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AKIB Construction Inc. v. Shipwash

Court of Appeals of Texas, First District

August 1, 2019


          On Appeal from the County Civil Court at Law No. 4 Harris County, Texas Trial Court Case No. 1074738

          Panel consists of Justices Keyes, Higley, and Landau.



         In this case, appellee David Shipwash sued appellant AKIB Construction, Inc. for breach of contract, arising out of an agreement for AKIB to facilitate the dismantling, moving, and reassembly of a steel building. AKIB filed a counterclaim for breach of contract. After a bench trial, the trial court rendered judgment in favor of Shipwash, finding that AKIB breached the parties' contract and awarding Shipwash $30, 424.50 in damages, plus pre- and postjudgment interest, attorney's fees, and court costs.

         In three issues, AKIB contends that the trial court erred in rendering judgment in favor of Shipwash because: (1) Shipwash did not present expert testimony, which was necessary to support his contention that AKIB breached the contract by failing to properly dismantle the building; (2) factually insufficient evidence supports the trial court's finding that AKIB's method of dismantling the building damaged the metal, constituting a breach of contract; and (3) the damages awarded to Shipwash are not supported by Shipwash's pleadings, as Shipwash only pleaded for general "out of pocket" damages, but did not specifically plead for the recovery of special reliance damages.

         We affirm.


         David Shipwash owns a company in Deer Park, Texas, that handles hazardous materials. In early 2015, he was looking to expand his business and build a new building when he met Manzoor Memon, president of AKIB Construction, and was impressed by the steel work in a building Memon owned. Memon showed Shipwash a steel building in Dickinson, which was owned by the Dickinson Independent School District and was about to be taken down, and Memon and Shipwash discussed dismantling the building and reassembling it on Shipwash's property. Shipwash acknowledged that the sheet metal on the outside of the building was in a state of disrepair, but he had plans to "cut the bottom [of the sheet metal] off, put brick on it, stone on it." He stated that the "red irons," or the steel beams that formed the structure of the building and were bolted together, and the "purlins," which attached the sheet metal to the red irons, were in good shape. Memon offered to facilitate purchasing the building, dismantling it, and moving it to Shipwash's property, where the parties would "repair the metal that we could and utilize it to rebuild another building."

         On February 23, 2015, Memon, on behalf of AKIB, and Shipwash entered into a contract to facilitate the purchase, dismantling, removal, storage, and eventual reassembly of the building. The contract included the following provisions:

1. [AKIB will w]ork as Facilitator to purchase Steel building located at [an address in Dickinson.]
2. The total price of the steel building will be $40, 000 which will include all steel sheet metal fixtures[, ] fittings[, ] doors[, and] windows of the property located at [the Dickinson address].
3. Joe's Construction and Erection will be responsible for removing, transportation of all the items given above at storage facility located at [an address in La Porte, Texas]. An additional $5000 will be paid to Joe's Construction and Erection for this phase of the job.
4. [AKIB] Construction Inc. will be responsible to make foundation drawings based on the steel structure for future use of the steel building. [AKIB] Construction shall be paid additional $2000 for developing these drawings.
5. The payments will be made as follows: $14000.00 upon signing the contract, $2000 upon completion of drawings, $14500 upon first delivery of steel and $14500 on second delivery, $2000 upon completing of delivery of all the steel and sheet metal.
6. Joe's Construction and Erection will be given the job to erect this steel and sheet metal[] walls at new location as soon as new land is acquired for $3.50 per sq. ft. of the building. All other additional work like concrete [s]and blasting and painting of steel will be billed separately.
7. [AKIB] Construction Inc. shall supervise the job and complete the job including assistance in getting the occupancy permit for the new warehouse at future location per the conditions given below.

         Thus, the parties agreed that AKIB would facilitate the purchase of the building for $40, 000, and it would oversee the dismantling and reconstruction of the building, which would be performed by Joe's Construction. Because the building was to be reassembled on Shipwash's property, AKIB was also to provide Shipwash with a drawing of the building, "a footprint," so the parties could reconstruct the building on Shipwash's property in the same manner in which it had been constructed on the Dickinson Independent School District property.

         The contract also included the following schedule of fees and payments owed to AKIB:

1. $5000 in advance payment before commencing construction phase of the project. All other payments will be done as per progress of the work.
2. [AKIB] Construction Inc. will charge 25% of the total construction cost of the project as management fees for all the construction services provided as given above. All other work will be billed at a rate of $50 per hour based on the scope of the work performed.
3. [AKIB] Construction shall provide owner [Shipwash] bimonthly cost analysis of the project on excel sheet or as required to make a bank draw if required. [AKIB] will bill the fees based on the work done and owner/Bank shall reimburse [AKIB] within seven working days of the billing.
4. Owner will pay for all the materials, equipment rental, permits, insurance and labor contracts directly to the sub-contractors. [AKIB C]onstruction will negotiate the contract prices[;] however[, ] owner shall have the right to award contracts to contractors they choose but the fee schedule shall remain the same.
5. [AKIB] shall be paid its total fees for the complete project even if owner decides to change the general contractor to complete the project. In case of termination of this contract by the owners [AKIB] shall be paid the fees based on the total cost incurred by the owners to complete the job.

         In March 2016, Shipwash filed suit against AKIB for breach of contract, alleging that AKIB "failed to properly deconstruct the building and failed to deliver any of the building to [Shipwash's] storage facility." Shipwash sought the recovery of "[a]ctual or economic damages for out of pocket damages."

         AKIB answered and asserted affirmative defenses, including impossibility of performance, frustration of purpose, anticipatory repudiation, failure to satisfy a condition precedent, and offset. AKIB later amended its answer and asserted counterclaims against Shipwash for breach of contract and promissory estoppel. AKIB alleged that it fulfilled its obligations under the contract by "securing, paying for, dismantling, storing, transporting, and delivering the steel building" to Shipwash, but Shipwash refused to accept delivery of the building and did not pay AKIB the amounts agreed to in the contract.

         At a bench trial, the trial court asked Shipwash several questions about how the steel building was constructed and how it should be taken down, such as whether the workers needed to "un-weld" the red irons that formed the frame of the building. Shipwash testified that the red irons were bolted together with large, one-inch bolts and that the red irons were heavy, requiring a crane to move them. He also testified that if the building was not taken down properly, and pieces were allowed to fall to the ground, the metal could bend at the ends and workers would be unable to reassemble the building because the various pieces would no longer match up properly. He characterized the dismantling of the building as "not a simple process."

         Shipwash testified that he paid AKIB $14, 000 upon signing the contract, and AKIB started on the project. Shipwash kept one of his own workers at the jobsite so he could monitor and oversee what was occurring. Although the contract required AKIB to complete blueprint drawings of the building so it could be reassembled in the same configuration on Shipwash's property, by the time the workers had taken the sheet metal down and were ready to start taking the red irons down, AKIB had not given any drawings to Shipwash. Shipwash ended up hiring another person to complete the drawings for $2, 500.

         During Shipwash's testimony, the trial court admitted a video recording of the building being dismantled, as well as multiple pictures depicting the sheet metal after it had been removed and the red irons.[1] Shipwash testified that, during the dismantling process, the workers bent the sheet metal that had formed the outside walls of the building. Some pieces of sheet metal were rusted along the bottom. Shipwash testified that that was not necessarily a problem because the rusted parts could be cut off and the remainder of the piece used, but he stated that "when the whole rest of [the sheet metal piece] is all bent up, there's no need to cut the bottom off" because the entire piece cannot be used. Several of the pictures depicted sheet metal and retractable garage-type doors from the building lying in disorganized piles, and Shipwash testified that "whoever took this down had no intention of anybody ever putting this back up." He stated, "[I]f somebody was to take this down in a manner so they could reuse it, this would all be single sheets [of sheet metal] or a stack of single sheets over to the side. We're just showing that there's multiple piles of sheet metal laying all over the property."

         The trial court also admitted pictures of the red irons from the building. One of the pictures depicted a red iron that had been cemented in a concrete block and parts of the concrete had been broken off. Shipwash testified that, with repairs, this red iron could have been used again. He stated, "We expected stuff like this" and explained that the red iron could "be sandblasted and a new plate welded on it." Some of the red irons had ends that were rusted with portions broken off, and Shipwash testified that the ends of these beams would need to be cut off, and even then, because they had been shortened, the beams could not be used in the reassembly of the building. Instead, these particular beams could only be used to construct a separate structure, such as a lean-to.

         Shipwash testified that AKIB never delivered any part of the disassembled building. He stated that when he saw the video of the dismantling, he spoke with his son Matt, who had been having routine conversations with Memon during the dismantling process, and told him to offer AKIB a "salvage price" for the metal. He stated that he did not get anything of value from his contract with AKIB.

         Shipwash also testified concerning the costs he had expended in connection with this project. He paid an initial $14, 000 to AKIB prior to the dismantling pursuant to the contract. He paid $2, 500 to a third party to complete the blueprints of the building. Shipwash had also prepared space on his property for the building to be reassembled, including clearing the land, laying gravel and sand, leveling the land, and laying crushed asphalt. He paid $500 to put material on top of the clay soil, $3, 274.50 for a sand and rocks mix to put on the site, $2, 650 for the leveling of this material, and $7, 500 to place crushed asphalt on the site. AKIB did not object to any of this testimony.[2]

         Matt Shipwash, David Shipwash's son, was also involved with the project, acting as an observer during the dismantling. Matt disagreed that the building was dismantled, instead stating that "it was demolished." He testified that the primary problem with the way this building was taken down was that the workers, instead of removing the bolts with a wrench, used an oxygen acetylene torch to blow the bolts out of their placements, which caused oversized holes in the metal where the bolts used to be. When asked if, after removing bolts in this way, the metal would be reusable, Matt testified, "I couldn't say if it was reusable. You would have to convince an engineer somewhere that it was reusable." He stated that the metal needed to have structural integrity and needed to withstand up to 150 miles-per-hour wind and that the way a building is bolted or welded together affects the structural integrity and "you change that once you blow holes" in the metal. He also testified that because pieces of the building were allowed to fall to the ground, "all of the ends of the metal were bent" and the bent ends could not be re-used.

         Matt testified that he sent a text message to Memon, informing him that "the condition of the metal was unacceptable, that I felt like that he did not take care of the metal in any way, shape or form and that it was not acceptable to us." Matt then met Memon at the jobsite, and they looked at "the red irons that had holes blown through [them]" and "the sheet metal that had been wadded up in a ball." Memon stated "that it wasn't that bad," but Matt informed him that the metal "was not usable for its intended purposes" and that it had value only as scrap.

         Johnny Rivera, a field service supervisor for a company owned by Shipwash, testified that he was often present at the jobsite during the dismantling, and one of his duties was to mark each piece that was dismantled so, when it came time to reassemble the building, the workers would know which piece went where. He stated that, at first, the dismantling process went well, but as the project continued, he felt that the workers started "rush[ing] along" and "tearing [the building] down." He was not present at the jobsite at the time the video recording was taken, but he was present after, and he noticed a lot of damage to the purlins, the structure, and the "cross members," including bent ends for "a good portion of them." He stated that he saw the workers unbolting pieces of the building in the early stages of the dismantling, but as time went by, the workers started using a torch to blow the bolts out of their holes.[3] Rivera testified that he did not consider the metal removed from the building to be reusable; instead, he considered it to be scrap.

         Memon testified that he was present at the jobsite every day supervising the workers from Joe's Construction, who were actually dismantling the building. He stated that there was no damage to the main columns of the building. He was not present at the time the video recording was taken. He disagreed that the building was dismantled in an improper way stating, "When I see the video I see that all the purlins were secured. They were trying to remove it. Something happened. It fell down." Memon also disagreed that the red irons of the building were destroyed during the dismantling process. He also stated that, despite falling to the ground, the purlins were not damaged, and even if they had been, they cost around $20 to $25 each and could have easily been replaced. He further stated that the building was sixty years old, that wear and tear would be "natural" for a building that age, and that Shipwash, who viewed the building at least three times before signing the contract, knew the building was old and had rusted in places but agreed to the contract anyway.

         With respect to the blueprint of the building, Memon testified that he hired a third party designer to prepare the drawings, but Shipwash informed him that he had already had another company prepare the drawings, so Memon terminated the contract he had with his designer. Memon testified that he told Shipwash that, if Shipwash had had another party complete the drawings, Memon would not charge Shipwash the $2, 000 required under the contract for the drawings. Memon also testified that one load of steel was delivered to Shipwash after the dismantling, but Shipwash "refused to take the building" and sent the steel back to the jobsite, and the job was not completed because Shipwash fired AKIB.[4] He testified that, under the contract, Shipwash was supposed to pay AKIB $14, 500 upon the first delivery of steel, but AKIB did not receive these funds because Shipwash refused to take delivery of the steel.

         Memon testified that he received a text message from Matt Shipwash, on behalf of David Shipwash, on May 28, 2015, that stated:

I am not pleased with the outcome of the [Dickinson] building. I don't see how this deal has gone as planned in any way. At this point in time the delays, the fact that the building was TORN down (leaving the metal in unusable condition) and the overall general lack of care for the integrity for the metal has left me with no choice but to negate our deal. I feel that nothing we spoke of has been correct, and we are too far away on value on the ...

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