Opinion
01-20-00144-CV
08-18-2022
R3BUILD CONSTRUCTION SERVICES, LLC, Appellant v. BRIAN DRAYDEN AND DEBRAEYIA DRAYDEN, Appellees
On Appeal from the County Civil Court at Law No. 3 Harris County, Texas Trial Court Case No. 1093009
Panel consists of Hightower, Countiss, and Guerra, Justices.
MEMORANDUM OPINION
Julie Countiss, Justice
Appellant, R3Build Construction Services, LLC ("R3Build"), challenges the trial court's judgment, entered after a jury trial on liability and a bench trial on damages and attorney's fees, in favor of appellees, Brian Drayden ("Brian") and Debraeyia Drayden ("Debraeyia") (collectively, "the Draydens"), in R3Build's suit against the Draydens for breach of contract, quantum meruit, and violation of the Texas Prompt Payment to Contractors Act and in the Draydens' countersuit against R3Build for violation of the Texas Deceptive Trade Practices Act ("DTPA"),breach of contract, and fraud. In seven issues, R3Build contends that the trial court erred in failing to award it damages, attorney's fees, and pre- and post-judgment interest and in awarding the Draydens damages, attorney's fees, and pre-judgment interest in their countersuit against R3Build. We affirm.
See Tex. Prop. Code Ann. §§ 28.001-.010.
See Tex. Bus. & Com. Code Ann. §§ 17.41-.63.
Background
In its petition, R3Build alleged that in September 2016, the Draydens and R3Build entered into an agreement (the "agreement") under which R3Build was to provide services and materials for the insurance-funded restoration of the Draydens' home in Spring, Texas after it sustained damage in the "Tax Day Flood" that occurred in April 2016 in Harris County, Texas and the surrounding area. The scope of work to be performed by R3Build on the Draydens' home included restoration of "the workshop" in the "[third] bay of the garage," "the main entry and foyer, the formal dining [room], the kitchen, the utility room, the bath[room] off the kitchen, the living room, the stairs, the [primary] bedroom and bath[room], the home office, [and] the HVAC system" as well as "paint preparation." R3Build provided an "original [repair] estimate . . . for the work to be performed under the [agreement]" of "$73,915.23, as of September 15, 2016," but at the Draydens' request, R3Build revised its repair estimate to "$67,466.03, as of January 31, 2017."
The Draydens paid R3Build a total of $31,825.67. According to R3Build, it "full[y] perform[ed] the work under the [agreement]," and on January 31, 2017, R3Build sent a final invoice to the Draydens for $35,640.36, the balance allegedly due under the agreement. The Draydens did not pay R3Build's final invoice. In March 2017, R3Build "provided written notice of its claims" to the Draydens and demanded that they pay the final invoice. According to R3Build, the Draydens still owed R3Build $35,640.36 for the work R3Build performed on the Draydens' home.
R3Build alleged that it had "complied with its obligations" under the agreement, but the Draydens nevertheless failed "to make full and final payment as due and owing under the agreement." R3Build asserted claims against the Draydens for breach of contract, quantum meruit, and violation of the Texas Prompt Payment to Contractors Act. R3Build sought damages in the amount of $35,640.36, interest on the amount due under the agreement at the statutory rate set forth in the Texas Prompt Payment to Contractors Act, and attorney's fees and costs under the Texas Prompt Payment to Contractors Act and Texas Civil Practice and Remedies Code section 38.001.
See Tex. Prop. Code Ann. § 28.002 ("Prompt Pay Required").
See id. § 28.004 ("Interest on Overdue Payment").
See id. § 28.005(b).
In response to R3Build's petition, the Draydens answered, generally denying the allegations in the petition. The Draydens also brought counterclaims against R3Build for violation of the DTPA, breach of contract, and fraud.
See Tex. Bus. & Com. Code Ann. § 17.46(b)(5), (7), (13), (15), (22), (24). In addition to violations of Texas Business and Commerce Code section 17.46, the Draydens alleged that R3Build "violated the DTPA" by breaching "the implied warranty of good and workmanlike services" and by engaging "in an unconscionable action or course of action that . . . took advantage of [their] lack of knowledge, ability, experience, or capacity to a grossly unfair degree." See Melody Homes Mfg. Co. v. Barnes, 741 S.W.2d 349, 354 (Tex. 1987) (recognizing claim for breach of implied warranty under DTPA); Ebrahimi v. Caliber Home Loans, Inc., No. 05-18-00456-CV, 2019 WL 1615356, at *8 (Tex. App.-Dallas Apr. 15, 2019, pet. denied) (mem. op.) ("The elements of a DTPA cause of action are that (1) the plaintiff is a consumer; (2) the defendant committed a wrongful act by engaging in a false, misleading, or deceptive act that is enumerated in a subdivision of the Texas Business and Commerce Code, section 17.46(b), or breached an express or implied warranty, or engaged in an unconscionable action or course of action; and (3) the act was a producing cause of the plaintiff's damages.").
In their counterclaim, the Draydens alleged that in September 2016, they entered into the agreement with R3Build "for the restoration of [their] home." R3Build initially offered to perform the restoration work on the Draydens' home for $73,915.23, but the Draydens did not accept R3Build's initial offer. The Draydens had "several conversations" with Cory Germon, R3Build's owner, about their expectations for the repairs to their home, but they were "never presented with, nor signed, an acceptably modified proposal" from R3Build. Yet the Draydens allowed R3Build to begin work on their home based on Germon's oral "representations and assurances."
According to the Draydens, in their discussions with Germon, the Draydens expressed their interest in "preserv[ing] the home's historic charm" by restoring the hardwood paneling, and they stressed the need for R3Build to "keep[] a hygienic and [a] dust-minimal work area" because of "the known health concerns of the [Draydens'] then-infant triplets." But "when work began," R3Build disregarded "[m]any of the[] agreements" it had made with the Draydens about the need to maintain a hygienic and safe environment for the Draydens' infant children. And "[d]espite several reminders and specific objections" by the Draydens, R3Build "continued to take unauthorized actions regarding wall, cabinetry, flooring, shower installation, door selection," and other tasks involved in the restoration of the home.
The Draydens alleged that they had paid R3Build $31,825.67 "toward the work they expected [R3Build] to perform" based on Germon's "assurances that the work would be performed" as the Draydens "desired." But when "the relationship between" R3Build and the Draydens deteriorated to the point that "[Germon] was no longer responding" to the Draydens' attempted communications, R3Build "tendered a final invoice" to the Draydens for $67,466.03. The invoice "provid[ed] a credit and offset" for the Draydens' prior payment, which left an alleged balance due of $35,640.36, even though the work on the Draydens' home was never completed and the damage that R3Build caused to the Draydens' home "far exceeded the amount" that R3Build claimed it was owed. According to the Draydens, "it would cost [them] $15,000 to correct the work improperly performed" by R3Build that the Draydens had "already paid for," and it would cost the Draydens at least $60,000 "to complete the work that [R3Build] should have performed under the parties' oral [agreement]." The Draydens sought $85,000 in actual damages, statutory treble damages under the DTPA, and attorney's fees.
At the jury trial, Germon testified that in September 2016, the Draydens asked him to perform "an inspection and prepare an estimate" of the cost to repair the damage to their home caused by the 2016 "Tax Day [F]lood." The Draydens' insurance company had already "approved an adjuster's estimate" which "itemized the scope of the work to be performed" in repairing the Draydens' home. In preparing R3Build's original repair estimate, Germon "mirror[ed] what the adjuster ha[d] written so that the insur[ance company] could compar[e] it side by side" with the adjuster's estimate of the repairs needed for the Draydens' home. Germon hoped that this would allow for faster review and approval by the Draydens' insurance company.
R3Build's signed original repair estimate was for $73,915.23, the same amount listed in the adjuster's estimate for the repairs needed for the Draydens' home. Some of work that R3Build included on its original repair estimate had already been performed by a mitigation company, so R3Build later provided the Draydens with a "credits estimate . . . which just excluded" the work items performed by the mitigation company "from [R3Build's] actual scope of work."R3Build then submitted the new repair estimate of $152,951.50 for approval by the Draydens' insurance company.
A copy of the original repair estimate, dated September 15, 2016, was admitted into evidence by the trial court as R3Build's Exhibit 1B. It is titled "Estimate Report: 1609089-1."
A copy of the credits estimate, dated September 15, 2016, was admitted into evidence by the trial court as R3Build's Exhibit 1C. It is titled "Estimate Report: 1609089-CREDITS."
According to Germon, in October 2016, the Draydens asked him to revise the repair estimate to "add[] in . . . upgrades." For example, the Draydens "decided to add" raised panels, known as "judge's paneling" in certain rooms. The type of panels that R3Build installed were "paint grade" recessed panels.
Debraeyia also asked R3Build "to redo the balustrade" for the staircase in the home and put "wrought-iron spindles" on the stair rail with "the newel post." And Debraeyia told Germon that she wanted to install a walk-in shower in the primary bathroom in place of the existing bathtub and to use "nicer" tile than what had been in the bathroom before the "Tax Day Flood." According to Germon, when a customer asks for upgrades, he "typically[] will try to give them a rough" estimate. And "as long as [the customers] say [that] they are okay with" the rough estimate he provides, R3Build "keep[s] working." The additional costs for the upgrades that Debraeyia had proposed were incorporated into "the adjuster's finalized and approved estimate," a copy of which the trial court admitted into evidence as R3Build's Exhibit 1F.
Germon further testified that by November 2016, "things" had become "a little bit more strenuous" between R3Build and the Draydens. R3Build had to "pull" a project manager whom [Germon] had assigned to work on the Draydens' home "off the job" because the worker "was not as experienced as he really needed to be." R3Build's relationship with the Draydens continued to deteriorate in late "November and early December" 2016, so Germon "offered [the Draydens] materials at cost without any markup, including twenty-some-odd-thousand-dollars' worth of materials." And Germon had R3Build take care of "the [air conditioner] repairs to [the Draydens'] home without adding any . . . profit" for R3Build.
In late December 2016, Debraeyia asked Germon for "additional revisions to the scope of work to be performed" by R3Build. She told Germon that she had "decided to remove the painting of the home from [R3Build's] scope of work as well as the countertop installation [and] plumbing hookups in the kitchen" because R3Build's "prices were too high." R3Build "credited the costs of the drywall replacement, foam installation," and "drywall tear-out work" in the garage as well as the "texture work" on the interior walls on the home because R3Build had installed paneling halfway up the walls. As to "[t]he dining room," R3Build gave the Draydens a credit "back for [the] texture and paint on the lower portion of the wall" for the same reason. R3Build also made "[m]aterial allowances for the front door, since [R3Build] ended up not replacing that." And as to the kitchen, R3Build adjusted the billing so that it was "strictly for reinstallation of the existing cabinets." Germon "[made] sure [the Draydens] got their money back" for those items and that R3Build was "not overbilling." According to Germon, R3Build's final repair estimate of $67,466.03 would fairly and accurately compensate R3Build for all of the work that the Draydens had requested and authorized and that R3Build had performed. After subtracting the deposit paid by the Draydens, the net amount that the Draydens still owed to R3Build was $35,640.36. R3Build billed the Draydens for that balance in a final invoice dated January 31, 2017. When R3Build did not receive payment from the Draydens, R3Build sent them a letter demanding payment of that amount, plus $500 in attorney's fees.
According to Germon, in March 2017, R3Build received a letter from the Draydens "disputing [R3Build's] claim in its entirety." Germon acknowledged that R3Build had installed medium-density fiberboard ("MDF") in certain parts of the Draydens' home, but he denied that the Draydens had instructed him not to use any MDF or particle board in restoring the home.
Debraeyia testified that she and her husband, Brian, had insurance proceeds of about $73,000 "in restricted escrow" with their mortgage company for restoration of their home after the "Tax Day Flood." She wanted to find the best prices on materials so that they could have as much work as possible done with the money they had received. But Debraeyia found it difficult to deal with R3Build because Germon would not tell her the cost of "anything above what [she] was aware of in" the adjuster's estimate in advance, even though she repeatedly asked Germon for that information. In response to her inquiries, Germon usually told Debraeyia that he would provide her with an estimate, but the "estimates that he would send" were "all encompassing," so she would have to "dig" for the information that she had requested.
Debraeyia also testified that R3Build failed to follow her instructions on certain aspects of the home restoration and made various other errors. Debraeyia "repeatedly told [Germon]" that he had to tell her "how much [the work] cost[]," because she "need[ed] to know where [she was] spending the money and what [she was] spending it on" to control costs.
As to R3Build's use of improper materials, Debraeyia explained that she had requested that R3Build install an exterior door in place of the interior door that opened into the workshop in the third bay of the garage. She had asked R3Build to buy a specific replacement door and gave Germon instructions about where to buy it because it was "less expensive" at that store than it was at "all of the other retailers at that time." But Germon did not follow her instructions. After R3Build installed the replacement door in the workshop, Debraeyia asked Germon "repeatedly where he [had] purchased" it from, but "[h]e would never tell [her]." And R3Build's final January 31, 2017 invoice charged a price for that door that was higher than the price of the door that Debraeyia had selected. Ultimately, Debraeyia "did not accept the materials" that R3Build had used to replace the door "because they were damaged."
Debraeyia also had asked R3Build to install judge's paneling in the entry, foyer, dining room, and stairwell of the home, but she "never gave [R3Build] final approval" to do so "because [Germon] would not provide" her with the "final cost." After R3Build did the work anyway, Debraeyia discovered that the judge's paneling as well as the living room bookcase, the baseboard, and the window frames that R3Build had installed contained MDF. According to Debraeyia, she had specifically directed R3Build not to use MDF in restoring the Draydens' home "because [the Draydens] ha[d] premature [then-infant] triplets," one of whom had "severe breathing issues" and a heart condition. She understood that MDF, which was "compressed sawdust . . . held together" by a "formaldehyde based" bond or glue, "was harmful," and she "did[] [not] want it in [her] house." The Draydens did not have any MDF in their home before R3Build did the restoration work, only hardwood. When Debraeyia learned that R3Build was using MDF in her home, she spoke to Germon about it. He responded by telling her to "wait for the finished product" and that "[h]omeowners do[] [not] know what's best." Later, Debraeyia raised the issue with Germon again, but "he refused to remove [the MDF]."
As to replacing the insulation in the home, Debraeyia told Germon that she "wanted to get the most energy efficiency for [her] home." But R3Build replaced the insulation on the first floor with insulation that had a lower energy efficiency rating. And although Debraeyia asked R3Build to replace a custom kitchen cabinet with a prefabricated cabinet to save cost, Germon nevertheless had installed a more expensive custom cabinet.
In addition to R3Build's use of improper materials, Debraeyia testified to various problems with the quality of R3Build's work, and the trial court admitted into evidence over 500 photographs showing the condition of the various areas in the Draydens' home where R3Build had done work. According to Debraeyia, some of the drywall in the home replaced by R3Build had been improperly floated and textured. The texture finish on the drywall "was runny and flat," and "there were a lot of areas that were inconsistent." One of the kitchen cabinets "was not installed properly on the studs," so it had to be reinforced and have a brace installed behind it to secure it to the wall.
Further, in the primary bathroom, where the Draydens had asked R3Build to replace the bathtub with a shower, R3Build had installed the shower without moving the drain to the center of the floor and the shower pan was not sloped properly, so water pooled on the shower floor instead of draining. The showerhead leaked, and the Draydens had problems with water pressure. Also, the "edges of the glass" tile installed in the shower "were jagged," and the tiles did not "me[e]t up cleanly or smoothly." In the shower niche, the mesh backing on the tile "could be seen through the grout." And in the primary bathroom closet, certain sections were installed with only wood glue; "[t]here were no finishing nails." Further, R3Build had replaced the window in the primary bathroom with a non-opening window, which the Draydens learned during their home inspection "was a violation of code."
Debraeyia testified that she received R3Build's January 31, 2017 final invoice, which contained items for certain tasks that Debraeyia had asked R3Build to do, but the invoice also included other items that she had "never agreed" to. For example, one item she had not agreed to was the replacement of "an existing lockset." All R3Build "was required to do was reinstall the lock" that had been "removed from the damaged door." And that lockset was not correctly reinstalled.
Jonathan Lang, a professional inspector licensed by the Texas Real Estate Commission and the director and owner of Texas Real Estate Inspection Services, testified that he had fourteen years' experience as a licensed professional inspector. He also had prior experience in the construction industry, "mostly remodeling historical buildings" and similar projects.
Lang testified that he first "inspected [the Draydens'] ho[me] for them before they purchased it." He inspected the home again after the "Tax Day Flood" and "performed a mold assessment for the[] [Draydens] after that." In October 2016, Lang was "called in" to assess the "work that was being performed on the [Draydens'] home" by R3Build. Lang confirmed that he found many of the same deficiencies in the work that Debraeyia had discussed in her testimony.
Chris Everett testified that he was employed by Elite Comfort Home and Commercial Services, a company that provided HVAC services for residential and commercial air conditioners and heaters. Everett explained that the Draydens had asked him to evaluate the air-conditioning system installed by R3Build in the Draydens' home. Everett discovered some "code violations, meaning the system was improperly installed." Specifically, "[g]as drip legs were missing," "[t]he ductwork was not properly sealed," "the return air for the system . . . was undersized for the size system," and "the electrical connections to the unit were made external to the cabinet of the equipment, which [was] not the best practice."
Everett stated that Debraeyia had asked him whether the air-conditioning unit installed in the home by R3Build was a "17[-]SEER unit." He explained that the HVAC industry looks to the Seasonable Energy Efficiency Rating ("SEER") provided by the American Heating and Refrigeration Institute to understand the efficiency of an air-conditioning system. In looking at the certificate for the unit installed in the Draydens' home, Everett discovered that it was a 16-SEER unit, which was less efficient than the 17-SEER unit identified in R3Build's repair estimate. According to Everett, the discrepancy between R3Build's repair estimate and the unit actually installed by R3Build "was misleading."
The parties' trial attorneys each testified to their reasonable and necessary attorney's fees.
After deliberating, the jury found, in response to Question No. 1, that the Draydens "agreed to pay [R3Build] for providing services and furnishing materials in the restoration" of their home. As to whether R3Build and the Draydens breached the agreement, the jury found as follows:
Question No. 2:
Did [the Draydens] fail to comply with the agreement?
A failure to comply must be material. The circumstances to consider in determining whether a failure to comply is material include:
(a) the extent to which the injured party will be deprived of the benefit which he reasonably expected, and
(b) the extent to which the injured party can be adequately compensated for the part of the benefit of which he will be deprived.
Delay in compliance beyond a reasonable period is a failure to comply.
Answer "Yes" or "No[.]"
Answer: Yes[.]
Question No. 3:
Did [R3Build] fail to comply with the agreement?
A failure to comply must be material. The circumstances to consider in determining whether a failure to comply is material include:
(a) the extent to which the injured party will be deprived of the benefit which he reasonably expected, and
(b) the extent to which the injured party can be adequately compensated for the part of the benefit of which he will be deprived.
Failure to comply by [R3Build] is excused by either [Brian's or Debraeyia's] previous failure to comply with a material obligation of the same agreement.
Answer "Yes" or "No[.]"
Answer: Yes[.]
And, in response to Question No. 4, the jury found that R3Build failed to comply with a warranty.
The damages questions in the charge to the jury were conditioned on "Yes" answers to Question No. 2 and Question No. 3, respectively. For R3Build, the jury found that $35,640.36, "if paid now in cash, would fairly and reasonably compensate" R3Build for its damages resulting from the Draydens' "failure to comply" with the agreement. And the jury found that $10,000.00 "if paid now in cash, would fairly and reasonably compensate" the Draydens for their damages resulting from R3Build's failure to comply with the agreement. The jury did not award either R3Build or the Draydens attorney's fees.
R3Build filed a motion to disregard the jury's finding that the Draydens were entitled to $10,000.00 in damages, which, R3Build asserted, was based on Debraeyia's "unqualified belief that the value of the services rendered and materials furnished by [R3Build] was approximately" $10,000.00. R3Build also requested that the trial court disregard the jury's finding that R3Build was not entitled to recover attorney's fees. And R3Build requested that the trial court enter a judgment in favor of R3Build on its claims for breach of contract and violation of the Texas Prompt Payment to Contractors Act and award it damages in the amount of $35,640.36 as well as attorney's fees and pre- and post-judgment interest.
In response, the Draydens filed a combined response in opposition to R3Build's motion to disregard jury findings and a motion to disregard jury findings, in which they challenged the jury's finding that they had $10,000.00 in damages, pointing out that Debraeyia had "testified that she was out of pocket approximately $60,000.00 for work she had to pay to a third party" to repair and replace the work that R3Build did that was unacceptable, never completed, or never started. According to the Draydens, they adduced evidence at trial that they paid $31,825.67 for work that was worth approximately $10,000.00, and "[t]he jury's award of damages to [the Draydens]" in that amount was "very low." The Draydens also challenged R3Build's evidence of damages, noting that Germon refused to provide evidence of his actual costs. And they asserted that Germon misled the jury by indicating that "his costs shown on the [repair] estimate, which was derived from a national standard, were his actual costs." Further, the Draydens asserted that "[b]ecause the jury found that [R3Build] failed to comply with both the agreement and with a warranty, and did not perform compensable work, it [was] inconceivable how the jury could find that neither the failure to comply with the agreement and with a warranty and failure to perform compensable work was not a producing cause of [the Draydens'] damages." The Draydens also challenged the jury's finding that they were not entitled to their attorney's fees. The Draydens requested that the trial court disregard the jury's findings awarding R3Build damages and that the trial court award the Draydens damages in the amount of $31,825.67.
The trial court denied R3Build's and the Draydens' motions and entered judgment based on the jury's findings. The trial court, in its judgment, awarded R3Build damages in the amount of $35,640.36 and pre- and post-judgment interest. The trial court also awarded the Draydens damages in the amount of $10,000.00 and pre- and post-judgment interest.
The Draydens then filed a motion for new trial, which the trial court granted as to the issues of damages and attorney's fees. The Draydens waived their jury demand, and those issues were tried to the trial court.
At the bench trial, Germon testified that R3Build provided the Draydens with an original repair estimate of $73,915.23 for the restoration work on the Draydens' home, and R3Build and the Draydens agreed to the work itemized in that repair estimate. R3Build's original repair estimate was identical to the amount of the adjuster's estimate, but R3Build's original repair estimate had fewer line items. Germon received an initial payment from the Draydens of $31,825.67, and R3Build's final invoice credited that amount. The final invoice from R3Build, dated January 31, 2017, showed that the total due was $67,466.03, credited the Draydens' initial payment, and showed a final balance due of $35,640.36.
The January 31, 2017 final invoice, a copy of which the trial court admitted into evidence as R3Build's Exhibit 1D, was used by R3Build as evidence of its damages.
According to Germon, R3Build's "final days" working at the Draydens' home were at the end of December 2016. At that time, "there was a dispute in the home" involving the amount of time R3Build's workers spent there "to the point to where there was some aggressive behavior from [Debraeyia]," so Germon "removed all the [R3Build] workers from the home and later decided to discontinue the scope of work." R3Build's attorney testified to the attorney's fees incurred by R3Build in the case.
Lang testified that in April 2017, he "went through the [Draydens'] home room by room" with R3Build's original repair estimate, and he "[f]ormulated a report based on what [he] observed in the home [as to] each of the line items [on the estimate]." As to the garage, Lang observed that "[n]o work that [had been] completed." He understood from Debraeyia that "[w]ork on [the] overhead doors," and other "things like that" had been done by a third party. The "exterior door" to the workshop, in the third bay of the garage," was fiberglass and not metal. And the garage shelving "was incomplete."
On the main level of the Draydens' home, Lang "found a number of issues related to the HVAC installation." The "ductwork connections were not properly sealed," and the "[p]rimary condensate drain line" had been improperly "routed to a waste vent." The exterior condensing unit and the electrical connections "were exposed." No sediment trap was installed on the gas line for the furnace. And the air-conditioning unit was a lower efficiency unit "than what [had been] actually proposed" and "was not communicating to the thermostats properly."
As to the entry, foyer walls, and baseboards, R3Build's repair estimate had specified hardwood, but instead of hardwood, MDF, a "low cost product" that "d[id] [not] last very long," had been installed. In the dining room, Lang found that "no quarter round" had been installed and MDF had been used for the baseboards instead of the hardwood specified in R3Build's repair estimate. MDF had also been used for the window trim. The "[d]rywall texture" was "poorly applied."
According to Lang, the work that R3Build left incomplete at the Draydens' home included "[s]eal[ing] and paint[ing] [the] door, window trim, [and] jamb" and "mask[ing] and prep[aring] for paint." Lang found "gaps" in the window casings. He also observed that the "[i]nterior window shutters were poorly installed." They had been "damaged by the installer" and did not align.
In the kitchen of the Draydens' home, Lang noted that MDF had been used for the baseboards rather than the hardwood specified in R3Build's repair estimate. R3Build had also left "grout on the tile wall" and the "[o]utlets and switches" item was not completed. The cabinetry had been detached and reset, but "it was completed by a third party." The countertops were also "completed by a third party." The task of removing and replacing the "toe kicks" was not completed. The kitchen "[s]ink [had been] installed backwards," and the "[d]isposal and faucet" and the "P-trap assembly" were installed incorrectly. A "third party had to be called in" to correct those plumbing errors.
In the utility room, Lang found that MDF had been used for the baseboards rather than the hardwoods specified in R3Build's repair estimate. The drywall and wall texturing were completed but "poorly installed," and the texturing "did[] [not] match across the wall." Lang believed that "the outlets and switches" had been completed "by a third party." And a fiberglass door had been used for the exterior door instead of the metal door specified in R3Build's repair estimate.
In "[t]he bath[room] off the kitchen," Lang found that the interior door had been damaged by the installer. "[S]hoe molding [had] not [been] installed," and MDF had been used to replace the baseboards rather than hardwood. "Texture [had been] applied" to the drywall "but [it] did[] [not] match across the wall." Lang also found that "somebody had actually installed an S-trap" in the bathroom sink, "which [was] a prohibited installation for plumbing for a drain line . . . because of clogging issues," and "a third-party plumber had to correct that." Lang believed that the remaining items, including the tile backsplash, the vanity, and the granite countertops had been "completed by a third party" or the homeowner.
In comparing the work performed in the living room to the list of items that were included in R3Build's repair estimate, Lang observed that quarter round had not been installed and MDF had been used in the judge's paneling instead of the hardwood specified in the repair estimate. At the bottom of the staircase, the baseboard and quarter round had not been installed. The baseboard stain and finish were incomplete. And the staircase had not been masked and prepared for paint. Supports were missing from the handrail, and "the height of the handrail was incorrect." "It was also higher on one end than it was on the other." The carpet installation had also "been poorly done." The carpet itself was damaged, and "[i]t had wrinkles in it that could pose a safety hazard."
Overall, Lang concluded that R3Build had used "substandard materials" in restoring the Draydens' home. "Materials specified [in the repair estimate] were not used" and were substituted with "lesser grade materials." The "[s]ubcontractors also failed to perform as expected." R3Build's work was incomplete, and "[c]odes were not followed" in certain areas of the home.
Debraeyia testified that R3Build's original repair estimate, dated September 15, 2016, and R3Build's credits estimate, dated September 15, 2016, which were admitted as R3Build's Exhibits 1B and 1C, respectively, constituted the parties' agreement. While R3Build was working in the Draydens' home, she told Germon "no MDF" multiple times and explained why she did not want it, but Germon "was repetitively persistent that MDF was premium to the hardwood and that it would cost [the Draydens] less" money. She acknowledged that nothing appeared in writing about her not wanting any MDF to be used in the home, but she "did communicate" to Germon that she did not want MDF used by R3Build and she "trusted him" and "what he said he was doing." Later, the Draydens paid third parties to remove and replace all the MDF that R3Build had installed in the home.
During her testimony, Debraeyia identified these documents as exhibits "B" and "C." The record shows that R3Build labeled the original repair estimate as Exhibit 1B and the credits estimate as Exhibit 1C.
Debraeyia reiterated her previous testimony presented to the jury about the problems in the primary bathroom shower and with the tile installation. The Draydens "had to replace the entire shower" in their primary bathroom "There was moisture in between the wall and behind the tile," and the shower had to be retiled. The shower also had to be replumbed so that the drain was centered. And the Draydens "ended up having to replace the [primary bathroom] window" that R3Build had installed because "[i]t was[] [not] installed properly."
Debraeyia also testified that the Draydens' working relationship with R3Build ended in December 2016. "The last straw" was when Germon told Debraeyia that he "would not repair" the work R3Build had done and "that [the work] looked fine." He agreed to give her a $150 credit "for appearance only," but he told her that R3Build would not be replacing any of the work. "And when [Debraeyia] also saw that [her primary] bedroom shutter was in pieces," she became "furious" and "asked [Germon] to pack up and leave [the] home."
The Draydens paid R3Build "a little over" $31,000.00. And all the work R3Build did at the Draydens' home had to be redone by third parties. The Draydens requested damages in the amount that they had paid R3Build.
On rebuttal, Germon testified that he did not receive a single complaint from the Draydens about R3Build's use of MDF in the home. And R3Build had used MDF because it provided "a more flawless finish" for "paint grade applications" than hardwood did. And the MDF was substantially less expensive, leaving extra funds for "different upgrades" in "the house that [the Draydens] did[] [not] have previously." "[T]he [adjuster's] estimate where the[] [Draydens] were paid" for hardwood "stain grade paneling" was about $20,000.00, whereas in R3Build's repair estimate, the MDF "paint grade judge's paneling only came to about $5,000.[00]."
As to the use of a fiberglass door instead of a metal door for the utility room in the Draydens' home, Germon testified that fiberglass was a "superior product" and "last[ed] longer" than metal. Also, a fiberglass door was more expensive than a metal one, so his adjustment of the price in the repair estimate actually benefited the Draydens.
Germon noted that he had received several complaints from the Draydens about R3Build's work in the primary bathroom. R3Build's workers "would continually go back, tear out," and "redo portions of [the shower] over and over." When R3Build left the Draydens' home in December 2016, "the only" task left unfinished, according to Germon, was to "fix a singular cabinet door front on the built-ins in the [primary bathroom's] closet."
Germon also testified that in his text message communications with the Draydens, the Draydens did not question the quality of R3Build's work; they asked only "when it was going to be finalized." But he acknowledged that there was a text message about "some issues" with a door in the utility room. Germon also acknowledged that R3Build's workers had installed some "material that was defective" and noted that he "had zeroed [that work] out on [the] final estimate[]" given to the Draydens.
Lang was recalled by the Draydens to rebut Germon's testimony. Lang disagreed with Germon's opinion that a fiberglass door was superior to a metal door. A metal door, depending on its use, was "a harder door to get through" by someone trying to "break in[to]" a home. And fiberglass will deteriorate if it is exposed to sunlight. Lang also noted that "regardless" of his opinion, the adjuster's estimate's scope of work stated that a metal door was to be installed in the utility room in the Draydens' home. The trial court signed a final judgment in favor of the Draydens containing the following findings:
• "[R3Build] breached the agreement for the restoration of [the Draydens'] home by failing to complete the restoration work agreed upon and identified in the [original repair] [e]stimate . . . approved and marked as Exhibit B."
• "[The Draydens] are therefore entitled to a refund of payment for substandard material and/or services and/or labor on the following as represented by the [original repair] [e]stimate . . .:
3rd Bay Garage Workshop
$
7,991.93
Entry/Foyer
$
177.09
Dining
$
529.15
Kitchen
$
2,823.40
Bath[room] off Kitchen
$
245.78
Living Room
$
4,643.54
Bottom of Staircase
$
80.08
Small entry to [Primary Bedroom]
$
108.36
[Primary] Bedroom
$
1,384.89
[Primary] Bathroom
$
243.43
Office
$
1,600.03
Total
$
19,827.68[.]"
The trial court's reference to "Exhibit B" appears to correspond to R3Build's Exhibit 1B, which is R3Build's September 15, 2016 original repair estimate.
The trial court thus ordered that the Draydens had judgment against R3Build "for principal damages" in the amount of $19.827.68, plus pre-judgment interest at the rate of "1-1/2 percent each month since April 19, 2017." It also awarded the Draydens reasonable and necessary attorney's fees in the amount of $23,000.00 and post-judgment interest "at the rate of five percent . . . per annum from the date of judgment until paid." The trial court did not award R3Build any damages or attorney's fees.
R3Build timely filed a motion to modify the judgment and for remittitur or, alternatively, for a new trial, which was denied by operation of law.
Judgment on Breach of Contract
In its first issue, R3Build argues that the trial court erred by entering a judgment that only R3Build breached the agreement because the trial court's judgment did not conform to the jury's findings that both R3Build and the Draydens breached the agreement. In its second, third, and fourth issues, R3Build argues that the trial court erred in entering a judgment that failed to award it damages, attorney's fees, and pre- and post-judgment interest because the jury found that the Draydens breached the agreement, R3Build "only received [partial] payment" from the Draydens, and R3Build was entitled to attorney's fees and pre- and post-judgment interest.
Texas Rule of Civil Procedure 301 provides that a trial court's judgment "shall conform to the pleadings, the nature of the case proved and the verdict, if any," meaning that a trial court should enter its judgment consistent with the jury's findings. Tex.R.Civ.P. 301; Ruff v. Univ. of St. Thomas, 582 S.W.3d 707, 711 (Tex. App.-Houston [1st Dist.] 2019, pet. denied). In addition to conforming to the pleadings, the judgment must also reflect a correct application of the law to determine the effect of the jury's verdict. Salomon v. Lesay, 369 S.W.3d 540, 554 (Tex. App.-Houston [1st Dist.] 2012, no pet.); cf. Walker v. Packer, 827 S.W.2d 833, 840 (Tex. 1992) ("A trial court has no 'discretion' in determining what the law is or applying the law to the facts."). R3Build's first, second, third, and fourth issues challenge the propriety of the trial court's application of law to the jury's findings. We thus review de novo the question whether the trial court complied with Texas Rule of Civil Procedure 301. See Salomon, 369 S.W.3d at 554; see also Tex. R. Civ. P. 301 (judgment "shall conform to the pleadings, the nature of the case proved and the verdict" (emphasis added)); cf. Marsh USA Inc. v. Cook, 354 S.W.3d 764, 768 (Tex. 2011) (application of the law to undisputed facts is reviewed de novo).
"In [a] standard contract dispute, one party cancels the contract or refuses to pay due to alleged breaches by the other; in such circumstances, jurors will often find both parties failed to comply with the contract . . . unless instructed that they must decide who committed the first material breach." Mustang Pipeline Co. v. Driver Pipeline Co., 134 S.W.3d 195, 200 (Tex. 2004). When a party to a contract commits a material breach of the contract, the non-breaching party is excused from further performance. Bartush-Schnitzius Foods Co. v. Cimco Refrigeration, Inc., 518 S.W.3d 432, 436-37 (Tex. 2017); Mustang Pipeline, 134 S.W.3d at 196; Nguyen v. Fantasias Cafe Inc., No. 01-18-00063-CV, 2018 WL 3849079, at *4 (Tex. App.- Houston [1st Dist.] Aug. 14, 2018, no pet.) (mem. op.); Levco Constr., Inc. v. Whole Foods Market Rocky Mountain/Sw. L.P., 549 S.W.3d 618, 645 (Tex. App.- Houston [1st Dist.] 2017, no pet.). The materiality of a breach generally presents a question for the fact finder. Henry v. Masson, 333 S.W.3d 825, 835 (Tex. App.- Houston [1st Dist.] 2010, no pet.); see also Mustang Pipeline, 134 S.W.3d at 199 (identifying seven circumstances relevant to determining whether failure to perform is material and excuses future performance).
After a non-material breach, the non-breaching party is not excused from further performance although it may still sue for damages caused by the breach. Bartush- Schnitzius Foods Co. v. Cimco Refrigeration, Inc., 518 S.W.3d 432, 437 (Tex. 2017).
Here, the jury found that both R3Build and the Draydens failed to comply with the agreement. And, because the damages questions in the charge to the jury were not conditioned on the jury's answers to the breach-of-contract questions, the jury made damages findings in favor of both R3Build and the Draydens. Both breach-of-contract questions in the charge also instructed the jury that "[a] failure to comply [with the agreement] must [have] be[en] material." Thus, in answering both questions in the affirmative, the jury found that both R3Build and the Draydens materially breached the agreement.
The charge also did not ask the jury to make a separate finding as to whether R3Build or the Draydens committed the first material breach of the agreement. But the question that asked whether R3Build failed to comply with the agreement also instructed the jury that the "[f]ailure to comply by [R3Build was] excused by either [Brian's or Debraeyia's] previous failure to comply with a material obligation of the . . . agreement." In finding that R3Build failed to comply with the agreement, then, the jury also found that R3Build was not excused by any previous failure by either of the Draydens to comply with "a material obligation of the . . . agreement." This finding is consistent with the parties' pleadings and the undisputed evidence. As to their breach-of-contract counterclaim, the Draydens alleged that R3Build breached the agreement by performing unsatisfactory and incomplete restoration work on the Draydens' home. The parties agreed that R3Build performed no work on the Draydens' home after December 2016. On the other hand, in its petition, as to its breach-of-contract claim, R3Build alleged that the Draydens breached the agreement by failing "to make full and final payment as due and owing under the agreement." R3Build's January 31, 2017 final invoice was not sent to the Draydens until about a month after R3Build stopped work on the Draydens' home, and no contractual term required the Draydens to make final payment before R3Build sent that invoice. As a result, the breach of the agreement by R3Build that the jury found had to have occurred no later than December 2016, when R3Build stopped work on the Draydens' home. And the breach of the agreement by the Draydens that the jury found could not have occurred earlier than the date that R3Build's January 31, 2017 final invoice was due and owing.
According to the undisputed facts and the jury's findings, then, R3Build committed the first material breach. As a result, the Draydens were excused from further performance under the agreement. See Bartush-Schnitzius Foods Co., 518 S.W.3d at 436-37; Mustang Pipeline, 134 S.W.3d at 196. And because of R3Build's prior material breach, R3Build did not have a valid breach-of-contract claim against the Draydens. See Mustang Pipeline, 134 S.W.3d at 201.
A trial court should disregard a jury's finding on an immaterial question when entering its judgment. See Ruff, 582 S.W.3d at 711. A jury question is immaterial where it should not have been submitted, where it is "legally defective," or where it submits a theory that otherwise fails as a matter of law. Id. Here, the jury's damages finding in favor of R3Build is immaterial because, based on the jury's finding that R3Build was the first party to have materially breached the agreement, R3Build is not entitled to damages as a matter of law. See Mustang Pipeline, 134 S.W.3d at 201.
For the same reason, R3Build is not entitled to recover attorney's fees or pre- or post-judgment interest. See id. (reversing award of attorney's fees in favor of party due to its prior material breach). Thus, we hold that the trial court did not err in entering a judgment that did not award R3Build damages, attorney's fees, and pre- and post-judgment interest.
We overrule R3Build's first, second, third, and fourth issues.
Factual Sufficiency of Damages Evidence
In its fifth issue, R3Build argues that the trial court erred in awarding the Draydens damages on their breach-of-contract claim because the evidence is factually insufficient to support the award. In its seventh issue, R3Build argues that the trial court erred in awarding the Draydens attorney's fees because there is no evidence to support the damages award.
When an appellant attacks the factual sufficiency of an adverse finding on an issue on which it did not have the burden of proof, it must demonstrate that the adverse finding is so contrary to the overwhelming weight of the evidence as to be clearly wrong and manifestly unjust. Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986). In conducting a factual-sufficiency review, we examine, consider, and weigh all evidence that supports or contradicts the fact finder's determination. See Dow Chem. Co. v. Francis, 46 S.W.3d 237, 242 (Tex. 2001); Plas-Tex, Inc. v. U.S. Steel Corp., 772 S.W.2d 442, 445 (Tex. 1989). We note that the fact finder is the sole judge of the witnesses' credibility, and it may choose to believe one witness over another; a reviewing court may not impose its own opinion to the contrary. See Golden Eagle Archery, Inc. v. Jackson, 116 S.W.3d 757, 761 (Tex. 2003). The fact finder may also resolve inconsistencies in the testimony of any witness. McGalliard v. Kuhlmann, 722 S.W.2d 694, 697 (Tex. 1986). We set aside the verdict only if the evidence is so weak or the finding is so against the great weight and preponderance of the evidence that it is clearly wrong or manifestly unjust. See Dow Chem. Co., 46 S.W.3d at 242; Pool v. Ford Motor Co., 715 S.W.2d 629, 635 (Tex. 1986).
"American law traditionally recognizes three types of recovery to compensate for a breach of contract: expectancy, reliance, and restitution damages." Atrium Med. Ctr., LP v. Houston Red C LLC, 595 S.W.3d 188, 193 (Tex. 2020) (footnote omitted). "Expectancy damages award a contract plaintiff the benefit of its bargain; reliance damages compensate the plaintiff for out-of-pocket expenses; and restitution damages restore to the plaintiff a benefit that it had conferred on the defendant." Id. (footnote omitted).
Debraeyia testified that she and Brian had paid R3Build "a little over" $31,000.00 to perform the restoration work at the Draydens' home that was covered by the agreement, and she asked for damages in the amount that they had paid R3Build. The Draydens did not seek compensation for out-of-pocket expenses or for the benefit of the bargain caused by R3Build's breach; instead, they sought to recoup what they had paid R3Build. In doing so, they sought restitution. See id.; see also Smith v. Nat'l Resort Cmtys., Inc., 585 S.W.2d 655, 660 (Tex. 1979) (referring to "suit for damages in the nature of restitution"). Restitution "involves restoring property or money taken from the plaintiff," and "[u]nlike other contractual damages, restitution focuses on forcing the defendant to disgorge benefits that it would be unjust to keep, rather than on compensating the plaintiff." City of Harker Heights v. Sun Meadows Land, Ltd., 830 S.W.2d 313, 317 (Tex. App.-Austin 1992, no writ).
The trial court found that, as a result of R3Build's breach of the agreement, the Draydens were "entitled to a refund of payment for substandard material and/or services and/or labor" for certain items "as represented by" R3Build's original repair estimate. R3Build does not challenge the sufficiency of the evidence as to any particular damages item identified by the trial court in its judgment. In limiting the refund to only certain items and in awarding the Draydens $19.827.68-less than the $31,000.00 they requested-the trial court implicitly found that the Draydens derived some benefit from R3Build's work under the agreement. R3Build discredits the testimony of Lang, the Draydens' expert witness, as speculative and lacking in personal knowledge, but Lang's testimony was not essential to the Draydens' case for restitution damages. Debraeyia testified in detail about problems with the quality of R3Build's work and the use of MDF instead of hardwood in various places in the home, which was contrary to her express instructions and deviated from the specifications set forth in R3Build's original repair estimate. Photographs of the items in the Draydens' home that Debraeyia addressed in her testimony were also admitted into evidence by the trial court. Here, we cannot say that such evidence was so weak as to make the trial court's damages findings clearly wrong or manifestly unjust. Thus, we hold that factually sufficient evidence supports the trial court's damages award in favor of the Draydens. And because factually sufficient evidence supports the trial court's damages award in favor of the Draydens, we hold that the trial court did not err in awarding the Draydens their attorney's fees. See Intercont'l Grp. P'ship v. KB Home Lone Star L.P., 295 S.W.3d 650, 653 (Tex. 2009) ("Before a party is entitled to fees under [Texas Civil Practice and Remedies Code] section 38.001, that party must (1) prevail on a cause of action for which attorney's fees are recoverable, and (2) recover damages." (internal quotations omitted)).
To the extent that R3Build complains that "Exhibit B" is not an accurate source for the amounts refunded in the trial court's judgment, we note that the parties disputed the accuracy of various exhibits addressing the cost and scope of work that they had agreed to, including R3Build's Exhibits 1B, 1C, and 1D-R3Build's January 31, 2017 final invoice. We defer to the trial court's resolution of that factual dispute. See Golden Eagle Archery, Inc. v. Jackson, 116 S.W.3d 757, 761 (Tex. 2003).
It is beyond dispute that expert witnesses may rely upon information about which they have no personal knowledge. See Tex. R. Evid. 703 (expert may base opinion on facts or data "perceived by, reviewed by, or made known to" expert and may consider evidence that would be otherwise inadmissible if it is "of a type reasonably relied upon by experts in the particular field in forming opinions or inferences upon the subject"); In re Christus Spohn Hosp. Kleberg, 222 S.W.3d 434, 440 (Tex. 2007) (experts may rely on hearsay, privileged communications, or other information that lay witnesses may not).
We overrule R3Build's fifth and seventh issues.
Pre-judgment Interest Award
In its sixth issue, R3Build argues that the trial court erred in awarding the Draydens pre-judgment interest on the damages award because they were not entitled to pre-judgment interest.
"Pre[-]judgment interest is compensation allowed by law as additional damages for lost use of money due as damages during the lapse of time between the accrual of the claim and the date of judgment." Johnson & Higgins of Tex., Inc. v. Kenneco Energy, Inc., 962 S.W.2d 507, 528 (Tex.1998) (internal quotations omitted). Texas law provides two sources for pre-judgment interest: (1) general principles of equity and (2) enabling statutes. Id. If no statute controls, an award of pre-judgment interest is governed by equitable principles, and the decision to award pre-judgment interest falls within the trial court's discretion. Trevino v. City of Pearland, 531 S.W.3d 290, 297-98 (Tex. App.-Houston [14th Dist.] 2017, no pet.); see also Fortitude Energy, LLC v. Sooner Pipe LLC, 564 S.W.3d 167, 188 (Tex. App.-Houston [1st Dist.] 2018, no pet.). We thus review the trial court's award of pre-judgment interest for an abuse of discretion. See Trevino, 531 S.W.3d. at 298.
We note that the Draydens, in the prayer for relief following their counterclaims, expressly requested pre-judgment interest but did not identify any statutory basis for that request, and no statute controls an award of pre-judgment interest for breach-of-contract damages. R3Build asserts that the trial court erred in awarding pre-judgment interest at the same one-and-one-half percent monthly rate available under Texas Property Code section 28.004, which was the statutory basis for the pre-judgment interest that R3Build requested in its petition. See Tex. Prop. Code Ann. § 28.004. But R3Build does not identify any reason why the trial court could not have concluded, based on principles of equity and public policy, that pre-judgment interest at a one-and-one-half percent monthly rate was appropriate to award the Draydens. See Trevino, 531 S.W.3d at 297-98; see also Tex. R. App. P. 38.1(i). As R3Build does not challenge the award on equitable grounds, we hold that the trial court did not err in awarding the Draydens pre-judgment interest on the damages award at a one-and-one-half percent monthly rate. See Whitlock v. CSI Risk Mgmt., LLC, No. 05-19-01297-CV, 2021 WL 1712215, at *15 (Tex. App.- Dallas Apr. 30, 2021, pet. denied) (mem. op.) (not disturbing trial court's pre-judgment interest award where "[a]ppellant d[id] not challenge the principles of equity permitting the trial court's discretion in awarding pre[-]judgment interest"). We overrule R3Build's sixth issue.
In their appellee's brief, the Draydens assert that pre-judgment interest at the five percent rate set forth in Texas Finance Code section 304.003 is "the more appropriate interest" rate and request that this Court reform the trial court's judgment to include pre-judgment interest at that rate. But the Draydens did not file a notice of appeal. Texas Rule of Appellate Procedure 25.1 states that "[a] party who seeks to alter the trial court's judgment or other appealable order must file a notice of appeal." Tex.R.App.P. 25.1(c); see also Frontier Logistics, L.P. v. Nat'l Prop. Holdings, L.P., 417 S.W.3d 656, 666 (Tex. App.-Houston [14th Dist.] 2013, pet. denied) ("[A]n appellee in the court of appeals who has not filed a notice of appeal may not seek to alter the trial court's judgment in a way that would award the appellee more relief than the trial court granted the appellee in its judgment."). An appellate court may not grant a party who did not file a notice of appeal more favorable relief than the trial court did. See Tex. R. App. P. 25.1(c); Locke v. Briarwood Village, No. 14-17-00113-CV, 2018 WL 5621379, at *4 (Tex. App.- Houston [14th Dist.] Oct. 30, 2018, no pet.) (mem. op.); N.Y. Party Shuttle, LLC v. Bilello, 414 S.W.3d 206, 218-19 (Tex. App.-Houston [1st Dist.] 2013, pet. denied). Because the Draydens did not file a notice of appeal, they have waived their right to present their pre-judgment interest complaint for appellate review, and we cannot consider their request as to pre-judgment interest. See, e.g., Cooper v. Cooper-Clifton, No. 01-20-00476-CV, 2022 WL 120015, at *11 (Tex. App.- Houston [1st Dist.] Jan. 13, 2022, no pet.) (mem. op.).
Conclusion
We affirm the judgment of the trial court.