Akins paid $218,300.00 on September 14, 2001, for the delivery of materials. On October 24, 2001, Red Dot sent Akins an invoice for final payment in the amount of $143,839.00. On December 12, 2001, Akins tendered a check for $138,873.49 marked "payment in full." In a letter accompanying the check, Akins informed Red Dot that the deductions were due to increased security costs caused by delays in construction, the cost of pouring new footers for twelve columns, and the cost of the anchor bolts. Red Dot refused to accept the check when Akins refused to remove the "payment in full" language. When the parties could not reach an agreement concerning the final invoice, Red Dot filed a mechanic's lien on the building and sought eighteen percent interest on the invoice.

Eventually, Akins sued Red Dot for usury, to quiet title, for breach of contract, and harassment. Following a bench trial,¹ the trial court found that Akins signed the contract in his individual capacity and had breached the contract. The trial court entered several detailed findings of fact. The trial court found Red Dot was justified in refusing to accept the check marked "payment in full" and that Red Dot had only received $256,932.00 of the $400,771.00 due under the contract. The trial court also found that the contract was ambiguous concerning whether Akins signed in his individual or personal capacity and determined that Akins signed in his personal capacity. The trial court held that the contract, which stated interest would be charged at the maximum rate allowed by law, authorized interest at the rate of ten percent. Although Red Dot had sought to collect eighteen percent interest, the trial court found that Red Dot had not committed usury. The trial court concluded that the transaction was not a loan or forbearance of money. The trial court rendered judgment that Red Dot recover from Akins $143,800.44 in actual damages, $33,921.14 in contract interest, attorney's fees, postjudgment interest, and costs. Akins appealed to this Court, and Red Dot has filed a cross-appeal.

II. All Seasons has Standing

As a preliminary matter, Red Dot argues All Seasons lacks standing. Since the trial court found All Seasons was not a party to the contract, Red Dot contends All Seasons does not have a cognizable interest in this appeal. Although All Seasons lacks standing to pursue its usury claims on appeal, All Seasons has standing to be a party to the appeal due to its claim for the cost of the anchor bolts.

Standing is a constitutional prerequisite to maintaining a suit under Texas law. Tex. Ass'n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 444 (Tex.1993). Standing, as a necessary component of a court's subject-matter jurisdiction, cannot be waived and can be raised for the first time on appeal. Id. Standing requires the claimant to demonstrate a particularized injury distinct from that suffered by the general public. Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 555-56 (Tex. 2000); see Rodgers v. RAB Inv., Ltd., 816 S.W.2d 543, 546 (Tex.App.-Dallas 1991, no writ). The claimant must have an actual grievance, not one that is merely hypothetical or generalized. Brown v. Todd, 53 S.W.3d 297, 302 (Tex.2001). We review de novo the issue of standing. Tex. Dep't of Transp. v. City of Sunset Valley, 146 S.W.3d 637, 646 (Tex.2004).

Red Dot argues All Seasons lacks standing to pursue its usury claim because All Seasons was not a party to the contract. All Seasons and Akins have consistently claimed All Seasons was not a party to the contract. Because All Seasons successfully persuaded the trial court it was not a party to the contract, Red Dot argues it lacks standing to appeal based on usury. Usury remedies are personal to the debtor and restricted to the parties to the transaction. See Houston Sash & Door Co. v. Heaner, 577 S.W.2d 217, 222 (Tex.1979); W. Bank-Downtown v. Carline, 757 S.W.2d 111, 115 (Tex.App.-Houston [1st Dist.] 1988, writ denied); see also TEX. FIN.CODE ANN. § 305.001 (Vernon Supp.2005). Only the obligor has standing to assert a usury claim. Weisfeld v. Tex. Land Fin. Co., 162 S.W.3d 379, 381 (Tex.App.-Dallas 2005, no pet.). Since the trial court found that All Seasons was not a party to the contract and that finding has not been challenged on appeal, All Seasons lacks standing to pursue usury claims against Red Dot.

However, All Seasons does have standing to pursue its counterclaim for $38.56. Red Dot argues All Seasons failed to plead any theory to justify recovery of the $38.56, which All Seasons paid for the missing anchor bolts. Although All Seasons pled breach of contract, the $38.56 cannot be recovered through breach of contract because the trial court found that All...