Opinion
No. 05-08-00561-CV
Opinion issued September 23, 2009.
On Appeal from the County Court at Law No. 2 Collin County, Texas, Trial Court Cause No. 002-1904-05.
Chad Ruback, Dallas, TX.
Israel Suster, Plano, TX.
Paul Hoffman, Plano, TX.
JOSEPH B. MORRIS, CAROLYN WRIGHT, JIM MOSELEY, DAVID L. BRIDGES, MICHAEL J. O'NEILL, KERRY P. FITZGERALD, MARTIN RICHTER, MOLLY FRANCIS, DOUGLAS S. LANG, ELIZABETH LANG-MIERS, MARY MURPHY, ROBERT M. FILLMORE, Chief Justice.
MEMORANDUM OPINION
MacMichael LLC d/b/a June Supply appeals the trial court's judgment that June Supply take nothing on its breach of contract action against Packaging Corporation of America (PCA). In a single issue, June Supply argues the trial court erred in holding that PCA's payment to "Rite-Way Asphalt Paving" satisfied its contractual obligation to pay June Supply. We affirm the trial court's judgment.
Dana Alvarez, PCA's plant controller, received a bid from Jody Biggerstaff at Rite-Way Asphalt on November 16, 2004. The bid was for repairing PCA's parking lot and totaled $2300. Rite-Way was assigned a vendor number by PCA, the bid was approved, and Biggerstaff completed the repairs. On December 20, 2004, PCA received an invoice from June Supply for $2300. An accounting associate brought the invoice from June Supply to Alvarez because there was no purchase order that matched the invoice. Alvarez asked Larry DeVore, PCA's plant production manager, about the invoice, and DeVore stated the invoice was for the repair job that Rite-Way had done. DeVore told Alvarez "it was okay to issue a check to June Supply" because he had talked to Biggerstaff, who asked that the check be issued to June Supply. In order to pay June Supply, June Supply needed a vendor number and had to be "set up in the system just like Rite-Way." PCA set up a vendor number for June Supply and issued a check to June Supply for $2300 dated January 13, 2005.
Meanwhile, on November 29, 2004, Biggerstaff submitted a bid of $58,700 to completely resurface PCA's parking lot. The bid went through the approval process and was approved in February 2005. The purchase order generated for the resurfacing job was once again done in the name of Rite-Way. The job required that half of the payment was to be paid up front to get the job started, and Biggerstaff requested that the initial payment be made to June Supply because "that was his money man." Alvarez asked DeVore about the situation because she "wasn't sure exactly how June Supply was involved in this." DeVore talked to Biggerstaff, and Biggerstaff said he "wanted to get authorization to go ahead and pay for the pavement, which is the asphalt." DeVore authorized a check to June Supply for $29,350. However, Biggerstaff did not represent that June Supply would be substituted for Rite-Way on the resurfacing job, and Alvarez did not communicate with anyone from June Supply. Alvarez saw Biggerstaff and "other people" working in the parking lot, and the job lasted five or six weeks, but Alvarez saw no indication that a company named June Supply was doing any of the work. On March 24, 2005, Biggerstaff submitted a $24,350 invoice from Rite-Way, and PCA issued a check to Rite-Way in this amount on April 6, 2005. After Rite-Way was paid, June Supply submitted an invoice for $27,850. Malcolm MacClary was the business manager of MacMichael LLC. MacClary had practiced law for twenty-five years in Massachusetts before moving to Texas. MacClarty had set up a business relationship with Biggerstaff. Biggerstaff would find the jobs and make the bids, and June Supply would furnish the equipment. June Supply allowed Biggerstaff to use his own forms to set up the original contract under the heading of Rite-Way Asphalt and Paving with Biggerstaff's address. The Rite-Way form had all the terms of the contract and was signed by Biggerstaff and Devore on behalf of PCA. MacClary did not know what Biggerstaff had told PCA about their relationship because MacClary did not participate in the negotiations. MacClary never spoke with anyone at PCA until he called about the last payment installment.
After Biggerstaff was paid for the repaving job, MacClary called PCA and spoke to "Danielle" and asked when he would be paid. "Danielle" did not know what MacClary was talking about and asked him to fax "something over." MacClary faxed the $24,350 invoice to "Danielle," and she called MacClary and told him that "Rite-Way had been paid." McClary was "pretty mad" and "went and saw [his attorney]" without speaking with "any superior of Danielle at PCA about the issue." Following a trial before the court, the trial court entered a take-nothing judgment against June Supply. This appeal followed.
In a single issue, June Supply argues the trial court erred in holding that PCA's payment to Rite-Way satisfied PCA's obligation to pay June Supply, and June Supply established its breach of contract action as a matter of law. Specifically, June Supply relies on the trial court's conclusion of law that June Supply "contracted with [PCA] to pave [PCA's] parking lot." June Supply points out that PCA nevertheless paid a check to Rite-Way and argues this check did not satisfy PCA's contractual obligation to pay June Supply. Because PCA did not pay June Supply, therefore, June Supply argues it established PCA breached its contract with June Supply as a matter of law. In its brief, June Supply further challenges the trial court's conclusions that PCA "did not knowingly breach any contract with" June Supply and PCA was exonerated from paying June Supply by paying Biggerstaff instead. June Supply also challenges the trial court's finding of fact that PCA believed, and was reasonable in this belief, that it was contracting for paving with Biggerstaff.
However, June Supply does not challenge the trial court's findings that:
(1) Between [June Supply] and Jody Biggerstaff, Biggerstaff was an agent; and [June Supply] was the principal.
(6) [June Supply] allowed Biggerstaff to act as an agent so broadly and so encompassing that [June Supply was] estopped from complaining that Biggerstaff acted beyond the scope of his authority.
(8) Biggerstaff never did any acts that were so grossly obvious, or should have been noticed as such, to [PCA] to put [PCA] on notice that Biggerstaff was acting beyond the pale of his authority for [June Supply].
(12) The act of re-directing the payment to [June Supply] was not sufficient to put [PCA] on notice that Biggerstaff was merely an agent for [June Supply].
(14) [PCA] believed, and was reasonable in this belief, that it was contracting for paving with Biggerstaff.
(15)The re-directing of money in this case to [June Supply] did not create a contract for paving, or affirm that one already existed, between June Supply and PCA.
(26) Biggerstaff is a "bad-acting" agent who defrauded and took property from [June Supply] to which he was not entitled.
(27) [PCA] was entitled to rely on Biggerstaff's re-direction of payment order.
(29) [PCA's] belief it was doing business solely with Rite-Way was both reasonable and fair.
(30) [June Supply] did not succeed by Plaintiff's Exhibit 10 [a $24,350 faxed invoice] in giving notice to [PCA] of Biggerstaff's lack of authority.
(31) [PCA] paid all sums due under the paving contract, regardless of whether the money ended up with [June Supply] or [Biggerstaff].
The trial court entered conclusions of law that:
(1) [June Supply] contracted with [PCA] to pave [PCA]'s parking lot.
(3) [PCA] did not know it was contracting with [June Supply] and therefore never agreed to contract with [June Supply].
The only way to reconcile these seemingly conflicting conclusions of law is by reference to the trial court's findings that Biggerstaff was an agent for June Supply with essentially unlimited authority.
In addition, the trial court concluded:
(4) [PCA contracted with June Supply] through the actions of Jody Biggerstaff a/k/a Rite Way, who acted as an agent for [June Supply].
(5) [PCA] never agreed to substitute [June Supply] as a party to any contract to pave [PCA's] parking lot.
(6) Biggerstaff had all necessary authority to act as [June Supply's] agent to bid and do the job.
(7) Biggerstaff, the agent, redirected payments due [to June Supply] wholly without authority from [June Supply] to do so.
(8) [PCA] had no knowledge, actual or constructive, that [Biggerstaff's] misappropriation of [June Supply's] money was done without [June Supply's] authority.
(9) [PCA] did not knowingly breach any contract with [June Supply].
(11) [PCA] is not liable to [June Supply] for any sum of money.
(12) [PCA] is not liable to [June Supply] for other damages or relief.
When findings of fact are filed and are unchallenged, they occupy the same position and are entitled to the same weight as the verdict of a jury. McGalliard v. Kuhlmann, 722 S.W.2d 694, 696 (Tex. 1986). They are binding on an appellate court unless the contrary is established as a matter of law or if there is no evidence to support the finding. Id. To determine a "no evidence" or "matter of law" point, this Court must disregard all evidence contrary to the trial court's finding, and if there is any remaining evidence which would support the verdict or judgment, the trial court's judgment must be upheld. Id. If, after the removal of all contrary evidence, this Court finds an absence of any evidence which would support the verdict or judgment, a contrary conclusion to the verdict or judgment is required as a matter of law. Id. A trial court's conclusion of law is not binding on this Court, and we independently evaluate a challenged conclusion. Cadle Co. v. Regency Homes, Inc., 21 S.W.3d 670, 682 (Tex. App.-Austin 2000, pet. denied). Conclusions of law may be reversed if they are erroneous as a matter of law. Id. Incorrect conclusions of law will not require reversal, however, if the controlling findings of fact will support a correct legal theory. Id.
When payment is made to an authorized agent, the default of an agent is the responsibility of the principal. Aquaduct, L.L.C. v. McElhenie, 116 S.W.3d 438, 445 (Tex. App.-Houston [14th Dist.] 2003, no pet.) (principal's conduct in allowing agent to collect full payment on notes made loss possible, and principal could not shift burden to party who dealt with agent). Here, June Supply's arguments focus on the existence of a contract between PCA and June Supply. The trial court only concluded that June Supply contracted with PCA, but PCA did not know it was contracting with June Supply. The trial court concluded Biggerstaff acted as June Supply's agent and misappropriated the money PCA paid for the repaving. PCA paid Biggerstaff for the paving work and was thereby exonerated from paying June Supply. A review of the evidence supports these conclusions and the trial court's findings of fact that PCA thought it was doing business with Biggerstaff and paid Biggerstaff for the paving work. The record shows only Biggerstaff performed the paving repair work and the more extensive repaving work. Biggerstaff explained that he wanted checks made out to June Supply because June Supply was Biggerstaff's "money man" and was later the supplier of the asphalt used in the repaving work.
MacMichael argues there is a conflict between the trial court's findings that Biggerstaff was "acting as an agent for" June Supply, yet Biggerstaff's status was "never more than an independent contractor for" June Supply. However, we discern no conflict in these findings. Read in context, the trial court's findings all support the conclusion that Biggerstaff was MacMichael's agent, though he was "never more than than an independent contractor," he was "never an employee," and there was "never a partnership between" June Supply and Biggerstaff. We conclude the evidence supports the trial court's unchallenged findings of fact and conclusions of law that Biggerstaff acted as June Supply's agent and was a "bad-acting" agent who defrauded and took property from June Supply in the form of PCA's final payment for paving. Under these circumstances, Biggerstaff's default is the responsibility of June Supply. See Aquaduct, 116 S.W.3d at 445. We reject June Supply's arguments that June Supply was entitled to enforce its contract against PCA and that PCA breached that contract as a matter of law by failing to pay June Supply directly. See McGalliard, 722 S.W.2d at 696-97; Cadle, 21 S.W.3d at 682. We overrule June Supply's single issue.
We affirm the trial court's judgment.
Dear Attorneys:
Enclosed is a corrected opinion for the above-mentioned case. Please note the following typographical errors which have been corrected:
pgs. 3, 5
corrected "Bickerstaff" to "Biggerstaff"
Please replace your previous copy of this opinion with the enclosed.
cc:
Judge, County Court at Law No. 2
Clerk, County Court at Law No. 2