Modine Mfg. Co. v. North East Independent School Dist.
| Decision Date | 29 November 1973 |
| Docket Number | No. 7514,7514 |
| Citation | 14 UCCRep.Serv. 317,503 S.W.2d 833 |
| Parties | 14 UCC Rep.Serv. 317 MODINE MANUFACTURING COMPANY, Appellant, v. NORTH EAST INDEPENDENT SCHOOL DISTRICT et al., Appellees. |
| Court | Texas Court of Appeals |
Matthews, Nowlin, Macfarlane & Barrett, San Antonio, for appellant.
Foster, Lewis, Langley, Gardner & Hawn, Gresham, Davis, Gregory, Worthy & Moore, Brite, Drought, Bobbitt & Halter, San Antonio, for appellees.
Defendant below appeals from an unfavorable judgment rendered in a suit upon a contract.
North East Independent School District (hereinafter 'School District') brought suit against Modine Manufacturing Company ('Modine') and Langhammer-Fincke-Hall, Inc. ('LFH') for damages resulting from the repudiation by Modine of an alleged contract to provide air conditioning equipment to School District. It also named Jud Plumbing & Heating Company, Inc. ('Jud') as a party defendant. School District also sought judgment declaring that Modine and LFH were obligated to indemnify it for any damages awarded to Jud against the School District as a result of Modine's repudiation of the alleged contract to supply the equipment.
Jud filed a cross-action against Modine, LFH, and School District seeking recovery of damages sustained in performing its contract to install air conditioning equipment in the schools after Modine's repudiation of the alleged contract to supply the equipment.
LFH filed a cross-action against Modine seeking a sales commission upon the price of the equipment mentioned in the alleged contract and indemnity for any liability to which it might be subjected by any other party in the actions arising out of the contract.
Modine denied that it was a party to the alleged contract; but, alternatively, counterclaimed against School District, contending that it had wrongfully refused to accept Modine's equipment. It also filed a cross-action seeking indemnity or contribution from LFH .
After trial to a jury, the court entered a judgment:
1. For School District against Modine for $46,026, plus attorney's fees of $20,000;
2. For Jud against School District and Modine, jointly and severally, for $61,000, plus attorney's fees of $16,500 for which Modine was solely liable; and School District was awarded indemnity against Modine for the $61,000 recovered by Jud;
3. For LFH against Modine for sales commission of $7,863.15, plus attorney's fees of $8,670.
4. Modine was denied all relief it sought.
Only Modine has perfected an appeal from the judgment and no appellee has protective cross-points assigned.
Modine has appealed with a lengthy brief containing 85 points of error that present a myriad of issues based upon a statement of facts containing over 2200 pages, along with approximately a hundred exhibits, many of which are voluminous. It is obvious that, while we must make a lengthy statement from the record, many facets thereof will escape mention.
School District, having floated a bond issue for the purpose of air conditioning its schools, retained an engineering firm to prepare plans and specifications for the equipment to be used in such project. The intent of this maneuver was to procure volume prices for the equipment needed so that such prices would be used by the installation contractors in their bids on the overall project. For many years prior to the events leading up to this suit, LFH had been Modine's sales representative in the San Antonio area under the terms of a specific written agreement.
LFH, being interested in selling Modine equipment, obtained the plans and specifications from School District's engineer, went to Modine's home office to consult with executive personnel of Modine and prepared a bid for the supply of Modine equipment on a part of the total project, its bid being slightly in excess of $157,000. Before the formal bid was submitted on May 5, 1969, one of Modine's executives came to San Antonio and conferred with LFH on the details of the bid and actually accompanied LFH's representative to the engineer's office where the bids were opened.
The bid forms specified that the equipment would be furnished 'on manufacturer's standard conditions of sale' and recited that a copy thereof was attached to the proposal. Our record is not clear whether the copy was actually attached to the proposal but, in any event, the engineer received a copy within a few days thereafter Shortly thereafter, the engineer advised the total work bidders that the LFH bid for Modine equipment had been accepted and advised such total work bidders that Modine's equipment at the bid price should be included in their bids . LFH then sent a copy of the original proposal to the total work bidders for their use in preparing their bids.
School District's superintendent advised Modine on May 20 that the School District intended to award a contract in June for the air conditioning of its schools and would include the Modine units as bid on May 5. A Modine official then wrote to the superintendent asking that he sign the enclosed copy of a letter which bound the School District to issue a purchase order on the Modine equipment no later than June 23 and accept equipment by August 23, 1969. The superintendent signed and returned such letter. Meanwhile, LFH learned that Modine's equipment was low in 'sensible heat capacity' but felt that it could secure the engineer's waiver of strict compliance and continued its work on the proposal.
Jud, having received the contract to install the equipment as the 'total work bidder' on June 19, issued its purchase order to Modine on June 20 for the equipment specified in the May 5 bid made through LFH. Modine, learning of the claimed deficiencies in its equipment, sent several of its executives to San Antonio to confer with the engineers in an effort to procure a waiver of the requirement or a modification of the equipment which would satisfy the engineer.
The engineer refused to waive the strict requirement of the contract and the parties then discussed a modification of Modine's equipment so as to comply with the literal requirements of the specifications. For reasons of its own, Modine decided against the modifications the parties had discussed; and, on July 28, 1969, notified the engineer (and later Jud) that it was refusing to accept Jud's purchase order and would not supply the units mentioned in its bid.
After notifying Modine that it would take such steps as it could to protect itself, the School District advertised for new bids on the equipment and, again, Modine entered a bid but it was not accepted. The School District then awarded the bid to another manufacturer at a higher price and its equipment was installed in the schools. School District then instituted the suit which underlies this appeal.
The jury found that LFH, in submitting the May 5 bid, intended to act as an agent of Modine; that it had actual authority to act as Modine's agent as well as apparent authority; that School District accepted the May 5 bid; that Modine Agreed to furnish and deliver the equipment by requiring School District's superintendent to sign its letter of June 2, 1969, and, in so doing, Modine agreed to accept a purchase order for the equipment from the successful total bidder on the job; that Modine ratified LFH's May 5 bid; that Modine's equipment was not in accordance with the engineer's specifications. The jury failed to find that it was the intention of the parties that the agreement to furnish the equipment was subject to the terms and conditions of its contract with LFH.
The jury also found that in submitting the equipment quotations to Jud, LFH intended to act as the agent of Modine, and had actual as well as apparent authority to act as agent for Modine. It also found as a fact that Modine did not give written notice to Jud of its objections to its purchase order within ten days after it was received. The increased cost to Jud, because of the refusal to furnish Modine equipment, was found to be $61,000, which could not have been reasonably prevented by Jud, and that Modine knew that its repudiation of the contract would result in increased costs to Jud.
Damages incurred by the School District because of Modine's repudiation of the contract were fixed at $46,026. We reserve discussion of the several awards of attorney's fees until later in the opinion.
The trial court overruled Modine's motions for judgment non obstante veredicto and to disregard certain of the findings, and the judgment followed the verdict.
We turn first to a consideration of point 80 contending that Modine, a foreign corporation, was not doing business in Texas and was not amenable to the in personam jurisdiction of the trial court. If sustained, this point would be dispositive of the entire litigation. School District's petition contained the necessary jurisdictional allegations to invoke the long-arm jurisdiction of the trial court under the provisions of § 3, Art. 2031b, Vernon's Ann.Civ.St. McKanna v. Edgar, 388 S.W.2d 927, 930 (Tex.1965).
We will have occasion later in this opinion to discuss in detail the activities In Texas of some of Modine's officials. At this point, it is sufficient to state that Modine had a sales representative in San Antonio, LFH, which had made many contracts of sale of Modine equipment. In the instant case, before bids were submitted, a Modine official came to San Antonio to discuss the project with School District's engineer; he helped put together the Modine bid proposal submitted by LFH; and Modine officials were in almost constant touch with officials of LFH concerning the bid proposal. Considering the totality of the circumstances, we are of the opinion that Modine had more than the necessary minimum contacts in Texas so that the maintenance...
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