Opinion
No. 01-03-01147-CV
Opinion issued July 7, 2005.
On Appeal from the 133rd District Court, Harris County, Texas, Trial Court Cause No. 2002-51985.
Panel consists of Justices TAFT, ALCALA, and HIGLEY.
MEMORANDUM OPINION
Appellant, Talley Construction Company (the company), appeals the judgment rendered in favor of appellee, Alfonso Rodriguez, on Rodriguez's breach of contract claim relating to payment for painting services he provided for the company. Trial was to the court, which filed findings of fact and conclusions of law. The company presents seven issues that challenge: (1) the finding of damages; (2) the legal and factual sufficiency of the finding of breach of contract; (3)the legal and factual sufficiency of the finding of quantum meruit; (4) the finding that the company ratified the hiring of Rodriguez; (5) the finding that Chris Braughton had actual or apparent authority to hire Rodriguez; (6) the legal and factual sufficiency of the finding of fraud; and (7) the granting of prejudgment interest at the rate of 18%. In its eighth issue, the company contends that the trial court erred by failing to find breach of the non-compete agreement on the company's counterclaim against Gene Robertson. We affirm.
Background
David Talley was the owner of the company. In Spring 2002, Rodriguez, a subcontractor who provides painting services, left his business cards at the company office. Afterwards, Chris Braughton, a subcontractor working as a supervisor and superintendent for the company, contacted Rodriguez, told him that he received the business card Rodriguez left at the office, and offered him work. Rodriguez accepted the offer and completed numerous projects at Braughton's request.
The parties' procedure for the assignment and payment for a task was as follows: Braughton would provide Rodriguez with the address of a house at which the two were to meet. The two men would walk through the house and determine the work to be done by Rodriguez and the price to be paid for the work. After the "walk-through," Braughton would fill out a work order on an estimator's sheet on which the company's name was printed. Upon completion of a project, Rodriguez would contact Braughton and inform him of the amount due for the work he had completed during the week. Braughton would report Rodriguez's requests for payment to the company and submit a check request on Rodriguez's behalf. The company would then review the check request, confirm that the work had been completed, approve the check request, and send a check directly to Rodriguez. The dispute here concerns payments owed to Rodriguez for labor and material Rodriguez performed on six houses that the parties refer to as the Craig, Ekonomou, Hurst, Johnson, Lindsey, and Weldon projects.
In June 2002, after Braughton stopped working for the company, Rodriguez requested payment directly from the company for outstanding costs for labor and material he provided for the six painting projects. The company refused to pay, and Rodriguez sued the company for breach of contract to recover the remaining balances owed to him for labor and material on the six projects. The trial court found for Rodriguez on the breach of contract claim and awarded him $10,027.98 in damages; $1,498.42 in prejudgment interest, calculated at the rate of 18%; $15,000 in attorney's fees through trial; and $7,000 in attorney's fees for an appeal to the court of appeals. Although Rodriguez also sued the company for negligence, quantum meruit, misapplication of trust funds, and statutory fraud, the trial court's judgment addressed only the breach of contract claim. Breach of Contract
In its second issue, the company contends that the evidence is legally and factually insufficient to support the trial court's judgment on Rodriguez's breach of contract claim because Rodriguez failed to submit any evidence as to any elements of the existence of a valid contract between the company and Rodriguez.
Findings of fact in a case tried to the court have the same force and effect as a jury's verdict on questions and are reviewable for legal and factual sufficiency. Anderson v. City of Seven Points, 806 S.W.2d 791, 794 (Tex. 1991); Min v. Avila, 991 S.W.2d 495, 500 (Tex.App.-Houston [1st Dist.] 1999, no pet.). The trial court's conclusions of law are reviewable de novo. McDermott v. Cronin, 31 S.W.3d 617, 623 (Tex.App.-Houston [1st Dist.] 2000, no pet.).
When, as here, the appellate record contains a complete reporter's record of the trial, the trial court's findings of fact are not conclusive, but subject to the same, well-settled standards that govern legal and factual sufficiency challenges to jury findings. Comm'n of Contracts v. Arriba, Ltd., 882 S.W.2d 576, 582 (Tex.App.-Houston [1st Dist.] 1994, no writ); In the Interest of M.J.Z., 874 S.W.2d 724, 728 (Tex.App.-Houston [1st Dist.] 1994, no writ). In analyzing legal sufficiency of the evidence to support findings on which Rodriguez had the burden of proof, therefore, we consider only the evidence and inferences tending to support the challenged finding and disregard all inferences to the contrary. See Alm v. Aluminum Co. of Am., 717 S.W.2d 588, 593 (Tex. 1986); Arriba, 882 S.W.2d at 582. If any evidence of probative force supports the finding, we must overrule the challenge and uphold the finding. S. States Transp., Inc. v. State, 774 S.W.2d 639, 640 (Tex. 1989); Arriba, 882 S.W.2d at 582. In reviewing this challenge, we first examine the record for evidence that supports the trial court's finding and disregard contrary evidence. See Sterner v. Marathon Oil Co., 767 S.W.2d 686, 690 (Tex. 1989). If no evidence supports the finding, we then examine the entire record to determine whether it establishes the contrary proposition as a matter of law. Id.
In determining factual sufficiency of the evidence to support findings on which Rodriguez had the burden of proof, we must weigh all the evidence, both supporting and conflicting with the finding, and may set the finding aside only if it is so contrary to the overwhelming weight of the evidence as to be clearly wrong and manifestly unjust. See Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986); In re King's Estate, 244 S.W.2d 660, 661 (Tex. 1951); Arriba, 882 S.W.2d at 582. In reviewing this challenge, we again examine the evidence to determine whether some evidence supports the trial court's finding. See Croucher v. Croucher, 660 S.W.2d 55, 58 (Tex. 1983). If some evidence supports the finding, we determine, in light of the entire record, whether the finding is so contrary to the great weight and preponderance of the evidence that the finding is clearly wrong and manifestly unjust, or whether the great weight and preponderance of the evidence supports nonexistence of the finding. Cain, 709 S.W.2d at 176.
The elements of a breach of contract claim are (1) the existence of a valid contract between plaintiff and defendant, (2) the plaintiff's performance or tender of performance, (3) the defendant's breach of the contract, and (4) the plaintiff's damage as a result of the breach. Prime Prods., Inc. v. S.S.I. Plastics, Inc., 97 S.W.3d 631, 636 (Tex.App.-Houston [1st Dist.] 2002, pet. denied). The elements of a valid contract are (1) an offer, (2) an acceptance, (3) a meeting of the minds, (4) each party's consent to the terms, and (5) execution and delivery of the contract with the intent that it be mutual and binding. Id.
The company contends that the only evidence Rodriguez presented was that the company hired Braughton as an independent subcontractor to perform work on various projects, and that Braughton thereafter hired Rodriguez to perform work as Braughton's employee. The company contends that this evidence negates the existence of a contract between the company and Rodriguez because it shows that Rodriguez was an employee of Braughton, and not of the company.
In support of its contention that the evidence was legally and factually insufficient to support the trial court's finding of a breach of contract, the company directs us to the testimony of David Talley, who stated that Braughton was a subcontractor hired to be solely responsible for the work on all six of the projects in dispute, and that Braughton hired Rodriguez as one of his own employees. The company further suggests that the checks paid to Rodriguez by the company were for "other" work Rodriguez performed for Braughton after Braughton submitted a request to pay Rodriguez. The company also suggests that there was no evidence that the company made an offer directly to Rodriguez.
The evidence presented in support of the trial court's finding of a breach of contract by the company reveals that (1) the company, not Braughton, approved of and issued all payment checks directly to Rodriguez, (2) Rodriguez performed work on all six of the disputed projects, (3) David Talley admitted in his answers to interrogatories that he hired Rodriguez to provide labor and materials on the Craig, Ekonomou, Johnson, and Lindsey projects, (4) David Talley stated his belief that Rodriguez also worked on the Hurst and Weldon projects, (5) the company deducted, as business expenses, funds from the payments it made to Rodriguez because Rodriguez did not have his own liability insurance, and the deductions were pursuant to written authorization by Rodriguez that authorized the company to make the deductions, (6) Rodriguez thought that he was working for the company and not for Braughton and expected to receive all payments from the company, not Braughton, (7) the company filed a document with the Texas Worker's Compensation Commission affirming that the company hired Rodriguez as an independent contractor, (8) the company's business records contained Rodriguez's W-9 taxpayer-identification number in order to report payments made to Rodriguez to the Internal Revenue Service, (9) Braughton testified that he was a company superintendent, and that he had the authority to hire Rodriguez on behalf of the company, (10) Braughton was listed as a superintendent in the company's business records, and (11) the company admitted that a company superintendent has the authority to hire a painter.
We hold that the record contains legally and factually sufficient evidence to support the trial court's finding that the company breached its obligation to pay for the labor and materials provided by Rodriguez, and that Rodriguez proved all elements for an action for breach of contract. We further hold that the trial court's finding is not so contrary to the great weight and preponderance of the evidence that the finding is clearly wrong and manifestly unjust, and, therefore, that the evidence is legally and factually sufficient to support the trial court's finding. See Cain, 709 S.W.2d at 176. We overrule the company's second issue.
Ratification and Agency
In its fourth and fifth issues, the company contends that the trial court erred by finding that the company ratified the hiring of Rodriguez and by finding that Braughton had actual or apparent authority to hire Rodriguez. The company reasons that Rodriguez did not specifically plead ratification, agency, or authority, that the issues were not tried by consent, and that the company objected at trial to the lack of the pleadings.
The joint trial-preparation order, signed by counsel for both Rodriguez and the company before the start of trial, specifies that the company's ratification and the agency and authority of Braughton, were disputed issues between these parties. See Tex. R. Civ. P. 11. Moreover, although the company objected in the trial court to a lack of pleading of ratification, agency, or authorization by Rodriguez, the record shows no ruling by the trial court on the company's objections. Having failed to obtain a ruling on its trial objections, the company has not preserved error. See Tex.R.App.P. 33.1(a) (stating that to preserve error for review, party must make proper objection, and trial court must make ruling on objection).
The company alternatively contends that the evidence is legally and factually insufficient to support the trial court's findings that (1) the company ratified the hiring of Rodriguez to provide labor and materials on the six projects, and (2) Braughton had actual or apparent authority to hire Rodriguez.
A principal is liable for the acts of its agent when the agent has actual or apparent authority to perform those acts, or when the principal ratifies those acts. Spring Garden 79U, Inc. v. Stewart Title Co., 874 S.W.2d 945, 948 (Tex.App.-Houston [1st Dist.] 1994, no writ); see Currey v. Lone Star Steel Co., 676 S.W.2d 205, 209 (Tex.App.-Fort Worth 1984, no writ) (actual and apparent authority); Little v. Clark, 592 S.W.2d 61, 64 (Tex.Civ.App.-Fort Worth 1979, writ ref'd n.r.e.) (ratification); see also Cadle Co., v. Morgan, No. 01-03-01020-CV, 2005 WL 856901, at *2-5 (Tex.App.-Houston [1st Dist.] April 14, 2005, no pet. h.) (same).
Actual Authority
"Actual" authority, which includes both express and implied authority, usually denotes authority that a principal (1) intentionally confers upon an agent, (2) intentionally allows the agent to believe that he possesses, or (3) allows the agent to believe that he possesses by want of due care. Spring Garden, 874 S.W.2d at 948; Currey, 676 S.W.2d at 209-10; Behring Int'l, Inc. v. Greater Houston Bank, 662 S.W.2d 642, 649 (Tex.App.-Houston [1st Dist.] 1983, writ dism'd by agr.). Express authority exists when the principal has made it clear to the agent that the principal wants the act under scrutiny to be done. City of San Antonio v. Aguilar, 670 S.W.2d 681, 683 (Tex.App.-San Antonio 1984, writ dism'd). Implied authority exists when there is no proof of express authority, but appearances justify a finding that, in some manner, the agent was authorized to do what he did; in other words, there is circumstantial proof of actual authority. Id. "Implied" actual authority exists only as an adjunct to express, actual authority, Behring, 662 S.W.2d at 649, because implied authority is that which is proper, usual, and necessary to the exercise of the authority that the principal expressly delegates. Employers Cas. Co. v. Winslow, 356 S.W.2d 160, 168 (Tex.Civ.App.-El Paso 1962, writ ref'd n.r.e.).
As a general proposition, the law does not presume agency. Buchoz v. Klein, 184 S.W.2d 271, 271 (1944). The individual alleging agency has the burden to prove its existence. Id. Therefore, it was Rodriguez's burden to prove the existence of an agency relationship between the company and Braughton. The company contends that the evidence is legally and factually insufficient to establish that Braughton had actual authority to bind the company because David Talley testified that he neither authorized, nor allowed Braughton to believe, that Braughton had the authority to hire Rodriguez as a painter.
The record shows that the company's business files list Braughton as a company superintendent, and that company superintendents have the authority to hire painters on the company's behalf. Furthermore, Braughton testified that he was hired as a superintendent, and that he typically received authority from a company estimator to hire extra subcontractors, such as Rodriguez, on behalf of the company. Additionally, Braughton believed he had the authority, as a company superintendent, to hire a painter. See Austin Area Teachers Fed. Credit Union v. First City Bank-Northwest Hills, N.A., 825 S.W.2d 795, 799 (Tex.App.-Austin 1992, writ denied) (considering agent's belief that action was authorized in finding implied authority). Lastly, Braughton testified that, in his role as a company superintendent, he hired Rodriguez as a painter on behalf of the company.
Under this record, the trial court could have reasonably concluded that evidence of probative force supported a finding that Braughton possessed the actual authority to contract with Rodriguez on the company's behalf. We therefore hold that the evidence is legally sufficient. Although David Talley's testimony, that he did not give Braughton actual authority to hire Rodriguez, is some evidence weighing in the company's favor, the testimony does not render the trial court's finding, that Braughton had actual authority, against the great weight and preponderance of the evidence. See Cain, 709 S.W.2d at 176.
Because we have found legally and factually sufficient evidence to support the trial court's finding that Braughton had actual authority to bind the company, we overrule the company's fifth issue, without need to address the issue of apparent authority. Similarly, because we have found that there was legally and factually sufficient evidence of Braughton's actual authority to bind the company, we need not address the issue of ratification, which is raised in issue four, and which we overrule.
Request for Disclosures
In its first issue, the company contends that the trial court erred by awarding $10,027.98 in damages because Rodriguez failed to comply with the company's discovery requests concerning the method of calculation for his damages. The company contends that Rodriguez should not have been allowed to testify concerning his damages.
Although the company objected orally at trial to Rodriguez's response to the request for disclosure, the company's objection was not in proper form. Rule 193.2(a) provides that, within the discovery period, a party must object to written discovery in writing and state the specific legal or factual basis for the objection and the extent to which the opposing party has refused to comply with the request. Tex. R. Civ. P. 193.2(a). Because the company did not object until trial, its oral objection was neither timely nor in proper form. See id. The company has not preserved its issue for review and has waived any error.
We overrule the company's first issue.
Quantum Meruit
In its third issue, the company contends that the evidence is legally and factually insufficient to support the trial court's judgment on Rodriguez's quantum meruit claim. The trial court's judgment, findings of fact, and conclusions of law demonstrate that the trial court based its judgment on the company's breach of its contract with Rodriguez, as opposed to rendering judgment based on Rodriguez's quantum meruit cause of action. Therefore, we need not address this issue. See Murray v. Crest Constr., Inc., 900 S.W.2d 342, 345 (Tex. 1995) (holding that recovery based on an express contract and on quantum meruit are inconsistent); see also Scharer v. John's Cars, Inc., 776 S.W.2d 228, 231 (Tex.App.-El Paso 1989, writ denied) (stating, "Breach of contract and quantum meruit theories are mutually exclusive; one rules out the other.").
We overrule the company's third issue.
Fraud
In its sixth issue, the company contends that the evidence is legally and factually insufficient to support the trial court's judgment on Rodriguez's fraud claim. However, the trial court's judgment, findings of fact, and conclusions of law demonstrate that the trial court did not render judgment against the company on Rodriguez's fraud claim. Therefore, we need not address this issue.
We overrule the company's sixth issue.
Prejudgment Interest
In its seventh issue, the company contends that the trial court erred by awarding $1,498.42 as prejudgment interest at the rate of 18% from October 8, 2002 to July 6, 2003. The company argues that Rodriguez did not properly plead the rate allowed by the trial court, and contends that there is no basis in law to support the granting of 18% in prejudgment interest.
As the company acknowledges in its brief, section 28.004 of the Property Code authorizes prejudgment interest at the rate of 18%. See Tex. Prop. Code Ann. § 28.004 (Vernon 2000). Moreover, despite the company's contention here, that section 28.004 was neither properly pleaded nor tried by consent, which implies lack of notice, the joint trial-preparation order, signed by counsel for both Rodriguez and the company before the start of trial, recites that Rodriguez would be entitled to prejudgment interest, as set forth in section 28.004, if he prevailed at trial. See Tex. R. Civ. P. 11. Having signed the joint trial-preparation order, the company was aware that Rodriguez would seek prejudgment interest pursuant to section 28.004 and may not assert a defect in pleading now. See id.
We overrule the company's seventh issue.
Non-Compete Agreement
In its eighth issue, the company contends that the evidence is factually insufficient to support the trial court's rendering a take-nothing judgment against Robertson on the company's claim that Robertson breached a non-compete agreement, which caused damage to the company in the amount of $1,000,000.
Robertson did not file a brief.
In March 2001, the company hired Robertson as an estimator. As a condition of employment, Robertson signed a non-compete agreement in which he promised not to contact the company's clients, and not to compete within 100 miles of the company. Robertson worked for the company until June 2002, when the company terminated him.
At trial, Robertson admitted that he signed the non-compete agreement. In support of the company's claim against Robertson, David Talley testified that Robertson contacted State Farm Insurance, a company client, and admitted to doing business with State Farm. David Talley also testified that a "good" estimator "should" earn $1 million for the company, and that the company would lose $1 million if an estimator left and competed with the company. However, there was no testimony concerning (1) the scope or duration of Robertson's alleged contacts or business dealings with State Farm, (2) where the alleged contacts or business dealings took place, or (3) how far from the company headquarters the alleged business dealings or contacts took place. Furthermore, besides generally stating that an estimator "should" earn $1 million for the company and that the company's damages would be $1 million if an estimator competed within 100 miles, the company did not sufficiently detail the correlation between the expected earnings of an estimator and the company's alleged damages.
This Court may not second guess or substitute our judgment for that of the trier of fact. Pool v. Ford Motor Co., 715 S.W.2d 629, 634 (Tex. 1986); Cain, 709 S.W.2d at 176. We cannot say that the trial court's failure to find a breach of the non-compete agreement is so contrary to the great weight and preponderance of the evidence that the finding is clearly wrong and manifestly unjust. See Cain, 709 S.W.2d at 176, and therefore hold that the evidence is factually sufficient to support the trial court's finding.
We overrule the company's eighth issue.
Conclusion
We affirm the judgment of the trial court.