Trimcos, LLC v. Compass Bank
| Decision Date | 28 July 2022 |
| Docket Number | 01-19-01000-CV |
| Citation | 649 S.W.3d 907 |
| Parties | TRIMCOS, LLC, Appellant v. COMPASS BANK, Appellee |
| Court | Texas Court of Appeals |
John C. Juravich, for Appellant.
Jack M. Kuykendall, Dallas, for Appellee.
Panel consists of Justices Goodman, Landau, and Countiss.
Appellant, Trimcos, LLC ("Trimcos"), has a filed a motion for rehearing of our December 23, 2021 opinion and judgment.1 We deny the motion for rehearing, withdraw our opinion and judgment of December 23, 2021, and issue this opinion and new judgment in their stead.
Trimcos challenges the trial court's rendition of summary judgment in favor of appellee, Compass Bank ("Compass"), in Trimcos's suit against Compass for money had and received, constructive trust, and breach of contract. In three issues, Trimcos contends that the trial court erred in granting Compass summary judgment.
We affirm.
In its first amended petition, Trimcos alleged that on or about April 26, 2013, it entered a general construction contract (the "contract") to build an office building on vacant land (the "project") "for Raffy O. Bell and/or Bell Tech Enterprises, Inc." (collectively, "Bell").2 On or about April 30, 2013, Trimcos and Bell executed a "Contractor's Agreement and Consent" (the "contractor's agreement") for Compass, Bell's lender, at a loan closing. (Internal quotations omitted.) As consideration for the contractor's agreement, Compass represented to Bell that it would be financially liable for the work Trimcos completed under the contract. On May 8, 2013, Compass recorded a deed of trust relating to the project.
During construction of the project, Trimcos received progress payments directly from Compass. But "[b]ecause Trimcos was not paid in full for [the] work completed," it "recorded a mechanic's lien affidavit on June 15, 2015."
Then Bell defaulted on its loan from Compass, and, as a result, Compass foreclosed on the property where the project was to be built. On July 10, 2017, Compass "recorded a substitute trustee's deed relating to the [p]roject." According to the substitute trustee's deed, Compass "bid $1,953,000.00 for the [p]roject." Trimcos "repeatedly demanded" that Compass "pay for work it [had] completed per the [c]ontract and ... account for proceeds resulting from the foreclosure sale," but Compass "refused to pay."
Trimcos brought claims against Compass for money had and received, constructive trust, and breach of contract.3 As to its claim for money had and received, Trimcos maintained that "[i]f [Compass] was subrogated to the 2008 deed of trust" and Trimcos's "[mechanic's] lien claim was extinguished, Trimcos still ha[d] a [mechanic's] lien claim against the foreclosure proceeds in excess of the amount needed to satisfy the 2008 deed of trust." And Trimcos requested the imposition of a "constructive trust in the foreclosure proceeds in an amount sufficient to satisfy its lien claim." As to its breach-of-contract claim, Trimcos alleged that Compass "failed to comply with its obligation under the [c]ontractor's [a]greement (which Compass Bank made part of the loan transaction between it and Bell) to pay for work completed" under the contract. Trimcos sought damages, attorney's fees, and costs.
Compass answered, generally denying the allegations in Trimcos's petition and pleading certain affirmative defenses. Compass also brought several counterclaims against Trimcos. In its second amended counterclaim, Compass alleged that in 2013, Bell "approached [Compass]" to obtain a Small Business Act4 "construction loan to purchase land and build an office building for [its] business." And Compass acknowledged that Trimcos entered the contract with Bell for Trimcos to serve as the general contractor for the project on April 26, 2013.
According to Compass, "[a]s part of [its] pre-loan procedures, Compass communicated with and interacted with Trimcos." To ensure that its deed of trust would constitute a first lien on the property where the project was to be built, Compass acquired, among other things, documentation signed by Trimcos that Trimcos had not commenced construction or delivered materials to the project property and Trimcos's written assurance that construction "would not begin" and materials would not "be delivered until" Compass had filed its deed of trust.
As part of the loan transaction, Compass also required Bell and Trimcos to execute a "Contractor and Owner Joint Affidavit of Commencement" (the "first affidavit") and an "Affidavit of Commencement" (the "second affidavit").5 Bell and Trimcos signed the first affidavit on April 25, 2013, the day before they executed the contract for the project. In the second affidavit, signed on April 30, 2013, Bell and Trimcos represented that no construction had begun on the project and no materials had been delivered to the property where the project was to be built and that construction would not begin and materials would not be delivered until Compass "notified [Bell] and [Trimcos] in writing that the [d]eed of [t]rust ha[d] been filed in the county records." Bell and Trimcos also attested that they executed the second affidavit "in order to assure [Compass] that the time of the inception of any mechanic's lien ha[d] not occurred, and w[ould] not occur until after [Compass]’s [d]eed of [t]rust [wa]s duly perfected by filing."
Compass further alleged that although Trimcos had executed the first and second affidavits, "Trimcos sent a demand letter to Compass" on August 16, 2017, "claiming for the first time that Trimcos began construction of the [project] before Compass [had] recorded its [d]eed of [t]rust."
Compass brought a counterclaim against Trimcos for "fraud involving a false promise of future performance." According to Compass, it was "not responsible for [making] payments to Trimcos," because, among other things, the contractor's agreement specifically precluded Compass from being liable to Trimcos, the "conditions [precedent] for payment under the [contractor's] agreement" were "not met," and "the amounts claimed by Trimcos [we]re not due and owing." And according to Compass, Trimcos committed fraud "[w]ith respect to the [s]econd [a]ffidavit," in which "Trimcos promised that construction [of the project] would not commence" and materials would not "be delivered to the [project property] until" Compass "notified Trimcos that the [d]eed of [t]rust was filed."
Compass also brought a breach-of-contract claim against Trimcos, asserting that, "as a direct creditor third party beneficiary of the [second affidavit]," Trimcos breached the second affidavit by "beginning construction or delivering materials to the [project property]" before Compass's deed of trust was filed. And Compass sought a declaration that it was not liable to Trimcos for any amount under the contractor's agreement.
Trimcos answered, generally denying the allegations in Compass's counterclaim and asserting certain affirmative defenses.
Compass then filed a combined no-evidence and matter-of-law summary-judgment motion on Trimcos's claims for money had and received, constructive trust, and breach of contract. As to the no-evidence portion of its motion, Compass argued that Trimcos's money-had-and-received claim failed because there was no evidence that Trimcos's mechanic's lien had priority over Compass's deed of trust or that Compass held funds belonging to Trimcos. And as to Trimcos's constructive-trust claim, Compass argued that there was "no evidence that [Compass] [wa]s holding money" that belonged to Trimcos because, as with Trimcos's money-had-and-received claim, its constructive-trust claim was dependent on establishing that the priority of Trimcos's mechanic's lien was superior to that of Compass's deed of trust, which Trimcos could not do.
As to the matter-of-law portion of its motion, Compass argued that it was entitled to judgment as a matter of law on Trimcos's breach-of-contract claim because Compass was not a party to the contractor's agreement between Bell and Trimcos, which was the basis for Trimcos's breach-of-contract claim. Alternatively, Compass argued that the particular "conditions precedent for [Trimcos's] right to receive payment under the [c]ontractor's [a]greement" had not been satisfied. To support its argument, Compass relied on paragraph 7 of the contractor's agreement, which provides that "the final advance, including all retainage, will not be made until [Compass] has received ... evidence that no mechanic's or materialmen's liens or other encumbrances have been filed and remain in effect against the [project] [p]roperty" and "final lien releases or waivers [have been made] by [Trimcos], ... subcontractors, materialmen and all other parties who have supplied labor, materials or services for the construction" of the project.6 And Compass attached to its summary-judgment motion the affidavit of Robert Zazula, a Senior Vice President of Compass, who attested that on April 30, 2013, Bell executed a promissory note payable to Compass in the amount of $4,622,500.00 as well as a deed of trust in favor of Compass to secure that indebtedness. Also, on April 30, 2013, "as part of th[at] transaction," Trimcos and Bell executed the contractor's agreement. According to Zazula, another company working on the project got into a dispute with Trimcos and that company filed a mechanic's lien on the project property which was covered by the deed of trust. "[A] lawsuit was in progress" between that other company and Trimcos. In February 2015, Trimcos's attorney informed Compass that Trimcos had worked on the project with that other company as a subcontractor, "even though [the other company] claimed that it was actually a general contractor." And in June 2015, Zazula learned from Trimcos's attorney that Trimcos "had also filed a mechanic[’]s lien on the [project] property [which was] being covered by the [d]eed of [t]rust." Zazula...
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