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Coastal Resources, Ltd v. Los Lazos Construction and Lease Service

April 24, 2013

COASTAL RESOURCES, LTD., APPELLANT
v.
LOS LAZOS CONSTRUCTION AND LEASE SERVICE, LLC AND COYOTE PAVING & CONSTRUCTION, INC., APPELLEES



From the 49th Judicial District Court, Zapata County, Texas Trial Court No. 6,864 Honorable Jose A. Lopez, Judge Presiding

The opinion of the court was delivered by: Luz Elena D. Chapa, Justice

MEMORANDUM OPINION

Opinion by: Luz Elena D. Chapa, Justice

Sitting: Karen Angelini, Justice Marialyn Barnard, Justice Luz Elena D. Chapa, Justice

AFFIRMED IN PART ON CONDITION OF REMITTITUR; REVERSED AND REMANDED IN PART

Coastal Resources, Ltd. appeals the trial court's judgment awarding damages and attorney's fees to Los Lazos Construction and Lease Service, LLC and Coyote Paving & Construction, Inc. Coastal contends: (1) the trial court erred in allowing Coyote to file an amended pleading on the day of trial asserting a cross-claim against Coastal; (2) Los Lazos's claim was barred by the statute of frauds; and (3) the evidence is legally and factually insufficient to support the jury's award of damages and attorney's fees. We affirm the judgment in favor of Los Lazos on condition of remittitur; however, we reverse the judgment in favor of Coyote and remand Coyote's claim against Coastal for a new trial.

BACKGROUND

Zapata County awarded two road construction contracts to Coastal. One contract involved construction on roads in an area identified as Precinct 3, and the other contract involved construction on roads in an area identified as Precinct 4. Coastal subcontracted with Coyote for work on each of the contracts. After construction on both contracts had commenced, representatives of Coastal and Coyote met with a representative of Los Lazos. Los Lazos had not been involved in the construction under either contract until this meeting. After the meeting, Los Lazos began supplying caliche and providing labor for certain streets included within the construction project. After the project was complete, Los Lazos sued Coastal and Coyote for payment, and Coyote asserted a cross-claim against Coastal for payment for its work. Based on a jury verdict, the trial court entered a judgment in favor of both Los Lazos and Coyote. Coastal appeals.

REINSTATEMENT OF COUNTER-CLAIM

In its first issue, Coastal asserts the trial court erred in granting Coyote leave to file an original cross-claim against Coastal on the day of trial. Coastal's issue, however, misstates the substance of the trial court's ruling.

Los Lazos originally filed its lawsuit against Coyote and Coastal in August of 2008. The first pre-trial guideline order set the cause for trial in August of 2009. In May of 2010, Los Lazos filed a request for a docket control conference because the case was not set for trial at that time. On June 1, 2010, the trial court signed a second pre-trial guideline order, setting the trial for August 16, 2010, with a final pre-trial hearing scheduled for August 3, 2010. The order also required the defendants to file their amended pleadings by July 3, 2010.

On July 8, 2010,*fn1 Coyote filed a third amended original answer and cross-claim, asserting various claims against Coastal, including breach of contract for its failure to pay Coyote for all of the service and work Coyote performed on the construction project. On August 3, 2010, the attorneys for Los Lazos and Coastal appeared before a visiting judge for the final pre-trial hearing. Los Lazos's attorney announced ready and noted that the case had been pending for two years. After Coastal's attorney announced not ready, Los Lazos's attorney explained that the not-ready announcement was based on Coyote's filing of its third amended original answer and cross-claim. Los Lazos's attorney argued the amended pleading should be stricken because it was filed three days late based on the deadlines contained in the pre-trial guideline order. Coastal's attorney then stated:

MR. RAMOS: Assuming the court would allow the pleadings to stand, I have statutory defenses, you might have a statute of limitations defense. We've done all the depositions when they came in, so I needed time to prepare for all that, that's why I'm announcing not ready.

Additionally, when we began the depositions, the deposition of Mr. Ramiro Saldivar the head plaintiff here, when it was my turn to cross-examine, there were some documents that were not available and they were supposed to have been provided for me so that I could then finish my cross-examination. We haven't done that.

Counsel tells me that in fact the documents may have been filed in one of the other depositions, but if [sic] they weren't identified as such, and, therefore, I was unable to finish cross-examining for taking my deposition of the main plaintiff, and, therefore, that's why we're announcing not ready. I would ask for an extension of about 90 days. That's all I need.

Based on the amended pleading being filed after the pre-trial guideline order deadline, the trial court verbally struck the pleading. Coastal's attorney then asked whether the case remained set for August 16, 2010, and the trial court responded that it was. However, Los Lazos's attorney then stated that he had a federal court setting in a criminal case on that date which he believed would take precedence over the trial setting of the underlying case. Los Lazos's attorney further stated, "I guess I can file a motion to continue." The visiting judge stated, "You probably need to file it with Judge Lopez [the presiding judge] and see what he says." A docket sheet entry was made regarding the striking of Coyote's third amended answer and cross-claim, but no written order was signed to document the ruling.

On August 13, 2010, Coyote filed a motion for continuance of the trial setting. The motion stated that the father of Coyote's attorney had been rushed to the emergency room earlier that week and remained hospitalized with a cardiac condition. The record does not reflect the basis for which the trial date was reset; however, the case did not proceed to trial on August 16, 2010.

On August 23, 2010, Los Lazos filed its fourth amended petition adding claims against Ernestina Flores and Joel Gutierrez, who were on Coyote's board of directors. These claims were based on the allegation that Coyote had forfeited its corporate existence, making its directors jointly and severally liable.

On August 31, 2010, the trial court signed a third pre-trial guideline order. This order set the case for trial on November 8, 2010, with a final pre-trial hearing scheduled for November 2, 2010.

On October 14, 2010, Flores and Gutierrez filed their answers and also filed cross-claims against Coastal, asserting the same claims Coyote asserted in its third amended answer and cross-claim. These claims included a breach of contract claim for Coastal's failure to pay Coyote for all of the service and work Coyote performed on the construction project.

On January 3, 2011, Los Lazos filed a request for a jury trial setting. The request noted the November 8, 2010 jury trial setting was removed from the trial calendar based on various other case settings. The trial court then signed an order setting the case for trial on March 28, 2011, with a final pre-trial hearing scheduled for March 3, 2011. At the March 3, 2011 hearing, the trial was again reset to July 18, 2011.

On July 18, 2011, the first day of trial, a Rule 11 agreement, dated July 15, 2011, was filed. The Rule 11 agreement settled the cross-claims Gutierrez and Flores asserted against Coastal. The Rule 11 agreement expressly stated, however, "As discussed, this does not affect the cross-claim filed by Coyote against Coastal or Coastal's filed defenses." In addition to the settlement between Coastal and these individual defendants, Los Lazos also non-suited the individual defendants that it had sued who were Coyote's directors or owners.

Coyote also filed a motion for reconsideration of the visiting judge's verbal order striking its third amended answer and cross-claim. The motion stated Coyote's attorney only discovered the verbal order when he was reviewing the hand-written docket sheet in preparation for trial. The motion asserted that the basis for the verbal order was a deadline in a pre-trial guideline order that was nullified by a resetting of the trial date. Finally, the motion noted that Coyote's cross-claim was the same claim that Gutierrez and Flores also asserted against Coastal.

After the case was called for trial and the judge made his initial remarks to the venire panel, the ...


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