Opinion
NO. 02-15-00124-CV
08-11-2016
HOBBY LOBBY STORES, INC. AND U.S. SPECIALTY INSURANCE COMPANY, SURETY APPELLANTS v. STANDARD RENEWABLE ENERGY, LP AND SRE3 GP, LLC, INDIVIDUALLY AND AS ITS GENERAL PARTNER APPELLEES
FROM THE 362ND DISTRICT COURT OF DENTON COUNTY
TRIAL COURT NO. 2013-40749-362 MEMORANDUM OPINION
See Tex. R. App. P. 47.4.
I. INTRODUCTION
Appellants Hobby Lobby Stores, Inc. and U.S. Specialty Insurance Company, Surety, appeal from a final judgment rendered on a jury verdict in favor of Appellees Standard Renewable Energy, LP and SRE3 GP, LLC, Individually and as its General Partner (collectively, SRE). In three issues, each containing several subissues, Hobby Lobby complains about SRE's fraud claim, the jury charge, and the judgment. We will reverse and remand.
II. BACKGROUND
In July 2012, Hobby Lobby and SRE entered into a Subcontract Agreement whereby SRE agreed to perform electrical work on a construction project that entailed downsizing an existing Hemispheres store so that a new Hobby Lobby store could open next door. The initial subcontract amount was for $91,368.00, but it later increased to $102,981.21 after Hobby Lobby approved several change orders.
The subcontract contained no deadline for completion, but it stated that time was of the essence, and SRE understood that Hobby Lobby wanted the electrical work done by the end of 2012. The subcontract required SRE to obtain all licenses and permits and to comply with all applicable state, federal, and local laws. It also allowed Hobby Lobby to terminate SRE, to withhold any payments that were due to SRE, and to complete SRE's scope of work if SRE failed to do so itself. Any changes to the subcontract were required to be in writing and approved by a Hobby Lobby corporate official.
Wayne Cahela was SRE's licensed master electrician and the primary contact person for SRE on the project. James Cannon was the construction superintendent for Hobby Lobby, and Jim Clark, an assistant vice-president for Hobby Lobby, acted as the "project manager."
The trades began work sometime in the summer of 2012, and aside from several delays and complications, the project "mov[ed] along well" until mid-to-late November or early December 2012, when Cannon inquired about a final inspection and things "kind of drug out." At the end of December 2012, Cannon told SRE that it needed to put more people on the project, and Clark informed SRE that it had until January 7, 2013, to complete its scope of work. Clark also warned SRE that he was "prepared to have [its] scope of work completed by others or to supplement [its] crew if these dates aren't met and [that] all additional cost incurred [would] be deducted from [SRE's] contract."
Clark sent SRE a similar, more formal demand on January 3, 2013.
Cahela left the project in early January 2013 and never returned. SRE did not have another master electrician on its staff, so at that point, it lacked a license to perform the electrical work on the project. According to Daniel de la Torre, one of SRE's owners, he contacted Cannon and offered to terminate from the project, but Cannon requested that SRE stay on the job, figuring that Hobby Lobby could bring on another electrical contractor—one with a master electrician license—relatively quickly. Just as Cannon had expected, Hobby Lobby hired Texsun Electrical Contractors, Inc. on January 7, 2013. Texsun worked on the project for about a month thereafter, taking direction from Cannon and working primarily on the electrical for the roof-mounted air-conditioning units. Hobby Lobby never terminated SRE from the project; rather, two SRE employees remained on the job and took direction from Cannon, who agreed that the labor they provided "was valuable to getting the job completed." The project was completed sometime in late February 2013.
Cannon had a similar conversation with Sam Elliott, an SRE employee who had been working on the project.
SRE also contributed between $10,000 and $15,000 worth of materials to the project after Cahela left. Clark acknowledged that "[i]t was in everybody's best interest" that the two SRE employees remain on the job and that SRE had a reasonable expectation of being paid for the work that it performed after Cahela left.
SRE submitted written invoices and change orders to Hobby Lobby for labor and materials that it provided for the project, and although Hobby Lobby ultimately approved all but one of the change orders, it paid SRE a total of only $61,474.11 under the subcontract—one payment in August 2012 for $28,562.64 and another payment in October 2012 for $32,911.47. De la Torre understood that SRE would be paid less than the subcontract's $102,981.21 total amount because Hobby Lobby had to hire Texsun to complete the project, but he thought that the reduction would be limited to approximately $5,000 because Cannon had told him so back in early January 2013. While Hobby Lobby's subcontract with Texsun initially called for a payment of around $5,000, that figure ultimately rose to approximately $28,000. Hobby Lobby paid Texsun that amount, and it offset the amount that it owed SRE under the subcontract by the amount that it paid Texsun and by other amounts that it claimed resulted from SRE's failure to complete its scope of work under the subcontract, including $380.79 paid to Richardson Ready Electric, Inc. in December 2012 to remedy a loss of power to the cash registers, $6,618.10 paid to Richardson Ready in April 2013 (after the project was complete) to install two additional circuits at the front of the store, and "additional resources (housing, food, travel and related costs) associated with keeping [Cannon] and other personnel on site longer than intended."
Cannon denied that he had told de la Torre or anyone at SRE that SRE's payment would be offset by only $5,000.
Clark recalled that the price increased because Texsun had to complete "a lot of items [that] had been temporaried in" by SRE and would not pass inspection.
After Hobby Lobby failed to pay SRE during the spring of 2013, SRE filed an "Original Contractor's Affidavit Claiming Mechanic's and Materialman's Lien" in the amount for $30,739.24 in the real property records of Denton County. SRE claims that when it filed the lien, Hobby Lobby had not informed SRE that the amounts owed under the subcontract would be offset by amounts paid to third parties. Nevertheless, Hobby Lobby later demanded that SRE remove the lien—because BV Vista Ridge, L.P. was the owner of the real property, not Hobby Lobby, and because Hobby Lobby had not contracted with BV Vista Ridge—but SRE refused.
Hobby Lobby filed this lawsuit against SRE in September 2013, seeking to remove the lien and asserting breach of contract and other claims. In addition to a number of defenses, SRE filed counterclaims against Hobby Lobby, including for breach of contract and for fraud, and later a third-party petition against U.S. Specialty Insurance Company. In November 2013, in an effort to "bond around the lien" that SRE had filed, Hobby Lobby recorded a "Release of Lien Bond" in the Denton County property records in the amount of $61,478.48 With the exception of SRE's constitutional-lien and Texas-Construction-Trust-Fund-Act claims, the trial court denied Hobby Lobby's motions for summary judgment on SRE's claims and defenses but reformed the lien that SRE had filed "to attach only to Hobby Lobby's leasehold interest" in the real property.
BV Vista Ridge was seeking to sell the property, and SRE's lien was a cloud on the title. U.S. Specialty Insurance was the surety on the bond.
At the jury trial that ensued, Daniel de la Torre and another SRE representative testified that Hobby Lobby breached the subcontract because although SRE had completed approximately 95% of its work under the subcontract (according to their estimates), Hobby Lobby had paid SRE only about 60% of the subcontract amount. They complained that Hobby Lobby never issued any document indicating that the subcontract was being reduced, and they surmised that SRE would not have stayed on the job after Cahela failed to return had they known that Hobby Lobby was going to charge back amounts exceeding $5,000. SRE sought contract damages in the amount of $43,397.08.
Clark and Cannon testified on behalf of Hobby Lobby that SRE failed to complete its scope of work under the subcontract: Clark estimated that SRE performed only 35-40% of its work, and Cannon estimated that SRE had completed about 65% of its work when Texsun came on. Clark testified that Hobby Lobby retained Texsun to complete SRE's scope of work, that Hobby Lobby intended to offset the amounts that were owed to SRE under the subcontract by the amounts that it paid to Texsun, and that Hobby Lobby did not owe SRE anything under the subcontract.
As relevant to this appeal, the jury found as follows:
• SRE failed to comply with the subcontract, but its failure to comply was excused;
• Hobby Lobby failed to comply with the subcontract, its failure to comply was not excused, and SRE sustained damages in the amount of $36,126.41;
• SRE and Hobby Lobby agreed to modify the subcontract "by agreeing that [SRE] would stay on the job providing services and materials and Texsun would provide the Master Electrician and the amount to be paid to [SRE] would be reduced by $5,000," Hobby Lobby failed to comply with the modified subcontract, and SRE sustained damages in the amount of $36,126.41;
• Hobby Lobby committed fraud against SRE, but SRE sustained damages in the amount of $0 resulting from that fraud; andThe trial court signed a final judgment in favor of SRE and against Hobby Lobby and U.S. Specialty Insurance in the amount of $36,126.41, and for pre- and post-judgment interest, court costs, and attorneys' fees. Hobby Lobby filed a combined motion for JNOV and motion for new trial, which the trial court denied.
• both SRE and Hobby Lobby were entitled to trial and appellate attorneys' fees in varying amounts.
III. SRE'S FRAUD CLAIM
In its first issue, Hobby Lobby challenges the trial court's rulings permitting SRE to present evidence in support of, submitting a jury question on, and refusing to direct a verdict against SRE's fraud claim. In addition to several purported evidentiary deficiencies, Hobby Lobby contends that it was entitled to judgment as a matter of law on SRE's fraud claim because it was merely a restated version of SRE's breach of contract claim. We construe this part of Hobby Lobby's first issue to complain that SRE's fraud claim sounds only in contract, not tort.
"[I]n determining whether an action sounds in tort or contract, we look to the source of the duty allegedly violated and the nature of the claimed loss." El Paso Mktg., L.P. v. Wolf Hollow I, L.P., 383 S.W.3d 138, 142-43 (Tex. 2012). "If the defendant's conduct—such as negligently burning down a house—would give rise to liability independent of the fact that a contract exists between the parties, the plaintiff's claim may also sound in tort." Sw. Bell Tel. Co. v. DeLanney, 809 S.W.2d at 494 (Tex. 1991). "Conversely, if the defendant's conduct—such as failing to publish an advertisement—would give rise to liability only because it breaches the parties' agreement, the plaintiff's claim ordinarily sounds only in contract." Id.
The gist of SRE's fraud theory was as follows: Cannon represented in early January 2013 that SRE's payments under the subcontract would be reduced by $5,000, SRE remained on the project and provided labor and materials in reliance upon Cannon's representations, but Hobby Lobby offset the amount that SRE was owed by much more than the $5,000 figure that Cannon had represented, effectively zeroing out any further payments to SRE under the subcontract.
Whether right or wrong, SRE pursued two theories of liability at trial to support its breach-of-contract claim—(1) Hobby Lobby's breach of the "Original Contract" and (2) Hobby Lobby's breach of the "Modified Contract." Under the "Original Contract" theory, SRE contended that Hobby Lobby failed to comply with the subcontract because, although SRE performed work under the subcontract through early January 2013—up until Cahela left and never returned—Hobby Lobby only paid SRE for work that it had performed through October 2012. Under the "Modified Contract" theory, SRE asserted that the parties agreed to modify the subcontract after Cahela failed to return as follows: SRE would remain on the project without a master electrician on staff, Hobby Lobby would hire Texsun for $5,000 to act as the master electrician, SRE would continue to provide labor and materials as contracted, and Hobby Lobby would pay SRE the remainder of the amounts owed under the subcontract, less the $5,000 paid to Texsun.
Juxtaposing SRE's fraud claim with its "Modified Contract" theory exposes the flaw with the fraud claim—the conduct that formed the basis of the fraud claim is no different than part of the conduct that SRE relied upon to subject Hobby Lobby to liability under the "Modified Contract" theory. In other words, the duty that Hobby Lobby allegedly violated derived not from the common law but from its obligations under the "Modified Contract." Further, aside from SRE's claim for exemplary damages, we see nothing in the record or SRE's briefing to indicate that it sought damages in one amount for fraud but damages in any other amount for breach of contract. SRE's fraud claim sounds in contract, not tort. See El Paso Mktg., L.P., 383 S.W.3d at 142-43; DeLanney, 809 S.W.2d 493, 494.
SRE argues that its fraud claim was legally tenable because SRE was entitled to make an election between its breach-of-contract and fraud claims. See Custom Leasing, Inc. v. Tex. Bank & Trust Co. of Dallas, 491 S.W.2d 869, 871 (Tex. 1973) ("An election of remedies is the act of choosing between two or more inconsistent but coexistent modes of procedure and relief allowed by law on the same state of facts."). However, SRE's ability to make a post-verdict election between alternative remedies did not somehow ameliorate the flaw in its fraud claim. See Plate & Platter, Inc. v. Wolf, 780 S.W.2d 453, 456 (Tex. App.—Dallas 1989, writ denied) ("Generally, the doctrine of election of remedies is only applied when the claimant actually has two valid and available remedies at the time he makes his election." (emphasis added)). SRE also seems to suggest that it could recover for fraud because the facts underlying the claim "were outside the scope of the Original Contract," but this ignores that SRE also sought to recover for breach of the "Modified Contract," which relied in part upon the same facts as the fraud claim.
While we agree with Hobby Lobby that SRE's fraud claim was improper as a matter of law, we disagree with Hobby Lobby that the error requires reversal. To obtain reversal of a judgment based upon an error in the trial court, an appellant must show that the error probably caused the rendition of an improper judgment or probably prevented it from properly presenting its case to this court. Tex. R. App. P. 44.1(a). Hobby Lobby vaguely argues that the error was harmful because "the presentation of this case not as one for breach of contract but instead for fraud allegedly committed by Hobby Lobby positioned the jury to believe that there was more at issue than just performance under the Subcontract." The error was harmless not only because the jury awarded SRE damages in the amount $0 for Hobby Lobby's fraud, but also because SRE unsurprisingly elected to recover under its breach-of-contract theory, for which the jury did award damages. See Hancock v. City of San Antonio, 800 S.W.2d 881, 885 (Tex. App.—San Antonio 1990, writ denied) ("[W]here there is error in the submissions or definitions relating to the liability question, the error is harmless if the net result nevertheless is that the complaining party recovers zero damages."). We overrule Hobby Lobby's first issue.
We need not address Hobby Lobby's alternative arguments challenging SRE's fraud claim because even if one or more were persuasive, the harm analysis would be no different than it is above. See Tex. R. App. P. 47.1.
IV. JURY CHARGE
Hobby Lobby argues in its second issue that the trial court committed reversible charge error (1) by submitting a jury question on both SRE's "Original Contract" theory and its "Modified Contract" theory and (2) by submitting instructions on SRE's defenses to Hobby Lobby's breach-of-contract claim.
A. Breach-of-Contract Questions
Hobby Lobby first contends that the trial court erred by submitting two questions on SRE's breach-of-contract claim because "oral modification was prohibited by the Subcontract." Texas courts have reasoned that a "written contract, not required by law to be in writing, may be modified by subsequent oral agreement, even if it provides that it can be modified only by a written agreement." See, e.g., Hyatt Cheek Builders-Eng'rs Co. v. Bd. of Regents of Univ. of Tex. Sys., 607 S.W.2d 258, 265 (Tex. App.—Texarkana 1980, writ dism'd) ("Such a written bargain is of no higher legal degree than an oral one, and either may vary or discharge the other."). The subcontract was not subject to the Statute of Frauds because the work was to be performed in less than one year from the date of the subcontract. See Tex. Bus. & Comm. Code Ann. § 26.01(b)(6) (West 2015). The subcontract was therefore amenable to an oral modification.
Hobby Lobby next argues that even if the subcontract could have been orally modified, "two questions on breach should still not have been submitted." Hobby Lobby cites no authority in support of this argument, and without any argument addressing the relevant caselaw, we are not inclined to engage in a lengthy charge-error analysis. See Tex. R. App. P. 38.1(i) (requiring brief to contain a clear and concise argument for the contentions made, with appropriate citations to authorities). Suffice it to say that assuming the trial court erred by submitting two questions instead of one, the error was harmless because the keen jury awarded identical damages under both the "Original Contract" question and the "Modified Contract" question—$36,126.41—and the judgment awarded SRE damages for Hobby Lobby's breach in the amount of $36,126.41, not twice that amount or some other problematic figure. See Tex. R. App. P. 44.1(a). We overrule this part of Hobby Lobby's second issue.
B. SRE's Defenses to Hobby Lobby's Breach-of-Contract Claim
In the other part of its second issue, Hobby Lobby argues that the trial court erred by instructing the jury in question number 2 that SRE's failure to comply with the subcontract—which the jury affirmatively found in question number 1—was excused under circumstances that reflected SRE's defenses of waiver, modification, fraud, estoppel, unconscionability, and authority. We limit our analysis to Hobby Lobby's arguments challenging SRE's waiver and contract-modification defenses.
Hobby Lobby initially contends that "waiver was precluded as a matter of law" because the subcontract prohibited waiver. But Texas courts, including this court, have held that a nonwaiver provision, like any other contractual provision, may be waived, depending upon the facts of the case. See, e.g., Musgrove v. Westridge St. Partners I, LLC, No. 02-07-00281-CV, 2009 WL 976010, at *3-4 (Tex. App.—Fort Worth Apr. 9, 2009, pet. denied) (mem. op.); Winslow v. Dillard Dep't Stores, Inc., 849 S.W.2d 862, 863-64 (Tex. App.—Texarkana 1993, writ denied). Hobby Lobby asserts no further analysis under this specific argument.
The relevant provision stated,
The failure of either party to this Agreement to insist on the performance of any of its terms and conditions or the waiver of any breach of any of the terms and conditions of this Agreement shall not be construed as waiving any such terms and conditions, but they shall continue and remain in full force and effect as if no such forbearance or waiver had occurred.
Hobby Lobby next argues that the trial court erred by instructing the jury on SRE's waiver defense because there was legally and factually insufficient evidence to support its submission. A trial court must submit in its charge to the jury all questions, instructions, and definitions that are raised by the pleadings and the evidence. Hyundai Motor Co. v. Rodriguez ex rel. Rodriguez, 995 S.W.2d 661, 663 (Tex. 1999); see Tex. R. Civ. P. 278. An instruction is proper if it assists the jury, accurately states the law, and finds support in the pleadings and evidence. Columbia Rio Grande Healthcare, L.P. v. Hawley, 284 S.W.3d 851, 855 (Tex. 2009). The legal and factual sufficiency standards of review are well established.
We may sustain a legal sufficiency challenge only when (1) the record discloses a complete absence of evidence of a vital fact, (2) the court is barred by rules of law or of evidence from giving weight to the only evidence offered to prove a vital fact, (3) the evidence offered to prove a vital fact is no more than a mere scintilla, or (4) the evidence establishes conclusively the opposite of a vital fact. Ford Motor Co. v. Castillo, 444 S.W.3d 616, 620 (Tex. 2014); Uniroyal Goodrich Tire Co. v. Martinez, 977 S.W.2d 328, 334 (Tex. 1998), cert. denied, 526 U.S. 1040 (1999). When reviewing an assertion that the evidence is factually insufficient to support a finding, we set aside the finding only if, after considering and weighing all of the evidence in the record pertinent to that finding, we determine that the credible evidence supporting the finding is so weak, or so contrary to the overwhelming weight of all the evidence, that the answer should be set aside and a new trial ordered. Pool v. Ford Motor Co., 715 S.W.2d 629, 635 (Tex. 1986) (op. on reh'g); Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986); Garza v. Alviar, 395 S.W.2d 821, 823 (Tex. 1965).
Question number 2 instructed the jury that SRE's failure to comply with the subcontract was excused "[i]f compliance is waived by Hobby Lobby. Waiver is an intentional surrender of a known right, or intentional conduct inconsistent with claiming the right." See Jernigan v. Langley, 111 S.W.3d 153, 156 (Tex. 2003). Hobby Lobby pleaded and presented evidence that SRE breached the subcontract by failing to timely complete its scope of work in a good and workmanlike manner, by failing to maintain licenses that were required for the project, and by failing to allow for offsets against the amounts owed SRE under the subcontract. We have thoroughly reviewed the entire record, and there is no evidence that Hobby Lobby waived SRE's compliance with any of these contractual obligations.
Regarding Hobby Lobby's allegation that SRE breached the subcontract by failing to complete the project in a good and workmanlike manner, although Daniel de la Torre opined at trial that SRE performed in a good and workmanlike manner, he admitted that SRE did not comply with the subcontract by completing its scope of work, and he agreed that "Hobby Lobby [had] the work completed by Texsun." There is no evidence that Hobby Lobby waived SRE's obligation to complete its scope of work under the subcontract. See id.
Regarding Hobby Lobby's allegation that SRE breached the subcontract by failing to allow for offsets, Clark notified SRE in late December 2012 that Hobby Lobby had the right to offset amounts owed to SRE if Hobby Lobby had to hire another electrical contractor to complete SRE's work, and Hobby Lobby continues to pursue its right to offset on appeal. There is no evidence that Hobby Lobby waived its right to offset the amount that it owed SRE under the subcontract by the amount that it paid third parties, including Texsun. See id.
As for Hobby Lobby's allegation that SRE breached the subcontract by failing to maintain licenses, SRE contends that Hobby Lobby "waived the requirement that SRE have a master electrician on the Project by asking it to stay on the Project and hiring a third-party electrician," but the record reflects otherwise. As explained above, SRE pursued two theories of liability to support its breach-of-contract claim—breach of the "Original Contract" and breach of the "Modified Contract." There is no evidence that Hobby Lobby waived the requirement that SRE maintain licenses at any point when the parties were operating under the "Original Contract." In early January 2013, after the parties orally modified the subcontract, thereby creating the "Modified Contract," Texsun entertained the obligation to maintain the appropriate licenses under its subcontract with Hobby Lobby, not SRE. Thus, at no point when SRE was contractually obligated to maintain licenses did Hobby Lobby engage in any conduct that could be construed as waiving the license requirement. See id. The trial court abused its discretion by instructing the jury on SRE's waiver defense, as there was legally insufficient evidence to support its submission.
SRE contends that Hobby Lobby waived other parts of the subcontract, but Hobby Lobby never pleaded or attempted to prove that SRE breached those parts of the subcontract.
We also conclude, however, that the evidence was legally and factually sufficient to support the submission of SRE's contract-modification defense. Question number 2 instructed the jury that SRE's failure to comply with the subcontract was excused "[i]f the parties agreed that the original contract would be modified and new terms would take the place of prior terms in the Subcontract Agreement." SRE pleaded that it and Hobby Lobby "orally modified the terms of the existing written contract" and that it "acted in reliance upon and complied with the terms of such modification." And as we have explained, SRE presented evidence that the subcontract was orally modified. The trial court did not abuse its discretion by submitting the modification instruction. We therefore overrule this part of Hobby Lobby's second issue.
A judgment will not be reversed for charge error unless the error was harmful. Tex. R. App. P. 44.1(a). Charge error is generally considered harmful, and thus reversible, if it relates to a contested critical issue. R.R. Comm'n of Tex. v. Gulf Energy Expl. Corp., 482 S.W.3d 559, 571 (Tex. 2016); see Island Recreational Dev. Corp. v. Republic of Tex. Sav. Ass'n, 710 S.W.2d 551, 555 (Tex. 1986) (reasoning that court must consider the pleadings of the parties, the evidence presented at trial, and the charge in its entirety when considering whether error in the jury charge is harmful).
Question number 2 was worded in such a way that it is impossible for us to determine whether the jury, in answering the question affirmatively, relied upon the improper waiver instruction or the proper contract-modification instruction. Further, the primary dispute between the parties concerned who breached the subcontract, each side alleging that the other failed to comply with its respective obligations. No other jury questions had the potential to render SRE's liability under question number 1 immaterial, and in its closing argument, SRE stressed that Hobby Lobby waived the requirement that SRE maintain the appropriate licenses. Under these circumstances, we conclude that the charge error was harmful. See Tex. R. App. P. 44.1(a). We sustain this part of Hobby Lobby's second issue and do not reach its remaining arguments challenging SRE's other defenses. See Tex. R. App. P. 47.1.
We recognize that this may present a Casteel presumed-harm scenario, but we nevertheless conclude that the charge error was harmful upon an application of the traditional harm analysis. See Crown Life Ins. Co. v. Casteel, 22 S.W.3d 378, 388 (Tex. 2000).
V. JUDGMENT
Hobby Lobby argues in its third issue that the trial court erred by failing to disregard the jury's answers to question numbers 2, 6, 7, 8, 9, 10, 11, and 20.
The trial court denied Hobby Lobby's motion for a directed verdict and combined motion for JNOV and new trial. Insofar as Hobby Lobby argues that the trial court erred by denying its motion for summary judgment on these same issues, that argument is inappropriate for appeal. See United Parcel Serv., Inc. v. Tasdemiroglu, 25 S.W.3d 914, 916 (Tex. App.—Houston [14th Dist.] 2000, pet. denied) (explaining that when a motion for summary judgment is denied by the trial judge and the case is tried on the merits, the order denying the summary judgment cannot be reviewed on appeal; the party's remedy is to assign error to the trial court's judgment).
Hobby Lobby's issue states that it also challenges the jury's findings to question numbers 14 and 16, but Hobby Lobby asserts no argument contesting those findings in this issue.
A trial court may disregard a jury verdict and render a JNOV if no evidence supports the jury findings on issues necessary to liability or if a directed verdict would have been proper. See Tex. R. Civ. P. 301; Tiller v. McLure, 121 S.W.3d 709, 713 (Tex. 2003); Fort Bend Cty. Drainage Dist. v. Sbrusch, 818 S.W.2d 392, 394 (Tex. 1991). A directed verdict is proper only under limited circumstances: (1) when the evidence conclusively establishes the right of the movant to judgment or negates the right of the opponent; or (2) when the evidence is insufficient to raise a material fact issue. Prudential Ins. Co. of Am. v. Fin. Review Servs., Inc., 29 S.W.3d 74, 77 (Tex. 2000); Playoff Corp. v. Blackwell, 300 S.W.3d 451, 454 (Tex. App.—Fort Worth 2009, pet. denied) (op. on reh'g).
A. Question Number 2
Hobby Lobby repeats all of the same arguments that it raised in its second issue, arguing that none of SRE's defenses to Hobby Lobby's breach-of-contract claim should have been submitted in question number 2 and additionally contending that we should render judgment that SRE's breach was not excused. We sustained the part of Hobby Lobby's second issue that challenged SRE's waiver defense but overruled the part of Hobby Lobby's second issue that challenged the legal and factual sufficiency of the evidence to support SRE's contract-modification defense. Thus, because at least one of the instructions was properly submitted, we cannot render judgment that SRE's breach was not excused as a matter of law. See Columbia Rio Grande Healthcare, L.P., 284 S.W.3d at 855 (stating that an instruction is proper when it has support in the pleadings and evidence). We overrule this part of Hobby Lobby's third issue.
B. Question Numbers 6 and 7
The jury found in response to question number 6 that Hobby Lobby failed to comply with the subcontract. Question number 7 then asked, "Was Hobby Lobby's failure to comply with the subcontract agreement excused because [SRE] previously failed to comply with a material obligation of the agreement between the parties." [Emphasis added.] The jury answered "No." Hobby Lobby argues that its performance under the subcontract was excused as a matter of law because SRE breached the subcontract first. See Mustang Pipeline Co., Inc. v. Driver Pipeline Co., Inc., 134 S.W.3d 195, 196 (Tex. 2004) ("It is a fundamental principle of contract law that when one party to a contract commits a material breach of that contract, the other party is discharged or excused from further performance.").
SRE presented evidence that it completed approximately 95% of its work under the subcontract but that Hobby Lobby paid it only about 60% of the subcontract amount. Steven Cory, SRE's president, testified that Hobby Lobby did not pay SRE for work that it performed from mid- to late October 2012 to February 2013. He also explained that SRE submitted invoices to Hobby Lobby in December 2012 but that they were "kicked back." Hobby Lobby's allegations that SRE breached the subcontract primarily revolved around the point in time when Cahela failed to return to the project in early January 2013. January 2013 came after October, November, and December 2012. Based on this evidence, the jury could have reasonably concluded that SRE did not breach the subcontract first. Thus, there is some evidence to support the jury's finding in question number 7 that Hobby Lobby's failure to comply with the subcontract was not excused on account of a previous breach by SRE. We overrule this part of Hobby Lobby's third issue.
The jury's answers to question numbers 1, 6, and 7 were therefore not fatally inconsistent, as Hobby Lobby additionally contends. Nor is the evidence factually insufficient to support the finding, insofar as Hobby Lobby raises that argument.
C. Question Numbers 9 and 10
The jury found in question number 9 that SRE and Hobby Lobby agreed to modify the subcontract "by agreeing that [SRE] would stay on the job providing services and materials and Texsun would provide the Master Electrician and the amount to be paid to [SRE] would be reduced by $5,000." In question number 10, the jury found that Hobby Lobby failed to comply with the modified subcontract. Hobby Lobby argues that the trial court should have disregarded these findings because "there was no evidence presented as to each term of the allegedly modified agreement," and "[f]ailure to agree on or include an essential term renders a contract unenforceable."
Once again, SRE presented evidence that the parties agreed to modify the subcontract after Cahela failed to return as follows: SRE would remain on the project without a master electrician on staff, Hobby Lobby would hire Texsun for $5,000 to act as the master electrician, SRE would continue to provide labor and materials as contracted, and Hobby Lobby would pay SRE the remainder of the amounts owed under the subcontract, less the $5,000 paid to Texsun. But those were not the extent of the "Modified Contract's" terms. A modification to a contract creates a new contract that includes the new, modified provisions and the unchanged, old provisions. Blackstone Med., Inc. v. Phoenix Surgicals, L.L.C., 470 S.W.3d 636, 647 (Tex. App.—Dallas 2015, no pet.). Thus, while SRE presented evidence of several modified terms, the remainder of the provisions contained in the original written subcontract filled out the parties' bargain. Accordingly, the "Modified Contract" was not lacking any terms that were not already excluded from the "Original Contract." We overrule this part of Hobby Lobby's third issue.
Hobby Lobby, of course, does not argue that the subcontract was unenforceable for lacking material terms; doing so would extinguish its ability to recover for SRE's breach. See T.O. Stanley Boot Co. v. Bank of El Paso, 847 S.W.2d 218, 221 (Tex. 1992) (reasoning that the material terms of a contract must be agreed upon before a court can enforce a contract). --------
D. Question Numbers 8 and 11
In the next part of its third issue, Hobby Lobby argues that the trial court erred by rendering judgment on the verdict as to SRE's damages. It first contends that SRE was not entitled to damages under both the "Original Contract" and the "Modified Contract." While we agree that such a recovery would have constituted an impermissible double recovery, as alluded to earlier, the judgment awarded SRE damages in the amount of $36,126.41; it clearly did not award SRE contract damages in the amount of $72,252.82 (twice $36,126.41) or some other figure.
Hobby Lobby next argues that the damages were excessive because an unapproved change order should not have been included in the amount awarded and because the offsets were calculated incorrectly. It also contends that SRE failed to present any evidence of damages. Hobby Lobby disregards relevant evidence and the standard of review.
The jury is the sole judge of the credibility of the witnesses and the weight to be given their testimony. City of Keller v. Wilson, 168 S.W.3d 802, 819 (Tex. 2005). It may choose to believe one witness and disbelieve another, and it is responsible for resolving conflicts in the evidence. Id. at 819-20. Anything more than a scintilla of evidence is legally sufficient to support a finding. Cont'l Coffee Prods. Co. v. Cazarez, 937 S.W.2d 444, 450 (Tex. 1996); Leitch v. Hornsby, 935 S.W.2d 114, 118 (Tex. 1996).
The parties presented competing theories of the case. SRE sought to recover the remaining amount owed under the subcontract plus $1,889.88 for the unapproved change order. Hobby Lobby argued that SRE was entitled to offset the entire remaining amount owed SRE under the subcontract by the amounts that it paid to third parties. The jury chose to believe SRE, but it also awarded SRE less than it asked for. The $36,126.41 award reflects the unpaid amount under the subcontract ($41,507.10, which did not include the unapproved change order), less the amount that Daniel de la Torre acknowledged SRE would not be paid because Hobby Lobby hired Texsun ($5,000), less the amount that Hobby Lobby paid Richardson Ready to fix the cash registers in late December 2012 ($380.79). See Gulf States Utils. Co. v. Low, 79 S.W.3d 561, 566 (Tex. 2002) ("In determining damages, the jury has discretion to award damages within the range of evidence presented at trial."). We overrule this part of Hobby Lobby's third issue.
E. Question Number 20
In the final part of its third issue, Hobby Lobby argues that the trial court erred by awarding SRE attorneys' fees because it should not have recovered damages on its contract claim. We overruled Hobby Lobby's arguments challenging SRE's contract claim; therefore, we overrule this contingent argument and the remainder of Hobby Lobby's third issue.
VI. RELEASE OF LIEN BOND
In its fourth issue, Hobby Lobby argues that the trial court erred by refusing to release the Release of Lien Bond that Hobby Lobby filed in the amount of $61,478.48 in order to "bond around the lien" that SRE first filed. Hobby Lobby contends that the bond is unnecessary and immaterial because it filed a supersedeas bond in an amount that adequately secured the entire final judgment ($136,761.96). Because we will reverse and remand this cause for a new trial, the supersedeas bond should be released and the surety discharged. See Amwest Sur. Ins. Co. v. Graham, 949 S.W.2d 724, 727 (Tex. App.—San Antonio 1997, writ denied); see also 5 Roy W. McDonald & Elaine Carlson, Texas Civil Practice § 30:35 (2d ed. 1999). In the absence of a supersedeas bond, the justification underlying Hobby Lobby's argument is absent, rendering the issue moot. We overrule its fourth issue.
VII. CONCLUSION
Having sustained part of Hobby Lobby's second issue, we reverse the trial court's judgment and remand this cause for a new trial.
/s/ Bill Meier
BILL MEIER
JUSTICE PANEL: LIVINGSTON, C.J.; WALKER and MEIER, JJ. DELIVERED: August 11, 2016