### T E X A S C O U R T O F A P P E A L S , T H I R D D I S T R I C T , A T A U S T I N

NO. 03-08-00427- CV

Eco Buil t, Inc. and E d Travis, App ellants

v. Mark Lulf

s d/b /a P aperhanger P lus; Lan dm ark Organization, L.P.; and Cali forni a Wholesale Mate rial Sup ply, In c. d/b/a Calp ly, Appellees

F ROM TH E DISTRI CT COURT O F TRAVIS CO UNTY, 126 TH JUDICI AL DISTRICT NO. D-1 -GN-0 3-0 0197 0, H ONO RAB LE LO RA J. LI VINGSTO N, JUDGE P RESIDING

M E M O R A N D U M O P I N I O N

Eco Built, I n c. ap p eals a district court judgme nt awa rding damag es to appellee L andmar k Org aniz at ion, L .P. for brea ch of a construction subcontrac t. In three issues, Eco Built

asser ts that (1) the district court err ed in disreg arding jury finding s that L andmar k had brea ched the contra ct and had there by damag ed Eco Built, (2) the evidenc e conclusively or by its g reat weig ht and preponde ranc e supported a larg er amount of contra ct damag es than the j u ry aw ar ded to Eco Built; and (3) no evidenc e supports the jury ’s finding as to the amount of L andmar k’s contra ct damag es or, in the alternative, the evidenc e conclusively establishes that L andmar k waived brea ch by Eco Built. Additionally , in a fourth issue, Eco Built and Yancey Ed Travis appea l a portion of the judgme nt awa

rding L andmar

k damag es from them, joi n tly and sever ally , based on a direc ted verdic t on claims that had been assig ned to L andmar k by one of Eco Bu i l t ’s suppliers. We will modify and af firm the judg ment in part and r ever se and r emand it in part.BACK GR OUND This appea l stems from disputes among contra ctors and suppliers who wer e involved in the construction of the Hilton Austin building, the “conve ntion cente r hotel” that is located next to the Austin Convention Center. The p ro j ec t o wner , Austin Convention Enterpr ises (ACE), an

en t i ty formed by the City of Austin, contra cted with appellee L andmar k to overse e and mana ge construction on ACE’s beh a lf

. L a n d ma r k ’ s d uti e s in c lu d e d h iring and supervising all subcontrac tors,

arc hitects, and eng ineer s. L andmar k executed a subcontrac t with Eco Built on September 27, 2002 (made eff ective retroa ctively on August 12, 2002) wher eby Eco Built was to provide all labor and materia l nece ssary to fabr icate and install the building’s exterior wall sy stem. I n response to the City of Austin’s expressed desire to feature “ec o-fr iendly ” materia ls i n the building, the projec t’s plans an d s p ec i fications called for an exterior wall sy stem that incorporated aer ated autoclave

concr ete (AAC), a materia l that weig hs signific antly less than o rd i n ary concr ete. The building’s outside wall or “skin” was to consist of sever al hundred larg e panels comprised of AAC attache d to a st eel frame and fini shed wit h a stucco- like appea ranc e. Prior to the Hilton Austin project, AAC had neve r bee n used as pa nels on a hig h-rise building like the hotel. Simpl y descr ibed, Eco Built’s scope of work under the sub co n t ra ct entailed it purcha sing two-inch thick, sever al square -foot siz ed piece s of AAC, steel, and other component materia ls and fabr icating p an el s by building a steel fra me, attaching two lay ers of the AAC piece to the frame with scre ws, and applying two coats of a fi n ishing treatment. Eco Built was then responsible for having the pref abric ated panels transporte d to the project site and installed on the building with a cra

ne. E co Bu i l t wa s also responsible for supply ing the AAC component to

2another contra ctor wh o wo u l d i nstall it into steel frames constructe d on the building itself to

cre ate “fie ld ap p l i ed ” panels, and for applying the finish to the field-a pplied panels. Eco Built subcontrac ted with appellee Mark Lulfs d/b/a Paperha ng er Plus to a s s is t it w it

h f a b r ic ating , finishing,
t ra n s p o rt ing and installing the pref abric ated panels from materia ls Eco Built supplied and also i n finishing f

ield-applied pa

nels. I n consideration for the full perf o rm ance of the work specifie d under Eco Built’s subcontrac t with L andmar k, L andmar

k agree d to pay Eco Built a total sum of $3,975,000. Howeve r, it was expli citly “provide d that no pay ments are to be made u n less [Eco Built’s] rate of prog ress, work done , and mater ials furnished a re satisfactory

to [ L andmar

k] and has here in ag ree d upon.” The subcontrac t pr ovided for monthly prog ress pay ments to E co Built—essentially draw s ag ainst the total contra ct amount—“cove ring the value of work completed to the satisfac tion of [ACE] during that month.” Eco Built was re q u i red to submit applications for such pay ments

on which it would list materia ls it had purcha s ed and work that had been perf ormed during that period. The work and materia ls wer e require d to b e ca t egoriz ed among sever al line-items in a “sche dule of va lues.” To e ach line item w as assig ned a perc entag e of the total contra ct value, a nd pay ment reque sts were to be char g ed ag ainst these values. The subcontrac t contemplated that L andmar k woul d incorpora

te information from Eco Built’s application into its own reque sts for pay ment from ACE. ACE would then inspect the work and mat er i al s t o verify the information provided in the pa

y ment reque sts, and either pa y the re quest or withhold pay ment pending cure of any defic iencies. Assuming L andmar k was paid for the materia ls or work, it would pay Eco Built, and Eco Built would in turn pay its suppliers and subcontrac tors. The subcontrac t contained a pay 3when- paid clause —“PAYMENT TO [EC O BU I L T] SHAL L BE CONDI TI ONED ON PAYMENT

TO [L ANDMARK] BY [ACE].”

Also of note, the subcontrac t require d Eco Built to furnish L andmar k a trea sury -rated pay ment and perf

ormanc e bond cover ing one-hundr ed perc ent of Eco Built’s contra ctual scope of work. T he bond wa s included in the total contra ct amount. Fina lly , the subcontra ct authorized L andmar k to terminate the c ontrac t at any time without cause upon wr itten notice to Eco B uilt. Essentially three sets of key disputes arose conce rning Eco Built’s work on the projec t. The first rela

ted to difficulty Eco Built encounte red in obtaining the require d bond. Despite repe ated assura

nces to L andmar

k that it would imminently o b t ai n and furnish the bond, wee ks and then months e lapsed without Ec o Built satisfying the require ment. The second se t of disputes

conce rned the quality of Eco Built’s work. Although L andmar k had paid an initial prog ress pay ment application for Eco Buil t ’s s et -u p costs (e.g ., expenses for fabr ication equipment, tools, and its fac ility ), complaints about cra cked or misali gn ed p anels prompted ACE to withhold pay ment to L andmar k for work and materia ls related to the panels, and L andmar k in turn withheld pay

ment from Eco B uilt. The third set of disputes, related to the sec ond, conce rned Ec o Built’s failure to pa y its suppliers and subcontrac tors and the prospec t that L andmar k could ultimately be require d to satisfy those obligations. These outstanding obli g ations included pay ments due to Paperha

ng er Pl us and to California Wholesale Materia ls Supply , I nc. d/b/a Calply , which had supplied steel to Eco Built.

On Novembe r 15, 2002, L andmar k serve d notice to Eco Built that it wa s in default under sever al provisions of the subcontrac t and demande d that the defa ults be cure d within 72 hours. T h e cl ai m ed defa

ults included Eco Built’s failure to provide a pay ment and perf

ormanc e bond;

4to pr omptly amend and make g ood any defe ctive materia ls a nd/or workmanship to the approva l of L andmar k, ACE, and the projec t’s arc hitect; to pay its subcontrac t o rs an d v endors; to provide a written quality control and assistance prog ram; and to obtain the approva l of L andmar k and ACE befor e subcontrac ting its work. The notice further cited an i n ci d en t earlier that day when Eco Built “[n] otified L andmar k

. . . that due to y our inabili t y t o make pay roll y ou wer e stopping work e ffe ctive immediately .”

Wit hin a few d ay s after this notice, howeve r, L andmar k and Eco Built ag ree d to modify their subcontrac t into two agre ements—(1) a $2,500,000 purcha se contra ct wher eby L andmar k would buy th e pref

abric ated panels from Eco Built, and (2) a $1,475,000 subcontrac t to cover Eco Built’s ere ction and installation of the pref abric ated panels and finishing of the field applied panels. This modification had the eff ect of reduc ing the amount of bond Eco Built was require d to obtain, as only the second contra ct require d a bond. Also, on November 21, L andmar k issued five chec ks cover ing materia ls and work for which Eco Built had reque sted pay ment in ear ly October

. Eac h of t hese chec ks was made pay able joi n t ly to Eco Built and the vendor or third-tier subcontrac tor who had provided the materia ls or work for which Eco Built had reque sted pay ment. One such che ck wa s pay able to Ec o Built and Paperha ng er Plus, anothe r was pay able to E co Built and Calply , and the r emainder wer e ea ch payable to Ec o Built and other materia ls vendors. The disputes continued, howeve r. On Dec ember 6, L andmar k i n voked its rig ht to terminate the subc ontrac t and subsequently hired another subcontra ctor to complete fabr ication and installation of the exterior wall panels. As of the date of termin at i o n , E co Built still had not obtained a bond. By that date, Eco Built had submitt ed a total of four prog ress pay ment applications

5cover ing materia ls and work provided throug h November 25. L andmar k had not been paid by ACE in connec tion with this work, nor had L andmar k paid Eco Built any

thing beyond the initial prog ress pay ment and the November 21 joint chec ks. In J an u ar y 2 003, L andmar k issued an additional joint chec k pay able to Eco Built and the vendor of the AAC panels. L andmar k subsequently issued chec ks direc tly to two other Eco Built materia ls vendors and to two vendors of Paperhang er Pl us. Eco Built also submitt ed a fifth and final application for p aym en t cl ai m ing additional work and materia ls betwee n November 26 and its Dec ember 6 termination, but L andmar k made no pay

ments to Eco B uilt for such work a nd materia ls. L itigation ensued. Pa p erhang er Plus and Calply sued Eco Built, L andmar k, and L andmar k’s surety for amounts they claimed they wer e owed o n t h e projec t, and L andmar k and Eco Built asser

ted claims ag ainst eac h other. Among other relief eac h reque sted, L andmar k soug ht to rec over its costs of completing fabr ication and installation of the wall panels and Eco Built soug ht to rec over sums it alleg ed L andmar k owed it for work and materia ls it had provided under the parties’ subcontrac t. Calply also asser ted a claim ag ainst appellant Yanc ey Ed Travis as a g uara ntor of Eco Built’s alleg ed outstanding pay ment ob l i gat i ons to Calply

. Prior to trial, L andmar k paid Pap er h an ger Plus $100,001 to settle the subcontrac tor’s claim ag ainst it, and Paperha ng er Plus assig ned to L andmar

k its claims agai n s t E co Built

. L andmar k also paid $65,000 to Calply in Aug ust 2007. Over a month later, Calply executed what purported to be an assig nment to L andmar k

6of its claims ag ainst Eco Built. L andmar k also obtained partial summary judgme nt ag ainst Eco Built on a promissory

estoppel cla im Eco Built had a sserted. 1 L andmar k proce eded to tr ial on cause s of action ag ainst Eco Built for brea ch of the subcontrac t, fra

ud, and neg lige nt misrepre sentation. I t also asser ted the claims of Paperha

ng er Plus and Calply ag ainst Eco Built as assig nee. Eco Built, in turn, as serted its own claim ag ainst L andmar k for brea ch of the subcontrac t (spec ifically , L andmar k’s failure to pay what Eco Bu i l t contende d it was owed) and a claim that L andmar k had conver

ted Eco Built’s tools and equipment following termination.

During trial, L andmar

k moved for and obtained a direc ted verdic t on the Calply claims. Following prese ntation of evidenc e, the distr i ct co u rt submitt ed eac h of the rema ining claims to the jury

. T h e submissi ons of the parties’ competing contra ct claims are signific ant to

our analy sis. I n Question 1, the district court inquired whether Eco Built had failed to comply with the “L andmar

k/Eco Built Contract” (def ined by ref

ere nce to the orig inal contra ct executed in September 2002), and, in Question 3, whether L andmar k had fa iled to comply

with that contra ct. I n both questions, the district court instructed the jury that a failure to comply must be “mater ial” and supplied a definition of materia lity that g ener ally trac ked the fac tors identified in section 241 of the Second Restatement of Contracts and applied by the Texas Supreme Court in Mustang Pipeline Co., Inc. v . Driver Pipe line Co., Inc. , 134 S.W .3d 195, 199 (Tex. 2004) (per curiam). 2 Early in the litigation, L andmar k’s surety also obtained summary judgme nt, on limit ation 1 g rounds, on claims asse rted a g ainst it by Eco B uilt. Reg arding materia lity , the jury was instructed that the circ umstan ce s t o consider in 2 deter mining whe ther a

failure to comply

is material include:

7I n Question 2, the district court submitt ed—pre dicat ed o n a finding that Eco Built

had failed to comply with the contra ct—an aff irmative defe nse of waiver asser ted by Eco Built. The court instructed the jury that Eco Built’s failure to comp l y wa s ex cused if L andmar k “wa ived” compliance , and that “wa iver” is “ an intentional sur rende r of a

known rig ht or intentional c onduct inconsistent with claiming that rig ht.” I n Question 4, the court submitt ed—pre dicated on a finding
t h at L andmar

k had failed to comply with the contra ct—an equitable estoppel defe nse asser t ed b y L andmar k. 3

a. the extent to which the injured party will be deprive d of the benef it which he rea sonably

expected; b. the extent to which the injured party can adequately be compensated for the part of that of which he will be deprive d;

c. the extent to which t h e p ar t y faili ng to perf orm or to offe r to perf

orm will suffe r for feiture ; d. the likelihood that the party failing to perf orm or to offe r to perf

orm will cure his failure, taking into acc ount the circumstances indicating a ny rea sonable assura nces. See Mustang Pipeline Co., Inc. v. Driver Pipeline Co., Inc. , 134 S.W .3d 195, 199 (Tex. 2004) (per curiam) (quoting Restatement (Sec ond) of Contrac ts § 241 (1981)). Specifica lly , the jury was instructed that L andmar k’s failure to comply would be excused 3 if ea ch to the following circ umstances ha d occur red: 1. Eco B uilt

a. by words or co n d u ct made a false repr esentation or conce aled materia l fac ts; b. wi t h k n o wledg e of the fac ts or with knowledg e or information that would lead a

rea sonable pe rson to discover the fac ts; and

8I n Question 5, the dist ri ct co urt inquired—pre dicated on (1) finding s that both

Eco Built and L andmar

k had failed to comply with the subcontrac t and (2) failure s to find that either party ’s brea ch had been exc u s ed

— “W ho failed to comply with the L andmar k/Eco Built Contract first? ” Next, predic ated on (1) a finding that Eco Built had brea ched and a failure to find it had been excused, or (2) that Eco Built had brea ched fi rs t , Question 6 asked the jury to awa rd damag es to L andmar

k, considering only “[t] he differ ence betwee n the unpaid agree d price o f t he L andmar k/Eco Built Contract and the amount L andmar k incurre d to complete the scope of work contained in the L andmar

k/Eco Built Contract.” Simi larly , Question 7—predic ated on (1) a finding that L andmar

k had brea ched first and a failure to find it had been excused or (2) that L andmar k had brea ched first—asked the jury to awa rd damag es to Eco Bu i l t, considering only “[t] he differ ence betwee n the amount paid by L andmar k to Eco Built for work and materia ls provided and the amount L andmar k had ag ree d to pay

Eco B uilt for that work a nd materia ls.” The jury found that both Eco Built and L andm ar k h ad failed to comply with the subcontrac t, failed to find that either party ’s non-complianc e had been excused, and that

c. with the intention that L andmar k would rel y o n t he false repr esentation or conce alment in acting or dec iding not to ac t; and 2. L andmar

k

a. did not know and had no mea ns of knowing the re al fa cts; and b. relied to its detriment on the false repr esentations or conce alment of materia l fac ts. See Comm. on Pattern J ury Charg es, State Ba r of Tex., T ex as P at t ern J ury Charg es: Business, Consumer, I nsuranc e & Employ ment PJ C § 101.25 (2008).

9Eco Built had brea ched first. Be cause the predic at es for the contra ct damag es submissi ons in

Questions 6 and 7 we re e ach stated in the disjunctive, the jury answe red both que stions, awarding L andmar k $481,859.26 and Eco Bu ilt $62,503.85. The jury failed to find that Eco Built had committed fraud a g ainst L andmar k or that Eco B uilt had failed to c omply with its agr eeme nt with Paperha ng er Plus, but did find that Eco Built had made a neg ligen t m i s repr esentation on which L andmar k had justifiably relied. As with L andmar k’s contra ct damag es submissi on, the neg lige ntmisrepre sentation damag es submissi on instructed the jury to consider only “[t] he differ en c e b e tw e en the unpaid ag ree d price of the L andmar k/Eco Built Contract and the amount L andmar k incurre d to complete the scope of work contained in the L andmar k/Eco B uilt C ontrac t,” and the jur y awa rded

an identical amount—$481,859.26. On the other hand, the ju ry also found that L andmar k had

conver ted Eco B uilt’s property

and aw arde d a total of $92,000 in dama g es on that cla im. L andmar k elec ted to rec over on its contra ct claim. Ba sed on the jury ’s fi n d i n gs, the di strict court render ed judgment awarding L andmar k a sum of $474,859.26—represe nting the jury ’s aw ar d o f $481,859.26 in contra ct damag es, offse t by Eco Built’s $92,000 in conver sion damag es, plus $85,000 in stipulated attorney ’s fee s—plus pr ejudg ment interest. The district court did not awa

rd Eco Built any portion of the damag es the jury had awa rded for L andmar

k’s brea ch of the subcontrac t. Additionally , based on its dire cted ve rdict on the Calply claims, the district court

awa rded L andmar

k, as assig nee, a t o t al of $63,505.97, plus prejudg ment interest, jointly and

sever ally from Eco Built and Travis. The $63,505.97 fig ure repr esente d $58,505.97 in damag es plus $5,000 in stipul ated attorney ’s fe es.

This appea l followed.

10ANALYSIS

Eco Buil t’s c ontractclaim

I n its first issue, Eco Built argues that the district court err ed in disreg arding the jury ’s finding s that L andmar

k had failed to co mply with the subcontrac t and that Eco Built had been damag ed by the brea ch. The district court could have disreg ar d ed t hese finding s only if they had

no support in the evidenc e or wer e immaterial. Southeastern Pipeline Co. v. Tichacek, 997 S.W .2d 166, 172 (Tex. 1999); Spence r v. Eagle Star , 876 S.W .2d 154, 157 (Tex. 1994); Billy Smith Enter., Inc. v. Hutchison Constr., Inc. , 261 S

. W

. 3 d 3 7 0 , 374 (Tex. App.—Austin 2008, pet. dism’d). Al t houg h the rec ord does not expli citly indicate the basis on which the district court disreg arde d
t h es e fi ndings, there is no indication that the court set aside these finding s for lack of evidentiary support. The rec ord is instead consistent with the district court’s having g iven these finding s eff ect but determining they

wer e immateria l. See Billy Smith Enter., Inc. , 261 S.W .3d at 372-74. 4 A j ury question is immaterial “when i t shoul d n o t have been submi tted, it calls for

a finding bey ond the province of the jury , such as a q uestion of law, or when it was proper ly submitt ed but has been rende red immaterial by other finding s.” Id. (quoting Tichacek, 997 S.W .2d
at 172). On appea l, the parties join issue as to whether the jury ’s finding s that L andmar k had failed to comply with the subcontrac t and that Eco Built had been damag ed wer e rende red immaterial by

Follo wi n g the verdict, L andmar k filed a one-pa g e mot ion for entry of j udg ment that did 4 not mention the findings in question, but mere ly attache d a form of j udg ment that is substantively identical to the judg ment that the district court ultimately signe d. That judg ment incorporated the jury ’s verdic t by ref

ere nce and awa

rded damag es to L andmar k on its contra ct claim, but omitted any mention of the jury finding s that L andmar k had breach ed and that Eco Built had been damag ed. Neither the judgme nt nor any other ruling ref lects that the district court set aside these or other finding s. 11the jury ’s finding i n Qu es t i o n 5 that Eco Built had brea ched befor e L andmar k did. The parties’ contentions cente r on the implications of the “funda mental principle of contra ct law that when one party commits a m aterial brea ch of that contra ct, the other party is discharg ed or excused from further perf

ormanc e.” Mustang Pipeline Co., Inc. , 134 S.W .3d at 196 (citing Hernandez v. Gulf Group Lloyds , 875 S.W .2d 691, 692 (Tex. 1994)).

L andmar k argues that beca

use the jury found in Question 5 that Eco Built’s materia l brea ch of the subcontrac t found in Question 1 occur red befor e L andmar

k’s materia l brea ch throug h failure to pay Eco Built, fo u nd in Question 3, L andmar k was, as a matter of l aw, discharg ed from any pay ment obligations under the subcontrac t that could have been the basis for the jury ’s finding s of brea ch in Question 3. Howeve r, the principle on which L andmar k relies is subject to an important

cave at, as Eco Built observe s. W h en a co n trac ting party commits a materia l brea ch, the nonbrea ching party must elec t betwee n two course s of action, either continuing perf ormanc e under the contra ct or c easingperf

ormanc e and te rminating the contract. See Gupta v. Eastern Idaho Tumor Inst., Inc. , 140 S.W .3d 747, 756 (Tex. App.—Houston [14t h Dist.] 2004, pet. denied) ; W orld Acc ess Telecomm s. Group, Inc. v. Statewide Calli ng, Inc. , No. 03-05-00173- CV, 2006 Tex. App. L EXI S 906 1 , at * 18 (Tex. App.—Austin Oct. 17, 2006, no pet.) (mem. op.). I f the non-bre aching party elec ts to treat the contra ct as continuing and insists the party in defa ult continue its perf

ormanc e, the previous brea ch constitut es n o ex cuse for nonperf ormanc e on the part of the party not in defa ult, and the c ontrac t continues in forc e for the benef it of both parties. Hanks v . GAB Bus. Serv s., Inc. , 644 S.W .2d 707, 708 (Tex. 1982); Gupta , 140 S.W .3d at 756.

12I n this case , L andmar k acknow ledg es t h at it continued to treat its subcontrac t with Eco Built as continuing—a nd continued to de mand perf ormanc e from Eco Built—until L andmar k finally terminated the contra ct on Dec ember 6, 2002. Consequently , L andmar k was not discharg ed by virtue of Eco Built’s materia l brea ch from any pay ment obliga t i o n s to Eco Built that acc rued under the subcontrac t prior to termination. See Gupta , 140 S.W .3d at 756; W orld Acc ess Telecomm s. Group, Inc. , No. 03-05-00173- CV, 2006 Tex. App. L EXI S 9061, at *18. The jury ’s finding s that 5 L andmar k brea ched the subcontrac t a nd that Eco Built was damag ed wer e, there fore , not r ender ed immaterial by

the jury ’s finding in Question 5 that Eco B uilt had materially brea ched f

irst. L andmar k also urg es that it had no obligations under the subcontrac t to make any pay ment to Eco Built. I t emphasizes evidenc e of Eco Built’s “infe rior work” and the pay -af ter-pa y clause in the subcontrac t. This a mounts to a contention that the district court proper ly disreg arde d the finding s that L andmar k had brea che d i t s p ayment obligations and that Eco Built had been damag ed bec ause the re is no evide nce to support the f inding of brea ch. This cannot be a basis for aff irming the judgme nt, howeve r, beca use there is no indication that L andmar k ever challeng ed the jury ’s findi ng of breach for lack of evidentiary support or that the district cour t set it aside on that basis. See Billy Smith Enter., Inc. , 261 S.W .3d at 372-74; Tex. R. App. P. 33.1.

L andmar k’s acknow ledg ment that the contra ct continued in eff ect until Dec ember 6, 2002, 5 obviates any potential issues with omitted or deeme d finding s reg arding whether or when L andmar k elec ted to terminate the subcontrac t prior to t h at t i m e. Nor could any such finding be deeme d in favor of L andmar

k, as there is no evidenc e that L andmar k elec ted to terminate the subcontrac t befor e Dec ember 6. See Tex. R. Civ. P. 279; Ramos v. Frito-Lay, Inc. , 784 S.W .2d 667, 668 (Tex. 1990) (ele ments omitted from a jury char g e that constitute only part of theory of rec overy may be deeme d found in support of judgme nt if no objection is made and they are supported by fac tually sufficie nt evidenc e). 13L andmar k also argue s t h at its “fa ilure t o elec t” t o terminate the subcontrac t befor e Dec ember 6, 2002, should not “excuse” Ec o Built’s mater ial brea ch in fa iling to provide the bond beca use Eco Built had “uncle an hands in causing L andmar k not to terminate ear lier.” This argument

seems to relate to Question 4, which submitt ed L andmar k’s aff irmative defe nse of equitable estoppel to its liability for brea ch of contra ct. The jury failed to find that L andmar k’s failure to comply with
t h e s ubcontra ct was excused by equitable estoppel. To the extent L andmar k is arg uing t h at t h e evidenc e con clusively established that defe nse, we reje ct that contention, which, in any event, L andmar k did not prese rve b el o w. Al t ernatively , to the ex tent L andmar k is attempting to rely on

some other equitable defe nse t o its contra ct l iability , it likewise failed to pre serve that contention. See Tex. R. App. P . 33.1.

Finding no basis in the evidenc e for the district c ourt to have disreg arde d the jury ’s finding s that L andmar

k failed to comply with the subcontrac t and that Eco Built was damag ed there by , we sustain Eco Built’s firs t i s s u e. I n its second issue, Eco Built argues t hat t he evidence conclusively establishes that it incurre d damag es g reater than the $62,503.85 the jury awa rded it or that the jury ’s failure to a war d g rea ter damag es was ag ainst the g reat weig ht and preponde ranc e of the evidence. Eco Built’s arg uments cente r o n a d am ag es calculation that L andmar k prese nted at trial to demonstrate what it viewed as the maxi mum amount Eco Built could rec over if, as Eco Built contende d, L andmar

k had ag ree d to pa

y Eco Built for work and materia ls reque sted in Eco Built’s prog ress pay

ment applica t i o n s . Ho weve r, we conclude that Eco Built did not prese rve these contentions in the district court.

14Eco Built did not object t o Qu estion 7 or otherwise raise its leg al-suff iciency contenti o n p ri o r to submissi on. Following the verdic t, Eco Built filed two motions that wer e authore d and prese nted by Travis with c onsent of appellants’ trial-leve l counsel and L andmar k—a motion for new trial and a “motion to set aside direc ted verdic t and objection to entry of judgme nt.” Although we have attempted to construe the substance of these filings fairly , we cannot discern that either complains of or seeks relief conce rning the jury ’s damag es finding in Question 7. Consequently , we must overr ule Eco Built ’s complaint reg arding the leg al sufficie ncy of the evidenc e supporting the jury ’s answe r on Question 7. See Tex. R. Civ. P. 324(b)( 2), (3), (4); Tex. R. App. P. 33.1; T.O. Stanley Boot Co. v. Bank o f E l Paso , 847 S.W .2d 218, 220 (Tex. 1992) (par ty must prese rve leg al sufficie ncy point by : (1) moving for instructed verdic t, (2) moving for judgme nt notwithstanding verdic t, (3) objecting to submissi on of jury question, (4) moving to disreg ard jury ’s

answe r to vital fac t question, or (5) movingfor ne w trial).

Land m ark’s contr act c laim

I n addition to its arguments conce rning the damag es t h e jury awa rded on its own contra ct claim, Eco B uilt also challeng es, in its second issue, the lega l sufficie ncy of t he evidence supporting the jury ’s awa

rd of $481,859.26 in contra ct damag es to L andmar k. As previously noted, Question 6 as k ed the j ury to deter mine the di ffe renc e between (1) “the unpaid agr eed price of the L andmar k/Eco Built Contract” (i.e., the pay ments to Eco Built that L andmar k saved by terminating the subcontrac t and using another subcontrac tor); and (2 ) “t h e amount L andmar k incurre d to complete the scope of work contained in the L andmar k/Eco Built Contract” (i.e., L andmar k’s costs to complete the work that Eco Built had orig inally contra cted to per form). Ec o Built argues 15that L andmar k failed to prese nt competent evidenc e of its completion costs (the second component) beca use wh i le L andmar

k prese nted testimony that it incurre d larg e out-of-poc ket costs of completion, it failed to prese nt any evidenc e that thes e co s t s we re rea sonable and nece ssary . See Mustang Pipeline , 134 S.W .3d at 200-01 (“ The pa rty seeking to rec over the cost of completion in

a brea ch of contra ct case has the burden to prove that the damag es soug ht are rea sonable. Evidence of the amounts char g ed and paid, standing alone, is no evidenc e that such pay ment was rea sonable and nece ssary .”) (citing Dallas Ry. Terminal Co. v. Gossett , 294 S.W .2d 377, 382-83 (Tex. 1956)). Howeve r, as was the case with Eco Built’s contra ct damag es, Eco Built did not prese rve this leg alsufficie ncy

complaint below. Te x . R. App. P. 33.1; T.O. Stanley Boot Co. , 847 S.W .2d at 220. Eco Built also argues that L andmar k failed to prese nt leg ally sufficie nt evidenc e that

some of the components of its claimed costs of completion had been within the scope of Eco Built’s contra ct. Eco Built did prese rve this con t en t i o n b el o w t o the ex tent it complained in its new trial motion that L andmar

k’s damag es model had excluded sever al cha ng e orde rs L andmar

k had made to the Eco Built contra ct from its calc ulation of the unpaid ag ree d price of the L andmar k-Eco Built subcontrac t (the first component of the calc ulation) y et deter mined L andmar

k’s costs of completion (the second component) based on a contra ctual scope of work that had incorporated the same chang e order s. L andmar

k disputed whether it had ag ree d to these chang e order s. Eco Built argued that the total amount of its alleg ed chang e order s—$709,863.85—should be added to “the unpaid ag ree d price of the L andmar

k/Eco Built Contract” befor e subtracting that fig ure from L andmar k’s costs of completion to deter

mine L andmar

k’s damag es. Assuming so, this would not alone demonstrate that the evidenc e supporting the jury ’s awa rd of $481,859.26 to L andmar k was leg ally insufficient.

16L andmar

k prese nted evidenc e that its costs of completion wer e $4,918,755. 7 3 a n d that the rema ining unpaid balanc e of the Eco Bu ilt contra ct was $3,219,838.47 (not including the alleg ed chang e order s), a differ ence of $1,698,920.26. I ncluding the al l eg ed chang e orders i n the unpaid balanc e of the Eco Built contra ct would reduc e this differ ence to $989,056.41—still well above the amount the jury awa rded. We ove rrule E co B uilt’s second issue. I n its thi rd issue, Eco B uilt arg ues i n the alternative t hat conclusive evidenc e and a statement by L andmar

k’s counsel during closing argument established Eco Built’s waiver defe nse

as a matter of law. Eco Built points to e vidence that in N ovember 2002, L andmar k and Eco Built 6 ag ree d to modify their original sub co n trac t into two ag ree ments, which had the effec t of reducing the amount Eco Built was require d to bond from almost $4 milli on to $1,475,000. During closing argument, L andmar

k’s counsel emphasized that the parties had ag ree d to “split” the contra ct to aid Eco Built in obtaining a bond. Eco Built further observe s that the jury issue on its brea ch-of -contra ct liability , Question 1, inquired whether it had “f ail ed to comply with the L andmar k/Eco Built contra ct,” and define d “L andmar k/Eco Built contra ct” b y ref ere nce to a copy of the orig inal subcontrac t. Fr om this, Eco Built rea sons that the evidenc e and counsel’s statements conclusively establish its waiver defe nse as to any brea ch- o f-contrac t claims that wer e predic ated on a bond require ment in the subcontrac t. Even assuming this, howeve r, Eco Built has not demonstrated err or in the judgme nt beca

use the broad- form submissi on of Eco Built’s brea ch-of -contract liability in

Eco Built raised this argument in its motion for new trial. Thus, while this argument was 6 prese rved, Eco Built’s reme dy would b e l i m i t ed t o a new trial. See Horrocks v. Texas Dep’ t of Transp. , 852 S.W .2d 498, 499 (Tex. 1993). 17Question 1 enable d t h e jury to find brea ch based on contra ctual obligations other than the bond

require ment. We overrule Eco B uilt’s third iss ue.

Direc ted ver dict on Calpl y claim s

Finally , in the fourth issue prese nted on appea l, Eco Built and Travis jointly contend that the district court err ed in g ranting a direc ted verdic t in L andmar k’s favor on the assig ned Calply claims and awarding $58,505.97 in damag es j oin t l y an d sever ally ag ainst them. When revie wing a dire cted ve rdict, we view the evidenc e in the l ight most favor able to the party ag ainst whom the verdic t was rende red and disreg ard all contra ry evidenc e and infere nces. See Szczepanik v. First S. Trust Co. , 883 S.W .2d 648, 649 (Tex. 1994); W hite v. Southwestern Bell Tel. Co. , 651 S.W .2d 260, 262 (Tex. 1983). I f t here is any conflicting eviden ce o f probative value that raises a materia l fac t issue on any theory of rec overy , that issue should be submitt ed to the jury

. Szczepanik, 883 S.W .2d at 649; W hite , 651 S.W .2d at 262. Appellants argue that the district court err ed in aw ar d i n g d amag es based on the direc ted verdic t beca

use the evidenc e prese nts a fac t issue as to whethe r L an d m ar k ’s pay ment of $65,000 to Calply satisfied in whole or in part the claims that Calply purported to assig n to L andmar k. Appellants emphasizes evidenc e t h at L andmar k first made an elec tronic transfe r of $65,000 to Calply to “cle ar their acc ount” on Aug ust 24, 20 0 7 , y et di d not execute an assig nment until ea rly October

. And that assig nment, appellants add, purported to a ssign “cla ims in exis tence as of Septembe r 18, 2007,” w hich was a lmost a month after L andmar k’s pay ment to Calply

.

18More broadly , appella n t s have complained both here and below that the awa rd resulted in a double- or eve n triple-re cover y for the sa me injury

. Although L andmar k insists that 7 “the evidenc e is that the pay ment is to clea

r [C alply ’s] claim ag ainst L andmar k” and that this claim is distinct from Calply ’s claim ag ainst Eco Built, L andmar k’s own damag es witness acknow ledg ed that the pay

ment was to satisfy an obligation that Eco Built had incurre d to Calply for steel Eco Built had purcha sed. L andmar

k asser ts, and appellants conce ded in its post-verdic t filings below, that the amount of Eco Built’s outstanding unpaid obligations to Calply had been $58,505.97. Thus, Calply

was paid in excess of this amount by L andmar k to “cle ar their acc ount,” then purported to assig n to L andmar k its right to re cover

the same $58,505.97 oblig ation from Ec o Built. Appellants have reque sted reve rsal of the p o rt i o n o f the district court’s judgme nt

awa rding L andmar

k damag es on the assig ned Calply claims and rema nd for trial. We ag ree that appellants have shown themselves entitled to this re l i ef

. Consequently , we sustain appellants’ fourth issue.

CONCLUSION

We have conclude d that the district court err ed in di s reg arding the jury ’s finding s that L andmar

k had brea ched the L an d m ar k -E co Built subcontrac t and that Eco Built had been damag ed thereby

. We have overrule d Eco Built’s issues perta ining to the amount of damag es t he jury awa rded to Eco Built and to L andmar k. I n light of these holdings, we modify the district court’s judgme nt to reduc e L andmark ’s awa rd of actua l damag es from Eco Built, $474,859.26, by the

Contrary to L andmar

k’s asser tions on appea l, Eco Built prese rved this complaint by raising 7 it in it s objection to entry of judg ment. 19amount of the jury ’s awa rd of contra ct damag es to Eco Built, $62,503.85, for a n et t o tal of $412,355.41. As so modified, we aff irm that portion of the j u dg ment. Having modified the damag e awa

rd, we must also reve rse the amount of prejudg ment interest awa rded to L andmar

k and

rema nd that portion of the cause to the trial court for rec alculation of p re j u d gm en t i n t ere st. See Lairsen v. Slutzky , 80 S.W .3d 121, 132 (Tex. App.—Austin 2002, pet. denied)

. We also reve rse the portion of the district court’s judgme nt awa rding L andmar

k, as assig nee of Calply , $58,505.97, and

rema nd for f urther pr ocee dings.

__________________________________________ Bob Pembe rton, J ustice Be fore Chief J ustice Jones, J ustices Pemberton a nd Waldrop Modified and, a s Modified, Aff irmed in part; Reve rsed a nd Remanded in pa

rt Filed: August 13, 2010

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