Ferguson v. Yorfino, 15950

• Decision Date: 12 July 1978
• Docket Number: No. 15950,15950
• Citation: 570 S.W.2d 422
• Parties: Donald O. FERGUSON, Appellant, v. Joseph R. YORFINO, Sr., Appellee.
• Court: Texas Court of Appeals

Page 422

570 S.W.2d 422

Donald O. FERGUSON, Appellant, v. Joseph R. YORFINO, Sr., Appellee.

No. 15950.

Court of Civil Appeals of Texas, San Antonio.

July 12, 1978.

Rehearing Denied Sept. 13, 1978.

W. Michael Murray, San Antonio, for appellant.

Jack M. McGinnis, San Antonio, for appellee.

KLINGEMAN, Justice.

This appeal involves a suit on a written contract to construct a residence. Under date of June 29, 1973, Appellant, Donald O. Ferguson, and Appellee, Joseph R. Yorfino, Sr., signed an AIA "Standard Form of Agreement Between Owner and Contractor" providing that Yorfino was to construct a house for Ferguson on a costs-plus basis, under which Yorfino was to receive the costs of all labor and material, plus a fee of 15 per cent of the costs of such labor and material. (PX-1). This instrument will sometimes be hereinafter referred to as the "AIA Contract." Such agreement contains a provision that the maximum cost was not to exceed $65,000. Thereafter, a second writing dated September 11, 1973, was entered into between Ferguson and Yorfino (PX-3), which provided that such agreement supersedes, negates and in all things voids any prior written or oral agreement or contract which may have existed between the parties, and further provides that Ferguson will pay Yorfino his costs plus 15 per cent for all work, material, or other costs; and that there is no agreement between the parties as to maximum cost for construction of the residence.

Disagreements arose between the parties and ultimately, Ferguson filed suit against Yorfino asserting that he had overpaid Yorfino. Yorfino filed a general denial and a counterclaim in which he contended that Ferguson had failed to pay him certain amounts owing him, consisting of some supervisory costs and underpayment of the 15 per cent fee. Ferguson filed a supplemental pleading alleging that the second contract was signed under duress.

Trial was to a jury which found: (1) Plaintiff's Exhibit No. 3 was not signed by Ferguson under duress; (2) Plaintiff's Exhibit No. 1 was a sham; (3) Supervision was a cost agreed to between Ferguson and Yorfino to be paid by Ferguson; (4) The reasonable value of the supervision performed by Yorfino on the house in question was $12,400. The trial court entered judgment that Ferguson take nothing from Yorfino and that Yorfino should take $9,910 from Ferguson, which amount is the difference between the costs of work, material, and other costs, including supervision costs, plus 15 per cent of such costs, and the amount paid by Ferguson; and that Yorfino is entitled to a lien to this extent.

Appellant by six points of error asserts: (1) the court erred in granting judgment for appellee on the basis of the writing of September 11, 1973, since appellee was under a pre-existing obligation under Plaintiff's Exhibit No. 1 to render the same services and there was no consideration for the second contract; (2) the jury's finding that Plaintiff's Exhibit No. 3 was not signed by Ferguson under duress is against the great weight and preponderance of the evidence; (3) the court erred in granting judgment for appellee based on the jury's finding that Plaintiff's Exhibit No. 1 was a sham, in that the defense of sham is an affirmative defense which was not pleaded by appellee; (4) there is no evidence that Plaintiff's Exhibit No. 1 was intended to be a sham in its entirety; (5) the court erred in granting judgment for Yorfino since there was no pleading or evidence that the AIA contract was entered into as a result of fraud, accident, or mistake, and therefore any evidence admitted to vary the terms of the AIA contract was in violation of the parol evidence rule and is of no legal effect; and (6) the court erred in overruling appellant's motion for summary judgment since appellant's original petition was filed pursuant to Rule 185 as a suit on a sworn account and Yorfino's answer and counterclaim failed to comply with the requirements of such rule as to denial of the claim.

Appellant is an attorney who desired to construct a residence and appellee is a general contractor. Appellee testified that he signed the AIA contract after appellant told him that he needed it in connection with a loan he was making on the residence; that the AIA contract was just for the purpose of getting a loan; that he told appellant that the residence could not be constructed for $65,000; that he told appellant that he wanted an open-end contract to which appellant agreed and thereafter appellant prepared the second agreement (PX-3); that appellee did not in any way dictate the terms; that after appellant typed the agreement he asked appellee if it was all right and appellant then signed it. He further testified that the second agreement voided the AIA contract, which contract was just for the purpose of getting a loan.

Appellant testified that he needed a contract to obtain a loan and that the bank required a signed contract in its file; that appellee desired a second agreement and told him that if he did not get it he would walk off the job; that although appellant prepared the second agreement, he was prepared to sign anything to get the job done; that a loan commitment letter was about to expire; that he owed several subcontractors; that he was over a barrel; that he signed the instrument under duress.

Appellee testified that he did not threaten to leave the job, but that he did tell appellant that the job could not be done for $65,000.

A number of appellant's points of error stand or fall on whether the AIA contract was a sham, and we will first discuss appellant's points of error in regard thereto. Point of Error No. 3 asserts that the defense of sham is an affirmative defense which was not pleaded by appellee and therefore was waived. Point of Error No. 4 asserts that there is no evidence to support the jury's finding that such contract was a sham. Point of Error No. 5 asserts that there is no pleading or evidence that the AIA contract was entered into as a result of fraud, accident, or mistake, and therefore any evidence varying the terms thereof was in violation of the parol evidence rule and of no probative force.

Appellant's point of error that the defense of sham was not properly pleaded and therefore was waived, is without merit. While the word "sham" is not specifically used in appellee's pleadings, it is clear from an examination of the entire pleadings that appellee asserted that the AIA contract was never intended to be the agreement between the parties. Said pleadings are sufficient to support the finding of sham. Moreover, there was no element of surprise to appellant as is evidenced by a motion in limine filed by appellant in which he in effect recognizes a plea of sham by appellee.

We have heretofore set forth in some detail the material testimony. In summary, the following evidence supports the jury's finding as to sham:

(a) Yorfino's testimony that the reason he signed the AIA contract was because Ferguson told him he needed it for a loan;

(b) Yorfino's testimony that the contract was only for the purpose of getting a loan;

(c) Testimony by Yorfino that he told Ferguson that the house could not be built for $65,000;

(d) Testimony by Yorfino that after Ferguson got the commitment from the bank he told Yorfino not to worry about the costs limitation provision;

(e) Testimony by Yorfino that he signed the AIA contract as a favor to Ferguson to help him get the interim financing;

(f) Plaintiff's Exhibit No. 3 prepared and signed by Ferguson dated September 11, 1973, which states that such agreement between Yorfino and Ferguson supersedes, negates, and in all things voids any prior writing or...