McAllen State Bank v. Linbeck Const. Corp.

• Decision Date: 28 March 1985
• Docket Number: No. 13-84-085-CV,13-84-085-CV
• Citation: 695 S.W.2d 10
• Parties: McALLEN STATE BANK, Appellant, v. LINBECK CONSTRUCTION CORPORATION, Appellee.
• Court: Texas Court of Appeals

Page 10

695 S.W.2d 10

McALLEN STATE BANK, Appellant, v. LINBECK CONSTRUCTION CORPORATION, Appellee.

No. 13-84-085-CV.

Court of Appeals of Texas,

Corpus Christi.

March 28, 1985.

Rehearing Moot May 2, 1985.

Charles C. Murray, Atlas & Hall, McAllen, for appellant.

James E. Ross, Ross, Griggs & Harrison, Houston, Russell McMains, Corpus Christi, O.C. Hamilton, Jr., Ewers & Toothaker, McAllen, Edward O. Garcia, Stone & Thompson, Corpus Christi, for appellee.

OPINION

UTTER, Justice.

McAllen State Bank (Bank) originally brought suit against Linbeck Construction Corporation (Linbeck) alleging (1) certain breaches of express warranties regarding the quality of workmanship and materials and (2) certain misrepresentations regarding the characteristics of certain modifications in connection with Linbeck's construction of a building for the Bank. The Bank further alleged that the breaches of warranties and misrepresentations violated the Deceptive Trade Practices--Consumer Protection Act (DTPA), TEX.BUS. & COMM.CODE § 17.41 et seq. (Vernon Supp.1985). Industrial Risk Insurers (Industrial Risk), the Bank's subrogee, intervened in the suit. The suit was tried before a jury, which returned its verdict in favor of the Bank. Based upon the jury's verdict and the parties' stipulations, the trial court awarded actual damages, reasonable attorney's fees, post-judgment interest and court costs but refused to award prejudgment interest and treble damages pursuant to the DTPA. From this judgment, the Bank has appealed complaining that the trial court erred by failing to award treble damages pursuant to the DTPA, and Linbeck has brought a cross-appeal complaining about the admission of certain evidence and about alleged factual and legal sufficiency of the evidence to support the judgment. We reform and, as reformed, affirm the judgment of the trial court.

On April 28, 1977, the Bank (as owner) and Linbeck (as contractor) entered into a written contract, wherein Linbeck agreed to be the general contractor for the construction of a seventeen-story building in McAllen for the Bank. Linbeck expressly warranted (1) that "all Work will be of good quality, free from faults and defects and in conformance with the Contract Documents" and (2) that it would use high quality materials, suitable for the function intended and of good appearance when exposed to view. The contract provided that "[t]he Date of Substantial Completion of the Work or designated portion thereof is the Date certified by the Architect when construction is sufficiently complete, in accordance with the Contract Documents, so the Owner can occupy or utilize the Work or designated portion thereof for the use for which it is intended" and that the "[w]arranties required by the Contract Documents shall commence on the Date of Substantial Completion or designated portion thereof unless otherwise provided in the Certificate of Substantial Completion." The contract also contained a liquidated damages provision for construction delays.

Construction on the bank building under the contract began in May 1977. During the construction, Linbeck implemented a modified skylight design and an alternative expansion joint waterproofing system between the tower of the building and the promenade deck at the third floor. The first four floors (the banking portion of the building) were certified by the architect "to be substantially complete" and ready for occupancy on February 19, 1979. At that time, the Bank moved into the banking portion of the building and began its banking operations. The remaining portions (the tenant or non-banking portions) of the building were certified "to be substantially complete" and ready for occupancy by August 7, 1979.

In August 1980, Hurricane Allen came ashore north of Brownsville and brought with it high winds and heavy rains to the McAllen area. During the storm, the bank building sustained significant wind and water damage. Large portions of the sloping metal roof system between the second and third floors of the building were blown off. Water leaked into the building from the following areas of the building: the window wall/precast fin system on the sides of the building, the sloping metal roof system between the second and third floors, the expansion joint system between the tower of the building and the promenade deck at the third floor, and the skylights. As a result of the leaking, the building's interior, including a large amount of wall-covering and carpet, sustained heavy water damage.

Prior to the storm but after the Bank moved into the building, the Bank had already detected problems with the building's construction. The Bank was dissatisfied with the installation of the concealed spline ceiling tile system on the first and second floors of the building. Also, the Bank noticed that the sky-lights and the expansion joint leaked. Following numerous complaints by the Bank to Linbeck, Linbeck represented that it had performed necessary repairs to correct the problems.

After the storm and after Linbeck had attempted to undertake some repairs of storm damages, the Bank retained 3D/International (3D/1) (the building's original architect), Valcon, Inc. (Valcon) (as general contractor) and miscellaneous others to correct alleged construction defects and to repair the damages to the building.

Based upon the pleadings, the parties litigated at trial concerning six alleged defective areas of work: (1) the window wall/precast fin system on the sides of the building; (2) the sloping metal roof system between the second and third floors; (3) the expansion joint waterproofing system between the tower of the building and the promenade deck at the third floor; (4) the skylights; (5) caulking at the reglet area of the sloping metal roof, parapet walls and wing walls; and, (6) the concealed spline ceiling tile system on the first and second floors. At the conclusion of the trial, the jury, in response to the special issues submitted, returned its verdict in favor of the Bank on all of the submitted issues. Based upon the jury's findings and the parties' stipulations, the trial court in its judgment (1) awarded $453,563.00 to the Bank and $506,537.00 to Industrial Risk (intervenor and the Bank's subrogee), for a total of $960,000.00, the total amount of actual damages found by the jury under each of the theories of recovery for breach of warranty (workmanship and materials), (2) awarded, as a matter of law, $6,600.00 to the Bank as liquidated damages for delays in substantial completion of the building, (3) awarded the Bank reasonable attorney's fees in the amount of $170,000.00 and post-judgment interest and (4) assessed court costs against Linbeck.

Since Linbeck in its cross-appeal primarily challenges the admission of certain evidence and the sufficiency of the evidence to support the trial court's judgment, we will first consider the cross-points of error raised in Linbeck's cross-appeal before considering the Bank's contention in its appeal that the trial court erred by failing to award treble damages pursuant to the DTPA.

LINBECK'S CROSS-APPEAL

In its fourth cross-point of error, Linbeck complains about the admission of bank's Exhibits Nos. 77 and 78. Both exhibits are duplicate computer printouts, which give an accounting summary/breakdown of charges for work performed by Valcon; and, Bank's Exhibit No. 78, unlike Bank's Exhibit No. 77, contains notations made by Bill Rogers, Valcon's general superintendent who identified and testified regarding the exhibit, allocating the charges to various aspects of the job. ¹

First, Linbeck argues that the computer printouts were inadmissible because each was "a summary of underlying [business] records" for which "a proper predicate for their admission had not been laid." More specifically, Linbeck argues that, since the underlying records allegedly had never been made available to it by the Bank, the requisites for the admission of a summary of underlying business records under Duncan Development, Inc. v. Haney, 634 S.W.2d 811 (Tex.1982), were not met.

In Duncan Development, Inc. v. Haney, the Texas Supreme Court wrote:

A summary of business records may be admitted into evidence upon proof of an additional predicate. This includes proof (1) that the records are voluminous, (2) they have been made available to the opponent for a reasonable period of time to afford inspection and an opportunity for cross-examination, and (3) the supporting documents are themselves admissible in evidence. Black Lake Pipeline Co. v. Union Construction Co., 538 S.W.2d 80, 93-94 (Tex.1976); Cooper v. La Gloria Oil and Gas Co., 436 S.W.2d 889, 891 (Tex.1969).

Duncan Development, Inc. v. Haney, 634 S.W.2d at 812-813. However, Duncan Development, Inc. v. Haney dealt with a summary of invoices from its "some three dozen subcontractors" that was prepared for trial purposes; whereas, here, we are dealing with two computer printout summary/breakdowns that, although each is a summary of underlying business records (labor and materials records), are themselves business records. Therefore, the computer printouts were entitled to be treated as business records, and not as a summary of business records for trial purposes. See Marquis Construction Company, Inc. v. Johnson Masonry, 665 S.W.2d 514 (Tex.App.--Houston [1st Dist.] 1983, no writ); See also Hodges v. Peden, 634 S.W.2d 8 (Tex.App.--Houston [14th Dist.] 1982, no writ); Voss v. Southwestern Bell Telephone Company, 610 S.W.2d 537 (Tex.Civ.App.--Houston [1st Dist.] 1980, writ ref'd. n.r.e.).

Secondly, Linbeck argues that the Bank did not establish the additional predicate allegedly required for the admission of computer printouts, which are business records. Relying on O'Shea v. International Business Machines Corporation, 578 S.W.2d 844 (Tex.Civ.App.--Houston [1st Dist.] 1979, writ ref'd. n.r.e.), and Railroad Commission v. Southern Pacific Railway Company, 468 S.W.2d 125 (Tex.C...