Court Opinion

ID: 3107075
Source: CourtListenerOpinion
Date Created: 2015-10-16 06:10:24.842448+00
Date Added: 2024-06-11T12:04:42.167830
License: Public Domain

NO. 07-10-00332-CV

                               IN THE COURT OF APPEALS

                       FOR THE SEVENTH DISTRICT OF TEXAS

                                    AT AMARILLO

                                      PANEL A

                                    JULY 18, 2011

                CONCEPT GENERAL CONTRACTING, INC., D/B/A
              CONCEPT BUILDERS, BW AFFORDABLE HOUSING, L.P.,
                 AND CAPITOL INDEMNITY CORP., APPELLANTS

                                          v.

               ASBESTOS MAINTENANCE SERVICES, INC., APPELLEE

           FROM THE 222ND DISTRICT COURT OF DEAF SMITH COUNTY;

              NO. CI-05H-106; HONORABLE ROLAND D. SAUL, JUDGE

Before CAMPBELL and HANCOCK and PIRTLE, JJ.

                                      OPINION

       Appellants, Concept General Contracting, Inc. (Concept) and Capitol Indemnity

Corp. (Capitol), appeal a judgment awarding damages to appellee, Asbestos

Maintenance Services, Inc. (AMS), in an amount of $120,883.95.       We affirm the

judgment of the trial court.
                                     Background

      On May 27, 2004, BW Affordable Housing, L.P. (BW), contracted with Concept to

renovate certain apartment units owned by BW in Hereford, Texas.           Concept, as

general contractor for the project, executed and filed a payment bond issued by Capitol.

As part of this project, Concept and AMS entered into a subcontract for AMS to provide

asbestos abatement for restricted areas within 125 apartment units.       This contract

specifically limited the areas to be abated in a manner that would allow AMS to utilize

an abatement method that is less intrusive and less costly than a full abatement. Soon

after AMS began work on the project, Concept requested some additional remediation.

AMS gave Concept a quote for this additional work, performed this additional work, and

Concept paid AMS for this additional work.

      While AMS was performing the work identified in these two contracts, Jack

Scheuerer, construction superintendent for Concept, requested AMS perform additional

abatement in certain units. Concept began performing this additional work, but the

additions were so numerous that they dramatically enlarged the scope of the project,

and altered the means by which the abatement could be performed.1 This extra work

was billed to Concept as it was performed by AMS. For the first four invoices, Concept

paid for the extra work without objection. However, somewhere around the fifth invoice,

Concept stopped paying for the extra work that AMS had performed. For approximately

      1
         According to the testimony of Glen Ashton, a third-party air maintenance
consultant employed for this project, the additional work requested by Scheuerer more
than doubled the scope of the work that was covered by the first two contracts, and
altered the manner of performing the work by requiring area containment and the
donning of hazmat suits.

                                             2
eleven invoices, AMS continued to do the extra work that was marked at the job site by

Scheuerer, but AMS eventually ceased doing this work when it determined that Concept

was not going to pay for this extra work. However, AMS continued to perform the work

delineated in the two contracts for some time.       At some point in the project, AMS

ceased working and left the work site but stood ready to complete the contract work if

and when recalled to the site by Concept. However, Concept did not call AMS back to

the work site. Rather, Concept contracted with another asbestos abatement company

to complete the work under the contracts as well as additional work that needed to be

done.

        On the basis of the unpaid extra work, AMS brought suit against Concept and

Capitol (collectively “appellants”). After a two-day trial, the trial court took the case

under advisement.      Nearly three years later, the trial court entered its judgment

awarding AMS $120,883.95 in damages, post-judgment interest, and $25,000 in

attorney’s fees. Concept and Capitol then filed a motion for new trial, which was denied

after hearing.   Concept and Capitol also filed a request for findings of fact and

conclusions of law. The trial court entered findings of fact and conclusions of law.

        Appellants present fifteen issues by this appeal.       By their first two issues,

appellants contend that the trial court erred in awarding AMS recovery for quantum

meruit because this was an undisclosed theory of recovery. By their third and fourth

issues, appellants contend that the trial court abused its discretion in admitting

documentary exhibits and photographs as business records.             By their fifth issue,

appellants contend that the trial court erred in finding appellants liable under a theory of

                                             3
quantum meruit when AMS dismissed the proper party, the owner of the benefited

property. By their sixth, seventh, eighth, and tenth issues, appellants contend that the

evidence was factually insufficient to support the trial court’s judgment. By their ninth

issue, appellants contend that liability under the theory of quantum meruit was error

because of the existence of express contracts covering the work performed. By their

eleventh and fifteenth issues, appellants contend that the trial court erred by failing to

comply with the requirements of Texas Government Code section 74.059(c)(2). By their

twelfth issue, appellants appear to contend that the evidence established their

affirmative defenses of waiver or estoppel as a matter of law. By their thirteenth and

fourteenth issues, appellants contend that they established their counterclaim as a

matter of law and should, therefore, have been awarded these damages and attorney’s

fees. We will overrule each of these issues, and affirm the judgment of the trial court.

                  Issues 1 & 2: Failure to Disclose Theories of Recovery

       By their first two issues, appellants contend that the trial court abused its

discretion in admitting evidence to support AMS’s quantum meruit and payment bond

theories of recovery because AMS failed to expressly disclose these theories in

response to a request for disclosure. Appellants contend that, under Texas Rule of Civil

Procedure 193.6(a), AMS’s failure to specifically identify these theories of recovery in its

disclosure prevents AMS from introducing evidence to support these theories. AMS

responds that each of its three petitions, including its live pleading, included claims for

quantum meruit damages and recovery from the payment bond, and that pleading these

theories of recovery is sufficient.

                                             4
        The appellants’ contention is premised entirely on AMS’s failure to specifically

disclose the theories of recovery under quantum meruit and the payment bond in

response to appellants’ request for disclosure of “[t]he legal theories and, in general, the

factual bases of your claims or defenses.” AMS responded to this request by disclosing

that,

        Plaintiff contracted with Concept General Contracting, Inc. to perform
        asbestos abatement services, and performed all services requested until it
        became apparent that Concept was refusing to pay for same, at which
        time work was suspended pending resolution of outstanding receivables.
        Thereafter, Concept requested that plaintiff remove its remaining materials
        from the job.
Appellants contend that AMS’s failure to explicitly disclose that it was seeking recovery

under the theory of quantum meruit and the payment bond provided by Capitol triggers

the exclusionary provision of Texas Rule of Civil Procedure 193.6 to prevent AMS from

offering any evidence to support these theories of recovery.          See TEX. R. CIV. P.

193.6(a).

        This Court finds it extremely significant that the record reflects that both theories

of recovery were always pled by AMS as theories upon which it sought recovery from

appellants. Notice that a plaintiff is pursuing a particular theory of recovery generally

must come from the pleadings. See Cunningham v. Parkdale Bank, 660 S.W.2d 810,

812 (Tex. 1983) (pleadings define the issues at trial and give opposing party sufficient

information to enable him to prepare a defense). Appellants do not contest that each of

these theories of recovery were properly pled by AMS nor did they file any special

exceptions to AMS’s pleadings. Thus, appellants were afforded appropriate notice that

                                              5
AMS intended to pursue theories of recovery in quantum meruit and under the payment

bond.

        Further, while failures to comply with requests for disclosure result in automatic

exclusion of the non-disclosed evidence, absent proof of good cause or lack of unfair

surprise or unfair prejudice, see TEX. R. CIV. P. 193.6(a); Phan v. Addison Spectrum,

L.P., 244 S.W.3d 892, 899 (Tex.App.—Dallas 2008, no pet.), properly pled claims for

affirmative relief, as opposed to withheld evidence, are not abandoned or waived by a

party’s failure to expressly identify those claims in a response to a request for

disclosure.2   See Killam Ranch Props., Ltd. v. Webb County, No. 04-08-00105-CV,

2008 Tex.App. LEXIS 8682, at *3-*5 (Tex.App.—San Antonio Nov. 19, 2008, no pet.)

(mem. op.) (holding failure to respond to discovery request not an abandonment of

properly pled claim for attorney’s fees).

        Because the live pleadings of AMS provide notice of its intent to pursue recovery

under the theories of both quantum meruit and the payment bond and because its

failure to expressly identify those theories in its responses to discovery requests are not

an abandonment of those claims, we overrule appellants’ first two issues.

        2
        In fact, this distinction between the failure to disclose evidence in response to a
discovery request as opposed to the failure to disclose properly pled theories of
recovery is precisely why the trial court’s ruling excluding the testimony of appellants’
untimely disclosed expert was proper. The withholding of evidence that is necessary to
respond to a discovery request properly results in the exclusion of that evidence under
Rule 193.6(a).
                                             6
                               Issues 3 & 4: Business Records

         By their third and fourth issues, appellants contend that the trial court abused its

discretion by admitting certain documents and photographs as unauthenticated

business records. The documents constitute AMS’s Exhibits Five through Nineteen and

appear to be records relating to the work that AMS’s employees performed on the BW

project.    The photographs, AMS’s Exhibit Twenty, portray various stages of work

performed in unidentified apartment units.        Appellants contend that the challenged

evidence was not properly authenticated and constitutes hearsay for which AMS has

failed to establish any applicable exception to the hearsay rule. AMS responds that the

testimony of Jack Coiner, an owner of AMS, established each of the requisites to qualify

the challenged evidence as business records, which are excepted from the hearsay

rule. See TEX. R. EVID. 803(6).

         Evidentiary rulings are committed to the sound discretion of the trial court. Bay

Area Healthcare Group, Ltd. v. McShane, 239 S.W.3d 231, 234 (Tex. 2007). A trial

court abuses its discretion when it acts without reference to any guiding rules and

principles.    Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241-42 (Tex.

1985).     However, even if a trial court abuses its discretion by improperly admitting

evidence, reversal is warranted only if the error probably caused the rendition of an

improper judgment. See TEX. R. APP. P. 44.1; Bay Area Healthcare, 239 S.W.3d at 234.

In such an instance, an appellate court reviews the entire record and requires the

complaining party to demonstrate that the judgment turns on the particular evidence

admitted. Bay Area Healthcare, 239 S.W.3d at 234.

                                              7
      Evidence is authenticated by proof that the challenged evidence is what its

proponent claims it to be.       See TEX. R. EVID. 901(a).3      Hearsay is defined as a

statement, other than one made by the declarant while testifying at trial or hearing,

offered in evidence to prove the truth of the matter asserted. Rule 801(d). Generally,

hearsay is not admissible in evidence. Rule 802. However, there are a number of

exceptions to this general rule, including the “business records” exception found in Rule

803(6). For evidence to be admissible as a business record, the record must have been

made at or near the time that the recorded event occurred by a person with knowledge

of the event if the record was kept in the course of a regularly conducted business

activity as shown by the testimony of a custodian of the record or other qualified

witness. See Rule 803(6).

      In the present case, appellants objected to the challenged evidence as not

having been properly authenticated by a person with personal knowledge of the

contents of the evidence and as violating the hearsay rule. AMS presented testimony

from Coiner that the evidence was made at or near the time that the work was

performed by a person with knowledge of the work performed and that these records

were kept in the ordinary course of business. Further, Coiner testified that he was the

custodian of the challenged records.

      Coiner, during voir dire, identified each document in Plaintiff’s Exhibit Five, which

appellants treated as representative of Exhibits Five through Nineteen, as well as

identifying what the photographs contained in Exhibit Twenty portrayed.               Coiner’s

      3
           Further reference to the Texas Rules of Evidence will be by “Rule ___.” 
                                              8
testimony that the evidence accurately portrays what AMS claims it portrays, which is

the records and photographs from the BW project that were compiled during work on

the project, is sufficient evidence to satisfy the authentication requirement of Rule

901(a), regardless of whether Coiner had personal knowledge of the contents of this

evidence. See Kirwan v. City of Waco, 249 S.W.3d 544, 549 (Tex.App.—Waco 2008),

rev’d on other grounds, 298 S.W.3d 618 (Tex. 2009). Thus, we find the challenged

evidence to have been properly authenticated and that the trial court did not abuse its

discretion in admitting the evidence over appellants’ authentication objection.

       In regard to appellants’ challenge to whether AMS established the business

records exception to the hearsay rule, Coiner testified to each of the requisites to

establish the evidence as business records under Rule 803(6). However, appellants

again contend that Coiner did not have personal knowledge of the information contained

in the records. But, for a witness to establish the business record exception, he need

not have been the record’s creator or have any personal knowledge of the contents of

the record; rather, the witness need only have personal knowledge of the manner in

which the records were prepared. Brooks v. State, 901 S.W.2d 742, 746 (Tex.App.—

Fort Worth 1995, pet. ref’d).    We conclude that Coiner’s testimony established the

requisites for application of the business records exception, and, therefore, that the trial

court did not abuse its discretion in admitting the evidence over appellants’ hearsay

objection.

                                             9
       Because the trial court did not abuse its discretion in admitting AMS’s Exhibits

Five through Twenty over appellants’ authentication and hearsay objections, we

overrule appellants’ third and fourth issues.

                                  Issue 5: Proper Party

       By their fifth issue, appellants contend that the trial court erred in awarding

damages to AMS against Concept and Capitol because neither appellant owned the

apartment units and, therefore, could not be liable for quantum meruit damages. AMS

responds contending that Concept is the proper party against whom quantum meruit

damages should be assessed because it was Concept, rather than the owner of the

apartment complex, that requested the extra work.

       In its original petition, AMS named the owner of the apartment units, BW, as a

defendant. However, in its subsequent amended petitions, AMS dropped BW as a

defendant. On this basis, appellants cite Truly v. Austin, 744 S.W.2d 934, 937 (Tex.

1988), for the proposition that “[c]entral to the contractor’s right to recover in quantum

meruit is the owner’s acceptance and retention of the benefits arising as a direct result

of the contractor’s partial performance.” Interpreting this quoted portion of Truly as

literally as possible, appellants contend that it is only the owner of the benefitted

property that can be held liable under the theory of quantum meruit. However, the Truly

court makes clear that, to recover in quantum meruit, the plaintiff must show that its

efforts were undertaken for the person sought to be charged. Id. Incidental benefits to

other parties do not give rise to quantum meruit claims against those third-party

beneficiaries. See id.; Bashara v. Baptist Mem’l Hosp. Sys., 685 S.W.2d 307, 310 (Tex.

                                            10
1985); see also Sourignavong v. Methodist Healthcare Sys., 977 S.W.2d 382, 385

(Tex.App.—Amarillo 1998, pet. denied).

       In the present case, the evidence is clear that AMS contracted with Concept, as

general contractor, to provide specific asbestos abatement services.         The evidence

does not establish that AMS ever dealt with BW directly. Further, all of the extra work

that was requested was at the direction of Scheuerer, Concept’s construction

superintendent for the project. Thus, it was Concept, rather than BW, for whom AMS

performed the extra work. See Bearden Investigative Agency, Inc. v. Melvin, No. 2-02-

078-CV, 2003 Tex.App. LEXIS 957, at *17-*18 (Tex.App.—Fort Worth Jan. 30, 2003, no

pet.); Fidelity Savs. & Loan Ass’n v. Morrison & Miller, Inc., 764 S.W.2d 385, 387-88

(Tex.App.—Beaumont 1989, no writ). Further, evidence was presented that Concept

needed AMS’s asbestos abatement, including the extra work, in order for Concept to

complete its general contract with BW. Therefore, the record establishes that the extra

work performed by AMS was for the benefit of Concept, and was not an incidental

benefit to a third-party.

       As such, we conclude that AMS could properly assert a claim of quantum meruit

against Concept, and overrule appellants’ fifth issue.

                 Issues 6, 7, 8, & 10: Factual Sufficiency of the Evidence

       By appellants’ sixth, seventh, and eighth issues, appellants contend that the

evidence is factually insufficient to support the quantum meruit elements that AMS

provided appellants valuable services or materials (issue six), AMS’s work benefited

appellants (issue seven), and Concept accepted services or materials from AMS (issue
                                            11
eight). By their tenth issue, appellants contend that the evidence is factually insufficient

to support the trial court’s judgment against Capitol under the payment bond. Each of

these issues challenge explicit factual findings made by the trial court.4

Standard of Review

       An assertion that the evidence is factually insufficient to support a fact finding

means that the evidence supporting the finding is so weak or the evidence to the

contrary is so overwhelming that the answer should be set aside and a new trial

ordered.     Garza v. Alviar, 395 S.W.2d 821, 823 (Tex. 1965).            In reviewing factual

sufficiency, the reviewing court must consider, examine, and weigh all of the evidence in

the record. Maritime Overseas Corp. v. Ellis, 971 S.W.2d 402, 406-07 (Tex. 1998). In

doing so, the court does not consider the evidence in the light most favorable to the

       4
           Appellants’ issues challenge the trial court’s following findings of fact:

       5. Concept then requested substantial additional work, approximately
       equal in scope to the original job. This additional work substantially
       increased the preparation necessary, thereby actually exceeding the
       quoted scope.

       6. Plaintiff [AMS] is an asbestos contractor, and the services provided
       involve removal of asbestos contaminated material. The limited scope
       quoted could be accomplished with the use of “glove bags” that do not
       involve area containment and donning of hazmat suits. The extra work
       subsequently requested include removal of carpet, which did require these
       additional precautions.

       8. Plaintiff’s work benefitted Defendant Concept . . . .

       9. Concept accepted the extra work.

       12. Asbestos [AMS] dealt directly with Concept, and presented its invoices
       stating the basis of its claim for compensation. All notice requirements for
       recovery under the payment bond against Defendant Capitol . . . have
       occurred or been satisfied.
                                                12
finding; instead, the court considers and weighs all the evidence, and sets aside the

disputed finding only if it is so contrary to the great weight and preponderance of the

evidence as to be clearly wrong and unjust. Id. at 407; Gooch v. American Sling Co.,

902 S.W.2d 181, 184 (Tex.App.--Fort Worth 1995, no writ).

Quantum Meruit Claim

         Quantum meruit is an equitable theory of recovery which is based on an implied

agreement to pay for benefits received. Heldenfels Bros., Inc. v. City of Corpus Christi,

832 S.W.2d 39, 41 (Tex. 1992); Iron Mountain Bison Ranch, Inc. v. Easley Trailer Mfg.,

Inc., 42 S.W.3d 149, 159 (Tex.App.—Amarillo 2000, no pet.). To establish a claim for

quantum meruit damages in Texas, a plaintiff must prove that it (1) provided valuable

services or materials, (2) for the benefit of the defendant, (3) that were accepted by the

defendant, and (4) the defendant had reasonable notice that the plaintiff expected

compensation for the services or materials. Heldenfels Bros., Inc., 832 S.W.2d at 41;

Iron Mountain Bison Ranch, 42 S.W.3d at 159-60. Thus, by their sixth through eighth

issues, appellants challenge the factual sufficiency of the evidence supporting the trial

court’s findings of fact that AMS proved the first three elements of its quantum meruit

claim.

         Appellants challenge the sufficiency of the evidence proving that the extra work

performed by AMS was a valuable service or material. Appellants’ contention reiterates

their complaints about the evidence addressed in issues three and four, and also

contends that AMS failed to follow appropriate procedures for obtaining approval to

perform the extra work. However, a review of appellants’ argument makes clear that

                                            13
they are not disputing that AMS performed valuable work that was outside the scope of

the contract.5   Rather, appellants’ contention relates to whether AMS is entitled to

payment for the extra work that was performed, and the appropriate amount of value

provided by AMS through its extra work.          The record establishes that Scheurer

requested that AMS perform extra work that exceeded the scope of the work that AMS

and Concept initially agreed upon. Further, while there was some dispute regarding

exactly how much extra work was performed and the value of this extra work, there is

no evidence that denies that AMS performed some work that exceeded the scope of the

initial agreements and that this extra work was valuable. Thus, we cannot agree with

appellants’ contention that the evidence was factually insufficient to establish that AMS

provided valuable services or materials to Concept. We overrule appellants’ sixth issue.

       Appellants also challenge the factual sufficiency of the second element of AMS’s

quantum meruit claim, that Concept benefited from AMS’s extra work. By this issue,

appellants simply reiterate their contention presented in issue five, that any benefit from

AMS’s extra work flowed to the owner of the property, BW, and not to appellants.

However, as addressed above in analysis of appellants’ fifth issue, the evidence that

Concept requested and benefitted from the extra work performed by AMS is not so

against the great weight and preponderance of the evidence as to be clearly wrong and

unjust. We overrule appellants’ seventh issue.

       5
          Within their argument of issue six, appellants allege that, “Finding of Fact No. 4
includes a reference to ‘ALC,’ a flaw which is fatal to the elements of the theory of
quantum meruit.” However, this allegation is not explained. As this Court cannot
determine the nature of appellants’ argument, we cannot agree that the trial court’s
reference to ALC is fatal to AMS’s quantum meruit claim. We do, however, note that
the trial court’s finding of fact No. 4 appears to go with Finding of Fact Nos. 2 and 3 to
identify the scope of the work covered by the express contracts.
                                            14
      Finally, appellants challenge the sufficiency of the evidence to establish that

Concept accepted the extra work performed by AMS.           Appellants contend that the

evidence establishes that, after August 18, 2004, Concept consistently refused to

accept the extra work provided by AMS by limiting payment of invoices to only those

charges attributable to work performed under the initial agreement. Concept contends

that it requested “backup” documentation to support the extra work, and that it conveyed

to AMS that this backup was required before Concept could accept the extra work.

While the record does evidence that Concept stopped paying for extra work after

August of 2004 and that it requested backup documentation to support AMS’s extra

work, the evidence also shows that Scheurer continued to request AMS to perform extra

work after August of 2004 and that the extra work performed by AMS was necessary for

Concept to complete its contract with BW. Thus, while there is some evidence that

appellants did not accept AMS’s work after August 18, 2004, we cannot conclude that

the trial court’s finding that Concept accepted the extra work performed by AMS after

August of 2004 is so against the great weight and preponderance of the evidence as to

be clearly wrong and manifestly unjust. We overrule appellants’ eighth issue.

Payment bond

      By their tenth issue, appellants contend that the evidence is factually insufficient

to support the trial court’s judgment against Capitol. Even though the trial court found

that all notice requirements under the payment bond had been satisfied by AMS,

appellants point to the testimony of Mark Gross, Concept’s president and owner, that

AMS failed to provide the requisite notice to assert a claim against the payment bond.

                                           15
AMS responds contending that the terms of the bond except a party in direct contract

with Concept from being required to provide notice of suit. Thus, according to AMS,

there was no notice requirement applicable to AMS, who was in direct contract with

Concept, and the trial court’s finding that all notice requirements have been satisfied is

sufficient as a matter of law.

       Reviewing the arguments of appellants in their tenth issue, it is clear that their

factual sufficiency challenge rests on an unstated premise, that the payment bond in

issue has a notice requirement that applies to AMS. A review of the record reveals that

the evidence does establish that AMS did not provide Concept notice of its intent to sue.

The terms of the payment bond provide that, “No suit or action shall be commenced

hereunder by any claimant: . . . unless claimant, other than one having direct contract

with the Principal, shall have given written notice to [Concept] . . . .” This payment bond

is defined by the scope of the work that Concept was to perform in completion of the

project for BW. As previously mentioned, while the extra work performed by AMS is

beyond the terms of the initial agreement between AMS and Concept, the evidence

establishes that AMS’s extra work needed to be performed for Concept to complete the

project. Thus, the extra work was within the general scope of the payment bond. Also,

the evidence establishes that Concept and AMS were in direct contract with regard to

the initial asbestos abatement that Concept consistently acknowledged and accepted.

As such, by the express terms of the payment bond, AMS was excepted from the notice

                                            16
requirement6 and, therefore, the trial court’s finding that all required notice has been

satisfied is supported by the evidence. We overrule appellant’s tenth issue.

                               Issue 9: Express Contract

      Appellants contend that the trial court erred in awarding AMS damages under the

theory of quantum meruit because there are express contracts between AMS and

Concept that generally cover AMS’s provision of asbestos abatement services for the

BW project. AMS responds that the express contracts did not cover the extra work

requested by Concept and performed by AMS and, therefore, recovery under the theory

of quantum meruit is permitted.

      The right to recover in quantum meruit is based upon a promise implied by law to

pay for beneficial services rendered and knowingly accepted. Davidson v. Clearman,

391 S.W.2d 48, 50 (Tex. 1965). However, when a valid express contract covers the

services or materials upon which recovery is sought, recovery in quantum meruit will not

be permitted. Truly, 744 S.W.2d at 936. But, the existence of an express contract does

not preclude recovery in quantum meruit for the reasonable value of services rendered

and accepted which are not covered by the contract. Black Lake Pipe Line Co. v. Union

      6
         We acknowledge that AMS’s quantum meruit claim is, by definition, extra-
contractual. However, the payment bond excepts claimants from providing notice of
claims when in direct contract with Concept. Exceptions to coverage contained within
an insurance policy are to be strictly construed against the insurer and in favor of
coverage, and any intent to exclude coverage must be expressed in clear and
unambiguous language. National Union Fire Ins. Co. of Pittsburgh, Pa. v. Hudson
Energy Co., 811 S.W.2d 552, 555 (Tex. 1991). In the present case, the terms of the
bond allow for a reasonable interpretation exempting AMS from the notice requirement,
and we are therefore compelled to interpret the policy in favor of coverage.
                                           17
Constr. Co., 538 S.W.2d 80, 86 (Tex. 1976), overruled on other grounds by Sterner v.

Marathon Oil Co., 767 S.W.2d 686, 690 (Tex. 1989).

      The trial court’s findings of fact make it clear that the extra work exceeded the

scope of the work covered by the express contracts. Specifically, the trial court found

that the work covered by the express contracts could be performed “with the use of

‘glove bags’ that do not involve area containment and donning of hazmat suits.”

However, the extra work that was requested by Scheuerer “included removal of carpet,

which did require these extra precautions.” Appellants’ argument simply states that the

express contracts covered “asbestos abatement to be conducted by Appellee” and that,

because the express contracts covered asbestos abatement, AMS is precluded from

recovery in quantum meruit based on the provision of any asbestos abatement services.

Appellants’ argument, however, wholly fails to address the trial court’s finding that the

scope of the asbestos abatement covered by the express contracts was exceeded by

the extra work as evidenced by the necessity that AMS take the specified extra

precautions. Finding that there is significant evidence in the record to support the trial

court’s finding that the extra work exceeded the scope of the express contracts, we are

bound by the trial court’s factual finding. See McGalliard v. Kuhlmann, 722 S.W.2d 694,

696 (Tex. 1986) (when a finding of fact is unchallenged, it is binding on an appellate

court unless the contrary is established as a matter of law or there is no evidence to

support the finding). Consequently, we overrule appellants’ ninth issue.

                                           18
                          Issues 11 & 15: Timeliness of Judgment

       Appellants contend that the trial court failed to comply with the requirements of

Texas Government Code section 74.059(c)(2),7 when it failed to enter judgment in this

case for more than two and a half years after the date of trial. In their analysis of the

alleged harm caused by this delay, appellants cite Coiner’s conviction for improper

disposal of asbestos.8 AMS responds contending that appellants failed to complain of

the delay in the trial court, and case law requires a showing of how the delay caused

harm before a delay is reversible. AMS contends that appellants fail to show how

Coiner’s conviction caused appellants harm or would necessitate that they be afforded a

new trial.

       Our review of the record does not indicate that appellants ever sought to obtain

the trial court’s ruling in this case nor did appellants bring to the trial court’s attention its

failure to comply with Texas Government Code section 74.059(c)(2) at any time before

the trial court rendered its judgment. Following the trial court’s judgment, appellants did

identify this issue in their timely filed motion for new trial.         Thus, the issue was

preserved. See TEX. R. APP. P. 33.1(b).

       7
        Section 74.059(c)(2) provides, “(c) A district, statutory probate, or statutory
county court judge shall: (2) rule on a case within 90 days after the case is taken under
advisement.” TEX. GOV’T CODE ANN. § 74.059(c)(2) (West 2005).
       8
        Appellants’ issue 15 does not challenge the judgment as being untimely, but
does challenge the trial court’s denial of appellants’ motion for new trial based on
Coiner’s conviction. Since that issue contends that appellants are entitled to a new trial
on the same basis upon which they contend that the trial court’s untimely judgment
caused them harm, we will analyze the issues together.
                                               19
      A trial court’s failure to comply with section 74.059(c)(2) is not automatically

reversible error.   See Smith v. Montemayor, No. 03-02-00466-CV, 2003 Tex.App.

LEXIS 5099, at *31-*32 (Tex.App.—Austin June 19, 2003, no pet.) (mem. op.). The

complaining party bears the burden of demonstrating that the trial court’s delay in

rendering judgment probably caused the rendition of an improper judgment. Id. at *32.

      To meet this burden, appellants contend that they were harmed by the passage

of the three-year period after AMS’s forfeiture of its corporate charter, and by the

intervening federal indictment and conviction of Coiner for improper disposal of

asbestos. However, appellants in no way identify the significance of the passage of

three years after AMS’s forfeiture of its corporate charter nor do they identify how such

an occurrence caused them harm.          Similarly, appellants identify that Coiner was

indicted and convicted of improper disposal of asbestos, but make no attempt to explain

to this Court how this conviction impacts the present case. Further, evidence provided

by appellants indicates that Coiner was convicted of negligent release of hazardous air

pollutants, and that the actions upon which this conviction is based occurred after AMS

had completed its work on the BW project. As such, we conclude that appellants have

failed to meet their burden of demonstrating that the trial court’s delay in rendering

judgment probably caused the rendition of an improper judgment.             Likewise, we

conclude that appellants have failed to establish that Coiner’s conviction entitles

appellants to a new trial. We overrule appellants’ eleventh and fifteenth issues.

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                             Issue 12: Waiver and Estoppel

       Appellants contend that the evidence established their affirmative defenses of

waiver or estoppel as a matter of law. Appellants’ contention is premised on AMS’s

acceptance of payment for the work covered by the agreements, while Concept refused

to pay for the extra work reflected in the invoices after August of 2004. Appellants

contend that AMS’s silence from August of 2004, when Concept stopped paying for the

extra work, until August of 2005, when AMS filed the present suit, constitutes a waiver

of AMS’s right to recover on the extra work.       Alternatively, appellants contend that

AMS’s failure to provide requested documentation to support the extra work performed

prior to trial estops AMS from recovering on the extra work.        AMS responds that

Concept’s request for backup documentation on the extra work was disputed and that,

in any event, its failure to provide documentation to support its claim for payment does

not constitute an “intentional relinquishment of a known right.”

       Our review of the record reveals that AMS continued to perform extra work for

Concept after Concept stopped paying for the extra work, but that the period of time

during which AMS performed extra work while not being paid was from September of

2004 to April of 2005. This is only a period of eight months. Further, evidence was

presented that Concept had paid for the extra work on the first four invoices. AMS

presented evidence that it continued to perform the extra work beyond this point in good

faith and because it thought that Concept may have been attempting to get change

orders approved by BW which was delaying payment for the extra work. However,

once Coiner determined that Concept was not going to pay AMS for the extra work,

                                            21
AMS stopped performing the extra work. Thus, AMS did not take a course of action

inconsistent with claiming a right to payment for extra work for such an extended period

that it can be fairly said that AMS waived its right to payment. See Sun Exploration &

Prod. Co. v. Benton, 728 S.W.2d 35, 37 (Tex. 1987) (waiver requires the intentional

relinquishment of a known right or engaging in intentional conduct inconsistent with

claiming that right).

       As to the claim of estoppel, appellants fail to cite to any authority that would

support their contention that a failure to substantiate a claim for payment estops a

person from seeking judicial recourse for the claim. While it was clearly incumbent

upon AMS to establish the value of the services it provided to Concept in order to

recover on its quantum meruit claim, nothing in the law requires that a plaintiff must

establish that value before filing suit and substantiate that value in a manner acceptable

to the benefitted party or else be estopped from asserting a quantum meruit claim.

       Finding no evidence to support appellants’ affirmative defenses of waiver or

estoppel, we overrule appellants’ twelfth issue.

               Issues 13 & 14: Concept’s Breach of Contract Counterclaim

       Appellants contend that they established their counterclaim for breach of contract

as a matter of law and that, as a result, they are entitled to at least $20,080 in actual

damages as well as $25,000 in attorney’s fees. AMS responds that it was Concept that

breached the contract and, therefore, the trial court did not err in denying appellants’

counterclaim. Further, AMS contends that the $5,000 in attorney’s fees attributable to

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the removal of AMS’s mechanic’s lien is being raised for the first time on appeal and is,

therefore, waived.

      Appellants premise their contention that they are entitled to recover for their

breach of contract counterclaim on their decision to retain a third-party asbestos

abatement company to complete the contract work on the project that was not

completed by AMS.      However, their argument fails to address the uncontroverted

evidence that AMS remained ready to complete the work identified in the agreements

upon being recalled by Concept.          However, apparently because AMS ceased

performing the extra work for which it was not being paid, Concept did not recall AMS to

complete the work, but rather chose to retain a third-party to complete the work on the

project. As such, the evidence establishes that it was Concept, not AMS, that breached

the contracts. Thus, we conclude that the trial court did not err in denying appellants’

counterclaim.

      Having determined that appellants are not entitled to recover on their breach of

contract counterclaim, their attorney’s fees issue is reduced to appellants’ contention

that AMS stipulated that Concept was entitled to $5,000 in attorney’s fees relating to the

removal of a mechanic’s lien. While the record does reflect that AMS acknowledged an

agreement that $5,000 in attorney’s fees for appellants would be attributable to removal

of the lien, this acknowledgement was part of a pre-trial stipulation that the parties had

agreed “that $25,000 was a reasonable and necessary attorneys’ fee through trial for

each side’s attorney, and agreed that of that sum, with respect to Defendants, $5,000 of

that would be reasonably attributable to the Motion to Remove Mechanic’s Lien . . . .”

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(emphasis added). Looking at the precise language used by AMS, we construe the

agreement to simply indicate that the parties agreed as to what would constitute a

reasonable and necessary attorney fee award, and that this agreement, as it relates to

appellants, has factored in $5,000 for the removal of the lien. Thus, nothing in the

agreement obligated the trial court to make a separate award of attorney’s fees to

appellants relating to the removal of the lien.

       Further, appellants cite Texas Property Code section 53.156 as statutory support

for their entitlement to these attorney’s fees. However, section 53.156 permits the trial

court to award costs and reasonable attorney’s fees as would be equitable and just.

TEX. PROP. CODE ANN. § 53.156 (West 2007). Appellants have wholly failed to show

that the trial court abused its discretion by not awarding them $5,000 as attorney’s fees

relating to removal of the mechanic’s lien.

       Finally, appellants failed to address the trial court’s award of attorney’s fees in

either their motion for new trial or in their motion for reconsideration of motion for new

trial. Thus, we conclude that appellants failed to bring their construction of the pre-trial

stipulation regarding attorney’s fees to the trial court’s attention and, therefore, have

waived any objection to the trial court’s award. See TEX. R. APP. P. 33.1.

       We overrule appellants’ thirteenth and fourteenth issues.

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                                       Conclusion

        Having overruled each of appellants’ fifteen issues, we affirm the judgment of the

trial court.

                                                       Mackey K. Hancock
                                                            Justice

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