Court Opinion

ID: 9857824
Source: CourtListenerOpinion
Date Created: 2023-09-24 16:02:36.94486+00
Date Added: 2024-06-11T09:46:31.943903
License: Public Domain

SPEARS, Justice,
dissenting.
I cannot agree with the majority’s conclusion that as a matter of law the jury intended that Mid-County, which breached all three contracts, can now recover from Miner-Dederick, the non-breaching innocent party, especially on one of the contracts that was not substantially performed by Mid-County. I would affirm the judgment of the trial court which correctly held that because of its unjustified breach, Mid-County could not recover. The trial court also correctly allowed Miner-Dederick to recover on its counterclaim for the sums Miner-De-derick paid or became obligated to pay less the extra work and attorney’s fees the jury found was owing to Mid-County. The trial court judgment was realistic and fair and conformed to the pleadings, the evidence, and the verdict.
*201The relevant jury findings, by unanimous verdict, are in summary that Mid-County failed to substantially perform contracts 1 and 3; that Mid-County performed extra work for which it was not paid in the amount of $2,090.64 and was entitled to $700.00 attorney’s fees thereon; that Mid-County breached all three contracts with Miner-Dederick; that Mid-County “willfully, intentionally or in bad faith failed to substantially perform” all three contracts; that Miner-Dederick was damaged because of the breach of each of the three contracts; that the difference between the contract price and the reasonable cost of completion of each of the three contracts was “none”; and that Miner-Dederick paid or became obligated to pay for labor or materials furnished Mid-County for use on the three contracts the sum of $10,000.
The three contracts were for related subcontract work in the construction of a library building at Lamar University in Beaumont. Contract 1 was for tunnels; contract 2 was for a parking lot, and contract 3 was for street paving. The contractor, Miner-Dederick, plead and proved that:
The three contracts were treated by the parties as one. The billings of Mid-County did not normally separate the amount charged by contract. Normally, the billings and payments were in a lump sum amount which sometimes covered more than one contract. The parties, including the insurance company-surety of Mid-County, were identical in each contract.
The majority allows a recovery by Mid-County on contract 3. The majority relied on Davis v. Campbell, 572 S.W.2d 660 (Tex.1978), for the proposition that although this court will not delve into the mental processes of the jury, “the constraints of the theory upon which the case was tried by the parties required the jury to offset the rent arrearages ... in determining . profit.” Davis actually calls for an opposite result. In Davis the jury was shown a chart similar to the charts shown the jury in the instant case. The Davis chart summarized the total damages claimed on the transaction and showed a net figure the plaintiff claimed. The jury’s award was very close to the net figure. In rejecting the reasoning of the court of civil appeals, this court stated in Davis, “the court of civil appeals apparently overlooked the parties’ trial theory and the jury’s offset of the rent arrearage in reaching its verdict and granted Campbell a second set-off of the amount thereof.” The theory we rejected in Davis is embraced by the majority.
The testimony and exhibits that reflect the analysis of the three contracts were obviously designed to assist the jury in undertaking the complex figures involved, not to create separate liabilities under separate contracts. The majority’s result ignores the “TOTAL” column of the chart which reflects that the net result of the three contracts that Mid-County was indebted to Miner-Dederick in the amount of $31,078.24. Furthermore, the extract of Miner-Deder-ick’s exhibit showing the analysis of the three contracts is incomplete. The complete exhibit shows a bottom line entitled:
“Net Amount claimed to be due to Miner Dederick by Mid county .$41,585.89”
This exhibit, when examined in its complete form, brings the case squarely within the purview of Davis v. Campbell.
The majority’s conclusion that the contracts must be treated as separate entities flies in the face of common sense applied by the jury and the trial court. No witness stated or implied that the contracts were treated separately; no exhibit indicates that the three contracts were not treated by both parties as one job. Even plaintiff Mid-County’s original petition treated the three contracts as one and prayed for a single figure of recovery “due under said contracts.” Although Defendant Miner-De-derick’s cross-action was broken down in detail in its allegations of breaches and damages, it treated the contracts as one and alleged, “the three contracts were treated by the parties as one.” The cross-action lumped the three contracts together by *202praying for a single sum for all three contracts. Both attorneys, in open-statements, treated the contracts as one by speaking of a contract when outlining their contentions to the jury. The witnesses and attorneys throughout the trial referred to all three contracts as “the job,” “the Lamar job,” “the Miner-Dederick job,” “the contract,” “Mid-County’s contract,” “the project,” “the site work of Mid-County,” “Mid-County’s work,” and Mid-County’s “undertaking.” These phrases were used by both sides in the trial, including the owner of Mid-County-
All three contracts were executed simultaneously by the same parties with the same terms. Three identical payment bonds and three identical performance bonds were executed in connection with the three contracts. Mid-County’s invoices frequently covered more than one contract. The parties, in their dealings during construction and in their correspondence when Miner-Dederick became dissatisfied, treated the three contracts as one. In computing the costs of completion of Mid-County’s work before any lawsuit arose, the job supervisor for Miner-Dederick lumped together the total costs for all the work left undone by Mid-County. Mid-County did not keep its “labor daily time sheets” or “equipment daily time sheets” broken down into three separate contracts. “Backcharg-es” were not kept separately by contract.
Only two of the three contracts were in the record.1 One contract required Mid-County “to complete in a good and workmanlike manner ... all of the EXCAVATION, BACKFILL and MISCELLANEOUS ITEMS (as listed on attached sheet of Exclusions and. Inclusions), all of every description necessary to make the job complete for a NEW LIBRARY FACILITY and ATTENDANT SITE WORK for Lamar University, Beaumont, Texas . . . .” The other contract required Mid-County “to complete in a good and workmanlike manner .. . all of the STREET PAVING, PARKING LOT PAVING and SHELL DRIVEWAYS, all of every description necessary to make the job complete for a NEW LIBRARY FACILITY and ATTENDANT SITE WORK for Lamar University, Beaumont, Texas . . . .” There was an overall schedule for the order in which the work was to be done by the contractor and the sub-contractors to ensure that the different phases of the work would be accomplished in the proper sequence and that the next phase could begin as scheduled. Mid-County’s work in performing its contracts was interspersed throughout that overall schedule, beginning with “cleaning the site” of trees and existing asphalt and excavating and backfilling where the footings of the building were to be poured, and ending with the final paving of driveway and parking areas. The work of all three contracts was so closely interrelated that it actually constituted three component parts of one job. For example, in support of Miner-Dederick’s claims for its costs to complete the three breached contracts, Miner-Dederick’s job foreman, Tommy Merriweather, testified:
A. . Contract three is very closely associated with contract one .
* * * * * *
Q. Tommy, instead of saying the contracts are “tied,” can you say “related” to the work?
A. Yes. They are related in the sense we excavated them on Colorado Street, we removed the street, we had to backfill it and get it to a certain grade, then the street we had to put right back in according to contract three. This is what I mean they are were related so we had to do some grading and paving beside the street, we had sidewalks to replace that were broken by equipment and the installation which was under contract three. It was very hard — -this was something I had to do myself, in my own mind, was to try to decide whether what we did was *203part of contract one or part of contract three. This is what I am trying to relate to you, I was the one that was determined in trying and chargement [sic] to contract three.
Q. Was it a judgment that you attempted to make fairly and objectively?
A. Yes, because in my mind I was trying to look at the thing as a whole, I was trying to bring it together as a whole.
Q. Now, Tommy, as you completed this project we are talking about your job 510 cost, did you try to make a judgment as to which contract one, two, or three this work related to?
A. Yes, I did.
Q. And you have gone through these material invoices and they have been scheduled out on Exhibit 252, have you marked on there, looking at the diary, looking at the invoices, and looking at the work, and then put it in a particular category?
A. Yes, sir.
In distinguishing Davis the majority seeks solace in the circumstance that the charge there asked for one net figure of recovery instead of breaking down the recovery into three figures as was done in the present case. That difference certainly does not compel as a matter of law the conclusion that the jury treated the contracts as separate or that the theory upon which the case was tried negated the interrelationship of all three contracts. Several motives existed for Miner-Dederick’s counsel to seek three separate answers on the three contracts. First, if there was no evidence or insufficient evidence to support the answer to one contract, the entire verdict would not fall because the three were lumped together in one sum. Second, the contracts were complicated and the exhibits were voluminous. It would clearly aid the jury to analyze the complete transaction by breaking it down rather than lumping all the figures together and hoping the jury would understand its complexity. Breaking it down into parts is not synonymous with trying the case on each separate contract independently. Miner-Dederick’s counsel undoubtedly understood the elementary trial principle of trying to assist the jury in understanding the evidence.
Since the jury found that Mid-County did not substantially perform contract 3 and further found that Mid-County breached contract 3 causing Miner-Dederiek damage, the trial court correctly concluded that the jury did not intend that Mid-County recover on that contract under their verdict. Nor is there any logical basis for construing the jury’s verdict to allow Mid-County to recover under any of the contracts. The jury obviously “netted” out the claims of both sides in issue 9.
I further disagree with the majority’s holding that Miner-Dederiek is not entitled to recover against U.S. Fidelity and Guaranty as surety under Mid-County’s bonds. The bonds were designated as payment and performance bonds and were furnished to protect Miner-Dederiek from exactly what happened here. The jury found that Miner-Dederiek became “legally obligated” to pay $10,000 to suppliers who furnished labor or materials for use by Mid-County on the subcontracts. Since Miner-Dederiek waived the notices of claims, which existed solely for its own protection, the provisions of Tex.Rev.Civ.Stat.Ann. art. 5160 (Vernon 1971) were fully met and the surety’s liability under the bonds was established. It is immáterial that the majority predicates Mid-County’s liability on the indemnity provisions of the contract rather than the failure of Mid-County to perform under the contract. The crucial fact is that Miner-De-derick became legally obligated to pay for Mid-County’s debts for labor and material incurred in connection with the job. The payment bonds bind the surety in sums certain, conditioned on the fact that “the said principal [Mid-County] shall pay all claimants supplying labor and material to him or a subcontractor in the prosecution of the work provided for in said contract . .” This condition was not met, and the surety should be held accountable under the clear, unambiguous provisions of the bonds.
*204I would affirm the judgment of the trial court which was in a much better position than an appellate court to know the theory on which the ease was tried.
GREENHILL, C. J., and STEAKLEY and POPE, JJ., join in this dissent.

. Plaintiffs Exhibits 1 and 3 were in the exhibits received by this court, but Plaintiff’s Exhibit 2 which presumably is the third contract and similar to the two contracts described is inexplicably absent.