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Guillermo Garza D/B/A Wilhome Builders v. Jesse Cantu

April 11, 2013

GUILLERMO GARZA D/B/A WILHOME BUILDERS & CONSTRUCTION,
APPELLANT
v.
JESSE CANTU, APPELLEE



On Appeal from the 164th District Court Harris County, Texas Trial Court Cause No. 2007-36738

The opinion of the court was delivered by: J. Brett Busby Justice

In The Fourteenth Court of Appeals

OPINION

Guillermo Garza, doing business as Wilhome Builders and Construction, ("the builder") sued Jesse Cantu ("the buyer") for breach of a construction contract. After the jury returned a verdict for the builder, the buyer moved for judgment notwithstanding the verdict (JNOV), arguing that the jury's damages calculations lacked evidentiary support. The trial court granted the motion. We conclude that, although the damage amounts found by the jury are not supported by legally sufficient evidence, the builder nonetheless introduced evidence of some amount of damages. We therefore reverse the trial court's JNOV and remand for a new trial.

BACKGROUND

The events giving rise to this case are not complicated. The parties agreed in writing that the builder would construct a duplex home for the buyer. When the project was nearly finished, the builder informed the buyer of cost overruns that significantly exceeded the project's estimated price. The buyer refused to pay for these overages or to authorize a final payment of the outstanding portion of the estimated price. The builder sued the buyer, and the jury rendered a verdict in favor of the builder.

The issues before us relate primarily to the jury's findings of damages, so we explain the terms of the parties' written contract and the figures at issue in some detail. The parties agreed that the home's price would be "based on cost plus" a 15% "Builder[']s Consulting Fee." In so-called cost-plus contracts like this one, "the contractor is to be reimbursed for costs of materials and labor by the owner and is to receive a stated percentage of such costs as his profit." Burditt v. Sisk, 710 S.W.2d 114, 118 (Tex. App.-Corpus Christi 1986, no writ) (internal quotation marks omitted). Here, the contract's relevant language is as follows:*fn1

Total price of house, including current changes and additions, is as follows

BASED ON COST PLUS

Builders Consulting Fee 15% $31,877.82

Builders Sale Price $244,396.65 Sale Price Per Square Foot $61 Estimates for this job cost are based on and not limited to what the Buyer may choose for his or her customization on this project.

The buyer obtained a loan for the $244,396.65 sale price, which represented a total estimated construction cost of $212,518.83, plus a 15% builder's fee of $31,877.82. As the builder completed certain portions of the work on the project, he requested payment from the buyer's lender. The lender would inspect the completed work and release a portion of the authorized funds commensurate with the work accomplished. In this way, the builder received $219,945.75 of the $244,396.65 estimated sale price. Only $24,450.90 of the sale price remained to be paid.

As the time for this remaining payment approached, the builder informed the buyer that the project was $55,713.40 over budget. The builder would later testify that these overages resulted from the buyer's selection of materials and from delays early in construction. The overages made the project's total cost $268,232.23 instead of the $212,518.83 estimate; this change increased the builder's 15% fee by $8,357.01.

The buyer balked at paying the overages, so the builder stopped work and filed a mechanic's lien. Although the home passed the lender's final inspection, the buyer refused to release the final payment of the estimated sale price to the builder. The builder sued the buyer for $88,521.31: the total cost of construction (including overages) plus his 15% fee less the amount already paid.

At trial, the parties contested the amount of work remaining when the builder left the project. The buyer argued that considerable work remained and that the builder breached the contract by leaving this work unfinished. The builder testified that "[a] couple punch-out items" remained.

The jury found that the buyer breached the contract and that the builder did not. The jury was also asked to find two "elements" of the builder's damages, which we discuss in detail in our analysis below. Each element was submitted to the jury without objection, and each required the jury to determine (among other things) the cost to complete the remaining work.

For the first damages element, called "Loss of Contractual profit," the jury awarded $24,450.90-the unpaid portion of the estimated sale price. For the second element, called "Loss of Contractual Profit Plus Expenses Incurred Before Breach," the jury awarded $55,713.40-the amount that the project went over budget. The jury did not award the builder his 15% fee for the overages, so the total jury award was $8,357.01 less than the builder sought.

The buyer moved for JNOV, arguing in part that the jury's damages findings were unsupported by the record. The buyer contended, among other things, that the record contained no evidence of the cost to complete the remaining work. Because the jury was told to use this cost in calculating each element of damages, the buyer argued that the jury's findings lacked evidentiary support. The trial court granted the buyer's JNOV motion and rendered a take-nothing judgment. The builder appealed.

ANALYSIS

I.Standard of ...


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