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Smith v. Bitner

Court of Appeals of Texas, First District

July 9, 2019

DEAN SMITH, Appellant

          On Appeal from the County Civil Court at Law No. 1 Harris County, Texas Trial Court Case No. 1087120

          Panel consists of Chief Justice Radack and Justices Higley and Hightower.


          Richard Hightower Justice.

         Appellee Lyle Bitner sued appellant Dean Smith for breach of contract. The case proceeded to a bench trial, but the trial court, acting sua sponte, rendered judgment against Smith before he was able to present any evidence or legal arguments in his defense. Because we conclude that the trial court's premature pronouncement of the judgment against Smith violated Smith's due process rights, we reverse the judgment and remand this case for further proceedings.


         Bitner Enterprises was formed on April 18, 2008, but it forfeited its status and became inactive on February 10, 2012. On September 8, 2015, Bitner and Smith entered into a contract providing for Bitner to make certain repairs to Smith's home. The document was written on letterhead that stated, "Bitner Enterprises, LLC," at the top despite Bitner Enterprises, LLC's forfeiture of its corporate status more than three years before the parties' agreement. The agreement was signed by both Bitner and Smith individually and set out the details for repairs to Smith's portico, estimating the cost, including labor, materials, and other expenses, to be $28, 000. Smith made payments to Bitner totaling $7, 500, and Bitner completed part of the work before their relationship broke down. The parties provide differing accounts of the reason for Bitner leaving the work unfinished, and they disagree about the nature and extent of the work provided by Bitner and the amount that is still due under the contract.

         Bitner sued Smith for breach of contract, alleging that he had performed the agreed-upon work, but Smith "failed and refused to pay" under the contract and, therefore, Smith owed him $20, 500 plus interest and attorney's fees. Smith filed a general denial, and he also pled several verified denials, asserting, in relevant part, that Bitner was not entitled to recover in the capacity in which he sued; that the amount due claimed by Bitner was not just and true; and that conditions precedent had not been performed as required. Specifically, Smith denied that Bitner "ha[d] completely performed or provided the goods and services alleged." Smith also asserted counterclaims for violations of the Deceptive Trade Practices Act and the Debt Collection Act.

         On February 6, 2018, the trial court held a pretrial hearing to address some of the issues raised by Smith, such as his special exceptions challenging the capacity in which Bitner had sued. The trial court signed an order stating, "After considering argument and evidence, the Court FINDS that [Bitner] is suing in his personal capacity despite the contract being on corporate letterhead, and, the Court therefore DENIES [Smith's] Special Exceptions and Motion to Abate."

         Immediately after the hearing on the special exceptions, the case proceeded to a bench trial. Bitner testified that he entered into the agreement with Smith to repair eight columns in the portico of Smith's residence for $28, 000. He testified that he and Smith had initially agreed that Smith would make a payment of $2, 500 every two weeks as the work progressed. Smith did not make all of these payments; instead, he paid only $7, 500. Bitner testified that he kept working because Smith promised he would pay "as soon as I got [the columns] jacked back down and got all the scaffolding moved off where the homeowners' association wouldn't be on them." But once that was done, Smith told Bitner "he didn't need me no more, he would get somebody else to finish the job." In addition to his testimony, Bitner provided photographs demonstrating the progress of the work he had completed for Smith, and he further testified that he had completed approximately 80% of the contracted-for work before Smith decided to hire someone else. Bitner also introduced a copy of the check Smith wrote for one of the payments. The check was for $1, 000, made payable to Lyle Bitner. Ultimately, Bitner asked the trial court for 80% of the total contract price, or $22, 400, minus the $7, 500 already paid.

         Bitner acknowledged that "Bitner Enterprises, LLC," appeared at the top of the parties' agreement, and he testified that "Bitner Enterprises, LLC," was his company "at one time." He stated that he "quit doing the LLC in [2012]," and he stated that he had also done business under "Bitner Enterprises, a d/b/a."

         Smith's counsel asked Bitner a series of questions regarding his business arrangements, the formation of the LLC, and whether Bitner believed that he personally and the LLC were, in fact, a single entity. Bitner's counsel objected, arguing that the trial court had already rejected counsel's arguments regarding Bitner's capacity to sue. Smith also introduced into evidence copies of the petition and amended petition that Bitner had filed in another court, attempting to recover the same debt as "Bitner Enterprises, LLC."

         Smith's counsel cross-examined Bitner, asking whether he was fired from the job. Bitner answered, "After not getting paid I was, yeah." Smith's attorney asked Bitner questions regarding an apparent discrepancy between the amount sought in his demand for payment-the full $20, 500 still allegedly owing under the contract-and what he sought at trial-$14, 900, or 80% of the contract minus the amounts already paid.

         The trial court expressed frustration with the length of the proceedings, as it had done on several previous occasions:

[trial court]: What do I have to do to get y'all to hurry up?
[Smith's counsel]: Dismiss the case, Your Honor. I mean, you asked what we would want, so-and otherwise, I have to ask the questions that establish whether or not he is entitled to the money that he's asked for and whether or not he ...

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