Calvin V. Koltermann, Inc. v. Underream Piling Co., s. 15889 and 15920

• Decision Date: 01 March 1977
• Docket Number: Nos. 15889 and 15920,s. 15889 and 15920
• Parties: CALVIN V. KOLTERMANN, INC., et al., Appellants, v. UNDERREAM PILING CO. and D. E. W., Inc., Appellees. D. E. W., INC., Appellant, v. CALVIN V. KOLTERMANN, INC., et al., Appellees.
• Court: Texas Court of Appeals

Page 950

563 S.W.2d 950

CALVIN V. KOLTERMANN, INC., et al., Appellants, v. UNDERREAM PILING CO. and D. E. W., Inc., Appellees.

D. E. W., INC., Appellant, v. CALVIN V. KOLTERMANN, INC., et al., Appellees.

Nos. 15889 and 15920.

Court of Civil Appeals of Texas, San Antonio.

March 1, 1977.

Rehearing Denied April 12, 1978.

Peter Torres, Jr., James F. Gardner, Wolff & Wolff, Phillip Yeager, San Antonio, for appellants.

Wolff & Wolff, Phillip Yeager, Peter Torres, Jr., James F. Gardner, San Antonio, for appellees.

KLINGEMAN, Justice.

This is a consolidated cause of three suits arising out of a contract between Calvin V. Koltermann, Inc. as general contractor, and San Antonio Independent School District, to construct an administrative center. Koltermann subcontracted with Underream Piling Co. for excavation and foundation work, with Redondo Manufacturing Co., Inc. for pre-cast concrete, and with D. E. W., Inc. for plumbing and heating work. After the election of new members of the School Board, the Board of trustees of San Antonio Independent School District voted to cancel the Koltermann contract.

On June 17, 1976, Redondo Manufacturing Co., Inc. (herein called "Redondo"), not a party to this appeal, filed a suit against Calvin V. Koltermann, Inc. (herein called "Koltermann"), alleging that the San Antonio Independent School District (herein called "SAISD") had entered into a contract with Koltermann on March 29, 1976 in which Koltermann agreed to construct the administration building involved. Redondo asserted that its bid for pre-cast concrete was accepted by Koltermann and that Redondo was authorized to proceed pursuant to the agreement. Similarly, D. E. W., Inc. (herein called "D. E. W.") and Underream Piling Co. (herein called "Underream") filed suits against Koltermann on their subcontracts. All the causes were consolidated and trial was before a jury.

The jury, in answer to special issues submitted, found: (1) that the School Board of Trustees authorized Grace Durr, President, to sign the contract of March 29, 1976 between SAISD and Koltermann; (2) that on such date, SAISD had sufficient unencumbered funds to pay the obligation of the contract of March 29, 1976 between Koltermann and SAISD; (3) that Redondo, Underream, and D. E. W., as subcontractors, and Koltermann, on or about March 30, 1976, agreed upon all of the essential and important terms of their respective agreements with Koltermann; (4) that the actions of SAISD, causing Koltermann to breach his contract with Redondo, Underream, and D. E. W., were with justifiable cause and were done to serve some legitimate interest of SAISD; (5) that Redondo, Underream, and D. E. W., subcontractors, and Koltermann, general contractor, did not understand and agree that each would be relieved of its respective obligations to the other if SAISD cancelled or terminated its contract with Koltermann; (6) that the reasonable and necessary costs incurred by Underream for remaining ready and able to perform its subcontract with Koltermann between the time Underream received notice to stop work and the time it received notice that the contract had been terminated, is $16,048.00; (7) that the reasonable and necessary costs which would have been incurred in such contracts for completion of the respective agreements with Koltermann are as follows: Redondo $160,000.00; Underream $16,828.00; D. E. W. $285,451.00.

Koltermann and SAISD moved for judgment n.o.v.; SAISD moved for a take nothing judgment; and D. E. W. and Underream moved for judgment under the verdict. Judgment was entered by the trial court as follows: (1) Koltermann's and SAISD's motions for judgment n.o.v. are overruled; (2) Redondo take nothing from Koltermann and SAISD; (3) Underream receive $16,048.00 against Kolterman; (4) Koltermann receive as an indemnity from SAISD, $16,048.00; (5) D. E. W. receive $4,970.00 from Koltermann, but takes nothing from SAISD; (6) Koltermann receive an indemnity from SAISD of $4,970.00.

SAISD does not here complain of the indemnity awards to Koltermann.

KOLTERMANN'S AND SAISD'S APPEAL

All of Koltermann's and SAISD's points of error are no evidence or legal insufficiency points of error. Koltermann's and SAISD's first point of error complains that the trial court erred in overruling their motion for judgment n.o.v. because Underream and D. E. W. failed to exhaust their administrative remedies as required by § 11.13 of the Tex.Education Code (1972).

§ 11.13 provides in part as follows: (1) Persons having any matter of dispute among them arising under the school laws of Texas or any persons aggrieved by the school laws of Texas or decisions of any board of trustees or board of education may appeal in writing to the Commissioner of Education, who, after due notice to the parties interested, shall hold a hearing and make and render a decision without cost to the parties involved, but nothing contained in this section shall deprive any party of any legal remedy.

Appellees, Underream and D. E. W., assert that appellants' first point of error should be overruled because (1) the failure of appellants to file a motion for new trial precludes their raising on appeal the purported failure of appellees to exhaust their administrative remedies; (2) the matter of failure to exhaust administrative remedies is moot because appellees were not awarded a judgment against SAISD; (3) appellees did not fail to exhaust the administrative remedies because there were no administrative remedies to exhaust in such a case.

We have concluded that appellants' point of error No. 1 is without merit and should be overruled. Appellees are subcontractors whose contract was with the general contractor and not with SAISD. Their obligations, rights, and duties arose out of their subcontracts. Appellees here were not aggrieved by the school laws of Texas or by any actions or decisions of any board of trustees, and the administrative remedies of the Texas Education Code are inapplicable. Appellees here contracted only with Koltermann and not SAISD, and the validity of these contracts was an issue, making the central question legal and not factual.

It is a well established rule that, in all matters pertaining to the administration of school law, involving questions of fact as distinguishable from pure questions of law, resort must be first had to school authorities and the method of appeal there provided for exhausted before the courts will entertain jurisdiction of a complaint with regard to such matters. State ex rel. Nevills v. Sanderson, 88 S.W.2d 1069 (Tex.Civ.App. Waco 1935, no writ).

However, we do not have such a situation here. The subcontractors here involved contracted with Koltermann alone and not SAISD, ¹ and we have here involved the validity of the contracts between the general contractor and the subcontractors. The central question is a legal one, not factual.

See Board of Trustees of Crystal City Ind. School Dist. v. Briggs, 486 S.W.2d 829 (Tex.Civ.App. Beaumont 1972), where the court said:

Whether or not District was entitled to reassign Briggs under the terms of the contract was one of law urged by District in defense of Briggs' claim for money. The Commissioner of Education does not exercise judicial power to determine the legality of contracts or the legal rights of parties thereto. Such are matters for the courts to determine under our system of a division of powers of government. Texas Constitution, Art. 2, § 1, Vernon's Ann.St.; Davis v. City of Lubbock, 160 Tex. 38, 326 S.W.2d 699, 711 (1959); Scott v. Texas State Board of Medical Examiners, 384 S.W.2d 686, 691 (Tex.1964).

Koltermann's and SAISD's second point of error is that the trial court erred in overruling their motion for judgment n.o.v. because there was no evidence to support the jury's answer to Special Issue No. 1; ² that the undisputed evidence shows that the School Board did not authorize Grace Durr, as President, to sign the contract of March 29, 1976; and that such contract is void. We disagree. Under the record, the jury could properly conclude there was such authorization from a number of things in the record, including (a) the minutes of the meeting of the Board of Trustees accepting the low bid of Koltermann on the construction of the administration building; (b) the signature of the president on the contract, with attestation by secretary; (c) testimony that Koltermann performed no work on such building until he had received approval of the architect for the SAISD; (d) an exhibit which is a written authorization from SAISD to Koltermann to proceed; (e) testimony by some of the trustees evidencing recognition of the contract but asserting that Koltermann breached the contract; (f) testimony by some of the trustees, who voted to give notice to cease work, that they ran for School Board on a platform to repeal the action of the School Board pertaining to the construction of the administration building; (g) testimony by the architect for the School Board that he was authorized by the Board to draw the working drawings for the administration building, which he did, and that after the acceptance of the low bid he told Koltermann to proceed; (h) testimony that, thereafter, Koltermann performed work under such contract and certain payments were made under the contract.

Appellees further contend that any irregularities in the execution of the SAISD contract are immaterial to this appeal since the appellees are subcontractors who are suing on their contract with Koltermann and not on Koltermann's contract with the School Board. Such contention is well taken.

By their third point of error, Koltermann and SAISD assert that the trial court erred in overruling their motion for judgment n.o.v., in that the evidence shows that appellees and Koltermann did not agree upon all of the essential and important terms of their respective agreements and, therefore, there was no evidence to support the jury's answer to ...