Appeal from the 215th District Court Harris County, Texas
Trial Court Cause No. 2013-69313
consists of Chief Justice Frost and Justices Jewell and
Frances Bourliot Justice.
appeal involves two agreements for the fabrication of pipes
called "spools" used in the oil and gas industry.
Summit Global Contractors, Inc., brought breach of contract
and quantum meruit claims against Enbridge Energy, Limited
Partnership (Enbridge Energy) and Enbridge Gathering (North
Texas) L.P. (Enbridge Gathering). After a bench trial, the
trial court found that the Enbridge parties did not breach
the contracts and concluded that Summit's quantum meruit
claim was precluded by the express contracts. Summit
challenges the sufficiency of the evidence in support of the
trial court's findings and challenges the trial
court's conclusion regarding the quantum meruit claim. We
Enbridge parties began construction of a natural gas
processing plant in Wheeler, Texas. International Alliance
Group (IAG) was hired to solicit bids for the project. IAG in
turn placed Summit on its potential vendor list. IAG sent
Summit a "Pipe Fabrication Inquiry Requisition"
form requesting a bid for "pipe spool fabrication."
The scope of work was to include "all labor, material
(exclud[ing] items furnished by customer), small tools,
consumables, storage, overheads, etc." The requisition
form also required the fabricator to "quote Lump
offered an initial "Lump Sum proposal" including
overtime but also specifying that "[a]ny down time will
be handled on a Time and Material basis." "Extra
Work" was to be billed for materials at cost plus 15%
and labor at $85 per hour. Summit's owner, Rich Miller,
testified that "lump sum" means a "fixed
price" for everything in the scope of the contract,
which includes some overtime. "Time and material"
pricing, on the other hand, is based on the time expended and
the materials used for the job. Miller also specified that
payment terms would be "NET 30" from invoice date,
meaning payment was due within 30 days of invoicing. The
first bid included a price quote from a pipe supplier called
was awarded the job, and a purchase order was issued that
incorporated Summit's bid terms and called for a 20%
advanced payment. Enbridge Energy was identified as the party
to be billed. Enbridge was also required to provide valves
for Summit to use in the spool fabrication. The purchase
order stated, "PRICE(S) ARE FIRM" and "PRICING
AND AVAILABILITY CONFIRMED WITH Rich Miller."
time Summit was awarded the job, however, Wolseley's
price quote-upon which Summit's bid was based-had
expired. Two days after the purchase order was issued, Summit
issued a $10, 847.54 change order request based on an
increase in Wolseley's price. Approximately two weeks
later, Summit submitted another change order request for a
materials price increase from Wolseley of $87, 113.10, which
included the amount of the prior request for $10, 847.54.
representative contacted a representative from Wolseley
regarding the price increase. The Wolseley representative
informed the IAG representative that Wolseley's price
quote included in Summit's bid package had been valid for
only 15 days and Wolseley received the order past its quote
validity date. Following negotiations, Wolseley agreed to
decrease its increased price from $87, 113.10 to $44, 365.53.
The purchase order was revised to reflect the $44, 365.53
price increase. The record does not reflect which Enbridge
entity paid that price increase, but it was paid.
submitted its second "Lump Sum proposal" on June
12, 2012 "to provide labor, material, equipment &
delivery necessary to fabricate Pipe Stools." Payment
terms, again, were to be "NET 30 from invoice
date," and "[a]ny down time [would] be handled on a
Time and Material basis." The proposal included
overtime. A second purchase order was issued, again with
Enbridge Energy identified as the party to be billed. That
purchase order incorporated Summit's terms and again
required a 20% advanced payment. The second purchase order
was issued on June 22, 2012. Summit submitted an invoice for
the advanced payment on the same day. That invoice was paid
on July 13, 2012.
met its first deadline for delivering spools. Summit then
fell behind on meeting its remaining delivery deadlines,
which were extended. According to Summit, one or both
Enbridge parties caused the late deliveries due to delays in
making the second advanced payment, negotiating the price
decrease with Wolseley, and delivering the valves. Summit
contends that it incurred expenses for unexpected overtime
and other overhead due to the delays. Summit submitted change
order requests after the job was completed totaling $390,
088.95 for the purported delays. Representatives from Summit,
the Enbridge parties, and IAG met to discuss the change order
requests. The Enbridge parties and IAG concluded the
requested change orders were not justifiable.
filed an affidavit of lien against Enbridge Energy for $390,
088.95 and filed this lawsuit, bringing claims, in relevant
part, for breach of contract, quantum meruit, and promissory
estoppel. In its petition, Summit alleged that both Enbridge
Energy and Enbridge Gathering were parties to the relevant
purchase orders. Referring to the Enbridge parties
collectively as "Enbridge," Summit alleged that
Enbridge breached the contracts. Summit also asserted quantum
meruit and other alternative liability claims against both
Enbridge parties answered and filed counterclaims in which
they also referred to themselves collectively as
"Enbridge." Although both purchase orders identify
Enbridge Energy as the party to be billed, the Enbridge
parties did not dispute that both defendants were bound by
the purchase orders.
bench trial, the trial court found that (1) as to the first
purchase order, it incorporated Summit's bid terms for a
lump sum contract; the payment terms were net 30, and the
prices were firm; despite this, the price for materials in
Summit's bid had increased; and Summit made its first
delivery on time but made subsequent deliveries late; (2) as
to the second purchase order, it incorporated Summit's
bid terms for a lump sum contract; (3) "Enbridge"
paid Summit the entire amount due under both purchase orders
plus "over $30, 000 that resulted from drawing changes,
material price increases, and the like"; and (4)
Summit's change order requests totaling $390, 088.95 were
"untimely and unsupported." The trial court
concluded that (1) the purchase orders were valid and
enforceable "lump-sum bid contracts"; (2)
"Enbridge" did not breach the contracts; (3) Summit
is not entitled to recover damages for breach of contract or
attorney's fees; and (4) Summit's quasi contract and
promissory estoppel claims are precluded by express contract.
The trial court referred to both Enbridge parties
collectively as "Enbridge" in its findings and
conclusions, as did the parties in their proposed findings
and conclusions. The court signed a take nothing judgment in
favor of the Enbridge parties.
issues, Summit challenges the legal sufficiency of the
evidence in support of the trial court's findings and
rulings on Summit's breach of contract and quantum meruit
claims. We conclude that Summit has not established as a
matter of law that either Enbridge party breached the
purchase orders. We further conclude that Summit's
quantum meruit claim is precluded by express contract.
review a legal sufficiency challenge to court findings using
the same standards applied in reviewing the evidence
supporting jury findings. Catalina v. Blasdel, 881
S.W.2d 295, 297 (Tex. 1994). We review the evidence in the
light most favorable to the challenged findings and indulge
every reasonable inference that would support them. City
of Keller v. Wilson, 168 S.W.3d 802, 822 (Tex. 2005). We
credit favorable evidence if a reasonable factfinder could
and disregard contrary evidence unless a reasonable
factfinder could not. Id. at 827.
sustain a legal sufficiency or "no evidence"
challenge only when (1) the record discloses a complete
absence of evidence of a vital fact; (2) the court is barred
by rules of law or of evidence from giving weight to the only
evidence offered to prove a vital fact; (3) the evidence
offered to prove a vital fact is no more than a mere
scintilla; or (4) the evidence establishes conclusively the
opposite of the vital fact. Marathon Corp. v.
Pitzner, 106 S.W.3d 724, 727 (Tex. 2003); Vast
Constr., LLC v. CTC Contractors, LLC, 526 S.W.3d 709,
719 (Tex. App.-Houston [14th Dist.] 2017, no pet.). A party
attacking the legal sufficiency of an adverse finding on an
issue on which it had the burden of proof must show that the
evidence conclusively establishes all vital facts in support
of the issue. Dow Chem. Co. v. Francis, 46 S.W.3d
237, 241 (Tex. 2001).
apply these standards mindful that the factfinder is the sole
judge of the credibility of the witnesses and the weight to
be given to their testimony. See City of Keller, 168
S.W.3d at 819, 822; 2900 Smith, Ltd. v. Constellation
NewEnergy, Inc., 301 S.W.3d 741, 745 (Tex. App.-Houston
[14th Dist.] 2009, no pet.). When, as here, there is a
complete reporter's record of the trial, the trial
court's findings of fact will not be disturbed on appeal
if there is any evidence of probative force to support them.
See Barrientos v. Nava, 94 S.W.3d 270, 288 (Tex.
App.-Houston [14th Dist.] 2002, no pet.).
appeal from a bench trial, we review a trial court's
conclusions of law de novo and will uphold them if the
judgment can be sustained on any legal theory supported by
the evidence. BMC Software Belgium, N.V. v.
Marchand, 83 S.W.3d 789, 794 (Tex. 2002); Stavinoha
v. Stavinoha, 126 S.W.3d 604, 608 (Tex. App.- Houston
[14th Dist.] 2004, no pet.). We review the legal conclusions
drawn from the facts to determine their correctness. BMC
Software, 83 S.W.3d at 794; Stavinoha, 126
S.W.3d at 608. Incorrect conclusions of law do not require
reversal if the controlling findings of fact support the
judgment under a correct legal theory. BMC Software,
83 S.W.3d at 794; Stavinoha, 126 S.W.3d at 608.
court should make additional findings of fact only if they
have some legal significance to an ultimate issue in the
case. Stuckey Diamonds, Inc. v. Harris Cty. Appraisal
Dist., 93 S.W.3d 212, 213 (Tex. App.-Houston [14th
Dist.] 2002, no pet.); Vickery v. Comm'n for Lawyer
Discipline, 5 S.W.3d 241, 255 (Tex. App.-Houston [14th
Dist.] 1999, pet. denied). Summit asserts that because it
requested additional findings of fact, we cannot presume the
trial court relied upon proper legal principles or factual
findings to support the challenged findings or conclusions.
That is incorrect because Summit requested additional
findings that are inconsistent with the trial court's
judgment. This court noted long ago that "[t]he primary
purpose for findings of fact is to assist the losing party in
narrowing his issues on appeal by ascertaining the true basis
for the trial court's decision." Vickery, 5
S.W.3d at 255. When a party requests findings contrary to the
judgment, as Summit did, the court's failure to make such
findings is consistent with its judgment. See
Vickery, 5 S.W.3d at 256. The presumption of validity is
not rebutted by the court's failure to make findings
contrary to its judgment. Id. With these standards
in mind, we turn to Summit's issues presented on appeal.
Summit did not conclusively establish that it suffered
damages because of Enbridge Energy's purported
three issues, Summit contends that Enbridge Energy's
purported delays in making advanced payments, negotiating
with Wolseley, and providing valves constituted breach of the
purchase order agreements and Summit incurred damages because
of Enbridge Energy's delays. We conclude that Summit
has not shown as a matter of law that it suffered damages
because of any delay by Enbridge Energy.
Contract Interpretation Principles
argument is based in part on its interpretation of the
parties' agreements. Thus, we refer to the general
principles concerning contract interpretation. See Port
of Houston Auth. of Harris Cty. v. Zachry Constr. Corp.,
513 S.W.3d 543, 551 (Tex. App.-Houston [14th Dist.] 2016,
construing a contract, we look to the language of the
parties' agreement. Barrow-Shaver Res. Co. v. Carrizo
Oil & Gas, Inc., No. 17-0332, 2019 WL 2668317, at *5
(Tex. June 28, 2019). We construe contracts de novo.
Id. We give effect to the parties' agreement as
expressed in the instrument. Id. We give the
contract its plain, grammatical meaning unless it "would
clearly defeat the parties' intentions."
Id. If we determine that the contract's language
is unambiguous-in other words, it can be given a certain or
definite legal meaning or interpretation- we construe it as a
matter of law. Id.
parties contend that the agreements are unambiguous, but they
disagree on the interpretation. Summit argues that Enbridge
Energy was required to make 20% advanced payments at the time
the purchase orders were issued. The Enbridge parties argue
these payments instead were due within 30 days after
invoicing.Summit also argues that it incurred
overhead for work outside the scope of the agreements caused
by Enbridge Energy's delays. The Enbridge parties argue
that any overhead incurred by Summit was included in the
parties' "lump sum" agreements.
asserts that we can look outside the four corners of the
parties' agreements to interpret the parties'
intentions. The supreme court recently reiterated that our
primary duty in construing an unambiguous contract is to
ascertain the intent of the parties from the language within
the four corners of the instrument. U.S. Shale Energy II,
LLC v. Laborde Props., L.P., 551 S.W.3d 148, 151 (Tex.
2018). However, we consider the words used "in light of
the facts and circumstances" surrounding the execution
of the agreement. Id. We may consider these
circumstances only when they inform but not when they
contradict the instrument. Id.
further contends that we can look to the bid proposals to
support our interpretation of the purchase orders. We agree
that we can consider the bid proposals because they are part
of the parties' agreements. Texas's version of the
Uniform Commercial Code applies to the sale of goods.
See Tex. Bus. & Com. Code § 2.102. When a
contract contains a mix of sales and services, the UCC
applies if the sale of goods is the "dominant
factor" or "essence" of the transaction.
Cont'l Casing Corp. v. Siderca Corp., 38 S.W.3d
782, 787 (Tex. App.-Houston [14th Dist.] 2001, no pet.). The
spools are without question goods as defined by the UCC. Tex.
Bus. & Com. Code § 2.105. The UCC states that a
"contract to sell" applies to not only a present
sale of goods but also an agreement to sell goods at a future
time. Id. § 2.106(a)-(b).
purchase orders contemplate the sale of "Goods, and the
services related thereto." Although Summit agreed to
fabricate the spools, Enbridge ultimately contracted for a
finished product. We conclude that the future sale of spools
to Enbridge was the dominant factor of the transaction.