Muller v. Light

• Decision Date: 23 June 1976
• Docket Number: No. 12406,12406
• Citation: 538 S.W.2d 487
• Parties: Dale E. MULLER et ux., Appellants, v. Billy L. LIGHT d/b/a Light Construction Company, Appellee.
• Court: Texas Court of Appeals

Page 487

538 S.W.2d 487

Dale E. MULLER et ux., Appellants, v. Billy L. LIGHT d/b/a Light Construction Company, Appellee.

No. 12406.

Court of Civil Appeals of Texas Austin.

June 23, 1976.

Rehearing Denied July 14, 1976.

James R. Sloan, Sloan & Wise, Austin, for appellants.

Jack Ritter, Jr., Austin, for appellee.

PHILLIPS, Justice.

This case involves a number of questions with respect to a contract between the parties hereto to construct a dwelling house for appellants Dale and Lucille Muller.

The appellee, Billy L. Light, doing business as Light Construction Company, brought suit in the district court to recover $11,827.87 from appellants for the cost of the house, for certain extra items, and to foreclose his mechanic's and materialman's lien on the project.

Appellants brought a counterclaim against appellee for delay of completion, defects in construction, and for failure to construct the house according to plans.

In response to jury findings on special issues, the trial court entered judgment for appellee for $10,775.77, granted the foreclosure of the lien, and denied appellants recovery on their counterclaim based on a liquidated damages provision in the contract. Appellants then perfected their appeal to this Court.

Appellants are before us on a number of points of error which, in essence, present three questions.

The first question involves the trial court's overruling appellants' motion for judgment on their cross-claim for $5,700. In this cross-claim appellants seek to recover on the following liquidated damage clause: '. . . time being the essence of this contract, contractor shall pay to the owners or deduct from the total contract price One Hundred and No/100 ($100.00) Dollars per day as liquidated damages for each day after said date that the construction is not completed and accepted by the Owners and Owners shall not arbitrarily withhold acceptance.'

We hold that the trial court was correct in overruling appellants' motion for judgment with respect to their claim for liquidated damages. In Stewart v. Basey, 150 Tex. 666, 245 S.W.2d 484 (1952), the Supreme Court held that in order to enforce a liquidated damage clause, the court must find: (1) that the harm caused by the breach is incapable or difficult of estimation, and (2) that the amount of liquidated damages called for is a reasonable forecast of just compensation. The issue of the enforceability of liquidated damages in any given case is one of law for the court to decide. Bourland v. Huffhines, 244 S.W. 847 (Tex.Civ.App.1922, writ dism'd); Schepps v. American District Telegraph Co. of Texas, 286 S.W.2d 684 (Tex.Civ.App.1955, no writ).

In our judgment the clause in question fails by each standard set out in Stewart v. Basey, supra. First, damages for delay in the construction of a building are usually predictable as the rental value of the building during the delay. Ryan v. Thurmond, 481 S.W.2d 199 (Tex.Civ.App.1972, writ ref'd n.r.e.); Hill v. Willett, 281 S.W. 1110 (Tex.Civ.App.1926, no writ).

Second, there is no reasonable relationship between appellants' actual damages, that is, the loss of the use of the house during the period of delay, and the amount of damages computed under the liquidated damages provision. Testimony established the rental value of the home at $400--$415 per month. The liquidated damages clause would establish damages of $3,000 per month. Such a disparity leads one to the conclusion that appellants, who drafted the liquidated damages provision, intended the provision to serve as an In terrorem device to insure prompt performance by the builder, rather than as a reasonable estimate of actual damages.

The next question presented by this appeal is whether the trial court erred in granting recovery to appellee on the jury's findings which appellants allege, were based upon no evidence or insufficient evidence.

In this respect, the jury found that appellee built the following features in appellants' home in 'substantial compliance of the plans and specifications of the contract': the barbecue pit, the flooring in the garage of the house, the driveway, the front sidewalk, the front porch, the windowsills on the windows, the china cabinet doors in the dining area, the roof of the house, the sliding glass doors opening off the bedrooms, the air conditioning and heating equipment, and the concrete foundation.

The jury found that the appellee had substantially complied with the contract in each of the above mentioned items. The only other inquiries put to the jury were conditioned on a Negative response to each inquiry on substantial compliance, whereupon the jury was asked whether the defects could be repaired without impairing the building as a whole and, if so, the cost of the repairs necessary to restore...