Eleuterio Fuentes v. San Anastacio Development Ltd., Oscar Corona, and Mauricio Gonzalez ( 2010 )

NUMBER 13-08-00743-CV
COURT OF APPEALS
THIRTEENTH DISTRICT OF TEXAS
CORPUS CHRISTI - EDINBURG
ELEUTERIO FUENTES, Appellant,
v.
SAN ANASTACIO DEVELOPMENT LTD.,
OSCAR CORONA, AND MAURICIO GONZALEZ, Appellees.
On appeal from the 398th District Court
of Hidalgo County, Texas.
MEMORANDUM OPINION
Before Chief Justice Valdez and Justices Garza and Benavides
Memorandum Opinion by Chief Justice Valdez
This appeal involves a dispute regarding a construction contract in which appellees,
San Anastacio Development Ltd., Oscar Corona, and Mauricio Gonzalez (collectively
referred to as “San Anastacio”), contracted with appellant, Eleuterio Fuentes, to construct
a water distribution system, a sanitary sewer system, storm drainage, and paving and
parking lot improvements at a subdivision being developed by Fuentes. After a jury trial,
judgment was rendered in favor of San Anastacio. San Anastacio was awarded $89,300
in damages and $7,000 in attorney’s fees. By four issues, Fuentes contends that the trial
court erred by: (1) granting judgment for San Anastacio because the jury did not make a
substantial performance finding; (2) rendering judgment for Cordova and Gonzalez
because “these parties did not submit a damage question”; (3) granting judgment for San
Anastacio because San Anastacio “failed to meet [a] condition precedent to payment”; and
(4) awarding attorney’s fees. We affirm.
I. BACKGROUND
On November 2, 2004, San Anastacio and Fuentes entered into a construction
contract in which San Anastacio contracted to construct a water distribution system, a
sanitary sewer system, storm drainage, and paving and parking lot improvements on the
Adams Crossing Subdivision for $212,000. The contract provided that San Anastacio
would complete the project within fifty working days of receiving a “notice to proceed” from
the City of Mission, Texas. The contract provided, in part, “The Owner [Fuentes] agrees
to pay the Contractor [San Anastacio] in current funds for the performance of the contract,
as provided in the proposal, and to make payments on account thereof.” The contract also
provided that San Anastacio’s payment requests were to be processed through Fuentes’s
agent, engineer Jaime Enriquez.
On July 1, 2005, San Anastacio filed suit against Fuentes for breach of contract for
failing to make payments on the agreement, and Fuentes counterclaimed that San
Anastacio failed to perform its obligations under the contract. A jury trial commenced on
May 13, 2008. At trial, Gonzalez testified that he owns San Anastacio Development Ltd.
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and that he and Corona, another contractor, entered into a joint venture to complete the
construction project at the Adams Crossing Subdivision. Corona testified that he and
Gonzalez began construction on the Adams Crossing project in mid-November 2005, and
believed that they could complete the project within fifty working days of receiving the
“notice to proceed” by combining their workforces.
Under the terms of the contract, San Anastacio submitted invoices to Enriquez for
approval. Upon receiving the invoices, Enriquez verified that the materials represented in
the invoices had been installed at the Adams Crossing Subdivision and then prepared a
“certificate for payment” that was submitted to Fuentes for payment. Three certificates for
payment were entered into evidence. The first certificate for payment was dated
December 9, 2004, and requested payment of $61,664.85. The second certificate for
payment was dated December 23, 2004, reflected that no payments had been made, and
requested payment of $88,086.60. The third certificate for payment was dated January 21,
2005; it reflected a $61,664.85 payment by Fuentes, presumably in response to the
December 9, 2004 request, and requested payment of $54,932.31. San Anastacio
contends that it continued to perform work and incur expenses after the January 21, 2005
certificate for payment was prepared.
Fuentes testified that the contract did not require that he make any payment to San
Anastacio before the completion of the Adams Crossing Project. However, Fuentes
confirmed that he satisfied payment under the first certificate for payment but none
thereafter. Fuentes testified that he ceased making payments because he learned that
San Anastacio had failed to pay various subcontractors who had worked on the Adams
Crossing project. Fuentes also testified that, after he paid the first certificate of payment,
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San Anastacio had twenty-one working days left under the contract to complete the project
but performed little work. Fuentes stated that, after the fifty working days under the
contract expired, he allowed San Anastacio to continue working on the project for two
additional months before terminating the contract in March 2005. After terminating his
contract with San Anastacio, Fuentes contracted with another construction company to
complete the project for approximately $70,000.
Fuentes’s testimony was hotly disputed by Corona and Gonzalez. According to
Corona and Gonzalez, when the parties contracted with Fuentes, they were told to turn in
their requests for payment on the 25th of each month and that they would be paid on the
10th of the following month. Moreover, Enriquez opined that a provision found within the
contract required Fuentes to make payments as the work progressed in accordance with
the work reflected in the certificates of payment. Corona admitted that San Anastacio was
unable to complete the Adams Crossing project but insisted that its failure to complete the
project resulted from Fuentes’s failure to make the requested payments. Corona testified
that Fuentes owes San Anastacio $37,000 for work performed under Corona’s portion of
the San Anastacio joint venture. Additionally, Gonzalez testified that Fuentes owes San
Anastacio a total of $89,300 for work performed under the contract. Gonzalez stated that
the $89,300 is comprised of $37,000 for work performed under Corona’s portion of the joint
venture, as well as $52,000 for work performed under Gonzalez’s portion.
The jury found that both San Anastacio and Fuentes failed to comply with the
November 2, 2004 contract. The jury awarded $89,300 to San Anastacio after it
determined that Fuentes was the first to breach the contract and that his breach was not
excused. The trial court entered a final judgment providing that San Anastacio evelopment
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Ltd., Oscar Corona, and Mauricio Gonzalez recover $89,300 in actual damages, pre- and
post-judgment interest, attorney’s fees, and court costs. Fuentes filed a “Motion for
Judgment Notwithstanding the Verdict” and a “Motion for New Trial or in the Alternative
Motion to Modify Final Judgment”; however, the trial court denied these motions. This
appeal ensued.
II. SUBSTANTIAL PERFORMANCE
By his first issue, Fuentes contends that the trial court erred in awarding damages
to San Anastacio because San Anastacio failed to plead and obtain a jury finding on
whether it substantially performed under the contract. “Substantial performance is a
doctrine that allows breaching parties who have substantially completed their obligations
to recover on a contract.” Tips v. Hartland Developers, Inc., 961 S.W.2d 618, 623 (Tex.
App.–San Antonio 1998, no pet.). Thus, Fuentes asserts that San Anastacio’s failure to
obtain a jury finding on whether it substantially completed the requirements of the
construction contract precludes it from collecting damages. We disagree.
In the present case, the jury found that: (1) both parties failed to comply with the
construction contract; (2) Fuentes was the first party to fail to comply; and (3) Fuentes’s
failure to comply was not excused. Texas law permits builders to recover under
construction contracts upon substantial performance, even if they have breached the
building contract. See Vance v. My Apartment Steak House of San Antonio, Inc., 677
S.W.2d 480, 481 (Tex. 1984). However, under the present facts, substantial performance
is irrelevant. “In the 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
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who committed the first material breach.” Mustang Pipeline Co. v. Driver Pipeline Co., 134
S.W.3d 195, 200 (Tex. 2004) (citing Mead v. Johnson Group, Inc., 615 S.W.2d 685, 689
(Tex. 1981) (default by one contracting party excuses performance by the other); see also
Lake LBJ Mun. Util. Dist. v. Coulson, 692 S.W.2d 897, 908 (Tex. App.–Austin 1985), rev’d
on other grounds, 734 S.W.2d 649 (Tex. 1987) (suggesting disjunctive submission in such
cases)). Although the jury found that both parties failed to comply with the contract, the
jury’s finding that Fuentes was the first to fail to comply excused San Anastacio from
further performance. See id. at 196 (“It is a fundamental principal of contract law that when
one party commits a material breach of that contract, the other party is discharged or
excused from further performance.”). Moreover, the jury found that damages resulted from
Fuentes’s breach. Accordingly, San Anastacio is not precluded from collecting damages
by failing to obtain a jury finding on substantial performance, and the trial court did not err
by rendering judgment in favor of San Anastacio. Fuentes’s first issue is overruled.
III. JURY CHARGE
By his second issue, Fuentes contends that the trial court erred in rendering
judgment for Cordova and Gonzalez because “these parties did not submit a damage
question.” Fuentes argues that charge error exists because the jury was asked:
What sum of money, if any, if paid now in cash, would fairly and reasonably
compensate SAN ANASTACIO DEVELOPMENT, LTD for its damages, if
any, that resulted from ELEUTERIO FUENTES[‘S] failure to comply with the
construction contract dated November 2, 2004?
Fuentes asserts that this question did not allow the jury to consider “the correct measure
of damages.”1
1
Texas Rule of Civil Procedure 301 provides that “[t]he judgm ent of the court shall conform to the
pleadings, the nature of the case proved and the verdict . . . .” T EX . R. C IV . P. 301. Although an argum ent m ay
be m ade that the trial court’s judgm ent does not conform to the jury’s verdict, this issue is not raised by
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“[A]ny complaint to a jury charge is waived unless specifically included in an
objection.” In re B.L.D., 113 S.W.3d 340, 349 (Tex. 2003) (citing TEX . R. CIV. P. 274; TEX .
R. APP. P. 33.1(a)(1)). “A party must make the trial court aware of the complaint, timely
and plainly, and obtain a ruling.” Id. (citing State Dep’t of Highways & Pub. Transp. v.
Payne, 838 S.W.2d 235, 241 (Tex. 1992)). Fuentes did not object to the jury charge during
trial or in any post-trial motion. We therefore conclude that Fuentes has waived his second
issue. See TEX . R. CIV. P. 274; TEX . R. APP. P. 33.1(a)(1); see also In re B.L.D., 113
S.W.3d at 349.
IV. CONDITION PRECEDENT
By his third issue, Fuentes contends that the trial court erred in granting judgment
for San Anastacio because San Anastacio “failed to meet [a] condition precedent to
payment.” The contract between Fuentes and San Anastacio provides:
Either the “Owner” [Fuentes] of [sic] the “Contractor” [San Anastacio] may
terminate this agreement for any reason at any time by giving notice in
writing to the other. Upon notice of termination by either party, th[e]
“Contractor” shall discontinue all services in connection with this agreement.
Within thirty (30) days after notice of termination, the “Contractor” shall
submit an invoice showing in detail the services under this agreement to the
date of termination to the “Engineer” for approval. The “Owner” shall then
pay the “Contractor” as per invoice approved by the “Engineer.” [Enriquez].
Fuentes alleges that he terminated the contract by letter in March 2005, and that
San Anastacio’s last request for payment was made on January 21, 2005. As previously
discussed, the jury found that Fuentes was the first to breach the contract. Fuentes’s
breach excused San Anastacio from further performance. See Mustang Pipeline Co., 134
S.W.3d at 196. Even if Fuentes attempted to terminate the contract by a letter presented
to San Anastacio in March 2005, evidence was presented that, as of that date, Fuentes
Fuentes. Accordingly, we consider only whether the jury charge was erroneous. See T EX . R. A PP . P. 47.1.
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had already breached the contract. Accordingly, Fuentes’s breach excused San
Anastacio from submitting a final invoice. See id. Fuentes’s third issue is overruled.
V. PRESENTMENT
In his fourth issue, Fuentes contends that the trial court erred by awarding attorney’s
fees to San Anastacio because there is no evidence that San Anastacio presented its
demand for attorney’s fees to Fuentes as required by civil practice and remedies code
section 38.002(1). See TEX . CIV. PRAC . & REM . CODE ANN . § 38.002(1) (Vernon 2008)
(providing that “[t]o recover attorney’s fees . . . the claimant must be represented by an
attorney . . .”).
A party who prevails on a breach of contract claim is entitled to recover attorney’s
fees for prosecution of the claim. Id. § 38.001 (Vernon 2008). To recover attorney’s fees,
a claimant must have first presented the claim to the opposing party or his agent. Id. §
38.002(2). The purpose of presentment is to allow the person against whom the claim is
asserted an opportunity to pay a claim within thirty days after notice of the claim without
incurring an obligation for attorney’s fees. Jones v. Kelley, 614 S.W.2d 95, 100 (Tex.
1981). No particular form of presentment is required. Id. All that is necessary is an
assertion of a debt or claim and a request for compliance made to the opposing party, and
the party’s refusal to pay. Panizo v. Young Men’s Christian Ass’n of Greater Houston Area,
938 S.W.2d 163, 168 (Tex. App.–Houston [1st Dist.] 1996, no writ). The statute is to be
generously construed to promote its underlying purpose. TEX . CIV . PRAC . & REM . CODE
ANN . § 38.005 (Vernon 2008).
Fuentes asserts that San Anastacio is not entitled to recover attorney’s fees
because “there was no evidence in the record that established that [San Anastacio] w[as]
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represented by counsel when any request for payment was made . . . .” The plain
language of section 38.002(1) requires that in order to recover attorney’s fees “the claimant
must be represented by an attorney”; however, it does not set forth whether or not the
claimant must be represented by an attorney at the time of presentment. Id. § 38.002(1).
Fuentes fails to cite any authority for his argument that an attorney must be employed by
the claimant at the time of presentment, and we find none.2 Construing section 38.002
generously, we cannot say on this record that the trial court erred in concluding that
presentment had been satisfied so as to allow recovery of attorney’s fees. Fuentes’s fourth
issue is overruled.
VI. CONCLUSION
Having overruled all of Fuentes’s issues on appeal, we affirm the judgment of the
trial court.
ROGELIO VALDEZ
Chief Justice
Delivered and filed the
29th day of July, 2010.
2
On appeal, Fuentes does not assert that San Anastacio failed to prove that: (1) it presented the
claim to Fuentes; or (2) paym ent for the just am ount owed was not “tendered before the expiration of the 30th
day after the claim is presented.” T EX . C IV . P RAC . & R EM . C OD E A N N . § 38.002(2), (3) (Vernon 2008).
Accordingly, we do not reach these issues. See T EX . R. A PP . P. 38.1, 47.1.
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