Prabhakar Guniganti, Individually, the Guniganti Children's 1999 Trust, and Triple PG Sand Development, LLC v. C & S Components Company, LTD , 467 S.W.3d 661 ( 2015 )

Affirmed as Modified and Opinion filed May 19, 2015.
In The
Fourteenth Court of Appeals
NO. 14-14-00224-CV
PRABHAKAR GUNIGANTI, INDIVIDUALLY, THE GUNIGANTI
CHILDREN’S 1999 TRUST, AND TRIPLE PG SAND DEVELOPMENT, LLC,
Appellants
V.
C & S COMPONENTS COMPANY, LTD., Appellee
On Appeal from the 80th District Court
Harris County, Texas
Trial Court Cause No. 2012-41323
OPINION
This lawsuit stems from the sale of sand processing plant components by appellee
C&S Components Company, Ltd. to appellant Triple PG Sand Development, LLC. The
plant was constructed on property owned by appellant The Guniganti Children’s 1999
Trust. Appellant Prabhakar Guniganti created the 1999 Trust and founded and owns
Triple PG. C&S sued Triple PG and Guniganti for, among other things, breach of
contract for failing to pay the total due on the components. C&S also obtained a
mechanic’s lien against the property owned by the 1999 Trust. Appellants
counterclaimed for, among other things, negligent misrepresentation and filing of a
fraudulent lien. Before the case was submitted to the jury, the trial court determined as
a matter of law that the parties entered into a modification of the original sales contract
and that Triple PG and Guniganti breached the agreement as so modified. The jury then
found damages for the breach of contract of $312,345.78, found C&S did not make
negligent misrepresentations or file a fraudulent lien, and found the reasonable and
necessary amount of attorney’s fees for C&S. The trial court rendered judgment
favoring C&S, including damages and attorney’s fees as found by the jury, but did not
provide for either foreclosure or discharge of the lien.
In four issues, appellants contend that (1) the trial court erred in determining as a
matter of law that the parties entered into a modification of the original sales contract;
(2) the trial court erred in failing to state in the judgment that C&S was not entitled to a
lien; (3) the jury’s failure to find that the lien was fraudulent was against the great
weight and preponderance of the evidence; and (4) in the event the judgment for breach
of contract is reversed, the award of attorney’s fees to C&S should also be reversed.
We modify the judgment in response to appellants’ second issue and affirm the
judgment as so modified.
I. Background
Guniganti and his wife created the 1999 Trust, transferred a 495-acre parcel of
land to the trust, and named Daya Puskoor, Guniganti’s brother-in-law, as trustee.
Hallett Materials operated a sand processing plant on the property for around ten years.
When the contract between Hallett and the trust expired in 2010, Guniganti and Puskoor
agreed that they did not need to bring in a third-party to run a sand processing plant on
the property. Guniganti founded Triple PG in February 2011 for the purpose of
constructing and running a new sand plant. C&S, owned by Danny Kautz and his wife,
2
sells components for sand processing plants. When an employee of Triple PG, Mark
Burnett, requested a quote from C&S for sand plant components, Kautz responded with
a detailed proposal on June 1, 2011. Although no formal contract was ever signed by
the parties, it is undisputed that the June 1 proposal, admitted into evidence as Plaintiff’s
Exhibit 1, became the original contract between C&S, Triple PG, and Guniganti. The
total contract price stated in the proposal was $1,217,959.1
C&S received the first payment of $365,387.70 on June 8, 2011 and within a few
weeks began delivering components. C&S received a second payment in the same
amount on August 4, 2011 and delivered the majority of the ordered components by
November 2011. The components were manufactured by Classifying Flotation Systems
(CFS) and a local fabricator. In mid-September 2011, Burnett notified Kautz of
problems with welding work on some of the components. On February 21, 2012,
Kautz, Burnett, Guniganti, and two manufacturer representatives met to discuss the
issues with the components. Guniganti’s daughter, Prathima Guniganti, who owned her
own consulting firm and had been managing the payroll and billing for Triple PG, also
attended the meeting. Kautz and the Gunigantis thereafter exchanged emails concerning
credits to be given for some of the components.
On February 28, Kautz sent an email to Prathima, stating “[s]ee the attached, I
think this is what you are looking for. If you need anything else, please call.” Prathima
responded a day later and copied Guniganti and his wife, stating to Kautz, “Thank you
for making the revisions to the invoice to reflect the adjustments from our discussion. I
have included Dr[.] and Mrs[.] Guniganti so they have the correct invoice for their
1
At trial, there was considerable testimony regarding discussions between Kautz and
representatives of Triple PG regarding what type of sand processing equipment would be best, given
the nature of the sand on the property as well as market conditions. Appellants based their claims for
negligent misrepresentation at least partly on these discussions, essentially asserting that Kautz led
them into purchasing more expensive equipment than was necessary. The jury rejected the claims, and
appellants do not contest that finding on appeal.
3
records and payment.” Attached to the emails was a C&S invoice showing a total
contract price of $1,061,572 (a reduction from the original price of $1,217,959) and a
balance due of $294,530.74. An additional invoice attached to the emails shows freight
charges of $30,068.04 for a total balance due of $324,598.78. The email string and
attached invoices were admitted into evidence as Plaintiff’s Exhibit 21.
At trial, Kautz testified that additional credits should be applied against the
invoice amount, leaving a final balance due of $312,345.78, the exact figure awarded by
the jury. Kautz thereafter sent a series of emails requesting payment, but when the
requests went unanswered, C&S filed the present lawsuit as well as the mechanic’s lien
against the 1999 Trust’s property. Appellants thereafter filed their counterclaims, and
after certain causes of action were dismissed in summary judgment proceedings, the
case proceeded to a jury trial principally on allegations that Triple PG and Guniganti
breached the contract and C&S made negligent misrepresentations and filed a fraudulent
lien.
As mentioned above, before submitting the case to the jury, the trial court determined
as a matter of law that the email string and attached invoices admitted as Exhibit 21
constituted a modification of the parties’ original sales contract and that Triple PG and
Guniganti breached the agreement as modified. The jury then found damages for the breach
of contract of $312,345.78, found C&S did not make negligent misrepresentations or file a
fraudulent lien, and found the reasonable and necessary amount of attorney’s fees for C&S.
Relative to the validity of the lien, the jury also answered “no” to inquiries regarding
whether Triple PG or Guniganti effectively controlled the 1999 Trust. The trial court
rendered judgment awarding C&S $312,345.78 plus attorney’s fees but did not provide for
foreclosure or discharge of the lien. The judgment also contains a Mother Hubbard clause
ordering that “[a]ll relief not expressly granted herein be, and the same is, denied to the party
seeking same.”
4
II. Modification of Contract
In their first issue, appellants contend that the trial court erred in determining as a
matter of law that the parties entered into a modification of the original sales contract.
The parties agree that as a sale of goods, the transaction was governed by the Texas
Uniform Commercial Code (UCC). Tex. Bus. & Com. Code §§ 2.101–.725; Howard
Indus., Inc. v. Crown Cork & Seal Co., LLC, 403 S.W.3d 347, 349 (Tex. App.—
Houston [1st Dist.] 2013, no pet.). UCC section 2.209 governs modification of
contracts that fall within the chapter. Tex. Bus. & Com. Code § 2.209. Appellants
focus their arguments on subsection 2.209(c), which provides that “[t]he requirements
of the statute of frauds section of this chapter (Section 2.201) must be satisfied if the
contract as modified is within its provisions.” Appellants specifically assert that the
alleged modification, Exhibit 21, did not meet the requirements of the UCC statute of
frauds, section 2.201, including any of the exceptions to its requirements contained
therein. According to appellants, the trial court erred in withdrawing the modification
question from the jury because a question of fact remains.
Under most circumstances, in order to obtain reversal on appeal, an appellant
must establish that it preserved its complaint by making it in the trial court, error in fact
occurred, and such error probably caused the rendition of an improper judgment or
probably prevented the appellant from properly presenting the case to the court of
appeals. See Tex. R. App. P. 33.1(a) (requiring preservation), 44.1(a) (prohibiting
reversal in the absence of harm). As to appellants’ statute of frauds argument, C&S
contends (1) appellants failed to preserve the issue below, (2) the court’s determination
was correct that modification was established as a matter of law, and (3) even if the
court’s ruling was in error, appellants have not demonstrated that they were harmed by
the ruling. Without stating a position on the first two contentions, we turn to the
question of whether appellants have demonstrated the court’s ruling probably caused the
5
rendition of an improper judgment or probably prevented the appellant from properly
presenting the case on appeal. See Tex. R. App. P. 44.1(a).
The harmless error rule applies to all errors. G & H Towing Co. v. Magee, 347
S.W.3d 293, 297 (Tex. 2011) (citing Lorusso v. Members Mut. Ins. Co., 603 S.W.2d
818, 819–20 (Tex. 1980)). “The rule recognizes that a litigant is not entitled to a perfect
trial for, indeed, few trials are perfect.” Lorusso, 603 S.W.2d at 819. Thus, the rule
“establishes a sound and common sense policy of not reversing a judgment unless the
error or errors can be said to have contributed in a substantial way to bring about the
adverse judgment.” Id. at 819-20. It is the complaining party’s burden to show harm on
appeal. Ford Motor Co. v. Castillo, 279 S.W.3d 656, 667 (Tex. 2009); see also
Mullendore v. Muehlstein, 441 S.W.3d 426, 430 (Tex. App.—El Paso 2014, pet. abated)
(stating in connection with harm analysis that an appellant is required to identify the
places in the record that support the complaint).
C&S contends that any error in ruling on the modification as a matter of law was
harmless because the modification, in effect, reduced the contract price by nearly
$150,000, thus lowering the amount for which appellants could be held liable. We need
not assess the correctness of C&S’s argument, however, because, as stated above, it is
the responsibility of appellants as the complaining parties to establish harm. See, e.g.,
Castillo, 279 S.W.3d at 667; Mullendore, 441 S.W.3d at 430. In a reply brief,
appellants argue that “the harmful ‘effect’ of the trial court’s ruling was to withdraw
disputed fact issues concerning the exceptions to the statute of frauds from the jury” and
that “[i]t defies logic to say that a party wrongly deprived of a jury determination of a
disputed fact issue is not harmed when the judgment against that party is based on that
determination.” Appellants neither cite authority supporting the proposition that merely
keeping an issue from the jury alone is sufficient to demonstrate that such error
probably caused the rendition of an improper judgment nor provide any argument or
6
record citations to dispel the suggestion that the modification may have actually
benefitted them by reducing the total contract price. Consequently, appellants have not
met their burden to show harm. See Castillo, 279 S.W.3d at 667; Mullendore, 441
S.W.3d at 430. We overrule their first issue.
III. Status of Lien
In the second issue, appellants, specifically the 1999 Trust, assert that the trial
court erred in failing to declare in the judgment that C&S was not legally entitled to a
lien under the Texas Constitution. See Tex. Const. art. XVI, § 37. On this basis, the
1999 Trust requests the judgment be modified. On June 21, 2012, C&S filed with the
Harris County Clerk’s office an affidavit by Kautz in support of a constitutional lien
against the property owned by the 1999 Trust. In its pleadings in the present case, C&S
sought a declaratory judgment that it was entitled to a lien against the 1999 Trust’s
property and that its lien was valid and sought foreclosure against the property. The
1999 Trust filed a counterclaim seeking to establish that C&S had no right to a
constitutional lien against the property and to have the lien declared invalid on that
basis.
A constitutional lien such as this requires the lienholder to be in privity of
contract with the landowner. See, e.g., Denco CS Corp. v. Body Bar, LLC, 445 S.W.3d
863, 870-71 (Tex. App.—Texarkana 2014, no pet.); see also Tex. Const. art. XVI, § 37
(authorizing liens); Tex. Prop. Code §§ 53.001–.260 (providing for the enforcement of
liens). It is undisputed that C&S did not have a contract with the 1999 Trust 2;
accordingly, the trial court submitted two questions to the jury inquiring whether
2
In Question 1, the trial court asked the jury what sum of money would compensate C&S for
Triple PG and Guniganti’s failure to comply with the contract. The 1999 Trust was not included in the
damages question because it was not a party to the contract. Moreover, Kautz testified that he dealt
with Guniganti and other representatives of Triple PG and did not have any contact with Puskoor, the
trustee of the 1999 Trust. Puskoor also testified that there was no contract between C&S and the 1999
Trust.
7
Guniganti or Triple PG “effectively control[led the 1999 Trust] through ownership of
voting stock, interlocking directorships, or otherwise?”3 The jury answered both
questions in the negative. However, even though C&S attempted but failed to establish
privity with the 1999 Trust, the trial court did not declare the constitutional lien invalid
or order it discharged in the final judgment.4
C&S suggests that this issue is moot because (1) the judgment contains a Mother
Hubbard clause, declaring that all relief not expressly granted therein is denied, and (2)
C&S itself released the lien on January 6, 2015, when it filed a release with the Harris
County Clerk’s office. We disagree with both contentions.
Although C&S is correct that the judgment contains a Mother Hubbard clause
denying all relief not expressly granted, which includes C&S’s request for declarations
that it was in privity with the 1999 Trust, its constitutional lien was valid, and it was
entitled to foreclosure on the lien, this does not end the analysis. The 1999 Trust also
requested a declaratory judgment that it was not a party to any contract with C&S,
C&S’s lien was invalid, and the property in question belongs solely to the trust and not
Triple PG or Guniganti. These declaratory judgment requests were, in effect, mirror
image counterclaims of C&S’s claims regarding the lien.5 Thus, denying all relief not
3
These submissions appear to be based on a “sham contract” theory of privity under Property
Code section 53.026(a). Prop. Code § 53.026(a); see also Trinity Drywall v. Toka Gen. Contractors,
Ltd., 416 S.W.3d 201, 211-12 (Tex. App.—El Paso 2013, pet. denied) (describing use of section
53.026 to establish privity of contract). We take no position regarding whether the submissions were
proper.
4
The record does not reveal why the trial court declined to address the validity of the lien in the
judgment. In its response to appellants’ motion for new trial, C&S represented that in light of the
jury’s findings and the Mother Hubbard clause in the judgment, it would remove the lien once the
judgment became final and unappealable or “upon other appropriate circumstances.”
5
We take no position regarding whether the 1999 Trust’s declaratory judgment counterclaims
were merely denials of C&S’s claims or whether they sought affirmative relief. See generally BHP
Petroleum Co. v. Millard, 800 S.W.2d 838, 841-42 (Tex. 1990) (orig. proceeding) (discussing
implications of a defendant’s mirror-image declaratory judgment claims); In re BP Oil Supply Co., 317
S.W.3d 915, 921-22 (Tex. App.—Houston [14th Dist.] 2010) (orig. proceeding) (same). At the time of
8
granted did not indicate the lien was invalid or discharged; in fact, the Mother Hubbard
clause denied relief to both sides on the issue of the lien’s validity as well as C&S’s
entitlement to a lien on the 1999 Trust’s property, leaving these issues—although fully
tried and disposed of by the judgment—unanswered.6 The 1999 Trust was legally
entitled to relief it did not receive in the judgment; the judgment itself, therefore, did not
moot the issue.
As stated, C&S further suggests that this appellate issue became moot when C&S
filed a release with the Harris County Clerk’s office during the pendency of the appeal.7
C&S requests that we take judicial notice of the release, a copy of which was provided
as an attachment to C&S’s brief. C&S insists that release of the lien mooted the issue
and thus defeats jurisdiction over the issue, citing Briones v. Brazos Bend Villa
Apartments, 438 S.W.3d 808, 812 (Tex. App.—Houston [14th Dist.] 2014, no pet.) (“A
case becomes moot if at any stage there ceases to be an actual controversy between the
parties.”), and Freedom Communications, Inc. v. Coronado, 372 S.W.3d 621, 624 (Tex.
2012) (noting appellate courts may take judicial notice of facts outside the record to
determine jurisdiction). On its face, the release appears to be recorded in the property
final judgment, the 1999 Trust’s declaratory judgment claims had not been dismissed or otherwise
disposed of in the case.
6
The existence of a Mother Hubbard clause in a judgment rendered without a conventional trial
on the merits does not by itself make the judgment final and appealable. Lehmann v. Har–Con Corp.,
39 S.W.3d 191, 203-04 (Tex. 2001). Here, however, the judgment was rendered after a full trial on the
merits. Additionally, the judgment also contained a statement that it “finally disposes of all claims and
all parties and is appealable.” The judgment was therefore final and appealable. See id. at 200. It is
final and appealable but erroneous for not disposing in the 1999 Trust’s favor the issue of C&S’s right
to a lien. See, e.g., S. Mgmt. Servs., Inc. v. SM Energy Co., 398 S.W.3d 350, 358 (Tex. App.—
Houston [14th Dist.] 2013, no pet.) (“If the order does not dispose of every pending claim but is
‘clearly and unequivocally’ final on its face, the order is not interlocutory merely because the record
does not afford a legal basis for the adjudication. Rather, the order is final but erroneous. ‘In those
circumstances, the order must be appealed and reversed.’”) (quoting Lehmann, 39 S.W.3d at 206).
7
Property Code section 53.157 provides several circumstances that will result in the discharge
of a lien, including the filing of a lien release by the claimant and the recording of a final judgment
providing for the discharge. Tex. Prop. Code § 53.157.
9
records and states that “[i]n light of the final judgment,” C&S releases and discharges
the 1999 Trust’s property from the constitutional lien. It also states that C&S reserves
all other rights and remedies available under applicable law. In oral argument before
this court, counsel for the 1999 Trust acknowledged that the copy of the release filed
with this court is what it purports to be.
However, even if we were to take judicial notice of the release and determine that
it discharged the lien, it would not render the issue raised on appeal moot. As explained
above, the issues raised by the parties and determined at trial went beyond the existence
of this particular lien and included the question of whether C&S had a right to take a
lien against the 1999 Trust’s property. Based on the undisputed and well-established
facts that the 1999 Trust owned the property and C&S had no contract with the 1999
Trust, and the jury’s negative answers to questions seeking to establish privity between
C&S and the trust in other ways, the questions of whether privity of contract existed
between C&S and the 1999 Trust and whether C&S had a right to take a lien on the
property were fully resolved at trial. Without privity of contract, C&S possessed no
right to take a lien on the 1999 Trust’s property. See, e.g., Denco CS Corp., 445 S.W.3d
at 870-71.
In its briefing on appeal, the 1999 Trust indicated concern that C&S’s release of
the existing lien did not prevent C&S from refiling a lien in the future. Despite ample
opportunity to do so, C&S steadfastly declined to stipulate or even acknowledge that it
would not attempt to refile its lien. Despite the release of the existing lien by C&S, a
live controversy still exists between the parties regarding whether C&S had a right to
such a lien. See Briones, 438 S.W.3d at 812. Release of the existing lien did not
extinguish C&S’s request for a declaration that it was in privity with the 1999 Trust or
the 1999 Trust’s request for declarations that it was not a party to any contract with
10
C&S and the property in question belongs solely to the trust.8 These issues were
resolved on the merits at trial and should have been resolved on the merits in the
judgment.9 Accordingly, we sustain appellant’s second issue and reform the judgment
to state that no privity of contract existed between C&S and the 1999 Trust and
therefore C&S was not entitled to a lien against the 1999 Trust’s property.
IV. Fraudulent Lien Claim
In issue three, appellants contend that the jury’s failure to find that C&S’s lien
was fraudulent was against the great weight and preponderance of the evidence. While
the jury effectively declined to find that C&S was in privity with the 1999 Trust, it also
declined to find that the lien was fraudulent. Question no. 6 read as follows:
Did C&S Components Company, Ltd. make, present, or use the
Mechanic’s Lien with: (l) knowledge that the Mechanic’s Lien is a
fraudulent lien or claim against real property owned by The Guniganti
Children’s 1999 Trust; (2) with the intent that Mechanic’s Lien be given
the same legal effect as a valid lien against real property; and (3) with
intent to cause another to suffer financial injury?
8
Declaratory judgment actions serve as a method “to settle and afford relief from uncertainty
and insecurity with respect to rights, status, and other legal relations.” Tex. Civ. Prac. & Rem. Code §
37.002(b).
A declaratory judgment is appropriate only if a justiciable controversy exists as to the
rights and status of the parties and the controversy will be resolved by the declaration
sought. To constitute a justiciable controversy, there must exist a real and substantial
controversy involving genuine conflict of tangible interests and not merely a theoretical
dispute.
Bonham State Bank v. Beadle, 907 S.W.2d 465, 467 (Tex. 1995) (internal quotation marks omitted).
Releasing the existing lien did not resolve the underlying declaratory judgment claims regarding
whether C&S had a right to obtain a lien against the 1999 Trust’s property.
9
C&S further argues that appellants waived their request for declarations by failing to either
object to the charge as submitted or submit a proposed jury question expressly asking about whether
privity of contract existed. This assertion, however, ignores the facts that (1) it is undisputed that the
1999 Trust owns the property and there is no direct contract between C&S and the 1999 Trust, and (2)
the court did submit questions regarding effective control of the 1999 Trust by either Guniganti or
Triple PG and the jury answered those questions in the negative. Any further request or submission to
the jury regarding privity would have been irrelevant.
11
Instruction: A lien is fraudulent if the person who files it has actual
knowledge that the lien was not valid at the time it was filed.10
The jury answered “no.” In reviewing this challenge to the factual sufficiency of the
evidence, we consider and weigh all of the evidence and set aside the judgment only if it
is so contrary to the overwhelming weight of the evidence that it is clearly wrong and
manifestly unjust. Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986). When, as here,
there was no objection to the charge, we review the sufficiency of the evidence
according to the charge actually given and not based on some other unidentified law.
Barker v. Eckman, 213 S.W.3d 306, 313 (Tex. 2006); Osterberg v. Peca, 12 S.W.3d 31,
55 (Tex. 2000); see also City of Fort Worth v. Zimlich, 29 S.W.3d 62, 71 (Tex. 2000)
(holding that when no objection was made to jury instruction, evidence to support
finding based on instruction should be assessed “in light of” the instruction given).
In arguing that the evidence is factually insufficient to support the jury’s finding,
appellants begin by emphasizing that, in his affidavit in support of the lien, Kautz
mentions a contract and an unpaid claim but does not expressly identify which party
C&S contracted with or which party owed the debt. Appellants additionally point to
Kautz’s testimony wherein he acknowledged that he knew the 1999 Trust owned the
property and stated that he did not have any contact with the trustee, Puskoor.
Appellants maintain that this evidence demonstrates Kautz must have known the lien
was fraudulent at the time it was filed, the first of the three elements appellants were
required to prove under Question 6. We disagree.
Even though the jury declined to find that a preponderance of the evidence
established Triple PG or Guniganti effectively controlled the 1999 Trust, there is
10
In Question 6, the trial court presents the basic elements contained in Civil Practice and
Remedies Code section 12.002(a). Tex. Civ. Prac. & Rem. Code § 12.002(a); see also Merritt v.
Davis, 331 S.W.3d 857, 860-61 (Tex. App.—Dallas 2011, pet denied) (discussing elements for
fraudulent lien cause of action). Because there was no objection to the charge, we need not address
whether Question 6 was a proper submission.
12
significant evidence of a close, interconnected relationship between Guniganti, Triple
PG, and the 1999 Trust.11 Moreover, it is clear that Kautz dealt exclusively with
Guniganti and other Triple PG representatives, even though the sand processing plant in
question was to be built on property owned by the 1999 Trust. The jury may therefore
have reasonably concluded that the evidence did not show, more likely than not, that
Kautz realized C&S was not in privity with the 1999 Trust and thus that the lien was
fraudulent at the time it was filed. In other words, the evidence supported the
conclusion that because of his dealings with Triple PG and Guniganti and their
apparently close, interconnected relationship with the 1999 Trust, Kautz believed that he
was also dealing with the 1999 Trust and did not realize he could not take a valid
constitutional lien on the trust’s property when he filed for the lien. The jury’s refusal
to find that C&S filed a fraudulent lien was therefore not so contrary to the
overwhelming weight of the evidence so as to be clearly wrong and manifestly unjust.
Cf. Gray v. Entis Mech. Servs., L.L.C., 343 S.W.3d 527, 530-31 (Tex. App.—Houston
[14th Dist.] 2011, no pet.) (reversing summary judgment on fraudulent lien claim based
on existence of fact question for jury); Walker & Assocs. Surveying, Inc. v. Roberts, 306
S.W.3d 839, 850 (Tex. App.—Texarkana 2010, no pet.) (reversing summary judgment
on fraudulent lien claim and remanding for trial on the merits). Consequently, we
overrule appellants’ third issue.
11
For example, Guniganti testified that he set up the 1999 Trust and appointed Puskoor as
trustee. Guniganti further stated that Puskoor lived in Dallas and had asked Guniganti to go to the
property from time to time to look at it because Guniganti lived much closer. Guniganti said that there
was an agreement that the new sand processing plant would have the same arrangement with the 1999
Trust as did Hallett Materials before. He acknowledged that there was no written agreement, just an
oral understanding between him and Puskoor, and that he was “performing services for the Trust,
basically anything that was needed.” Guniganti said that he did not mind doing it because it benefitted
his children. Prathima Guniganti testified that she believed both of her parents had authority to sign
checks on behalf of the 1999 Trust, although Guniganti testified somewhat inconsistently on this point.
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V. Attorney’s Fees
In their fourth issue, appellants point out that in the event the judgment for breach
of contract is reversed, as they requested in their first issue, the award of attorney’s fees
to C&S should also be reversed. They do not raise any other specific complaints
regarding the award of attorney’s fees. Because we overruled appellants’ first issue, we
now overrule their fourth issue.
VI. Conclusion
Having sustained appellants’ second issue, we modify the judgment to state that
no privity of contract existed between C&S and the 1999 Trust at the time the lien was
filed and therefore C&S was not entitled to a lien against the 1999 Trust’s property.
Having overruled the remainder of appellants’ issues, we affirm the judgment as so
modified.
/s/ Martha Hill Jamison
Justice
Panel consists of Chief Justice Frost and Justices Jamison and Busby.
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