Opinion
02-23-00033-CV
09-07-2023
One Time Construction Texas, LLC and Shay Fretwell, Appellants v. Clint Snow and Jana Snow, Appellees
On Appeal from the 43rd District Court Parker County, Texas Trial Court No. CV21-1670.
Before Kerr, Birdwell, and Womack, JJ.
MEMORANDUM OPINION
Dana Womack, Justice
I. Introduction
This is an appeal from a summary judgment in a dispute related to a residential construction project. Appellants One Time Construction Texas, LLC (OTC) and Shay Fretwell, seeking the reversal of the trial court's summary judgment in favor of Appellees Clint and Jana Snow, argue in seven issues that the evidence is insufficient to support the trial court's summary judgment and that the trial court erred by (i) sustaining the Snows' objections to OTC and Fretwell's summary judgment evidence, (ii) overruling their motion for new trial without a hearing, and (iii) denying their special exceptions to the Snows' summary judgment motion. We affirm.
Specifically, OTC and Fretwell argue that the evidence is insufficient to show (1) that Section 162.006 of the Texas Construction Trust Fund Act applies to OTC; (2) that OTC breached any express or implied warranties; (3) that OTC or Fretwell "knowingly" violated the Texas Deceptive Trade Practices Act so as to entitle the Snows to treble damages under that statute, see Tex. Bus. & Com. Code Ann. § 17.50(b)(1); and (4) that Fretwell engaged in any conduct that would support the Snows' summary judgment against him individually.
II. Background
In September 2020, the Snows entered into a contract (the OTC Contract) with OTC, which is solely owned and operated by Fretwell, for the construction of a new home in Weatherford, Texas. Fretwell told the Snows that their home would be completed before school started in August 2021. But, unfortunately, the project did not go as planned.
In January 2021, at the request of the Snows' lender, First National Bank of Weatherford (FNB), the Snows and OTC entered into a set of contracts (collectively, the FNB Contract) pertaining to the construction project. Under the terms of the FNB Contract, which incorporates the OTC Contract and controls in the event of any conflict, OTC (1) agreed to construct the Snows' new home for the fixed price of $375,000, (2) warranted that the funds to be advanced were sufficient to construct the home, pay all expenses related thereto, and otherwise discharge all of OTC's obligations under the FNB Contract (except as may otherwise be provided in a written change order), (3) agreed neither to request nor to accept payment unless (i) the portion of the construction being paid for had been completed and (ii) OTC either had already paid-or would pay from the proceeds being remitted-all subcontractors who had worked on the project up to that point, (4) agreed that unless such individuals had already been paid, it would use all payments received on the project to pay all subcontractors who had performed any work on the project to date, and (5) agreed to provide the Snows signed, written statements listing any bills or expenses for which OTC requested payment.
However, OTC failed to comply with these terms. The Snows paid OTC $116,990-of which $50,000 was earmarked for framing and $7,500 was for the roof. But despite having paid this sum to OTC, in June 2021 the Snows received a notice from Simms Lumber that it intended to file a mechanic's lien against the Snows' property because OTC had not paid for lumber and certain other framing materials that Simms had supplied for the project. As a result, the Snows were forced to pay Simms $39,305.78 to prevent the filing of the lien.
During his deposition, Fretwell admitted that of the $116,990 that the Snows had paid him, $7,000 was for an HVAC unit that had never been delivered to their property or installed.
The Snows also purchased $442.84 in framing materials for OTC's subcontractors.
Then in August 2021, another subcontractor, Jimmy Prescher's Roofing, notified the Snows that it had recorded a mechanic's lien against their property because OTC had not paid it for roofing work that it had performed on the project. Thus, despite having already paid OTC $7,500 for roofing, the Snows were forced to pay an additional $1,260 directly to this subcontractor for the removal of the lien.
But the project's problems were not limited to the nonpayment of subcontractors; there were also issues with the quality of the construction. Certain work was not performed according to the plans. Further, even though the Snows had already paid $50,000 for framing, this fundamental part of the project had not been completed, and the framing work that had been done was defective.
Both the FNB Contract and the OTC Contract required OTC to perform all work in accordance with the plans and specifications agreed upon by the Snows and approved by their lender. Per the terms of the FNB Contract, changes and alterations required a written change order, and changes resulting in extra costs required the lender's written approval.
In June 2021, the Snows sent OTC an email expressing their frustration with the slow pace of the construction and outlining the deficiencies in the work that had been performed up to that point. In his response, Fretwell indicated that many of the defects would be addressed and that progress would increase within a week. However, approximately one month later, OTC abandoned the project.
The Snows were forced to hire another contractor, Hunter Homes, to complete the project and remedy the defects. The new contractor observed numerous deficiencies in the construction, including the following:
• A significant amount of the wood and oriented strand board (OSB) was molded and needed to be replaced;
• The showers and tubs were missing blocking for drain pans, requiring the surrounding framing to be removed;
• Much of the framing-including the framing of the entire upstairs as well as the powder room, master bedroom, and water closet-had not been done according to the plans and needed to be repaired;
• The fireplace framing had never been performed, and because it had not been done in the proper sequence, multiple repairs to the roof and existing framing were required;
• A number of studs needed to be replaced because they were warped, twisted, and molded;
• The top plate between the floors needed to be reinforced with a steel beam because the top plate was sitting on two 2x4s, causing pressure on the window and walls and requiring replacement of the damaged elements;
• Many joist hangers were missing, and multiple joists were not connected to cross beams, requiring removal and reframing;
• The front door framing had to be moved because it was not aligned with the pitches of the roof;
• Sections of the house wrap needed to be replaced or installed; and
• Studs on the exterior walls had to be moved and replaced to properly install the siding because they were not spaced in accordance with the plans.
The Snows had to pay Hunter Homes $37,127.24 to remedy these defects. And beyond the extra construction costs, OTC's failure to perform the project as required caused the Snows to incur $20,656.92 in additional interest charges on their construction loan and $22,477.99 in additional expenses for alternate living arrangements and storage costs.
In October 2021, the Snows filed suit against OTC and Fretwell, asserting claims for, among other things, breach of contract, breach of express and implied warranties, money had and received, negligence, violation of the Texas Construction Trust Fund Act (TCTFA), and violation of the Texas Deceptive Trade Practices Act (DTPA).
The Snows sought damages against Fretwell individually based on his violations of the Texas Construction Trust Fund Act, see Tex. Prop. Code Ann. §§ 162.006, 162.031, and the Texas Deceptive Trade Practices Act, see Tex. Bus. & Com. Code Ann. § 17.50(a)(3).
The Snows also sought a declaratory judgment that the mechanic's lien filed by OTC was void and damages pertaining to the filing of the fraudulent lien.
Although OTC and Fretwell answered the suit, they failed to make timely initial disclosures as required by Rule 194 of the Texas Rules of Civil Procedure-or indeed to make them at all. Moreover, they failed to timely produce documents in response to the Snows' production requests, making it necessary for the Snows to file two motions to compel discovery. On August 12, 2022, the trial court signed an agreed order compelling OTC and Fretwell to "produce all items which are the subject of the [Snows'] motion in their possession[,] custody[,] or control by August 23, 2022."
In October 2022, the Snows filed a motion for summary judgment, which was set for written submission on October 28, 2022. On October 21, 2022, OTC and Fretwell filed their response to which they attached a number of documents as summary judgment evidence, including Fretwell's declaration (Exhibit 1-A), a subcontractor list and home improvement contract (Exhibit 1-B), a summary of OTC's payments to suppliers with check numbers (Exhibit 1-C), and a "Statement of Profits Owed for Work Completed by [OTC]" (Exhibit 1-D). Contemporaneously with their summary judgment response, OTC and Fretwell filed special exceptions to the Snows' summary judgment motion and requested a continuance to allow them additional time to respond to the motion and to conduct discovery.
On October 26, 2022, the Snows filed Rule 193.6 objections to OTC's and Fretwell's summary judgment evidence, arguing (1) that all of the evidence should be excluded because OTC and Fretwell had "wholly failed" to serve their initial disclosures as required by Rule 194 and (2) that additional grounds existed for excluding Exhibits 1-C and 1-D (and any declaration testimony pertaining to these exhibits) because they had not been produced in discovery even though they were responsive to the Snows' previously served requests for production and the trial court had entered an order compelling OTC and Fretwell to produce all responsive documents.
In their objections to OTC's and Fretwell's summary judgment evidence, the Snows also objected to portions of Fretwell's declaration testimony on the grounds that it was hearsay or conclusory (or both). In addition, the Snows pointed out that OTC and Fretwell had attempted to rely on a number of unpleaded affirmative defenses-including offset, impossibility of performance, discharge by the Snows' prior material breach, and paying actual expenses directly related to construction-in their summary judgment response and that they had failed to offer any summary judgment evidence to prove the only two affirmative defenses that they had actually pleaded-unclean hands and equitable estoppel.
On October 31, 2022, the trial court sustained the Snows' Rule 193.6 objections and excluded all of OTC and Fretwell's summary judgment evidence on the grounds that they had failed to serve mandatory disclosures and signed an order granting the Snows' summary judgment motion. Subsequently, the trial court entered a final judgment awarding the Snows $472,568.49 in damages, court costs, and attorney's fees.
The trial court also sustained the Snows' objections to Exhibits 1-C and 1-D and Fretwell's declaration testimony pertaining thereto because these exhibits had not been produced in response to the Snows' requests for production.
This amount included $108,867.57 in actual damages and $326,602.71 in statutory treble damages for OTC's and Fretwell's knowing violations of the DTPA.
OTC and Fretwell filed a motion for new trial, which the trial court denied without a hearing. This appeal followed.
III. Discussion
On appeal, OTC and Fretwell argue in seven issues that (1) the trial court abused its discretion by sustaining the Snows' objections to their summary judgment evidence, (2) the trial court abused its discretion by overruling their motion for new trial without a hearing, (3) the trial court erred by denying their special exceptions to the Snows' summary judgment motion, (4) the trial court erred by awarding the Snows damages for violations of the TCTFA because the evidence is insufficient to show that this statute applies to OTC and Fretwell, (5) the summary judgment evidence is insufficient to support the trial court's treble damages award to the Snows based on OTC's and Fretwell's "knowing" violations of the DTPA, (6) the summary judgment evidence is insufficient to support the Snows' breach-of-warranty claims, and (7) the summary judgment evidence is insufficient to support the trial court's judgment against Fretwell individually. We will address these issues-all of which lack merit-in turn below.
A. The Trial Court Did Not Abuse Its Discretion by Sustaining the Snows' Objections to Appellants' Summary Judgment Evidence
In their first issue, OTC and Fretwell contend that the trial court abused its discretion by sustaining the Snows' objections to their summary judgment evidence. Specifically, OTC and Fretwell argue-without citing any authority-that (1) the
OTC and Fretwell cite only one case in their entire brief And this single case-an opinion from the Dallas Court of Appeals cited only as authority for the elements of a breach of contract claim-is not even directly relevant to any of the issues that OTC and Fretwell raise on appeal Thus, they have arguably forfeited all of their appellate issues See Tex R App P 381(i) (providing that an appellant's brief "must contain a clear and concise argument for the contentions made, with appropriate citations to authorities and to the record" (emphasis added)); Huey v Huey, 200 S.W.3d 851, 854 (Tex App-Dallas 2006, no pet) (admonishing that the "[f]ailure to cite applicable authority or provide substantive analysis waives an issue on appeal"); see also Fredonia State Bank v Gen Am Life Ins Co, 881 S.W.2d 279, 284 (Tex 1994) (observing that error may be waived by inadequate briefing) Despite this lack of authority, we will address the merits of this appeal See Eco Planet, LLC v ANT Trading, No 05-19-00239-CV, 2020 WL 6707561, at *5 (Tex App-Dallas Nov 16, 2020, pet denied) (mem op) (Osborne, J, concurring) ("Appellate courts have the discretion to waive issues for inadequate briefing." (first citing Fredonia State Bank, 881 S.W.2d at 284; and then citing Horton v. Stovall, 591 S.W.3d 567, 569-70 (Tex. 2019)); cf. Perry v. Cohen, 272 S.W.3d 585, 587 (Tex. 2008) ("[A]ppellate courts should reach the merits of an appeal whenever reasonably possible.").
Snows' evidentiary objections and the trial court's rulings thereon were untimely, (2) the trial court erred by failing to verify whether the challenged summary judgment evidence had actually been disclosed, and (3) even if the challenged evidence had not been previously disclosed, the Snows would not have been unfairly surprised or prejudiced by its admission. We disagree on all counts.
1. Standard of Review
"The standards for the admissibility of evidence in a summary judgment proceeding are the same as those applicable to a regular trial." Luke v. Unifund CCR Partners, No. 02-06-444-CV, 2007 WL 2460327, at *6 (Tex. App.-Fort Worth Aug. 31, 2007, no pet.) (mem. op.) (citing United Blood Servs. v. Longoria, 938 S.W.2d 29, 30 (Tex. 1997)); accord Houle v. Capital One Bank (USA), N.A., 570 S.W.3d 364, 369 (Tex. App.-El Paso 2018, pet. denied). Thus, we review a trial court's decision to admit summary judgment evidence under an abuse of discretion standard. Owens- Corning Fiberglas Corp. v. Malone, 972 S.W.2d 35, 43 (Tex. 1998); Longoria, 938 S.W.2d at 30; Houle, 570 S.W.3d at 369. "The test for abuse of discretion is not whether, in our opinion, the facts present an appropriate case for the trial court's actions." Houle, 570 S.W.3d at 369 (citing Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241-42 (Tex. 1985)). Rather, in an abuse of discretion review, we consider whether the trial court acted arbitrarily or unreasonably, or without reference to guiding rules and principles. Downer, 701 S.W.2d at 241-42.
2. Timeliness
OTC and Fretwell's argument that the Snows' objections to their summary judgment evidence were untimely because they were "filed two days before the [trial court's] submission date"-or that the trial court violated Rule 21's notice requirements by sustaining these objections-is baseless.
Rule 166a, which governs summary judgment proceedings, provides no specific deadline for parties to object to summary judgment evidence. See Tex.R.Civ.P. 166a; Barnes v. Athens, No. 02-12-00173-CV, 2012 WL 4936624, at *1 (Tex. App.- Fort Worth Oct. 18, 2012, no pet.) (mem. op.). "As a result, a trial court acts within its discretion when it considers objections filed as late as the day of the hearing." Barnes, 2012 WL 4936624, at *1 (first citing Reynolds v. Murphy, 188 S.W.3d 252, 259 (Tex. App.-Fort Worth 2006, pet. denied); then citing Shelton v. Sargent, 144 S.W.3d 113, 118-19 (Tex. App.-Fort Worth 2004, pet. denied); and then citing Bradford Partner's II, L.P. v. Fahning, 231 S.W.3d 513, 521-22 (Tex. App.-Dallas 2007, no pet.)).
Thus, we cannot say that the trial court abused its discretion by considering the Snows' objections merely because they were filed two days before the submission date. See id. OTC and Fretwell contend that the trial court "should have held a properly noticed hearing or provided a reasonable submission date[]" to consider issues related to the Snows' evidentiary objections, but the record does not show that OTC and Fretwell ever requested such a hearing or submission date. See id. at *2 ("The [trial court] did not err by ruling on [appellee's] objections without granting [appellant] relief he did not request ...."). Indeed, the record reflects that OTC and Fretwell filed their own objections to the Snows' summary judgment evidence on October 28, 2022-on the submission date and two days after the Snows filed their objections-despite having had more time than the Snows to prepare their objections. Even though they were filed at the last minute, OTC and Fretwell's objections were considered by the trial court, who sustained several of them. Under these circumstances, OTC and Fretwell are in no position to question the fairness of the trial court's procedure for addressing the parties' evidentiary objections.
The Snows filed and served their summary judgment motion, which included all of their summary judgment evidence, on October 5, 2022, but OTC and Fretwell, as the respondents, did not serve their summary judgment evidence on the Snows until October 21, 2022.
3. Exclusion of the Evidence
The trial court did not abuse its discretion by determining that the excluded evidence had not been disclosed.
As noted above, see supra note 8, in addition to sustaining the Snows' blanket objection to the entirety of OTC's and Fretwell's summary judgment evidence on the grounds that they failed to make their required disclosures under Rule 194, the trial court also sustained the Snows' specific objections to Exhibits 1-C and 1-D (and Fretwell's declaration testimony pertaining thereto) because these exhibits had not been produced in response to the Snows' requests for production. Because we conclude that the trial court did not abuse its discretion by sustaining the Snows' blanket objection, we need not address its rulings on the Snows' specific objections to Exhibits 1-C and 1-D. See Tex.R.App.P. 47.1.
OTC and Fretwell assert that the trial court erred by making a "factual determination" that their summary judgment evidence had not been disclosed even though the Snows had not presented any evidence to support such a "finding." But OTC and Fretwell cite no authority for the proposition that the Snows were required to present evidence of nondisclosure to support their evidentiary objections, nor are we aware of any such authority. Rather, as the Snows point out, the default rule is that parties' discovery requests and responses "must not be filed" with the court. Tex.R.Civ.P. 191.4(a); see also Tex.R.Civ.P. 191.4(b) (enumerating specific types of discovery materials that must be filed with the court), (c) (listing permissive exceptions). Thus, the Snows were not required to file all of the documents that OTC and Fretwell had produced so that the trial court could verify the nondisclosure of a piece of summary judgment evidence.
See supra note 10.
Moreover, the record shows that the trial court was well within its discretion to determine that OTC and Fretwell had failed to make their required disclosures. OTC filed its original answer on November 22, 2021; therefore, its initial disclosures were due on December 22, 2021. See Tex.R.Civ.P. 194.2(a). But on March 22, 2022, the Snows filed a motion to compel discovery from OTC in which they informed the court that OTC had still not made its required initial disclosures despite the Snows' requests. Fretwell answered the Snows' suit on April 20, 2022, meaning his initial disclosures were due by May 20, 2022. See id. But in their evidentiary objections filed in October 2022, the Snows pointed out to the trial court that "despite several reminders . . . [OTC and Fretwell] have utterly failed to comply with their disclosure requirements-still to this day they have not served their mandatory disclosures under Rule 194." At no point between the filing of the Snows' evidentiary objections on October 26, 2022, and the trial court's ruling on October 31, 2022, did OTC and Fretwell file a response denying the Snows' repeated (at least as to OTC) allegations that they had not disclosed the information required by Rule 194 or otherwise offer any evidence that they had, in fact, made the required disclosures. Nor did they dispute the Snows' nondisclosure allegations in their motion for new trial.
The feasibility and propriety of filing such a response is evidenced by the fact that the Snows themselves filed a response to OTC's and Fretwell's evidentiary objections on October 28, 2022-the same day that the objections were filed.
Thus, we cannot conclude that the trial court abused its discretion by determining that OTC and Fretwell had failed to make the disclosures required by Rule 194.
4. Unfair Surprise or Unfair Prejudice
OTC and Fretwell argue that even if they had failed to comply with their disclosure obligations, the trial court nevertheless erred by sustaining the Snows' evidentiary objections because "[t]here is no basis upon which the [Snows] could claim that they were unfairly prejudiced or surprised by" OTC and Fretwell's summary judgment evidence. See Tex.R.Civ.P. 193.6(a). This argument lacks merit.
Rule 193.6(a) provides that "[a] party who fails to make . . . a discovery response, including a required disclosure, in a timely manner may not introduce in evidence the material or information that was not timely disclosed." Id. But the rule provides an exception that applies if the court finds that the offering party's "failure to timely make . . . the discovery response will not unfairly surprise or unfairly prejudice the other parties." Tex.R.Civ.P. 193.6(a)(2). The party seeking to introduce the evidence bears the burden of establishing a lack of unfair surprise or unfair prejudice, Tex.R.Civ.P. 193.6(b), and a trial court has broad discretion to determine whether the introducing party has satisfied this burden, Syrian Am. Oil Corp., S.A. v. Pecten Orient Co., 524 S.W.3d 350, 366 (Tex. App.-Houston [1st Dist.] 2017, no pet.).
OTC and Fretwell assert that the trial court did not provide them any opportunity to demonstrate a lack of unfair prejudice or unfair surprise. We disagree. OTC and Fretwell could have filed a response to the Snows' evidentiary objections- as the Snows did to OTC and Fretwell's objections-setting forth their explanation as to why the admission of their previously undisclosed and unproduced summary judgment evidence would not unfairly prejudice or surprise the Snows. But they elected not to do so. They had another opportunity to provide such an explanation in their motion for new trial, but their motion does not even reference Rule 193.6 and offers only a single conclusory sentence in support of their contention that the trial court erred by sustaining the Snows' evidentiary objections.
Because they did not explicitly argue lack of unfair prejudice or unfair surprise in the trial court as a basis for overruling the Snows' evidentiary objections, OTC and Fretwell arguably forfeited this issue on appeal. See Tex.R.App.P. 33.1(a). But apart from this preservation issue, OTC and Fretwell's absence-of-unfair-prejudice argument lacks substance. In essence, OTC and Fretwell argue that the Snows could not have been unfairly prejudiced or surprised by OTC and Fretwell's summary judgment evidence because they had the opportunity to depose Fretwell. However, granting a party the right to depose a witness does not, in and of itself, demonstrate a lack of unfair prejudice or unfair surprise. See Barron as Trustee of 3001 Decatur Trust v. Fort Worth Transp. Auth., No. 02-19-00274-CV, 2021 WL 1323415, at *5 n.12 (Tex. App.-Fort Worth Apr. 8, 2021, pet. denied) (mem. op.); Franke v. Palau, No. 01-18-00424-CV, 2019 WL 2220112, at *5 (Tex. App.-Houston [1st Dist.] May 23, 2019, no pet.) (mem. op.) (first citing PopCap Games v. MumboJumbo, 350 S.W.3d 699, 718 (Tex. App.-Dallas 2011, pet. denied); and then citing Ersek v. Davis &Davis, P.C., 69 S.W.3d 268, 272 (Tex. App.-Austin 2002, pet. denied)); Mid Continent Lift &Equip., LLC v. J. McNeill Pilot Car Serv., 537 S.W.3d 660, 675 (Tex. App.-Austin 2017, no pet.) (quoting Ersek, 69 S.W.3d at 272). Thus, even though the Snows had the opportunity to depose Fretwell, the trial court was well within its discretion to conclude that OTC and Fretwell had not satisfied their burden to show a lack of unfair prejudice or unfair surprise, particularly given that the Snows' evidentiary objections identified at least two specific responsive documents that OTC and Fretwell had failed to produce and pointed out multiple unpleaded and undisclosed affirmative defenses that their summary judgment evidence purported to support.
We overrule OTC and Fretwell's first issue.
B. The Trial Court Did Not Abuse its Discretion by Denying OTC and Fretwell's Motion for New Trial
In their second issue, OTC and Fretwell-again citing no authority-assert that the trial court abused its discretion by denying their motion for new trial without a hearing (or notice of submission of evidentiary issues). We disagree.
See supra note 10.
"Generally, a hearing on a motion for new trial is not mandatory." Landis v. Landis, 307 S.W.3d 393, 394 (Tex. App.-San Antonio 2009, no pet.) (citing In re T.B.H.-H., 188 S.W.3d 312, 315 (Tex. App.-Waco 2006, no pet.)). Rather, a trial court is only required to conduct a hearing "when a motion [for new trial] presents a question of fact upon which evidence must be heard," the motion "alleges facts, which if true, would entitle the movant to a new trial," and the movant properly requests a hearing. Cecil v. Smith, 804 S.W.2d 509, 511 n.5 (Tex. 1991) (quoting Hensley v. Salinas, 583 S.W.2d 617, 618 (Tex. 1979)). Moreover, when a motion for new trial presents a complaint on which evidence must be heard, the motion must be verified or include affidavits. See In re J.A.L., 630 S.W.3d 249, 253 (Tex. App.-El Paso 2020, no pet.) (holding that "[b]ecause new evidence was necessary to support the [appellant's] argument" that the trial court's judgment was erroneous, the appellant "had an obligation to notify the trial court of its purported error . . . by filing a verified motion for new trial and seeking a ruling o[n] that motion"); Zuniga v. Zuniga, 13 S.W.3d 798, 803 n.4 (Tex. App.-San Antonio 1999, no pet.) (parenthetically noting that "affidavits are required 'when the motion for new trial is based on the grounds listed in [Rule] 324(b)(1) [of the Texas Rules of Civil Procedure] or any other ground that requires the presentation of evidence at a hearing'" (quoting O'Connor's Texas Rules-Civil Trials § 3.2, at 548 (1999))), disapproved on other grounds, In re Z.L.T., 124 S.W.3d 163, 166 (Tex. 2003); see also In re T.L.T., No. 05-16-01367-CV, 2018 WL 1407098, at *4 (Tex. App.-Dallas Mar. 21, 2018, no pet.) (mem. op.) ("In order to introduce evidence outside the record, a motion for new trial must be verified.").
OTC and Fretwell's motion for new trial was not verified, nor did it include any attached affidavits. Further, the record does not show that OTC and Fretwell ever requested a hearing on their new trial motion. Accordingly, the trial court did not abuse its discretion by denying the motion without a hearing. See In re Columbia Med. Ctr., 290 S.W.3d 204, 210 (Tex. 2009) ("Texas trial courts have historically been afforded broad discretion in granting new trials.").
OTC and Fretwell assert that the trial court did not give them adequate time to request a hearing because it "denied the motion for new trial . . . nine days after it was filed, two of which were weekend days and one of which was a legal holiday." Even excluding the weekend days and the holiday, OTC and Fretwell had six business days to request a hearing on their motion. On its face, this appears to be ample time in which to take the ministerial step of requesting a hearing, and OTC and Fretwell have provided no explanation for their contention that this amount of time was insufficient.
We overrule OTC and Fretwell's second issue.
C. OTC and Fretwell Failed to Preserve Their Complaint That the Trial Court Erred by Failing to Grant Their Special Exceptions to the Snows' Summary Judgment Motion
In their third issue, OTC and Fretwell argue that the trial court erred by denying their special exceptions to the Snows' summary judgment motion. However, they have failed to preserve this complaint for our review.
Special exceptions are used "to compel clarification of pleadings when the pleadings are not clear or sufficiently specific or fail to plead a cause of action." Baylor Univ. v. Sonnichsen, 221 S.W.3d 632, 635 (Tex. 2007) (citing Friesenhahn v. Ryan, 960 S.W.2d 656, 658 (Tex. 1998)); see also Tex.R.Civ.P. 91. "Failure to obtain a timely hearing and a ruling on special exceptions waives the exceptions and does not preserve them for appeal." Davis v. Angleton Indep. Sch. Dist., 582 S.W.3d 474, 481 (Tex. App.-Houston [14th Dist.] 2018, pet. denied) (citing McAllister v. Samuels, 857 S.W.2d 768, 773 (Tex. App.-Houston [14th Dist.] 1993, no writ)); see also Jimmie Luecke Child. P'ship v. Droemer, No. 03-20-00096-CV, 2022 WL 243162 at *8 (Tex. App.-Austin Jan. 27, 2022, pet. denied) (mem. op.) ("'[W]hen a nonmovant believes a motion for summary judgment is unclear, ambiguous, or lacks specificity, it must file special exceptions' and 'must then obtain a ruling on the special exceptions to preserve the issue for appellate review.'" (quoting Reg'l Specialty Clinic, P.A. v. S.A. Randle & Assocs., 625 S.W.3d 895, 901 (Tex. App.-Houston [14th Dist.] 2021, no pet.))). Here, the record does not reflect that OTC and Fretwell requested-much less obtained-a hearing on their special exceptions or that the trial court ruled on them. Accordingly, OTC and Fretwell have forfeited this appellate issue. See Davis, 582 S.W.3d at 481; see also Tex.R.App.P. 33.1(a).
OTC and Fretwell's special exceptions filing was formatted as a proposed order with checkboxes for "GRANTED" or "DENIED." However, nowhere in the filed document did OTC and Fretwell request a hearing, and none of the checkboxes are filled in. None of the trial court's subsequent orders refer to OTC and Fretwell's special exceptions, much less contain a ruling on them.
Moreover, even assuming-without deciding-that this issue had been preserved for our review, it would nevertheless fail on the merits. Rule 166a provides that a summary judgment motion must "state the specific grounds therefor." Tex.R.Civ.P. 166a(c). "Grounds are sufficiently specific if they give 'fair notice' to the nonmovant." City of Roanoke v. Westlake, 111 S.W.3d 617, 633 (Tex. App.-Fort Worth 2003, pet. denied). Under the fair-notice standard, "courts assess whether an opposing party can ascertain from the pleading the nature of the controversy, its basic issues, and the type of evidence that might be relevant." Reaves v. City of Corpus Christi, 518 S.W.3d 594, 600 (Tex. App.-Corpus Christi-Edinburg 2017, no pet.) (first citing Low v. Henry, 221 S.W.3d 609, 612 (Tex. 2007); and then citing Horizon/CMS Healthcare Corp. v. Auld, 34 S.W.3d 887, 896 (Tex. 2000)).
The Snows' summary judgment motion set forth very specific and detailed grounds:
[The Snows] are entitled to summary judgment on their claims for (1) breach of contract; (2) breach of express warranty; (3) breach of implied warranty; (4) violation of the DTPA; (5) negligence; (6) violation of the [TCTFA]; (7) money had and received; and (8) declaratory
judgment, because the undisputed summary judgment evidence shows that:
a) OTC, in breach of its agreement with [the Snows], requested and accepted payment for work and goods that had not been performed and supplied and in excess of the agreed amounts; failed to pay Simms Lumber and Jimmy Prescher's Roofing for the work performed and materials supplied on the project with the funds provided by [the Snows] to OTC; and failed to construct [the Snows'] home per the plans;
b) OTC breached its express warranty that the work would be performed according to the plans;
c) OTC breached the implied warranty of good workmanship in the construction of [the Snows'] new home;
d) OTC violated the DTPA by breaching its implied and express warranties and failing to supply a completed Notice of Cancellation form in duplicate with its contract;
e) Fretwell violated the DTPA through his unconscionable actions;
f) OTC was negligent as it breached its duties to [the Snows] to: (1) exercise ordinary care in the performance of its duties, (2) act with reasonable skill and diligence in performing the scope of work, and (3) perform its duties in a good and workmanlike manner and according to recognized construction standards;
g) [OTC and Fretwell] both violated the [TCTFA] as they received, controlled and directed trust funds, namely the money received from [the Snows] for the construction of their home, and subsequently diverted those funds for purposes other than fully paying and satisfying the obligations to the beneficiaries of the payments they received (Simms Lumber and Jimmy Prescher's Roofing), [OTC and Fretwell] also violated the [TCTFA] by admittedly not complying with § 162.006, which required the trust funds be deposited into a "construction account" as that term is defined in § 162.005(6);
h) [The Snows] paid OTC for work, materials, and supplies that [the Snows] did not receive (the HVAC and completion of the framing), resulting in unjust enrichment on the part of OTC; and
i) [OTC's mechanic's] [l]ien [a]ffidavit is invalid.Given this detailed list of grounds, the trial court would have been well within its discretion to hold that the Snows' summary judgment motion was sufficiently specific to give OTC and Fretwell fair notice and to overrule their special exceptions on that basis. See City of Roanoke, 111 S.W.3d at 633; see also M &M Res., Inc. v. DSTJ, LLP, 564 S.W.3d 446, 452 (Tex. App.-Beaumont 2018, no pet.) ("We review a trial court's ruling on special exceptions under an abuse of discretion standard."). The soundness of such a ruling is further supported by the fact that at the same time OTC and Fretwell filed their special exceptions, they filed a response reflecting their understanding of the nature of the controversy and its basic issues and attached relevant-though ultimately excluded-summary judgment evidence. See Reaves, 518 S.W.3d at 600.
We overrule OTC and Fretwell's third issue.
D. The Trial Court Did Not Err by Awarding the Snows Damages for Violations of the TCTFA
In their fourth issue, OTC and Fretwell argue that the trial court erred by awarding the Snows damages for violations of the TCTFA. Tex. Prop. Code Ann. §§ 162.001-.033. Specifically, OTC and Fretwell assert that because the Snows failed to demonstrate that the project in question was a "residential homestead," the evidence is insufficient to show that the TCTFA applies. See Tex. Prop. Code Ann. § 162.006(a). We disagree.
"[T]he [TCTFA] was enacted for the protection of laborers and materialmen, and is a remedial statute that should be given a broad construction." Dealers Elec. Supply v. Scoggins Constr. Co., 292 S.W.3d 650, 658 (Tex. 2009). It "imposes fiduciary responsibilities on contractors to ensure subcontractors, mechanics, and materialmen are paid for the work they complete." Fuller v. Le Brun, 616 S.W.3d 31, 39 (Tex. App.-Houston [14th Dist.] 2020, pet. denied). Construction payments are trust funds if they "are made to a contractor . . . or to an officer, director, or agent of a contractor . . . under a construction contract for the improvement of specific real property in this state." Tex. Prop. Code Ann. § 162.001(a). "A contractor . . . or an officer, director, or agent of a contractor . . . who receives trust funds or who has control or direction of trust funds, is a trustee of the trust funds." Id. § 162.002. In addition to any "artisan[s], laborer[s], mechanic[s], contractor[s], subcontractor[s], or materialm[e]n" who furnished labor or material for the project, a property owner is a beneficiary of trust funds in connection with a "residential construction contract" and is thus entitled to the protections afforded by the TCTFA. Id. § 162.003.
In their summary judgment motion, the Snows sought relief against both OTC and Fretwell for violating the TCTFA by, among other things, failing to comply with Section 162.006. This section requires any contractor "who enters into a written contract with a property owner to construct improvements to a residential homestead for an amount exceeding $5,000" to deposit any trust funds into a "construction account." Id. § 162.006(a); see also id. § 162.005(6) ("'Construction account' means an account in a financial institution into which only trust funds and funds deposited by the contractor that are necessary to pay charges imposed on the account by the financial institution may be maintained.").
As additional summary judgment grounds, the Snows argued that OTC and Fretwell had "received, controlled[,] and directed trust funds, namely the money received from [the Snows] for the construction of their home, and subsequently diverted those funds for purposes other than fully paying and satisfying the obligations to the beneficiaries of the payments they received ...." See Tex. Prop. Code Ann. § 162.031(a). However, OTC and Fretwell only challenge the sufficiency of the evidence to establish the applicability of TCTFA Section 162.006; they do not question the applicability of Section 162.031(a). Further, although OTC and Fretwell assert that their summary judgment evidence creates a fact issue regarding whether they misapplied any trust funds, we have already held that the trial court did not abuse its discretion by excluding OTC and Fretwell's summary judgment evidence, and therefore we cannot consider it.See Lawrence v. Lawrence, 911 S.W.2d 443, 446 (Tex. App.-Texarkana 1995, writ denied).
The TCTFA does not define the term "residential homestead," and we have not found-nor have the parties cited-any caselaw defining this term for purposes of the TCTFA. However, the caselaw regarding what constitutes a "homestead" for purposes of the exemption from creditor claims provided by the Texas Constitution and Chapter 41 of the Property Code is well-developed, and we find it instructive. See Tex. Const. art. XVI, § 50(a); Tex. Prop. Code Ann. § 41.001(a).
In Texas, a landowner seeking to claim a homestead exemption for a particular property has the burden to establish "(1) overt acts of homestead usage and (2) the intention to claim the property as a homestead." Zorrilla v. Apyco Constr. II, LLC, 469 S.W.3d 143, 159 (Tex. 2015). A landowner may also establish a homestead over unoccupied land by showing "(1) a present intent to occupy and use the land as a home and (2) an overt act in furtherance of this intent." AG Acceptance Corp. v. Veigel, 564 F.3d 695, 698 (5th Cir. 2009) (citing Farrington v. First Nat. Bank of Bellville, 753 S.W.2d 248, 250 (Tex. App.-Houston [1st Dist.] 1988, writ denied)).
Here, the Snows' summary judgment evidence shows both their "present intent" to use the property as their homestead and an "overt act" manifesting that intent. See id. In Jana Snow's declaration filed in support of the Snows' summary judgment motion, she stated that she and her husband "hired [Fretwell], who owns [OTC], to build [their] new home . . . on [their] property ...." She also stated that Fretwell had told her that "construction would be complete before school started in August of 2021" and expressed that the Snows had incurred $22,477.99 in "alternate living arrangements and storage costs" because of OTC's failure to complete the project. Ms. Snow's declaration testimony-particularly when combined with the other record evidence, including the OTC Contract, the FNB Contract, and the architect's plans-demonstrates both (1) that at the time the OTC Contract and FNB Contract were executed, the Snows had a clear intent to use the property as a homestead at a reasonable and definite time in the future, see id. at 699 (explaining that a landowner who does not currently occupy land he seeks to claim as a homestead can satisfy the present-intent prong by demonstrating "a good faith intent to use the land as a home 'in a reasonable and definite time in the future'" (quoting Farrington, 753 S.W.2d at 250-51)), and (2) that the Snows had engaged in overt acts manifesting that intent, see Clark v. Salinas, 626 S.W.2d 118, 120 (Tex. App.-Corpus Christi- Edinburg 1981, writ ref'd n.r.e.) (holding that trial court did not abuse its discretion by concluding that appellee's "purchase . . . of building materials and preparation by him of plans for his home [was] sufficient evidence of the overt acts required to establish the existence of a homestead").
The OTC Contract is entitled "Home Improvement Contract" and states in the second numbered prefatory paragraph that "[the Snows] desire[] [OTC] to build [a] new custom home." The FNB Contract is entitled "Residential Construction Contract and Lien" and recites that "[OTC] has agreed to construct the Improvements," which are defined as "the improvements made to a single-family residence or new construction of a single-family residence." The architect's plans, which Jana Snow sent to Fretwell via an email with the subject line "Snow Houseplans," are clearly for the construction of a single-family dwelling and include the label "A NEW RESIDENCE FOR CLINT AND JANA SNOW" on each page.
Accordingly, we conclude that the evidence is sufficient to show that the Snows' property constituted a "residential homestead" for purposes of TCTFA Section 162.006(a) and that, therefore, the trial court did not err by holding that this provision applied to OTC and Fretwell.
We overrule OTC and Fretwell's fourth issue.
E. The Trial Court Did Not Err by Awarding the Snows Treble Economic Damages under the DTPA
In their fifth and sixth issues, OTC and Fretwell argue that the evidence is insufficient to support findings (1) that OTC violated the DTPA by breaching any express or implied warranties, (2) that OTC and Fretwell violated the DTPA by committing "unconscionable" acts, and (3) that OTC and Fretwell "knowingly" committed the acts giving rise to these violations. See Tex. Bus. &Com. Code Ann. § 17.50(a)(2), (3) (providing that a consumer may maintain an action under the DTPA when a "breach of an express or implied warranty" or "any unconscionable action or course of action by any person" constitutes "a producing cause of economic damages or damages for mental anguish"), (b)(1) (authorizing a trial court to award treble economic damages if it "finds that the conduct of the defendant was committed knowingly"). These arguments lack merit.
Because these issues are interrelated, we address them together. See Vann v. Gaines, No. 02-06-00148-CV, 2007 WL 865870, at *1 (Tex. App.-Fort Worth Mar. 22, 2007, no pet.) (mem. op.).
1. Breach of Express Warranty
OTC and Fretwell assert that the Snows "presented no evidence of an express warranty in this case other than the limited [one-]year warranty [contained] in the original OTC contract," which OTC and Fretwell contend "was waived by the Snows' nonpayment ...." But this assertion is belied by the appellate record.
A plaintiff can recover on a claim for breach of express warranty for services if
(1) the defendant sold services to the plaintiff; (2) the defendant made a representation to the plaintiff about the characteristics of the services by affirmation of fact, by promise, or by description; (3) the representation became part of the basis of the bargain; (4) the defendant breached the warranty; (5) the plaintiff notified the defendant of the breach; and (6) the plaintiff suffered injury.Paragon Gen. Contractors, Inc. v. Larco Constr., Inc., 227 S.W.3d 876, 886 (Tex. App.- Dallas 2007, no pet.).
As one of their summary judgment grounds, the Snows asserted that "OTC breached its express warranty that the work would be performed according to the plans" and specifications created by their architect, and they presented sufficient summary judgment evidence to prove each element of this express-warranty claim. Based on this summary judgment evidence, the trial court found that OTC had violated the DTPA by breaching its express warranty to the Snows. See Tex. Bus. &Com. Code Ann. § 17.50(a)(2).
Regarding the first element, OTC and Fretwell do not-indeed cannot- dispute that OTC sold services to the Snows, and there is myriad evidence in the record to support such a finding, including the OTC Contract, the FNB Contract, and Fretwell's own deposition testimony acknowledging that OTC agreed to build a home for the Snows.
Regarding the second and third elements, the second numbered prefatory paragraph of the OTC Contract expressly states that "[the Snows] desire[] [OTC] to build [a] new custom home . . . pursuant to the plans and specifications created by Karen Turner ('Architect'), dated June 26, 2020." These plans, which are included in the record, are also referenced in Article 1 of the OTC Contract, which defines "Contract Documents" as consisting of the OTC Contract, "the plans and specifications created by the Architect, dated June 26, 2020, ('Plans') and any Modifications issued after the date of [the OTC Contract]." Article 2 of the OTC Contract provides that OTC "shall fully execute the Work described in the Contract Documents." These terms of the OTC Contract are incorporated by reference into the FNB Contract, and the Residential Construction Loan Agreement executed by FNB, the Snows, and OTC expressly provides that "[t]he Improvements are to be built in accordance with the plans and specifications previously provided to and approved by [FNB] and attached to the [OTC Contract]." Further, Fretwell agreed during his deposition that "the agreement [was] that . . . [OTC] would build the home according to the plans and specs provided by the Snows" and acknowledged that there were no written change orders to those plans. Thus, there is ample evidence (1) that OTC represented that it would construct the Snows' home according to their architect's plans and specifications and (2) that this representation became part of the basis of the bargain. See Paragon, 227 S.W.3d at 886 (concluding that "[t]he representation's presence in the contracts show[ed] it was part of the basis of the bargain").
Regarding the fourth and fifth elements, the record contains sufficient evidence showing that OTC breached its express warranty by failing to construct the Snows' home in accordance with the architect's plans and that the Snows notified OTC of the breach. Indeed, Fretwell admitted in his deposition that certain aspects of the construction did not comply with the plans. In addition, Kenlee Dennis, the Snows' replacement contractor and expert witness, provided declaration testimony enumerating many defects and deficiencies in OTC's construction of the home and identified certain aspects of the work, including the upstairs framing, that had not been "performed per the plans." The record also shows that the Snows emailed Fretwell to notify him of OTC's failure to comply with the plans.
Finally, regarding the sixth element, the Snows provided evidence of damages, including Jana Snow's declaration testimony that (1) the Snows paid a total of $116,990 to OTC before it abandoned the project, (2) the Snows had to pay $39,305.78 directly to Simms Lumber to prevent the filing of a mechanic's lien on their property and $1,260 directly to Jimmy Prescher's Roofing so that it would release its mechanic's lien on their property, (3) the Snows had to pay $200 to Greene's Home Inspections to inspect OTC's work on the project, (4) the Snows had to pay Hunter Homes $37,127.74 to remedy OTC's deficient and nonconforming work, (5) the Snows had to pay an additional $20,656.92 on their construction loan that they would not have had to pay if OTC had completed the project as agreed,and (6) the Snows had to pay $22,477.99 for alternate living arrangements and storage costs that they would not have incurred if the project had been completed on schedule.
Kenlee Dennis provided declaration testimony corroborating that the Snows had to pay Hunter Homes $37,127.74 to remedy the defects in OTC's work, and copies of the invoices were attached as exhibits to his declaration.
Jana Snow included bank records reflecting these additional interest payments as an exhibit to her declaration.
Jana Snow included bank records and other proof of payment of these expenses as an exhibit to her declaration.
Thus, contrary to OTC and Fretwell's assertion, the record contains sufficient evidence to support each element of the Snows' breach-of-express-warranty claim.
2. Breach of Implied Warranty
In their summary judgment motion, the Snows also asserted-and the trial court ultimately found-that OTC violated the DTPA by breaching the implied warranty of good and workmanlike construction. See Tex. Bus. &Com. Code Ann. § 17.50(a)(2). A plaintiff can recover on a claim for breach of the implied warranty of good and workmanlike construction of residential property if (1) the defendant built residential property; (2) the plaintiff purchased the property; (3) the construction was not performed in a good and workmanlike manner; and (4) the plaintiff suffered injury. O'Connor's Texas Causes of Action ch. 32-I, § 1.1 (2022); see Evans v. J. Stiles, Inc., 689 S.W.2d 399, 399-400 (Tex. 1985); see also Nghiem v. Sajib, 567 S.W.3d 718, 723 n.33 (Tex. 2019) (listing the implied warranty of good and workmanlike construction as one of the implied warranties recognized in Texas).
Here, there is sufficient evidence to support each element of the Snows' breach-of-implied-warranty claim. As noted above, it is undisputed that the Snows hired and paid OTC to build them a residence on their property. Further, we have already set forth much of the evidence showing that OTC's construction of the Snows' residence was not performed in a good and workmanlike manner, so we will not restate it here. We do note, however, that the Snows' expert Kenlee Dennis explicitly stated in his declaration that "there were numerous defects" in OTC's work, "which fell below the acceptable standard of care and industry standard." And as detailed above, the Snows provided ample evidence of injury, including additional construction costs, additional loan payments, and additional amounts incurred for alternative housing arrangements and storage fees.
OTC and Fretwell argue that their summary judgment evidence was sufficient to create a fact issue regarding whether OTC's work was performed in a good and workmanlike manner. However, as previously noted, see supra note 18, because we have determined that the trial court did not abuse its discretion by excluding OTC and Fretwell's summary judgment evidence, we cannot consider it. See Lawrence, 911 S.W.2d at 446.
Thus, the evidence was sufficient to support the trial court's finding that OTC breached the implied warranty of good and workmanlike construction.
3. Unconscionable Actions
The trial court also found that both OTC and Fretwell violated the DTPA by committing "unconscionable" acts. See Tex. Bus. &Com. Code Ann. § 17.50(a)(3). OTC and Fretwell contend that the evidence was insufficient to support these findings. We disagree.
The DTPA defines an unconscionable action or course of action as "an act or practice which, to a consumer's detriment, takes advantage of the lack of knowledge, ability, experience, or capacity of the consumer to a grossly unfair degree." Id. § 17.45(5). To determine whether a consumer was taken advantage of to a grossly unfair degree, we must examine the entire transaction and not simply inquire whether a defendant actually intended to take advantage of the consumer. Chastain v. Koonce, 700 S.W.2d 579, 583 (Tex. 1985). A determination that an action takes advantage of a consumer "to a grossly unfair degree thus requires a showing that the resulting unfairness was glaringly noticeable, flagrant, complete and unmitigated." Id. at 584.
Here, the record contains sufficient evidence to support the trial court's findings that OTC and Fretwell each engaged in unconscionable conduct, including the following:
• Fretwell admitted in his deposition that OTC paid only $18,533.94 to Simms Lumber for framing materials even though the Snows had paid OTC $50,000 specifically for framing as reflected on OTC Invoice No. 1120;
• Fretwell admitted in his deposition that the Snows had paid OTC $7,000 pursuant to Invoice No. 1117 for an HVAC unit that had never been delivered to the Snows and for which they had not received a credit;
• The Snows had to directly pay Jimmy Prescher's Roofing $1,260 to release its mechanic's lien against their property because OTC had not paid this subcontractor even though the Snows had already paid OTC $7,500 for roofing;
• On June 6, 2021, the Snows sent Fretwell an email detailing an extensive list of defects and requested remedies from OTC and also stating that (1) OTC's progress and workmanship had been unacceptable, (2) the project had been understaffed, and (3) multiple prior verbal and written requests for defects to be corrected had gone unanswered. In his response dated June 8, 2021, Fretwell represented that multiple issues would be corrected or looked into and promised that there would be "considerable progress by the end of next week." However, Fretwell admitted in his deposition that he and OTC abandoned the job less than one month later.As a result, the Snows were forced to hire Hunter Homes to remedy the defects; and
• Despite the extensive evidence of OTC's defective work and noncompliance with the Snows' architect's plans, the Snows' written notification to Fretwell and OTC of these issues, Fretwell's acknowledgement of a number of construction defects in his deposition, and OTC's abandonment of the project, Fretwell executed a Mechanic's and Materialman's Lien Affidavit, which was recorded in October 2021, claiming $67,941.36 for "unpaid labor, material, and/or equipment" for the months of February through July 2021 and testified that portions of the claimed amount were for "changes" despite admitting that there were no written change orders for the project as required by the OTC and FNB Contracts.
Fretwell testified that he abandoned the project in "July of 2021" or "possibly . . . the end of June."
Viewed as a whole, this evidence is sufficient to support the trial court's findings that OTC and Fretwell engaged in unconscionable conduct. See Chastain, 700 S.W.2d at 583 (explaining that a court must consider the entire transaction in determining whether a defendant's actions were unconscionable). Indeed, in a similar case involving a dispute between a property owner and a home builder, the Texas Supreme Court held that the builder's "continued reassurances that he would discuss . . . defects and variances with his subcontractors and his flagrant failure to correct the problems" was evidence of unconscionable conduct because it showed that the builder had taken advantage of the property owners' "lack of knowledge of the construction business and lack of ability to correct the problems themselves." Kennemore v. Bennett, 755 S.W.2d 89, 92 (Tex. 1988). Likewise, OTC's and Fretwell's flagrant failure to correct the defects pointed out by the Snows after providing assurances that they would do so combined with their pattern of failing to use the Snows' construction payments for their designated purpose is evidence that OTC and Fretwell took advantage of the Snows to a grossly unfair degree. See Tex. Bus. &Com. Code Ann. §§ 17.45(5), 17.50(a)(3); Chastain, 700 S.W.2d at 583.
In sum, we conclude that the evidence is sufficient to support the trial court's findings that OTC and Fretwell violated the DTPA by committing unconscionable actions.
4. Treble Damages
The DTPA provides that a consumer may recover treble economic damages if the trier of fact finds that the defendant's conduct was committed knowingly. Tex. Bus. &Com. Code Ann. § 17.50(b)(1). The DTPA defines "knowingly" as
actual awareness, at the time of the act or practice complained of, of the falsity, deception, or unfairness of the act or practice giving rise to the consumer's claim or, in an action brought under [Section 17.50(a)(2)],
actual awareness of the act, practice, condition, defect, or failure constituting the breach of warranty, but actual awareness may be inferred where objective manifestations indicate that a person acted with actual awareness.Id. § 17.45(9). In an action involving multiple DTPA violations, if one knowing violation is proved, the trier of fact can award treble damages for all violations. See McLeod v. Gyr, 439 S.W.3d 639, 652 (Tex. App.-Dallas 2014, pet. denied).
Here, the trial court awarded the Snows treble damages against OTC and Fretwell based on their knowing violations of the DTPA. OTC and Fretwell contend that the record contains insufficient evidence to support the trial court's findings that OTC and Fretwell knowingly violated the DTPA. Again, we disagree.
As noted above, see supra note 9, the trial court awarded the Snows $108,867.57 in actual damages and $326,602.71 in statutory treble damages. Thus, in essence, the trial court awarded the Snows quadruple damages-actual damages plus additional statutory damages of three times that amount-based on OTC's and Fretwell's knowing DTPA violations. See Ramsey v. Spray, No. 02-08-00129-CV, 2009 WL 5064539, at *4 (Tex. App.-Fort Worth Dec. 23, 2009, pet. denied) (mem. op.). This damages calculation was incorrect because "the DTPA permits a maximum award of three times the amount of economic damages for a knowing violation." Dal-Chrome Co. v. Brenntag Sw., Inc., 183 S.W.3d 133, 144 (Tex. App.-Dallas 2006, no pet.) (citing Jim Walter Homes, Inc. v. Valencia, 690 S.W.2d 239, 240-42 (Tex. 1985)); see Ramsey, 2009 WL 5064539, at *4 (holding that trial court abused its discretion by awarding appellees actual economic damages plus three times that amount as additional damages for the appellants' knowing DTPA violations); see also Reyelts v. Cross, 968 F.Supp.2d 835, 844 n.3 (N.D. Tex. 2013) (mem. op. & order) (discussing split in Texas caselaw regarding the use of a quadruple multiplier or a triple multiplier in calculating damages for knowing DTPA violations and concluding "that [S]ection 17.50(b)(1) only allows for the adding of up to two times the original economic and mental anguish awards for a total of a triple multiplier"). But OTC and Fretwell have not asserted that the trial court miscalculated the damages amount, nor have they asserted a point of error asking us to modify the judgment. Accordingly, we cannot do so. See Mobil Oil Corp. v. Ellender, 968 S.W.2d 917, 926 (Tex. 1998) ("A court of appeals cannot modify a judgment without a point of error asking it to do so." (citing Tex. Nat'l Bank v. Karnes, 717 S.W.2d 901, 903 (Tex. 1986))).
Regarding OTC's breach of its express and implied warranties, see Tex. Bus. &Com. Code Ann. § 17.50(a)(2), Fretwell admitted in his deposition that certain work was deficient or had not been performed according to the architect's plans. Further, as detailed above, the Snows sent Fretwell an email notifying him of numerous defects and other issues with the project, and Fretwell responded and promised to remedy many of them shortly before abandoning the project. This evidence is sufficient to show that Fretwell-and, by extension, OTC-had "actual awareness of the . . . condition[s], defect[s], or failure[s] constituting the breach of warranty." Id. § 17.45(9).
There is also evidence that Fretwell knowingly engaged in unconscionable conduct. See id. § 17.50(a)(3). The Snows' claim that Fretwell had violated the DTPA by engaging in unconscionable conduct was based, in part, on Fretwell's representations that the defective work would be corrected combined with his subsequent inaction and ultimate placement of a mechanic's lien on the Snows' property. The amount claimed in the mechanic's lien included charges for work that Fretwell admitted was defective or had not been performed in accordance with the plans and at least one item-the HVAC unit-that had not been delivered.
Having reviewed the record and having concluded that it contains sufficient evidence to support the trial court's findings that OTC knowingly violated the DTPA by breaching express and implied warranties, see id. § 17.50(a)(2), and that OTC and Fretwell knowingly violated the DTPA by engaging in unconscionable conduct, see id. § 17.50(a)(3), we overrule OTC and Fretwell's fifth and sixth issues.
F. The Evidence Is Sufficient to Support the Snows' Summary Judgment Against Fretwell Individually
In their seventh issue, OTC and Fretwell contend that the evidence is insufficient to support the Snows' summary judgment against Fretwell in his individual capacity. We disagree.
The trial court's final judgment awarded the Snows damages against Fretwell individually based upon (1) his violation of the DTPA by engaging in unconscionable conduct, see id., and (2) his violations of the TCTFA, see Tex. Prop. Code Ann. §§ 162.006, 162.031. The evidence supports Fretwell's liability under both of these statutes.
1. Personal Liability Under the DTPA
Under the DTPA, a consumer may maintain a cause of action against "any person" whose unconscionable action is a producing cause of the consumer's economic damages. Tex. Bus. &Com. Code Ann. § 17.50(a)(3). The DTPA broadly defines a "person" as "an individual, partnership, corporation, association, or other group, however organized." Id. § 17.45(3) (emphasis added). Thus, under the DTPA's plain language, individuals may be held personally liable for violations of the statute. See Miller v. Keyser, 90 S.W.3d 712, 717 (Tex. 2002). However, absent any pleadings or findings to support a theory of recovery on alter ego or piercing the corporate veil, a corporate agent cannot be held liable under the DTPA unless the trier of fact finds that he personally violated the statute. See Light v. Wilson, 663 S.W.2d 813, 814-15 (Tex. 1983).
Here, the Snows explicitly asserted-and the trial court found-that Fretwell personally violated the DTPA by engaging in unconscionable actions. See Tex. Bus. &Com. Code Ann. § 17.50(a)(3). Having already determined that there was sufficient evidence to support this finding, we likewise conclude that the evidence was sufficient to support Fretwell's personal liability under the DTPA. See Miller, 90 S.W.3d at 718; Weitzel v. Barnes, 691 S.W.2d 598, 601 (Tex. 1985); Cimarron Hydrocarbons Corp. v. Carpenter, 143 S.W.3d 560, 564 (Tex. App.-Dallas 2004, pet. denied).
See supra Section III.E.3, 4.
2. Personal Liability Under the TCTFA
As discussed above, under the TCTFA, construction payments are trust funds, and contractors and their officers, directors, and agents are trustees of these funds. Tex. Prop. Code Ann. §§ 162.001(a), 162.002. Thus, a contractor's owner or agent who has control or direction over trust funds may be held personally liable for violations of the TCTFA. See C &G, Inc. v. Jones, 165 S.W.3d 450, 453-54 (Tex. App.-Dallas 2005, pet. denied) (citing Lively v. Carpet Servs., Inc., 904 S.W.2d 868, 873 (Tex. App.-Houston [1st Dist.] 1995, writ denied)).
See supra Section III.D.
In his deposition, Fretwell testified that he was the sole owner of OTC, and there is nothing in the record to suggest that anyone other than Fretwell exercised control over any funds that OTC received from the Snows. Thus, Fretwell is a "trustee" of the trust funds OTC received from the Snows and can be held individually liable for TCTFA violations involving these funds. See Tex. Prop. Code Ann. § 162.002; see also Lively, 904 S.W.2d at 873 (holding that contractor's sole owner and director who had control or direction over trust funds could be held individually liable for TCTFA violations).
Fretwell testified that Christy Fretwell had access to OTC's bank account and could make payments from the account if directed to do so by Fretwell, but Fretwell made clear that "nothing is done without [his] approval."
In their summary judgment motion, the Snows alleged that OTC and Fretwell violated the TCTFA by misapplying the trust funds received for the Snows' project, see Tex. Prop. Code Ann. § 162.031(a), and by failing to deposit the trust funds into a construction account, see id. § 162.006. The summary judgment evidence shows that
• OTC received a total of $116,990 in construction trust funds from the Snows, and Fretwell, as OTC's sole owner, had control over these funds.
• Of this total amount, $50,000 was earmarked for framing, but OTC paid only $18,533.94 to Simms Lumber and $1,278.98 to Home Depot for framing materials and a total of $20,925 to subcontractors Juan Galvez and Norberto Alvarado for framing labor. This leaves at least $9,262.08 of the framing trust funds unaccounted for.
• Another $7,500 of the trust funds was earmarked for the roof, which OTC never completed. Exhibit 11 from Fretwell's deposition, which, according to Fretwell, showed all payments that OTC had made to subcontractors and suppliers for the Snow project, does not reflect any payments made for roofing materials or labor. Indeed, the Snows were forced to directly pay Jimmy Prescher's Roofing $1,260 so that it would remove its mechanic's lien from their property.
• Another $7,000 was earmarked for an HVAC unit. But, as noted above, Fretwell admitted that this unit was never delivered to the Snows and they were not provided a credit for it.
Fretwell testified that he would give the Snows a credit for the HVAC unit if he were able to use it on another project.
This evidence is sufficient to support a finding that OTC and Fretwell misapplied approximately $24,000 in trust funds. See id. § 162.031(a) ("A trustee who, intentionally or knowingly or with intent to defraud, directly or indirectly retains, uses, disburses, or otherwise diverts trust funds without first fully paying all current or past due obligations incurred by the trustee to the beneficiaries of the trust funds, has misapplied the trust funds."); see also id. § 162.005(1)(A) ("A trustee acts with 'intent to defraud' when the trustee . . . diverts trust funds with the intent to deprive the beneficiaries of the trust funds.").
In addition, the Snows alleged that OTC and Fretwell violated the TCTFA by failing to deposit all trust funds received for the Snows' project into a construction account. See id. § 162.006; see also id. § 162.005(6) (defining "construction account"). As discussed above, the TCTFA requires "[a] contractor who enters into a written contract with a property owner to construct improvements to a residential homestead for an amount exceeding $5,000" to deposit any trust funds into a construction account. Id. § 162.006. We have already determined that the record contains sufficient evidence to support a finding that the Snows' property qualifies as a "residential homestead" for purposes of the TCTFA, meaning that OTC and Fretwell were required to establish a designated construction account for the Snows' project and deposit all trust funds into this account. See id. But Fretwell admitted in his deposition that he did not do so; rather, he used OTC's "general" account for the Snows' project. Thus, the record supports a finding that OTC and Fretwell violated TCTFA Section 162.006.
See supra Section III.D.
Having concluded that the evidence is sufficient to support findings that Fretwell personally violated the DTPA and that, as OTC's sole owner and agent, he is individually liable for OTC's violations of the TCTFA, we overrule OTC and Fretwell's seventh issue.
IV. Conclusion
Having overruled all of OTC and Fretwell's issues, we affirm the trial court's judgment.