NO. 07-06 -020 8-CV IN THE CO UR T OF APPEA LS FO R THE S EVEN TH D ISTRI CT O F TEXAS

AT AM AR ILLO PAN EL D APR IL 30 , 200 8

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___ DA NN YVAU GH AN AN D KATHLE EN VAU GH AN , Appel lan ts
v. ROSS PHIL LIP S d/b /a READY-BUILT HOMES AND

ON -S ITE C ON STRU CTIO N, Appel lee

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______ FRO M T HE 11 0 DIS T RI CT COU RT OF B RI SC OE COU NT Y; TH NO . 310 0; H ON . J OH N R. H OLLU MS , PR ESID IN G

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_____ Before QUINN, CJ. and CAMPB ELL and PIRT LE, JJ.
CO NC UR RI NG OPI NI ON
Con cur ri ng i n the re sul t re ached by the major ity , I w ri te to cl ar ify w hat I percei v e to be a mis conc epti on by

the par ti es conc er nin g the “c ost s o f comple ti on” as i t rela tes to the
re medies to w hic h theym ay hav e show n, or

on remand mi g ht s how , t hemsel v es enti tl ed to recei v e.2 Va ugha n’

s A pp ea l - Is s ue T wo
T he Vau ghans cont end t he trial co urt erred in den y ing th em atto rney’s fees b ecau se they w ere effe ct iv ely

aw arded damag es w hen t he tr ial co urt found t hat t he “ cos ts of compl eti on” sh oul d be deduc ted from the cont ra ct pr ic e in deter mini ng the amount o w ed to Phil li ps under

the cont ra ct. It is a fundamental pr inc ipl e of cont ra ct law thatw hen one par ty to a c ontractco mmits a mat er ial breach of that c ont ra ct , and the breach is not other w is e ex cus ed, t he ot her party i s dis charg ed or ex cus ed from fur

ther per formance. Mu sta ng Pipel

ineCo., Inc . v

. D ri ver Pi pel ineC o., Inc ., 134 S.W .3d 195 , 196 (Tex. 2004 ). T he jury foun d the Vaugha ns brea ched the ir contract w ith Phillips, th e brea ch w as ma terial, and t h e b re a c h w a s u n e x c u s e d

. B a s e d u p o n t h o s e fi n d i n g s , t h e V a u g h a n s w er e not enti tl ed to a recov er

y upon thei r cont ra ct cl aim. Hav ing fail ed to prev ail on that cl aim, the Vaug hans si mply

are notenti tl ed to recov er y of attor ney ’s fees und er § 38 .001 o f the T exas Ci v il Practice s & R em edie s Code. W hatthe trial court did or did not d o in det ermin ing the reme dy to w hich Ph illips w as en titled h as no thing to do w ith the Vaugha ns’ rig ht to recover atto rney’s fees. As stated bythe m ajority, the fact th at th e trial court did
no t g ran t Ph i l l i ps rec ov er y of da ma g es d oe s n ote q ua te t o th e tr i al c ou rt g ran ti ng t he m a re cov er y pursuantto thei r cont ra ct cl aim. I ag re e w it h the maj or ity opi nio n findi ng that Vaug han’ s i ss ue two s houl d be ov er ru led

.3 Phi ll ips ’ s A ppeal - Is sue One My real co ncer n c omes w it h the submi ss ion of Quest ion 4 an d my percept ion that the p arti es cons ide r Vaug han’ s “c ostof compl eti on,” reason abl e or other w is e, as hav ing anythi ng to do w it h the remedy to w hic h Phi ll ips may

be e nti tle d. In a sui t for breach of cont ract af

ter partia l performa nce, the pa rty w ho h as pa rtially

performe d the contractis enti tl ed to re co ver a n a m ount that w oul d pl ace the p arty i n a p osi ti on eq uiv ale nt t o tha t
w hic h he w oul d hav e occ upi ed if the cont ra ct had been fully per formed. Ma ys

v. Witt, 387 S.W .2d 688 (Tex.App .–A ma rill o 19 65, n o w rit). T he typical measu re of dam ages in such a situa tion is the “bene f it-of-the -b a rgain” or expectan cy mea sure, by w hich th e recovery wou ld be c alc ula ted b y su btract ing the v alu e recei v ed by the non- breachi ng par ty ( both act ual and inc ide ntal ) from the v alu e the par ty ex pect ed to recei v e w hen t he c ontractw as made. Ar

thur Ander

son & Co. v. Per

ry Equi pm ent C o., 945 S .W .2d 8 12, 8 17 (T ex. 1997 ). Assum ing that on rema nd the j ury f inds the Vau ghans breache d the cont ract, Philli ps w ould be ent it led to recei v e the co ntractpr ic e ( the v alu e Phi ll ips ex pect ed to recei v e) , l ess the sum of (1) any

amounts al re ady

pai d and ( 2) any

ex pense s t hat P hil li ps w il l not h av e to incur as a result of

being excused f rom f urthe r performa nce (t h e va lue Ph illips actually
re cei v ed)

. Phi ll ips ’s co st o f c o m p let ing the cons tr uct ion proje ct is not the s ame thi ng as Vau ghan’s cost of

co mp letion b ecau se Vau ghan’s “cost of comp letion ” w ould nece ssarily inc lud e a reason abl e profit, incl udi ng a re asona ble retur n on inv est ment to the compl eti ng cont ractor. T o assum e tha t Vau ghan’s cost of co mp letion is equiv alen t to Ph illips’s cost of compl eti on i s t o deny Phi ll ips the benefit of thei r or ig ina l barg ain

.4

To the e xtent that the p arti es mig ht c onst ru e thi s Cou rt ’s opi nio n as ag re ein g w it h the meas ure of damages as present ed by the submi ss ion of Ques ti on 4, they w oul d be in c o rr e c t

. W it h t h a tcl a ri f ic a t io n , I jo in t h e m ajo ri t y.

Pat rick A. Pirtle Justice