Tribble & Stephens Co. v. Rgm Constructors

• Decision Date: 28 October 2004
• Docket Number: No. 14-02-01062-CV.,14-02-01062-CV.
• Citation: 154 S.W.3d 639
• Parties: TRIBBLE & STEPHENS CO., Appellant, v. RGM CONSTRUCTORS, L.P., Appellee.
• Court: Texas Court of Appeals

154 S.W.3d 639

TRIBBLE & STEPHENS CO., Appellant, v. RGM CONSTRUCTORS, L.P., Appellee.

No. 14-02-01062-CV.

Court of Appeals of Texas, Houston (14th Dist.).

October 28, 2004.

Supplemental Opinions Overruling Rehearing February 10, 2005.

Lynne Liberato, John S. Torigian, Murry B. Cohen, Mercy Lynn Carrasco Lowe, Houston, for appellant.

Charles Black McFarland, Houston, for appellee.

Panel consists of Justices EDELMAN, FROST and SEYMORE.

PLURALITY OPINION

CHARLES W. SEYMORE, Justice.

In this breach of contract case, Tribble & Stephens Company ("T & S") appeals a summary judgment in favor of RGM Constructors, L.P. ("RGM")¹ on the grounds that: (1) RGM failed to comply with a contractual condition precedent to litigation; (2) there were disputed fact issues concerning RGM's performance under the contract; (3) the trial court erred in: (a) sustaining RGM's objections to T & S's summary judgment evidence, and (b) refusing to grant leave to amend that evidence; (4) the trial court granted RGM more relief than requested; and (5) the trial court erred by granting RGM's partial summary judgment motion on T & S's deceptive trade practices claims and granting sanctions under the DTPA² against T & S. We hold that the trial court erred in (1) granting RGM's summary judgment motion because fact issues exist as to RGM's performance under the contract; (2) in granting summary judgment in connection with T & S's reformation claim; and (3) in granting RGM's partial summary judgment motion on T & S's DTPA claims and in granting sanctions on those claims against T & S. Further, because it is unclear whether RGM agreed to be bound by the condition precedent as argued by T & S in its summary judgment motions, a fact issue exists as to the parties' intent. We reverse the judgment of the trial court and remand.³

I. BACKGROUND

In 1997, T & S, as general contractor, was hired by Remington Suites Austin, L.P., as owner ("Remington"), to build an Embassy Suites hotel in Austin (the "project"). The agreement between Remington and T & S was an American Institute of Architects ("AIA") form document A101 with modifications (the "prime contract"). The prime contract incorporated by reference AIA form document A201, entitled "General Conditions of the Contract for Construction" (hereinafter "General Conditions"). On August 21, 1997, T & S entered into a subcontract with RGM (the "subcontract"), in which RGM agreed to perform the concrete formwork⁴ on the floors and ceilings of the hotel. The subcontract is not a standard AIA form.

During the course of RGM's work, problems arose. As early as November 1997, T & S notified RGM its formwork may need remediation to correct offsets, fins, or other defects.⁵ Specifically, by letter dated November 17, 1997, T & S's project manager, Bart Dansby, advised RGM as follows:

Please be reminded that the bottom of the suspended slabs on level 3 through the roof will be exposed concrete. We have encouraged your field personnel to be cognizant of this condition in order to minimize the remedial work that might be necessary to correct offsets, fins or other defects in the exposed concrete surface caused by your formwork.

Subsequently, T & S notified RGM that its work was unacceptable to the project architect, Stuart Campbell, because the formed concrete surfaces visible to the public in some of the guest suites and corridors exceeded the tolerances for irregularities as required in the contract documents. Although RGM attempted to rectify the problems, Campbell again rejected RGM's work during subsequent inspections.

On March 19, 1998, T & S sent a letter to RGM (the "default letter"), in accordance with the terms of the subcontract, advising RGM that Campbell had "rejected the quality of the exposed to view formed concrete surface[s]." The letter also stated that "[p]ursuant with specification section 03300-3.10B.1 we must direct your company to return and perform additional repair work...." The default letter indicated that the problem with RGM's work was primarily with form offsets. Also, as permitted in the subcontract, T & S advised RGM that if it did not begin remedial work or establish an acceptable plan to address the problems within 72 hours, T & S would be forced to hire a third party to perform the work on RGM's behalf. On March 24, T & S accepted a bid from the painting subcontractor, Coburn & Company ("Coburn"), to float the form offsets which T & S claimed were the result of RGM's work.

RGM's project engineer, Martin Morello, met with Campbell on March 31 to discuss the stage of completion for RGM's work. Campbell explained to Morello that the offsets in the concrete surfaces needed to be smooth and level, with no abrupt offsets. At the meeting, Morello did not discuss his belief that RGM had performed its work in accordance with the contract specifications.

In June 1998, RGM submitted pay requests No. 8 and No. 9, requesting final payment on the contract.⁶ In September of 1998, T & S submitted invoices to RGM for work done by Coburn, advising RGM that its share of the costs for Coburn's remedial work was $12,564. In response, RGM's attorney sent a demand letter to T & S, informing T & S that RGM believed its work was performed in accordance with the contract terms and within the contract tolerances, and requesting full and final payment under the subcontract.

RGM filed suit against T & S in Travis County to recover the unpaid balance of the contract price. Upon motion to transfer filed by T & S, venue was transferred to Harris County. T & S filed counterclaims against RGM for breach of contract, breach of warranty, DTPA violations, promissory estoppel, and indemnification.

RGM filed a motion for partial summary judgment seeking dismissal of T & S's DTPA claims and the trial court granted the motion. Subsequently, the court also issued an order finding that T & S's DTPA action was groundless and granted sanctions against T & S. Meanwhile, both parties submitted competing motions for summary judgment on the additional claims. The trial court granted RGM's summary judgment motion and denied T & S's motions for summary judgment. This appeal ensued.

II. ANALYSIS

In two issues, T & S argues the trial court erred in denying its motion for summary judgment and in granting RGM's summary judgment. Specifically, in its first issue, T & S contends it was entitled to judgment as a matter of law because RGM failed to fulfill a contractual condition precedent to litigation and RGM failed to raise any viable grounds to defeat T & S's right to summary judgment. In its second issue, T & S presents five sub-issues for our review:

• Did RGM establish entitlement to summary judgment as a matter of law?

• Were there genuine issues of material fact precluding summary judgment for RGM?

• Did the trial court err by sustaining all of RGM's objections and striking T & S's evidence without first granting T & S the right to amend its evidence as provided by Texas Rule of Civil Procedure 166a(f)?

• Did the trial court err by granting RGM more relief than it requested in its motion for summary judgment?

• Did the trial court err by granting RGM partial summary judgment on T & S's DTPA claims and granting sanctions against T & S on the ground that it filed its DTPA claims in bad faith?

A. Standard of Review

The propriety of a summary judgment is a question of law. Accordingly, we review the trial court's decision de novo. Natividad v. Alexsis, Inc., 875 S.W.2d 695, 699 (Tex.1994); Taub v. Aquila Southwest Pipeline Corp., 93 S.W.3d 451, 462 (Tex.App.-Houston [14th Dist.] 2002, no pet.). A summary judgment is proper only when the movant establishes that there is no genuine issue of material fact and he is entitled to judgment as a matter of law. Tex.R. Civ. P. 166a(c). We review the summary judgment evidence in the light most favorable to the nonmovant, indulging every inference and resolving all doubts in his favor. Sci. Spectrum, Inc. v. Martinez, 941 S.W.2d 910, 911 (Tex.1997); Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 549 (Tex.1985). If the movant establishes a right to summary judgment, the burden shifts to the nonmovant to raise any issues that would preclude summary judgment. Pennwell Corp. v. Ken Assocs., Inc., 123 S.W.3d 756, 760 (Tex.App.-Houston [14th Dist.] 2003, pet. denied).

When cross-motions for summary judgment are filed, a reviewing court examines all of the summary judgment evidence presented by both sides, determines all questions presented, and if reversing, renders such judgment as the trial court should have rendered. Bradley v. State ex rel. White, 990 S.W.2d 245, 247 (Tex.1999); Vill. of Pheasant Run Homeowners Ass'n v. Kastor, 47 S.W.3d 747, 749-50 (Tex.App.-Houston [14th Dist.] 2001, pet. denied). We may also remand in the interests of justice. Lidawi v. Progressive County Mut. Ins. Co., 112 S.W.3d 725, 730 (Tex.App.-Houston [14th Dist.] 2003, no pet.); W.W. Laubach Trust/The Georgetown Corp. v. The Georgetown Corp./W.W. Laubach Trust, 80 S.W.3d 149, 155 (Tex.App.-Austin 2002, pet. denied). When both parties move for summary judgment, each party must carry its own burden and neither can prevail due to the other's failure to meet its burden. W.H.V., Inc. v. Assocs. Hous. Fin., LLC, 43 S.W.3d 83, 87-88 (Tex.App.-Dallas 2001, pet. denied).

B. RGM's Summary Judgment

Because resolution of T & S's first appellate issue is dependent in part on resolution of its second issue, we begin with T & S's claim that the trial court erred in granting RGM's summary judgment motion.

T & S argues that RGM failed to demonstrate it was entitled to judgment as a matter of law because there were material fact issues regarding RGM's performance under the subcontract such as the extent to which the concrete work was exposed to public view, the applicable tolerance levels for irregularities under the contract documents, and whether RGM's finished work was within those tolerance levels. Contrarily,...