## COURT OF APPEALS SECOND DISTRICT OF TEXAS FORT WORTH NO. 02 - 16 - 00057 - CV
HOWARD M ICHAEL LAUDERBACK, INDIVIDU ALLY AND D/ B/A NEW ERA CONTRACT SERVICES APPELLANT

V. FMWB , INC. APPELLEE

---------- FROM THE 16TH DISTRI CT COURT OF DENTON C OUNTY

TRIAL COURT NO. 15
- 06246
- 16

---------- 

### MEMORANDUM OPINION 1

---------- Appellant Howard Michael Lauderback, i ndividually and d/b/a New Era Contract Services, appeals from the trial court’s summary judgment entered in favor of appellee FMWB, Inc. Because FMWB conclusively est ablish ed its right

1 See Tex. R. App. P. 47.4.2

to judgment on its claim fo r breach of contract, we affirm the trial c ourt’s judgment. I. BACKGROUND The relevant facts are largely undisputed. Lauderback contracted with the Texas Department of Transportation (TDOT) to provide mowing services along various roadways located in Cooke County (the contract)

. The contract in cluded several “special provisions,” one of which required Lauderback and any subcontractor to provide to TDOT a “Certificate of Insurance,” verifying that either Lauderback or the subcontractor provided worker s ’ compensation insurance in an amount “Not Le ss Than: Statutory.” On June 4, 2013, Lauderback and FMWB entered into a sub contract under which FMWB agreed to perform these mowing services along a particular Cooke County highway (the subcontract)

. FMWB was to f inish the project in 57 working days. In exchange, Lauderback agreed to pay FMWB $100,159.26. The subcontract apparently incorporated the special provisions included in Lauderback’s contract with TDOT. 2 FMWB provi ded a certificate of insurance

. During a “preaudit review of subcontractor d ocumentation,” Lauderback’s insurance carrier informed him that FMWB’s certificate of insurance “was

2 FMWB argues that the special provisions in the contract between TDOT and Lauderback were not incorporated into its subcontract with Lauderback; however, the subcontract reflects that FMWB agreed to perform the services “as shown and described in the plans and in accordance with the provisions of the referenced specifications and special provisions which are a part of this contract .” [Emphasis added.]3

inadequate, inaccurate, and did not provide the minimum amount of coverage of Workers’ Compensation Insurance as required by the contract.” As a result, L auderback withheld the last payment he owed FMWB on the subcontract

— $42,951.64

— “in lieu of the charges that [Lauderback] will have to pay to provide workers [’] comp insurance.” FMWB asserts, and Lauderback does not dispute, that it performed the mowing se rvices within the 57
- day deadline. On May 27, 2015, FMWB sent written notice of its claim for the unpaid portion of the subcontract to Lauderback and his insurer (the demand letter)

. Lauderbac k never paid the amount requested in the demand letter : $42 , 951.64 plus $1,000 in incurred attorney’s fees. On July 27, 2015, FMWB filed a verified petition against Lauderback , alleging a suit on a sworn account and a claim for breach of contract

. See Tex. R. Civ. P. 185

. FMWB also alternatively asserted a quan tum
- meruit claim . FMWB attached to its petition the affidavit of Shawn Sloan, FMWB’s president. In turn, Sloan attached to his affidavit a “Statement of Claim,” reflecti ng the total amount Lauderback owed FMWB on the subcontract , and the demand letter

. Lauderback filed a verified denial, denying the account and denying that “all just and lawful offsets, payments, and credits have been given or allowed.” See Tex. R. Civ. P. 93(10) , 185 . Lauderback also alleged the following affirmative defenses: waiv er, equitable estoppel, discharge, justification, offset, credit, laches, failure to meet conditions precedent, and fraud. See Tex. R. Civ. P. 94.4

FMWB moved for a traditional summary judgment on its claim on a sworn account , arguing that it had establi shed as a matter of law “its sworn account based upon a written contr act or founded on business deal ings between the parties on which a systematic record has been kept; that the account is just and true; and that all lawful offsets, payments, and credits h ave been allowed,” resulting in damage to FMWB “in the sum of $42,951.64.” FMWB also moved for summary judgment on its breach
- of
- contract claim, contending that it had established as a matter of law the existence of an enforceable contract between the par ties and Lauderback’s breach by his failure to pay all amounts owed under the subcontract , which resulted in $42,951.64 in damages

. In support of its motion , FMWB attached Sloan’s affidavit, the demand letter, and portions of the subcontract. Sloan’s aff idavit again included as attachments the demand letter and the “Statement of Claim.” FMWB also argu ed it was entitled to attorney’s fees and attached its attorney’s aff idavit, reflecting the attorney’s fees it had incurred. Lauderback responded to the motion, arguing that summary judgment would be inappropriate because he had filed a verified denial and because genuine issues of material fact exist ed on FMWB’s breach
- of
- contract and
sworn - account claims . Lauderback also argued that he was entitled to a n offset. Lauder back ’s attached summary
- judgment evidence consisted of his affidavit, his business records regarding the subcontract , and the subcontract. Neither FMW B5

nor Lauderback objected to the other’s proffered summary
- judgment evidence. See Tex. R. Civ. P. 166a(f)

. T he trial court granted FMWB’s motion “in its entirety” and entered a final judgment awarding FMWB $42,951.64, prejudgment and p ostjudgment interest, attorney’s fees, and court costs. In its judgment, the trial court denied all othe r claims for relief. Lauderback appeals from the trial court’s judgment and argues in five issues that the trial court erred by granting summary judgment on FMWB’s claims. 3 II. DISCUSSION A. S TANDARD OF R EVIEW We review a summary judgment de novo. T ravelers Ins. Co. v. Joachim , 315 S.W.3d 860, 862 (Tex. 2010). We consider the evidence presented in the light mos t favorable to the nonmovant

— Lauderback

— crediting evi dence favorable to him if reasonable jurors could and disregarding contrary evi dence unl ess reasonable jurors could not. See Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding , 289 S.W.3d 844, 848 (Tex. 2009). We indulge every reasonable inference and res olve any doubts in Lauderback ’s favor. See 20801, Inc. v.

3 Although Lauderback asserts that summary judgment on FMWB’s claim for quantum meruit was in error, FMWB did not move for and the trial court did not grant summary judgment on that claim. FMWB raised quantum meruit solely in the alternati ve to its contractual claims

. See generally Arias v. Brookstone, L.P. , 265 S.W.3d 4 59, 469 (Tex. App.

― Houston [1st Dist.] 2007, pet. denied) (recognizing party may plead quantum meruit in the alternative to contractual claims but noting recovery may not be had on both). Thus, we will not address Lauderback’s fourth issue and that portio n of issue five directed to this claim.6

Parker , 249 S.W.3d 392, 399 (Tex. 2008). A plaintiff is entitled to summary judgment on a cause of action if it conclusively prov es all essential elements of the claim. See Tex. R. Civ. P. 166a(a), (c); MMP, Ltd. v. Jones , 710 S.W.2d 59, 60 (Tex. 1986). Once a movant produces summary - judgment evidence entitling it to summary judgment, the burden shifts to the nonmovant to present evidence raising a fact issue on at least one of those elements. See Amedisys, Inc. v. Kingwood Home Health Care, LLC , 437 S.W.3d 507, 511 (Tex. 2014 ). We must affirm a summary judgment if any of the grounds presented to the trial court are meritorious. Provident Life & Accident Ins. C o. v. Knott , 128 S.W.3d 211, 216 (Tex. 2003). B. B REACH OF C ONTRACT In its summary
- judgment motion, FMWB argued tha t it had conclusively established that Lauderback breached the sub contract “by failing to pay [FMWB] for the labor and equipment provided to [Lauderback] under the terms of the contract

. ” In his third issue and part of his fifth issue, Lauderback asserts that the trial court erred by granting summary judgment on FMWB’s breach
- of
- contract claim because there were genuine issues of material fact regarding FMWB’s performance and whether Lauderback was entitled to an offset based on FMWB’s alleged failure to c arry the required insurance. Lauderback raised these arguments in response to FMWB’s summ ary - judgment motion as well

. To be entitled to summary judgment on its breach
- of
- contract claim, FMWB had to conclusively establish (1) the existence of a valid co ntract,7

(2) FMWB’s performance or tender of performance, (3) Lauderback’s breach of contract, and (4) FMWB’s damages as a result of the breach. See Schum v. Munck Wilson Mandala, LLP , No. 06
- 16
- 00006
- CV, 2016 WL 3197159, at *2 (Tex. App.

— Texarkana June 9, 2016, no pet.) ; Triton 88, L.P. v. Star Elec., L.L.C. , 411 S.W.3d 42, 56 (Tex. App.

— Houston [1st Dist.] 2013, no pet.). No party disputed that Lauderback and FMWB had entered into a valid contract or that Lauderb ack had failed to pay FMWB the final insta llment payment of $42,951.64 for the mowing services it timely performed under the subcontract. Lauderback argues that summary judgment was improper because FMWB failed to conclusively establish that it had fully performed under the subcontract because it had failed to provide sufficient workers’ compensation insurance

― the second element of FMWB’s claim

. T he subcontract incorporate d the TDOT special provisions from the contract , including the provision requiring subcontractors to provide workers’ compensation insurance in a statutorily required amount through its own coverage or through Lauderback’s coverage

. On appeal, both Lauderback and FMWB point solely to section 505.013 of the labor code as the source of th is sta tutory duty

. See Tex. Lab. Code Ann. § 505.013 (West 2015 ). That section provides that an individua l employed by a subcontractor is not considered an employee of TDOT for the purposes of insurance unless the subcontractor leases “a tractor, a truck, mowing or cutting machinery, or other equipment to [TDOT] and us[es] the equipment to perform work under a contract with [TDOT].”8

Id. ; see also id. § 406.002(a) (West 2015 ) (providing that employers’ participation in state’s workers’ compensation scheme is voluntary “except for public employees and as otherwise provided by law”). Here, Lauderback did not as sert that FMWB had leased equipment to TDOT to perform the subcontract. Indeed, the subcontract recognized that FMWB was “fully equipped” and that it had agreed to perform all of its contractual work “at its own proper cost and expense.” Therefore, under the terms of section 505.013

― the sole statute identified by the parties as defining the applicability and scope of a subcontractor’s workers’ compensation obligations

― FMWB was not under a duty to provide a certificate of insurance under the subcontract ev en though the TDOT special provision was incorporated into the subcontract

. Lauderback ’s assertion in his affidavit that his insurer informed him that FMWB’s certificate of insurance was “inadequate” and “inaccurate” failed to raise a fact issue regarding FMWB’s performance in light of the limits of section 505.013. Similarly, Lauderback’s assertion that it was entitled to an offset, thereby raising a fact issue regarding FMWB’s perfo rmance and damages, is unavailing. Firs t, this argument rests on Lauderb ack’s contention that FMWB failed to provide the insurance required under the subcontract. As we have concluded, the special provision incorporated into the subcontract did not require FMWB to provide a certificate of insurance to TDOT . Second, Lauderbac k failed to conclusively establish the affirmative defense of offset upon which he had the9

burden of proof. 4 To establish offset, Lauderback had to produce conclusi ve evidence of the existence and amount of damages caused by FMWB’s alleged failure. See M

athis v. Benavides , No. 04
- 15
- 00555
- CV, 2016 WL 3020893, at *5 (Tex. App.―San Antonio May 25, 2016, pet. filed ) (mem. op.). In Lauderback’s January 14, 2016 affidavit, which was prepared more than t wo years after Lauderback withheld his final payment to F MWB, he could not state the damages he had incurred as a result of FMWB’s alleged failure to provide a sufficient certificate of insurance to TDOT:

I paid FMWB for all of their work on all of the contracts, with the exception of the last payment due. . . . The money that is being withheld is in lieu of the charges that I will have to pay to provide workers [’] comp insurance.

. . . . Because FMWB has not provided proper Workers [’] Comp Insurance documentation, I will have to purchase coverage for the time period of their work. I have requ ested information fro m State Farm regarding this and as of the date of this affidavit, I do not have the final information regarding how much this will cost or when it will cost you money.

4 We assume without deciding that Lauderback’s claim of “offset” is an affirmative defense

― as Laud erback pleaded in the t rial court and asserts on appeal

― and not a counterclaim

― as FMWB contends. Whether it was a n a ffirmative defense or a counterclaim, Lauderback had the burden to produce summary - judgment evidence establishing the amount of his damages, which he did not do. See Davis v. Am. Express Bank, FSB , No. 03
- 12
- 0056 4
- CV, 2014 WL 4414826, at *4 (Tex. App.

― Aus tin Aug. 29, 2014, no pet.) (mem. op.); Triton 88 , 411 S.W.3d at 60 ; Bellair, Inc. v. Aviall of Tex., Inc. , 819 S.W.2d 895, 899

– 900 (Tex. App.

― Dallas 1991, writ denied). See generally Tex. R. Civ. P. 94 (listing affirmative defenses that must be pleaded), 97(a) (defining compulsory counterclaims).10

There is no evidence tha t any claim for a work
- related injury regarding the subcontract has been filed. FMWB conclusively proved all essential elements of its breach
- of
- contract claim through its summary
- judgment evidence , and Lauderback failed to raise a fact issue on any of th ese established elements

. See, e.g. , Sw. Pipe Servs., Inc. v. Sunbelt Rentals, Inc. , No. 01
- 15
- 00124
- CV, 2016 WL 888780, at *3

– 5 (Tex. App.

― Houston [1st Dist.] Mar. 8, 2016, no pet.) (mem. op.); Kleas v. Clark, Thomas & Winters, P.C. , No. 03
- 12
- 00755
- CV, 2013 WL 4516120, at *2 (Tex. App.

― Austin Aug. 21, 2013, pet. denied) (mem. op.); Law Office of David E. Williams, II

, P.C. v. Fort Worth Tex. Magazine Venture, LP , No. 02
- 10
- 00373
- CV, 2011 WL 2651865, at * 1

– 2 (Tex. App.

― Fort Worth July 7, 2011, no pet.) (m em. op.) ; UL, Inc. v. Pruneda , No. 01
- 09
- 00169
- CV, 2010 WL 5060638, at *11

– 15 (Tex. App.

― Houston [1st Dist.] Dec. 9, 2010 , no pet.) (mem. op.)

. Accordingly, the trial court did not err by granting judgment as a matter of law in favor of FMWB on its claim for breach of contract. III . CONCLUSION FMWB conclusively establish ed each element of its claim for breach of contract , and Lauderback failed to raise a fact issue as to those established elements. We overrule issue three and that portion of issue fiv e directed to FMWB’s breach
- of
- contract claim. We need not address issue one, issue two, or that portion of issue five directed to FMWB’s suit on a sworn account. See Tex. R. App. P. 47.1. A suit on a sworn account is not an independent cause of action11

but is a procedural device by which a plaintiff may recover for certain types of contractual claims. See Rizk v. Fin. Guardian Ins. Agency, Inc. , 584 S.W.2d 860, 862 (Tex. 1979). Because we have upheld the summary judgment on FMWB’s breach
- of
- contract cl aim, we are not required to address the propriety of the summary judgment on its suit on a sworn account. See Burruss v. Citibank (S.D.), N.A. , 392 S.W.3d 759, 762 (Tex. App.

― Dallas 2012, pet. denied) (after affirming summary judgment on breach
- of
- contract claim, declining to address summary judgment regarding claim for account stated). Finally and as we previously stated, we will not address issue four or that portion of iss ue five directed to FMWB’s quantum
- meruit claim. Accordingly, we affirm the trial court’s judgment. See Tex. R. App. P. 43.2(a).
/s/ Lee Gabriel LEE GABRIEL JUSTICE PANEL: DAUP H INOT, GARDNER, and GABRIEL, JJ. DELIVERED: October 6, 2016