Court Opinion

ID: 2984682
Source: CourtListenerOpinion
Date Created: 2015-09-22 22:06:47.682116+00
Date Added: 2024-06-11T11:38:07.722109
License: Public Domain

Affirmed and Opinion filed February 25, 2014.

                                     In The

                    Fourteenth Court of Appeals

                             NO. 14-12-01003-CV

     DAVID WIGHT CONSTRUCTION COMPANY, LTD., Appellant
                                       V.
 FEDERAL DEPOSIT INSURANCE COMMISSION AS RECEIVER FOR
            FIRST NATIONAL BANK, N.A., Appellee

            On Appeal from County Court at Law Number Three
                         Galveston County, Texas
                  Trial Court Cause No. CV-0063221-A

                               OPINION
      This fraud case arises out of a dispute between a general contractor on a
real-estate development project and the bank that provided the construction
financing for the real-estate developer. The trial court granted summary judgment
in favor of the bank on the general contractor’s various claims against the bank,
and the general contractor now appeals, challenging the no-evidence summary
judgment as to the general contractor’s common-law fraud claim. The main issue
in this appeal is whether the summary-judgment evidence raises a genuine fact
issue regarding the general contractor’s allegation that the bank represented to the
general contractor that the bank was withholding ten percent of each payment as
“retainage” to be paid to the general contractor upon completion of its work on the
project.   We conclude that the summary-judgment evidence does not raise a
genuine fact issue in this regard, and we affirm the trial court’s judgment.

                    I. FACTUAL AND PROCEDURAL BACKGROUND

       Friendswood Cypress, LP (hereinafter “Friendswood”) embarked upon a
real-estate-development project. To finance the project, Friendswood entered into
a construction loan agreement with appellee/defendant First National Bank, N.A.
(hereinafter the “Bank”). 1       Friendswood hired appellant/plaintiff David Wight
Construction Company, Ltd. (hereinafter “Wight Construction”) to construct
streets, underground drainage, and water and sewage systems for a new real-estate
development as part of the project. As Wight Construction completed work under
its contract with Friendswood, Wight Construction submitted requests to
Friendswood for payment. These requests reflected that ten percent in retainage
was being withheld by Friendswood.                 Friendswood, in turn, presented these
requests to the Bank, requesting that the Bank advance loan proceeds to
Friendswood.       In response, the Bank advanced proceeds from the loan to
Friendswood.

       Friendswood began having difficulties making loan payments in April 2008,
and in June 2008, defaulted. Wight Construction allegedly completed work on the
project in May 2008, but allegedly did not receive payment in response to payment

1
  In September 2013, during the pendency of this appeal, the Comptroller of the Currency
appointed the Federal Deposit Insurance Corporation as receiver for the Bank. Thus, the
appellee in this case is The Federal Deposit Insurance Commission as receiver for First National
Bank, N.A.

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requests submitted in May or June, nor did it receive the “retainage” withheld from
its previous payment requests.

        In February 2010, the Bank foreclosed its lien in the real property involved
in the project.    Wight Construction brought suit, alleging a variety of claims
against various defendants, including the Bank. The Bank filed two summary-
judgment motions seeking dismissal of Wight Construction’s claims against the
Bank.     After the Bank filed these motions, Wight Construction amended its
petition to add a claim for fraud and a request that the trial court impose a
constructive trust. The next week, the trial court granted summary judgment in
favor of the Bank on Wight Construction’s (1) suit to foreclose mechanic’s and
materialmen’s lien, (2) suit to foreclose constitutional lien, (3) breach-of-contract
claim, (4) claim for breach of alleged retainage obligations under section 53.101(a)
of the Texas Property Code, (5) promissory-estoppel claim, (6) negligence claim,
(7) quantum-meruit claim, (8) unjust-enrichment claim, and (9) suit to remove a
cloud on title. The Bank then filed a no-evidence motion for summary judgment
seeking dismissal of the fraud claim and constructive-trust request. The trial court
granted the motion and later severed Wight Construction’s claims against the Bank
to create a final judgment.

                              II. STANDARD OF REVIEW

        In reviewing a no-evidence summary judgment, we ascertain whether the
nonmovant pointed out summary-judgment evidence raising a genuine issue of fact
as to the essential elements attacked in the no-evidence motion. See Johnson v.
Brewer & Pritchard, P.C., 73 S.W.3d 193, 206-08 (Tex. 2002). In our de novo
review of a trial court’s summary judgment, we consider all the evidence in the
light most favorable to the nonmovant, crediting evidence favorable to the
nonmovant if reasonable jurors could, and disregarding contrary evidence unless

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reasonable jurors could not. Mack Trucks, Inc. v. Tamez, S.W.3d 572, 582 (Tex.
2006). The evidence raises a genuine issue of fact if reasonable and fair-minded
jurors could differ in their conclusions in light of all the summary-judgment
evidence. Goodyear Tire & Rubber Co. v. Mayes, 236 S.W.3d 754, 755 (Tex.
2007).
                             III. ISSUES AND ANALYSIS

      On appeal, Wight Construction advances two issues: it asserts that the trial
court erred in granting the Bank’s summary-judgment motion as to the fraud claim
and as to the request for the imposition of a constructive trust.

A.    Did the trial court err in granting a no-evidence summary judgment as
      to the fraud claim?
      In its first issue, Wight Construction argues that the trial court erred in
granting summary judgment on its claim for common-law fraud.           The Bank
challenged each of the essential elements of Wight Construction’s common-law
fraud claim. One of these elements is that the Bank made a material representation
to Wight Construction. See In re FirstMerit Bank, N.A., 52 S.W.3d 749, 758 (Tex.
2001).    Wight Construction asserts that the Bank represented to Wight
Construction that it was withholding ten percent of each payment as “retainage” to
be paid to Wight Construction upon completion of its work on the project. Though
Wight Construction asserts that the Bank made such a representation, Wight
Construction does not cite to any summary-judgment evidence that, under the
summary-judgment standard of review, would allow reasonable and fair-minded
jurors to find that the Bank made such a representation.

      In response to the Bank’s no-evidence summary-judgment motion, Wight
Construction submitted an affidavit from David Wight and deposition testimony
from Richard Hendee, the Bank’s corporate representative. In his affidavit, David

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Wight stated that Wight Construction submitted requests for payment on work
completed and materials provided to date and that each request was reduced by a
retainage amount of ten percent. David Wight did not state to whom he submitted
the requests or who directed that the requests be reduced. He did not state that the
Bank withheld the retainage, nor did he testify that the Bank made any
representation to Wight Construction.

      Hendee explained, in his deposition, that he did not handle the Bank’s loan
to Friendswood. Hendee repeatedly testified that the Bank had a relationship with
only the borrower, Friendswood, and not Wight Construction. He explained that
when the Bank has a construction loan with a borrower and a company submits a
request for payment to the borrower for construction work, the Bank reviews the
payment request and advances amounts under the loan agreement so that the
borrower can pay the company. Hendee stated that usually the Bank would place
the proceeds in the borrower’s checking account, or if the borrower did not have a
checking account, the Bank would issue a cashier’s check. Hendee stated that
Wight submitted requests for payment to Friendswood and that Friendswood
submitted these requests to the Bank. According to Hendee, the Bank did not
withhold retainage; the Bank advanced to Friendswood the amount of funds
requested by Friendswood. Hendee noted that it was Friendswood’s obligation to
pay Wight Construction. Hendee agreed that on one occasion, the Bank advanced
proceeds from the loan and made a direct payment to Wight Construction by
means of a cashier’s check from the Bank, even though Friendswood had a
checking account with the Bank at that time. Hendee testified that “we never
talked to Mr. Wight.”

      Wight Construction argues that Hendee’s testimony raises a genuine fact
issue as to whether the Bank represented to Wight Construction that it was

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withholding ten percent of each payment as “retainage” to be paid to Wight
Construction upon completion of its work on the project. On one occasion the
Bank issued a cashier’s check directly to Wight Construction. Nonetheless, this
action does not change the fact that the payment to Wight Construction was made
with funds advanced to Friendswood by the Bank under the construction loan.
Wight Construction calculated the amount of its payment request by deducting ten
percent as retainage. Friendswood then forwarded this request to the Bank, and the
Bank advanced funds under the construction loan and issued a cashier’s check in
the requested amount to Wight Construction. Neither the Bank’s issuance of this
cashier’s check nor its advancing of funds to Friendswood to pay other payment
requests raises a genuine fact issue as to whether the Bank represented to Wight
Construction that the Bank was withholding ten percent of each payment as
“retainage” to be paid to Wight Construction upon completion of its work on the
project.   According to Hendee, the Bank advanced all funds available to
Friendswood under the construction loan with the Bank.

      Hendee’s testimony shows that the Bank received documents from
Friendswood indicating that the amount requested by Friendswood had been
reduced to reflect the ten-percent retainage. Hendee’s testimony also shows that he
understands what retainage is and that the Bank was aware that the payment
requests had been reduced to reflect a ten-percent retainage. Still, Hendee did not
testify that there was any communication between the Bank and Wight
Construction. On the contrary, Hendee indicated that no Bank employee ever
spoke to David Wight. Under the familiar summary-judgment standard of review,
the summary-judgment evidence would not allow reasonable and fair-minded
jurors to find that the Bank represented to Wight Construction that the Bank was
withholding ten percent of each payment as “retainage” to be paid to Wight

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Construction upon completion of its work on the project. See Goodyear Tire &
Rubber Co., 236 S.W.3d at 755; In re FirstMerit Bank, N.A., 52 S.W.3d at 758.
The trial court did not err in granting the Bank’s no-evidence summary-judgment
motion as to Wight Construction’s fraud claim. 2 See Goodyear Tire & Rubber
Co., 236 S.W.3d at 755; In re FirstMerit Bank, N.A., 52 S.W.3d at 758.
Accordingly, we overrule Wight Construction’s first issue.

B.     Did the trial court err in granting summary judgment as to the request
       for the constructive-trust remedy?
       In its second issue, Wight Construction argues that the trial court erred in
granting the Bank’s motion for summary judgment as to Wight Construction’s
request for the remedy of constructive trust. Wight Construction correctly notes
that the imposition of a constructive trust is a remedy, not an independent claim.
See Beverly Foundation v. W.W. Lynch, 301 S.W.3d 734, 736 (Tex. App.—
Amarillo, 2009, no pet.); Sherer v. Sherer, 393 S.W.3d 480, 491 (Tex. App.—
Texarkana 2013, pet. denied); LTTS Charter School, Inc. v. Palasota, 362 S.W.3d
202, 209 (Tex. App.—Dallas, 2012, no pet.). But, the only claim against the Bank
as to which Wight Construction has assigned error on appeal is its claim for
common-law fraud, and we already have concluded that the trial court correctly
granted summary judgment as to this claim. See Beverly Foundation, 301 S.W.3d
at 736; Sherer, 393 S.W.3d at 491; LTTS Charter School, Inc., 362 S.W.3d at 209.
Thus, no claim by Wight Construction against the Bank remains that could support
imposition of a constructive trust. Accordingly, we overrule Wight Construction’s
second issue.

2
  We need not and do not address the other essential elements of Wight Construction’s fraud
claim that the Bank attacked in its motion.

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                                   V. CONCLUSION

      The summary-judgment evidence does not raise a genuine fact issue as to
whether the Bank made a material representation to Wight Construction, and the
trial court did not err in granting summary-judgment as to Wight Construction’s
common-law fraud claim.       Because no claim remains that might support the
imposition of a constructive trust, we cannot reverse the trial court’s judgment as
to the request for this remedy.

      The trial court’s judgment is affirmed.

                                  /s/   Kem Thompson Frost
                                        Chief Justice

Panel consists of Chief Justice Frost and Justices Busby and Donovan.

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