Westech Engineering, Inc. v. Clearwater Constructors, Inc., a Div. of Phelps, Inc.

• Decision Date: 01 July 1992
• Docket Number: No. 3-90-127-CV,3-90-127-CV
• Citation: 835 S.W.2d 190
• Parties: 20 UCC Rep.Serv.2d 36 WESTECH ENGINEERING, INC., Appellant, v. CLEARWATER CONSTRUCTORS, INC., A DIVISION OF PHELPS, INC., Appellee.
• Court: Texas Court of Appeals

Page 190

835 S.W.2d 190

20 UCC Rep.Serv.2d 36

WESTECH ENGINEERING, INC., Appellant, v. CLEARWATER CONSTRUCTORS, INC., A DIVISION OF PHELPS, INC., Appellee.

No. 3-90-127-CV.

Court of Appeals of Texas Austin.

July 1, 1992.

William Knolle, Hearne, Knolle, LeWallen, Livingston & Holcomb, Austin, for appellant.

Brian S. Greig, Mary S. Canfield, Fulbright & Jaworski, Austin, for appellee.

Before POWERS, JONES and B.A. SMITH, JJ.

B.A. SMITH, Justice.

This case involves a construction contract. In twenty-three points of error, the sub-contractor, WesTech Engineering, Inc. (WesTech), has challenged the trial court's determination that it entered into and subsequently breached an agreement with the general contractor, Clearwater Constructors, Inc. (Clearwater) to provide wastewater-treatment equipment. In sixteen points of error, WesTech attacks the legal or factual sufficiency of the evidence supporting the trial court's judgment that WesTech pay damages to Clearwater for breach of contract; in the remaining seven points of error, WesTech attacks particular conclusions of law underlying the judgment. Clearwater, in turn, has brought two cross-points complaining of the trial court's denial of consequential damages and certain expenses. We will affirm the judgment of the trial court as modified.

THE CONTROVERSY

This appeal arises from WesTech and Clearwater's business dealings during 1987 and 1988. In the summer of 1987, the City of Austin undertook to expand and improve its Walnut Creek Wastewater Treatment Facility. Early in the process, the City retained the engineering firm of Camp, Dressar & McKee (CDM) to prepare the plans and specifications for the project. The City then solicited bids from general contractors, one of which was Clearwater Constructors.

WesTech was aware of the Walnut Creek Facility expansion and made bids to prospective general contractors, including Clearwater, in an attempt to secure a portion of the project. In these bids, WesTech offered to supply particular water-treatment equipment called for in the plant expansion. Specifically, WesTech sought to supply (1) two final clarifier mechanisms ("clarifiers"), and (2) a dissolved air flotation sludge thickening system ("DAF"). On June 30, 1987, Clearwater received a bid from WesTech on these two items and used WesTech's figures when formulating its own bid to the City.

In August 1987, the City chose Clearwater as the general contractor for the plant expansion project. In a letter of intent dated September 15th, notifying WesTech that it had been selected to supply the clarifiers and the DAF, Clearwater indicated that it would forward to WesTech a purchase agreement "in the very near future." WesTech received an unsigned agreement from Clearwater in mid-December.

A WesTech representative signed the purchase agreement but attached a letter to Clearwater indicating that the agreement contained terms that differed from WesTech's initial proposal. In its letter dated December 16, 1987, WesTech expressed its intent that the terms of its original proposal be "made a part of the [purchase] order." In its findings of fact, the trial court found that Clearwater subsequently signed the purchase agreement and dated it December 18, 1987. In separate findings, the trial court referred to this purchase agreement as "the contract" between the parties.

Initially, relations between WesTech and Clearwater proceeded normally. WesTech submitted to Clearwater specific data concerning both the clarifiers and the DAF. Problems arose, however, when the project engineering firm, CDM, determined that WesTech's clarifier equipment would not meet the particular specifications set out in the City's contract. The parties conducted a number of meetings to resolve these problems. For its part, WesTech supplied additional data on its proposed equipment, which Clearwater and CDM re-evaluated. Nevertheless, CDM decided that the WesTech equipment would not comply with the City's contract requirements.

Ultimately CDM concluded that the central-drive gears to be used in WesTech's clarifiers did not meet the durability requirements set out in the City's plans and specifications. Clearwater notified WesTech of its decision to seek an alternate source for the clarifiers and informed WesTech that it would be liable for Clearwater's increased procurement costs, if any.

In March 1988, WesTech supplied Clearwater with its DAF equipment submittal. Later that month, CDM engineers rejected WesTech's DAF submittal on the grounds that WesTech lacked the DAF installation experience called for in the City contract. Clearwater again notified WesTech of the rejection and informed WesTech it would be accountable for any increased costs in procuring DAF equipment from an alternate source. Eventually Clearwater obtained the clarifiers and the DAF from other companies, but at a cost greater than that contracted for with WesTech.

In March 1990, Clearwater filed suit against WesTech for breach of contract, hoping to recover its increased costs for the equipment. After a trial before the court, Clearwater was awarded $123,495 in "cover" costs resulting from WesTech's breach, plus prejudgment interest and attorney's fees. WesTech now appeals the trial court's judgment.

STANDARDS OF REVIEW

At WesTech's request, the trial court filed findings of fact and conclusions of law in support of its judgment; some eighty-nine findings of fact and twenty-seven conclusions of law are contained in the record. In addition, the record contains a statement of facts from the proceedings.

Findings of Fact

We attach to findings of fact the same weight that we attach to a jury's verdict upon jury questions. City of Clute v. City of Lake Jackson, 559 S.W.2d 391, 395 (Tex.Civ.App.1977, writ ref'd n.r.e.). Findings of fact are reviewable for legal and factual sufficiency of the evidence by the same standards used to review jury findings. Okon v. Levy, 612 S.W.2d 938, 941 (Tex.Civ.App.1981, writ ref'd n.r.e.) (citing Hall v. Villarreal Dev. Corp., 522 S.W.2d 195 (Tex.1975)).

An appellant who challenges the legal sufficiency of the evidence supporting an issue upon which it did not have the burden of proof must demonstrate that there is no evidence to support the adverse finding. Raw Hide Oil & Gas, Inc. v. Maxus Exploration Co., 766 S.W.2d 264, 275 (Tex.App.1988, writ denied). In reviewing a no-evidence point, we consider only the evidence supporting the finding and we disregard all evidence to the contrary. Best v. Ryan Auto Group, Inc., 786 S.W.2d 670, 671 (Tex.1990). If there is any evidence supporting the finding, we must overrule the point and uphold the finding.

When challenging the factual sufficiency of the evidence supporting an adverse finding upon which it did not carry the burden of proof, an appellant must demonstrate that there is insufficient evidence to support the adverse finding. Maxus Exploration Co., 766 S.W.2d at 275-76. We will consider and weigh all the evidence in support of and contrary to the finding. Plas-Tex, Inc. v. U.S. Steel Corp., 772 S.W.2d 442, 445 (Tex.1989). The contested finding will be upheld unless we find that (1) the evidence is too weak to support the finding, or (2) the finding is so against the overwhelming weight of the evidence as to be manifestly unjust. Garza v. Alviar, 395 S.W.2d 821, 823 (Tex.1965). We will not substitute our judgment for that of the trier of fact merely because we reach a different fact conclusion. Otis Elevator Co. v. Joseph, 749 S.W.2d 920, 923 (Tex.App.1988, no writ).

On those issues on which an appellant has the burden of proof, it must prevail on a no-evidence challenge and then must demonstrate on appeal that the evidence conclusively establishes the issue in its favor as a matter of law. Holley v. Watts, 629 S.W.2d 694, 696 (Tex.1982). Only when the contrary proposition is established conclusively by the evidence will we sustain the point of error. Meyerland Community Improvement Ass'n v. Temple, 700 S.W.2d 263, 267 (Tex.App.1985, writ ref'd n.r.e.).

Conclusions of Law

The trial court's conclusions of law are always reviewable. Middleton v. Kawasaki Steel Corp., 687 S.W.2d 42, 44 (Tex.App.1985, writ ref'd n.r.e.). ¹ Conclusions of law will be upheld on appeal if the judgment can be sustained on any legal theory supported by the evidence. Simpson v. Simpson, 727 S.W.2d 662, 664 (Tex.App.1987, no writ). Incorrect conclusions of law will not require reversal, however, if the controlling findings of facts will support a correct legal theory. Valencia v. Garza, 765 S.W.2d 893, 898 (Tex.App.1989, no writ). Moreover, conclusions of law may not be reversed unless they are erroneous as a matter of law. Mercer, 715 S.W.2d at 697.

DISCUSSION

Preservation of Error

Before discussing the substantive issues of this case, we address Clearwater's contention that WesTech has not preserved error. Clearwater argues that WesTech failed to preserve error in two respects. First, WesTech failed to present to the trial court any request, objection or motion complaining of the issues WesTech has raised on appeal as required by Tex.Rule of Appellate Procedure 52. See Tex.R.App.P.Ann. 52 (Pamph.1992). Although Rule 52 was amended to allow factual-insufficiency points challenging a finding of fact in a bench trial to be raised for the first time on appeal, Clearwater argues that the amendment came after WesTech's time to perfect its appeal had expired. Second, Clearwater asserts that under the former rule WesTech failed to follow the procedures for preserving a no-evidence point.

We disagree with Clearwater's interpretation of Rule 52. As WesTech points out in its reply brief, challenges to a finding of fact's legal and factual sufficiency can be made for the first time by properly raising them as points of error. Kissman v. Bendix Home Sys., Inc., 587 S.W.2d 675, 678 (Tex.1979); Bluebonnet Express, Inc. v. Employers Ins., 651 S.W.2d 345 (Tex.App.1983,...