Court Opinion

ID: 8213728
Source: CourtListenerOpinion
Date Created: 2022-10-13 07:11:56.871996+00
Date Added: 2024-06-11T16:42:24.642411
License: Public Domain

COURT OF APPEALS
                                 EIGHTH DISTRICT OF TEXAS
                                      EL PASO, TEXAS

  COX PAVING OF TEXAS, INC.                        §               No. 08-20-00164-CV

                   Appellant/Cross-Appellee,       §                  Appeal from the

  v.                                               §            33rd Judicial District Court

  H.O. SALINAS & SONS PAVING, INC.                 §             of Blanco County, Texas

                   Appellee/Cross-Appellant.       §                  (TC# CV08222)

                                          OPINION

       Road construction is ubiquitous in Texas and sometimes ends in disputes between the

contractors who do that work. That is what happened here. Following a jury trial, subcontractor

H.O. Salinas & Sons Paving, Inc. (Hoss), obtained a substantial judgment against general

contractor Cox Paving of Texas, Inc. (Cox). On appeal, Cox challenges: (1) the jury’s liability

findings in favor of Hoss under three theories of recovery—quantum meruit, breach of contract,

and the Prompt Pay Act; (2) the trial court’s imposition of attorney’s fees, costs, and interest; (3)

and the jury’s finding against Cox on its breach-of-contract claim. Hoss cross-appeals, arguing

that the trial court awarded Hoss insufficient attorney’s fees, costs, and expenses. We affirm the

portion of the trial court’s judgment awarding Hoss damages under its breach-of-contract and

Prompt Pay Act claims, but reverse and render the portion of the judgment awarding Hoss damages

under its quantum meruit claim. Based on these holdings, we reverse the award of attorney’s fees,
costs, expenses, and charges to Hoss, with a remand for a new determination of those awards

consistent with this opinion.

                           I. FACTUAL AND PROCEDURAL BACKGROUND1

         A. The Contracts

         In 2014, Martin County (the County) received a grant from the Texas Department of

Transportation (TXDOT) to repair the County’s roads. Following the bidding process, the County

selected Cox2 as the general contractor. Cox and the County executed a written agreement (the

General Contract) that obligated Cox to repair approximately 40 roads covering some 90 miles.

The General Contract required that the existing roadbed would be reworked such that the “[b]ase

material on all roads shall have a minimum compacted thickness of 6 (six) inches.” Cox, however,

is in the “seal coat” business (the last phase of road construction) and does not perform road base

preparation work. It disclosed that fact to the County before entering its bid. The County told Cox

that it should still submit its bid and that Cox should employ a subcontractor to perform the base

preparation work.

         The General Contract also provided that “[r]oad preparation work is expected to vary

depending on the condition of each road at the start of work . . . . Caliche shall be dumped, spread,

mixed, wind rowed, watered and processed as necessary to produce a uniformly blended mixture

of the desired course thickness, moisture condition, and gradation.” The County was to provide

the necessary caliche material to perform the repairs.

         In February 2015, Cox solicited a subcontractor bid from Hoss for “base preparation” work.

1
  This case was transferred from our sister court in Austin, and we decide it in accordance with the precedent of that
court to the extent required by TEX.R.APP.P. 41.3.
2
 Cox’s name sometimes appears as Blacktopper Technology, Inc. in the contract documents. Blacktopper apparently
merged with or was acquired by Cox.

                                                          2
Before submitting a bid, Hoss’s construction manager, Daniel Salinas, along with the project

superintendent, John Clark, spent a day driving “at least” 75-80% of the roads. In March 2015,

Hoss submitted its bid which included unit pricing for two tasks: (1) “scarify and reshape existing

roadway (6”) (25’ width)”; and (2) applying a temporary sealant (RC-250—a type of rapid cure

asphalt) and a fine aggregate to the roadway. Based on the roads involved, the subcontract totaled

just over $1.8 million dollars.

        Hoss had some forewarning that the County would need to bring caliche to the worksite to

ensure the roadbeds met the six-inch base thickness, albeit not to the extent actually required under

the General Contract. Before signing its subcontract with Cox, Hoss attended a pre-construction

meeting. At that meeting, the County Judge advised that most of the roads had a six-inch base.

Another County employee informed Hoss that “some” of the roads did not have six inches of base

and that “they would have to bring in caliche to get it up to that minimum thickness.”3 The County

assured Hoss that if there was not six inches of base, it would bring caliche out to the worksite.

        Following that pre-construction meeting, Cox and Hoss entered a written subcontract (the

Subcontract). The Subcontract provided that Hoss would “furnish all of the supervision, labor,

equipment, services, supplies, permits, bonds, licenses and fees necessary” to complete the work

it bid for, and specifically for scarifying and reshaping the existing roadway. The Subcontract also

referenced the existence of the General Contract between Cox and the project owner. The

Subcontract then recited Hoss’s “agree[ment] to perform all of the obligations and responsibilities”

of Cox under the General Contract “to the extent [they] cover or relate” to Hoss’s work. Consistent

with the County’s promise to provide any needed caliche, the word “materials”—which would

have otherwise been Hoss’s obligation as a part of the Subcontract—was crossed out and initialed

3
  Hoss presented testimony from another County employee who had previously told the County Commissioners that
the “vast majority” of the roads needed additional caliche base material.

                                                      3
by the parties on the Subcontract.

       B. Issues Arise During Repairs

       Hoss began performing under the Subcontract in April 2015. It soon became apparent that

many more miles of the County’s roads lacked a minimum six-inch caliche base than Hoss had

contemplated. Hoss informed Cox about the need for additional caliche, who in turn informed the

County. The County began providing the caliche, but the pace of Hoss’s work was slowed because

the County’s dump trucks did not provide enough caliche. And after two weeks, the County’s

trucks stopped dropping off caliche at the worksites altogether. Cox responded by hiring third-

party trucking companies to haul in more caliche. The County paid Cox for that associated

expense.

       Hoss kept working in this fashion from May to December 2015. By September 2015,

however, Hoss brought up with Cox receiving compensation for its extra work. In October, Hoss

made Cox aware of extra equipment it needed to process and spread caliche. Cox first told Hoss

that it would try and work with the County to obtain extra compensation. But at some point, Cox

informed Hoss that it would not intercede with the County to obtain more funds for the extra work.

       Effective December 31, 2015, Hoss and Cox mutually agreed to terminate the Subcontract

for convenience. At the time of termination, Hoss had worked on about 40% of the roads, (or 43

of the 89 miles covered by the Subcontract). Hoss submitted 21 pay applications for the work it

did under the contract. Most of the invoices were paid. Hoss contended, however, that Cox did not

pay, or improperly reduced the amount due, on four other invoices (Applications Nos. 16, 18, 20,

21). Hoss calculated that $90,147.38 was due it under the Subcontract.

       Cox hired a new subcontractor to complete the project. Cox ultimately claimed it expended

$513,611.45 in out-of-pocket expenses because Hoss left the job-site. Conversely, Hoss, claimed

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it had an oral agreement to be compensated for the extra-work caused by the need to add so much

caliche into the roadbed. In April 2016 it made a written claim for $572,123.55 for that additional

compensation. It based that figure on its calculation of 628.5 hours of extra work at a rate of

$910.30 per hour.

       When Cox did not pay this amount, Hoss sued Cox for: (1) breach of contract to recover

the amounts due under the Subcontract; (2) quantum meruit to recover amounts due for the extra

work; (3) violations of the Prompt Pay Act; and (4) fraud. Hoss also sought to recover attorney’s

fees. In response, Cox counterclaimed for: (1) breach of contract over the quality of Hoss’s work;

(2) breach of warranty based on Hoss’s failure to perform its obligations under the Subcontract;

(3) violations of the Deceptive Trade Practices Act; and (4) fraud. Cox subsequently abandoned

its DTPA and fraud claims.

       C. The Trial and Verdict

       The issues at trial largely revolved around whether Cox or Hoss breached any material term

of the Subcontract, and if both did so, who breached first, and whether any breaches were excused.

Hoss pointed to its unpaid invoices for the work that it did. Cox countered that Hoss’s work was

defective and many roads needed repair before Cox could apply the final seal coat. More

particularly, it claimed Hoss failed to properly apply the RC-250 seal coat, failed to leave enough

crown on the road, and failed to maintain an acceptable moisture level on the roads where it

worked. Based on these failures, Cox claimed that the roads left stretches of roads with potholing

and streaking. It also contended that Hoss’s conduct significantly delayed the project.

       In response to those assertions, Hoss defended its performance by noting that Cox never

complained about the quality of its work until Hoss made a claim for the extra work. It also argued

that any failure of the roadbeds resulted from Cox not timely putting down the final seal coating.

                                                 5
Hoss contended that its application of an RC-250 seal coat was only meant to protect the roadbed

for several months until the final coating would be applied by Cox, and Cox’s failure to timely

apply the final seal coating left the roadbeds unprotected from damage by traffic.

       The jury returned a verdict favorable to Hoss on its breach of contract, quantum meruit,

and Prompt Payments Act claims. The jury found that neither Cox’s breach of the contract, nor its

failure to pay the amounts invoiced promptly, were excused. The jury failed to find that Cox

committed fraud. As for damages, the jury assessed: (1) $81,897.10 in damages against Cox for

breach of contract; and (2) $300,000.00 in quantum meruit damages for the reasonable value of

the extra work performed. The parties had agreed that the issues of attorney’s fees and any penalty

interest under the Prompt Payment Act would be resolved by the trial court at the end of the case.

In its final judgment, the trial court awarded Hoss: (1) the amounts that the jury’s assessed in

damages for the breach of contract and quantum meruit claims; (2) $24,836.68 in interest penalties

under the Prompt Payment Act; (3) $44,472.29 in attorney’s fees; (4) $55,000 in conditional

appellate attorney’s fees; (5) $24,895.68 in costs, charges, and expenses; (6) $71,605.74 in

prejudgment interest; and (7) post-judgment interest at a rate of 5%, compounded annually.

                                   II. ISSUES ON APPEAL

       On appeal, Cox raises five issues, arguing: (1) that Hoss cannot recover under its quantum

meruit claim because the contract governed all the work performed; (2) that Hoss cannot recover

under its breach-of-contract claim because Hoss first breached the contract; (3) that Hoss cannot

recover under the Prompt Payment Act because no payments were due given Hoss’s breach; (4)

that Cox should recover under its breach-of-contract claim; and (5) if this Court reverses any

portion of the judgment in Cox’s favor, the case should be remanded to the trial court for a new

determination of attorney’s fees, interest, and court costs. Hoss cross-appeals and argues in two

                                                6
issues that the trial court erred by awarding less than the amount it proved up for attorney’s fees,

costs, expenses, and charges.

                                  III. QUANTUM MERUIT

       A. Standard of Review and Applicable Law

       Quantum meruit is a common-law equitable remedy that is “based upon the promise

implied by law to pay for beneficial services rendered and knowingly accepted.” Hill v. Shamoun

& Norman, LLP, 544 S.W.3d 724, 732 (Tex. 2018), quoting In re Kellogg Brown & Root, Inc.,

166 S.W.3d 732, 740 (Tex. 2005). The purpose of quantum meruit is “to prevent a party from

being ‘unjustly enriched’ by retain[ing] the benefits of the . . . performance without paying

anything in return.” Id., quoting Truly v. Austin, 744 S.W.2d 934, 938 (Tex. 1988) (internal

quotation marks omitted). A plaintiff seeking to recover under quantum meruit must prove: (1)

valuable services were rendered or materials furnished; (2) for the party sought to be charged; (3)

those services and materials were accepted by the party sought to be charged, and were used and

enjoyed by the party; and (4) the party sought to be charged was reasonably notified that the

plaintiff performing such services or furnishing such materials was expecting to be paid by the

party sought to be charged. Id. at 732-33, citing Vortt Exploration Co. v. Chevron U.S.A., Inc., 787

S.W.2d 942, 944 (Tex. 1990).

       Because quantum meruit is based on an implied agreement, a party generally cannot

recover under quantum meruit when there is a valid contract covering the services or materials

furnished. Id. at 733, citing In re Kellogg Brown & Root, 166 S.W.3d at 740. That rule invites the

question of whether the parties’ contract covers the services or materials for which the quantum

meruit claim is made. And that question often turns on interpretation of the parties’ existing

contract. When interpreting the terms of a written contract, a reviewing court’s “fundamental

                                                 7
objective is to effectuate the parties’ intent as expressed by the words chosen to memorialize their

agreement.” Exxon Mobil Corp. v. Ins. Co. of State, 568 S.W.3d 650, 657 (Tex. 2019). We are

bound to interpret the terms of the contract as written and not how the parties would like them to

have been written. Nelson v. Vernco Constr., Inc., 566 S.W.3d 716, 750 (Tex.App.--El Paso 2018,

judgm’t set aside, op. not vacated).

         The question of whether an express contract covers the services at issue is a legal question

reviewed de novo. Hill, 544 S.W.3d at 737. The construction of an unambiguous contract is also a

question of law that we review de novo. URI, Inc. v. Kleberg County, 543 S.W.3d 755, 763 (Tex.

2018).

         B. Analysis

         On appeal, Cox argues that because the General Contract and Subcontract already govern

the spreading and balancing of new base material, Hoss would not be entitled to additional payment

for performing that task. Cox contends this is so regardless of any unforeseen difficulties or

expenses associated with Hoss’s work. Thus because the express terms of the Subcontract

governed the services Hoss furnished, Hoss could not recover under its quantum meruit theory.

         Cox relies in part on this Court’s decision in Nelson v. Vernco Constr., Inc. There, a

subcontractor sued for breach of a subcontract related to a TXDOT prime contract for road

construction, claiming that it was entitled to additional payments. 566 S.W.3d at 730. The

subcontractor succeeded at trial. Id. at 741. On appeal, the subcontractor argued that the award was

proper because, without additional payments, it would have been required to perform its

obligations despite being in a “negative cash-flow position, making it economically unreasonable

to perform the contract.” Id. at 754. This Court rejected that argument, reasoning that “total

performance in light of changing circumstances is exactly what [the subcontractor] bargained for

                                                  8
. . . when it submitted a hard bid. [The subcontract] not only gives the general contractor the power

to add or subtract things from the Subcontract, but it explicitly requires [the subcontractor] to

execute those changes . . .” Id. at 754. We added that “[c]hanging circumstances are always a

background risk in submitting a hard bid,” and “‘[t]he intent of a contract is not changed simply

because the circumstances do not precisely match the scenarios anticipated by the contract.’” Id.,

quoting SAS Inst., Inc. v. Breitenfeld, 167 S.W.3d 840, 841 (Tex. 2005) (per curiam).

       Cox also points to D2 Excavating, Inc. v. Thompson Thrift Constr., Inc., a Fifth Circuit

decision considering whether an award for breach of contract and quantum meruit was proper

when a subcontractor sought additional payment for site grading and excavation work. 973 F.3d

430, 432 (5th Cir. 2020). The trial court awarded breach of contract and quantum meruit damages

for the work the subcontractor had performed. Id. at 433.

       In reversing the trial court, the Fifth Circuit first recognized the default Texas rule “that the

party doing the work bears the risk that it will end up being more difficult than anticipated unless

the contract shifts that risk to the buyer of the services.” Id. at 434, citing Lonergran v. San Antonio

Loan & Tr. Co., 104 S.W. 1061, 1065-66 (1907), and Interstate Contracting Corp. v. City of

Dallas, 407 F.3d 708, 720-21 (5th Cir. 2005) (“In order for an owner to breach a contract by

supplying inadequate plans to a contractor, [Texas law] require[s] that the contract evidence an

intent to shift the burden of risk of inadequate plans to the owner.”). The court further stated, “This

default rule flows from the basic contract principle that ‘where one agrees to do, for a fixed sum,

a thing possible to be performed, he will not be excused or become entitled to additional

compensation, because unforeseen difficulties are encountered.’” Id., quoting El Paso Field Servs.,

L.P. v. MasTec N. Am., Inc., 389 S.W.3d 802, 811 (Tex. 2012). Applying this rule, the court held

that the contract did not allocate the risk to the general contractor that the worksite would be

                                                   9
unfavorable, pointing to the subcontract’s language that the subcontractor agreed that it had

“visited the Project site, become familiar with local conditions under which the Work is to be

performed and correlated personal observations with requirements of the Contract Documents.”

Id.

       The Subcontract here similarly allocated to Hoss the risk of unanticipated additional

expenses to scarify and reshape the roads. The Subcontract first contained Hoss’s representation

that it was fully aware of the conditions of the work, had made all necessary investigation, and

assumed the risk that conditions were different than described in the General Contract:

       1.3     Subcontractor represents that it has examined or had an opportunity to
       examine all of the documents . . . which relate to the Work and is fully acquainted
       with all of the physical conditions surrounding the Project, insofar as the same
       affects or relates to the performance of the Work, and has made all necessary
       investigations essential to the full understanding of any and all difficulties that may
       be encountered in the performance of the Work. Subcontractor assumes any and all
       risks incident to any variance between the actual physical conditions at the job site
       affecting the Work and those set out in the General Contract.

The Subcontract also expressly denied extra compensation caused by delays or acts of the County
or Cox:

       2.3     ...
       In the event the Subcontractor’s performance of this Subcontract is delayed or
       interfered with by the acts of the Owner, Contractor or other subcontractors, it may
       request an extension of time for the performance of the Work, but shall not be
       entitled to any increase in the Subcontract price or to damages or additional
       compensation as a consequence of such delays or interference.

Under the Subcontract’s Article 3, entitled “Subcontractor Obligations and Warranties,” Hoss

agreed that it had examined the contract documents, the condition of the road, and that it was not

relying on any statements of the County or Cox:

       3.1     Subcontractor represents and agrees that it has carefully examined and
       understands the Contract Documents and has investigated and satisfied itself as to
       the nature and location of the Work and the conditions and anticipated difficulties
       under which it is to be performed; the character, quantity, quality and kinds of
       materials needed, the adequacy and composition of any surface or subsurface
       conditions necessary to assure proper installation of the Work; the kinds and

                                                 10
           quantity of equipment needed; and, that Subcontractor enters into this Subcontract
           on the basis of its own examination, investigation and evaluation of all such matters,
           and not in reliance upon any opinions or representations of the Contractor, or the
           Owner, or any of their respective officers, agents or employees.

But before considering how these clauses fit into the dispute, we begin with the question of whether

adding caliche to the roadbed was part of Hoss’s contract.

           Hoss urges that the Subcontract “strictly ties Hoss’s obligations . . . to scarify and reshape

the existing roadway,” and that the Subcontract did not mention any obligation to “‘spread and

balance’ any new caliche (or ‘flex’) base material that might be required.” The fallacy in this

argument, however, is that Hoss was required by its subcontract to both “furnish all of the

supervision, labor, equipment, services, supplies, permits, bonds, licenses and fees necessary” to

complete the work it bid for (scarifying and reshaping the existing roadway), and also to “perform

all of the obligations and responsibilities” of Cox under the General Contract “to the extent [they]

cover or relate to” Hoss’s work.4 The General Contract, made a part of the Subcontract, expressly

states that “Caliche shall be dumped, spread, mixed, wind rowed, watered and processed as

necessary to produce a uniformly blended mixture of the desired course thickness, moisture

condition, and gradation (emphasis original).” And it states the obvious that if Hoss was scarifying

(breaking up the existing roadbed) and “reshaping” it, that working in any needed caliche would

4
    The Subcontract contained an integration clause that incorporates the terms of the General Contract:

           1.2      The General Contract and the general conditions, special conditions, plans, drawings,
           specifications, bulletins, addenda and amendments (the “Contract Documents”) as the same relate
           to the Work are incorporated herein by reference and Subcontractor agrees to perform its part of the
           Work in strict accordance with and reasonably inferable from the Contract Documents and be bound
           by the terms and conditions of said documents and assumes and agrees to perform all of the
           obligations and responsibilities of the Contractor under said documents to the extent said documents
           cover or relate to the Work.

                                                           11
be related to that job.5

         Given that the Subcontract required Hoss to process the extra caliche into the roadbed, its

other contentions are all belied by the Subcontract’s terms. Based on the plain terms of the

Subcontract, Hoss generally bore the risk of incurring extra expenses if difficulties arose in its

work. While Hoss argued it was misled by the County Judge as to the number of roads needing

additional caliche, Hoss represented in Section 3.1 of the Subcontract that it had “investigated and

satisfied itself as to the nature and location of the Work” and did not rely “upon any opinions or

representations of the Contractor, or the Owner, or any of their respective officers, agents or

employees.” Hoss also complains that the County at first failed to timely deliver caliche, but

Section 2.3 expressly answers that complaint, stating that Hoss was not entitled to any increased

compensation occasioned by delays caused by the County. Cox further adds that: (1) Hoss

submitted no contemporaneous invoices for the Extra Work; and (2) failed to obtain a written

agreement or change order with Cox for additional payment for the Extra Work. And finally, while

Hoss contended that it never had access to the General Contract, it nonetheless represented in the

Subcontract that it had “examined or had an opportunity to examine all of the documents which

relate to the Work,” which, according to Section 1.2 of the Subcontract, included the General

Contract incorporated by reference in the Subcontract’s integration clause.

         We also agree with Cox that Hoss cannot recover under the “partial performance”

doctrine—an exception to the general rule that a valid contract covering the provision of goods or

services bars a quantum meruit claim. See D2 Excavating, Inc., 973 F.3d at 436. This exception

5
  Cox also argues in its briefing that “scarify and reshape” is a defined term under TXDOT Specification Manual Item
251 (“Reworking Base Courses”). Cox further notes that Hoss’s construction manager testified below that the scope
of Hoss’s work was defined by Item 251. And Item 251 defines “scarifying and reshaping” expressly to include
shaping the road subgrade to conform to the project plans, which here required a uniform 6-inch base using caliche
supplied by the County. While all the parties agreed that Item 251 governed here, the text of that Item was not admitted
into evidence, and given our view of the actual contract language, we find no need to take judicial notice of Item 251
as Cox requests.

                                                          12
allows a “plaintiff that does not substantially perform a construction contract, and thus ‘cannot

recove[r] under the express contract,’ [to] pursue quantum meruit for the value of its services.” Id.,

quoting Murray v. Crest. Constr., Inc., 900 S.W.2d 342, 345 (Tex. 1995). The rationale for this

exception is that because partial work done on a construction contract cannot be transferred to

another buyer, it would be unjust to allow the party receiving the partial construction not to pay

anything for it. Id. The exception, however, does not apply when the subcontractor substantially

performs its contractual duties, thus allowing recovery based on the contract. See id.

       Hoss cannot rely on the exception because it did not request or submit jury findings on

whether it partially performed its duties under the Subcontract. Because the jury did not enter

findings on the partial-performance exception, Hoss has waived any argument that the exception

applies here. See TEX.R.CIV.P. 279 (“Upon appeal all independent grounds of recovery or of

defense not conclusively established under the evidence and no element of which is submitted or

requested are waived.”); see also Union Bldg. Corp. v. J & J Bldg. & Maint. Contractors, Inc.,

578 S.W.2d 519, 521-22 (Tex.App.--Houston [14th Dist.] 1979, writ ref’d n.r.e.) (holding that a

party who failed to request special issues related to a quantum meruit recovery waived those issues

on appeal).

       In sum, the contract language here tracks the default rule in Texas that the party doing the

work, not the purchaser of services, bears the risk that the work may be more difficult to perform

than anticipated. See D2 Excavating, 973 F.3d at 434. The plain language of the Subcontract

governs the extra work Hoss performed, and Hoss agreed to bear the risk of unanticipated

difficulties that might arise during the performance of its duties under the Subcontract. Because

the Subcontract governed the extra work Hoss performed, we find that Hoss’s quantum meruit

award was precluded as a matter of law.

                                                 13
       Cox’s Issue One is sustained.

                                IV. BREACH OF CONTRACT

       Next, we consider whether legally and factually sufficient evidence supports the jury’s

finding that Cox breached the Subcontract and the mirror image finding that Hoss did not breach.

       A. Standard of Review

       Legal and factual sufficiency arguments both challenge the sufficiency of the evidence to

support determinations by the fact finder; but each invoke a different standard of review. Wolf v.

Starr, 617 S.W.3d 898, 903 (Tex.App.--El Paso 2020, no pet.). Under a legal sufficiency or “no

evidence” challenge, we will uphold a jury’s finding if it is supported by “[a]nything more than a

scintilla of evidence.” In re K.M.L., 443 S.W.3d 101, 112 (Tex. 2014), quoting Formosa Plastics

Corp. U.S.A. v. Presidio Eng’rs & Contractors, Inc., 960 S.W.2d 41, 48 (Tex. 1998). More than a

scintilla exists when the evidence would enable reasonable and fair-minded people to reach the

finding or judgment being challenged. See Burbage v. Burbage, 447 S.W.3d 249, 259 (Tex. 2014);

see also City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex. 2005) (the test for legal sufficiency

is “whether the evidence at trial would enable reasonable and fair-minded people to reach the

verdict under review.”). On the other hand, if the evidence is so weak that it only creates a “mere

surmise or suspicion” of the existence of a vital fact, “it is regarded as no evidence.” Waste Mgmt.

of Texas, Inc. v. Texas Disposal Sys. Landfill, Inc., 434 S.W.3d 142, 156 (Tex. 2014).

       In resolving a no-evidence challenge, we view the evidence in the light most favorable to

the finding or judgment, and “indulge every reasonable inference that would support it,” crediting

favorable evidence if a reasonable fact finder could and disregarding contrary evidence unless a

reasonable fact finder could not. City of Keller, 168 S.W.3d at 822, 827. It is the province of the

trier of fact to draw from the evidence whatever inferences it wishes, so long as more than one

                                                14
inference is possible. Id. at 821-22. Thus, we will sustain a legal sufficiency or “no evidence”

challenge only if the record shows: “(a) the complete absence of a vital fact; (b) the court is barred

by rules of law or evidence from giving weight to the only evidence offered to prove a vital fact;

(c) the evidence offered to prove a vital fact is no more than a scintilla; or (d) the evidence

establishes conclusively the opposite of the vital fact.” Id. at 810, quoting Robert W. Calvert, “No

Evidence” & “Insufficient Evidence” Points of Error, 38 Tex.L.Rev. 361 (1960).

       When a party challenges the factual sufficiency of the evidence, it concedes that conflicting

evidence was presented at trial, but argues that the evidence against a finding or judgment is “so

great” that to find the opposite was erroneous. See Wolf, 617 S.W.3d at 903. Factual sufficiency

challenges require courts of appeals to weigh all the evidence. See Eggemeyer v. Hughes, 621

S.W.3d 883, 890 (Tex.App.--El Paso 2021, no pet.), citing Ortiz v. Jones, 917 S.W.2d 770, 772

(Tex. 1996). A factual sufficiency challenge is sustained only when the evidence supporting the

finding is so weak “as to be clearly wrong and unjust,” or when the finding is “manifestly unjust,”

“shock[s] the conscience,” or “clearly demonstrate[s] bias.” Cain v. Bain, 709 S.W.2d 175, 176

(Tex. 1986); Windrum v. Kareh, 581 S.W.3d 761, 781 (Tex. 2019).

       In applying either standard, we remain mindful that the trier of fact is the sole judge of the

credibility of witnesses and the weight to be given their testimony. In re Estate of Scott, 601

S.W.3d 77, 88 (Tex.App.--El Paso 2020, no pet.); see also McGalliard v. Kuhlmann, 722 S.W.2d

694, 696 (Tex. 1986). The trier of fact may choose to believe one witness and disbelieve another,

and resolve conflicts, and we must not impose our opinion to the contrary, if the trier of fact’s

resolution “falls within [the] zone of reasonable disagreement.” City of Keller, 168 S.W.3d at 822.

       B. Analysis

       The jury found that (1) Cox breached the Subcontract; (2) Cox was not excused by a prior

                                                 15
material breach by Hoss; (3) Hoss did not breach the Subcontract; (4) Cox failed to promptly pay

Hoss; (5) Hoss’s breach of contract damages totaled $81,897.10 We discuss the evidentiary

challenges to those questions together because they implicate interrelated testimony.

        “A party breaches a contract when he fails to perform an act that he has expressly or

impliedly promised to perform.” Duncan v. Woodlawn Mfg., Ltd., 479 S.W.3d 886, 894 (Tex.App.-

-El Paso 2015, no pet.), quoting STR Constructors, Ltd. v. Newman Tile, Inc., 395 S.W.3d 383,

387 (Tex.App.--El Paso 2013, no pet.). When one party commits a material breach, the other party

is excused from further performance under the contract. Id., citing Mustang Pipeline Co., Inc. v.

Driver Pipeline Co., Inc., 134 S.W.3d 195, 198 (Tex. 2004). This rule often requires a

determination of which party breached first. Id., citing Mustang Pipeline, 134 S.W.3d at 200.

        Materiality was defined for the jury with a series of factors lifted from the Texas Supreme

Court’s Mustang Pipeline case. See Mustang Pipeline, 134 S.W.3d at 199 (listing similar factors).

The jury was instructed to consider these factors in determining the materiality of a breach: (1)

how the injured party will be deprived of the benefit of which he reasonably expected; (2) the

extent to which the injured party can be adequately compensated for the part of the benefit of

which he will be deprived; (3) the extent to which the party failing to perform or to offer to perform

will suffer forfeiture; (4) the likelihood that the party failing to perform or to offer to perform will

cure his failure, taking into account the circumstances including any reasonable assurances; and

(5) the extent to which the behavior of the party failing to perform or to offer to perform comports

with the standards of good faith and fair dealing.

        In its answer to question one, the jury found that Cox breached a material term of the

contract. There was evidence in the record that Cox did not pay four of the payment applications

that Hoss submitted while it was on the job. In the termination for convenience memo, Cox states

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that it would pay Hoss for “work that is completed and is paid for by the County.” Cox’s primary

response to non-payment claim is that it was excused from making the payments due to Hoss’

failure to perform. 6 The jury, however, answered in question two that Cox’s breach was not

excused, and in question four, the jury found that Hoss did not commit a material breach. We

discuss the evidence on those issues together.

         Cox argues that any failure to pay was excused by Hoss’s breach of the Subcontract due to

the defective and untimely performance of its duties. Cox notes that multiple witnesses testified

that Hoss’s work was substandard and skirted proper specifications, forcing Hoss to redo its work

and causing delays between July and September 2015. Cox further alleges that Hoss’s breach

prevented Cox from applying the top rubber seal to the roads.

         Even so, the jury was free to believe that Cox, not Hoss, was responsible for the defects in

the roadbed by its failure to timely apply the final seal to the roads. The evidence shows that Hoss

was responsible for first scarifying and reshaping the six-inch base on the roads, and then shooting

RC-250 (a layer of petroleum oil) and spreading Grade 5 aggregate to form an “inverted prime

coat” on the roads. This coating was only meant to temporarily protect the roadbed (for two or

three months) before the final rubber-asphalt seal coat was applied by Cox. The record contains

some evidence that Cox did not timely apply the final asphalt seal coat, and that Cox had not

moved its sealing equipment into Martin County until Spring 2016, months after Hoss completed

its work on the roads. Hoss presented testimony from John Clark, a civil-construction contractor

employed by Hoss, that while Hoss was working on the roads in 2015, he never saw any Cox

equipment performing final seal coating at all during that period. Clark had previously discussed

6
  Cox did offer testimony that it had issued checks for those invoices, but it would have required Hoss to sign a release
to receive the checks, which Hoss was unwilling to do.

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with Cox’s principal, Josh Cox, that once Hoss had enough roads ready, Cox would follow along

behind to put on the final seal coat. By June, Clark started to get “nervous” when he did not see

Cox’s equipment putting on the final seal coat and he raised the issue with Josh Cox. Cox replied

that they were “busy” and trying to get to the project. Clark continued to raise the issue with Cox

in June and July.7 Clark testified that without the final rubber-asphalt seal coat, the roadbed was

subject to damage from vehicles passing over it. Hoss also presented testimony from David Gilver,

a civil engineer, that with only the temporary inverted prime coat, the roads could not withstand

harsh conditions like high temperatures and heavy traffic.

           At trial, Hoss rebutted the criticism of its adherence to the construction schedule in two

ways. First, Cox was directly involved in the delivery of caliche to the roads and Hoss could work

no faster than the caliche was available to spread and mix into the roadbed. And while Hoss had

to return to several roads to “redo” its work, it attributed those situations to where the inverted

prime road been exposed too long without a final seal coat.

           Hoss also presented testimony that its pay applications from May 2015 to October 2015,

as submitted to Cox, were approved by the grant administrator and the County, despite some

complaints by local residents over the conditions of the roads. Hoss also notes there were no

written complaints about the work while Hoss was on the project. This evidence supports an

inference that while Hoss’s work may not have been perfect, any deficiencies were not material.

           And this view of the evidence unwinds the balance of Cox’s arguments. Cox argues that

Hoss’s failure to timely perform deprived Cox and the County of the benefit of having functioning

roads in good working condition. Yet one view of the evidence shows that it was Cox’s delay in

putting on a final seal that deprived the County of proper roads. Echoing another Mustang Pipeline

7
    A Cox witness had testified that the ideal season to put down the final seal coating is between April to October.

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factor, Cox urges that there was “no likelihood” of Hoss curing its faulty work because it reworked

several portions of the road that still failed to conform to proper standards. Yet the testimony that

Cox did not bring in the equipment to apply the final seal until March 2016, suggests that any

additional work Hoss could have undertaken to repair the roads would have been fruitless due to

the lack of final sealant on the roads. Cox also urges that Hoss failed to act in good faith because

it waited until after it materially failed to perform and the Subcontract was terminated to demand

additional payment from Cox. While we might agree the demand for the additional payments was

improper (as we have rendered judgment on that claim), under the evidence, the termination for

convenience was by mutual agreement. Nothing in the language of the mutual termination supports

bad faith by either party.

       In sum, there is more than a scintilla of evidence that Cox, not Hoss, was responsible for

the deficient work, which renders Cox’s prior-material-breach justification unavailing. We hold

that Cox’s legal sufficiency challenge to the jury’s finding on this matter must fail. Neither do we

find that the evidence is so against the great weight and preponderance of the evidence as to be

manifestly unjust. Again, there is conflicting evidence on which party’s failure to perform caused

the roads to be unacceptable. Although Cox presented testimony establishing that the quality of

Hoss’s work did not comply with the Subcontract’s requirements, the jury was free to reject that

testimony and credit the evidence tending to suggest that Cox’s failure to timely apply the final

seal coat caused Hoss’s work to be substandard.

       We overrule issue two (Cox’s liability for breach of contract) and issue four (denial of

Cox’s claim for breach of contract).

                              V. PROMPT PAY ACT DAMAGES

       The trial court’s award of $24,836.68 in penalty interest under the Prompt Pay Act, which

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was based on Hoss’s breach of contract claim addressed above. See TEX.PROP.CODE ANN. § 28.004

(providing for interest on overdue payment). The only argument that Cox advances to challenge

this award is that if we decide the breach of contract issue in its favor, we should also reverse the

Prompt Pay Act award. Both parties agree that the resolution of this issue turns on our disposition

of Cox’s breach of contract issue. Because we decide that issue against Cox, we hold that the trial

court did not err by awarding damages under the Prompt Pay Act.

       Cox’s Issue Three is overruled.

              VI. ATTORNEY’S FEES, COSTS, EXPENSES, AND CHARGES

       At trial, Hoss prevailed on its quantum meruit and breach of contract claims. Both theories

might support an attorney’s fee award to a prevailing claimant. See TEX.CIV.PRAC.& REM.CODE

ANN. § 38.001(1), (2), (3), (8) (providing for an award of attorney’s fees on claims for services

and labor rendered and furnished material, and for oral or written contract); Cox’s Fiesta

Supermarkets of San Antonio, Inc. v. WMS, L.L.C., No. 04-17-00699-CV, 2018 WL 2694780, at

*3 (Tex.App.--San Antonio June 6, 2018, no pet.) (mem. op.) (a party who prevails on a quantum

meruit claim may recover attorney’s fees); Gentry v. Squires Constr., Inc., 188 S.W.3d 396, 406

(Tex.App.--Dallas 2006, no pet.) (same). Of course, claimants seeking attorney’s fees “have

always been required to segregate fees between claims for which they are recoverable and claims

for which they are not.” Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299, 311 (Tex. 2006).

But the trial court here would not have considered segregation, or any of its exceptions, because

all the theories would have supported a fee award.

       Cox argues that if we are to reverse any portion of the trial court’s judgment—as we have—

the judgment for the court’s award of attorney’s fees, costs, expenses, and charges must also be

reversed and remanded for reconsideration by the court. Arguing that the trial court erred in not

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awarding sufficient attorney’s fees, Hoss also seeks a remand of the case to the trial court for a

new determination of those matters. Given our disposition of Cox’s first issue, we reverse the trial

court’s award of attorney’s fees, and remand the case for the trial court to determine the amount

of fees due on the claims for which we upheld. See, e.g., Foster v. Stump, No. 01-98-00656-CV,

2000 WL 1059776, at *4 (Tex.App.--Houston [1st Dist.] Aug. 3, 2000, no pet.) (mem. op.)

(reversing and remanding to the trial court the issue of attorney’s fees awarded to the plaintiff

where the appellate court reversed only some of the plaintiff’s claims that they prevailed on in the

trial court); see also McAnelly v. Brady Med. Clinic, P.A., No. 03-04-00095-CV, 2004 WL

2556634, at *4 (Tex.App.--Austin Nov. 12, 2004, no pet.) (mem. op.) (remanding case to the trial

court for determination of attorney’s fees attributable to a quantum meruit claim where trial court

erroneously entered a JNOV on that claim).

       Cox’s Issue Five is sustained. Hoss’s Issues One and Two are overruled.

                                      VII. CONCLUSION

       We reverse the portion of the trial court’s judgment that awards damages to Hoss under its

quantum meruit claim and render judgment against Hoss on that claim. We also reverse the award

to Hoss for attorney’s fees, costs, expenses, and charges, and we remand the case to the trial court

for a new determination of those issues. We affirm the trial court’s judgment in all other respects.

                                              JEFF ALLEY, Justice

October 12, 2022

Before Rodriguez, C.J., Palafox, and Alley, JJ.

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