Opinion
No. 05-08-01149-CV
Opinion issued March 16, 2010.
On Appeal from the 366th Judicial District Court, Collin County, Texas, Trial Court Cause No. 366-3613-06.
Before Justices MOSELEY, RICHTER, and FRANCIS.
MEMORANDUM OPINION
In this contract dispute, Arch and Sherry Bonnema appeal the trial court's judgment, rendered after disregarding jury findings in their favor, awarding Builders Carpet Design Center, Inc. damages and attorney's fees. For the reasons set out below, we reverse the trial court's judgment and render judgment that Builders Carpet take nothing on it claims against the Bonnemas. Further, because there is some evidence in the record to support the jury's unjust enrichment findings against Builders Carpet, we render judgment that the Bonnemas recover $2,239.14 from Builders Carpet.
The Bonnemas built a new house in McKinney, Texas, with Sterling Design as the original contractor. Builders Carpet agreed to install and seal the floors and submitted its invoices to Sterling Design, which then paid the invoices. After the floors were installed, Sterling Design quit the job and the Bonnemas took over the construction of their house.
A dispute arose between the Bonnemas and Builders Carpet. The Bonnemas claimed Builders Carpet had charged them for more tile than had been installed and had not sealed the floors. The Bonnemas hired someone else to seal the floors and then sought reimbursement from Builders Carpet. Ultimately, the Bonnemas sued Builders Carpet for breach of contract and unjust enrichment. Builders denied the claims and countersued for breach of contract and quantum meruit, contending the Bonnemas had failed to pay for $10,225 in black galaxy tile flooring.
During the two-day trial, the jury heard conflicting evidence over whether Builders Carpet had actually sealed the floors, but Builders Carpet admitted it had mistakenly overcharged the Bonnemas. The parties also disputed whether the flooring contract was with the Bonnemas or with Sterling Design; the Bonnemas asserted they had an agreement with Builders Carpet while Builders Carpet maintained the agreement was with Sterling Design.
The jury found that the Bonnemas and Builders Carpet had an agreement and that Builders Carpet had not breached the agreement but had been unjustly enriched and awarded the Bonnemas $2,239.41 in damages. As for Builders Carpet's counterclaim, the jury found the Bonnemas breached the agreement but awarded zero contract damages. In addition, the jury affirmatively answered a question on quantum meruit, although it was conditioned on a "no" finding as to whether the parties had an agreement; the jury awarded $10,225 in quantum meruit damages to Builders Carpet.
Builders Carpet moved for partial judgment notwithstanding the verdict, arguing that the evidence conclusively showed the Bonnemas owed them $10,225 for breach of contract or, alternatively, as quantum meruit damages. Further, Builders Carpet asserted the Bonnemas were precluded as a matter of law from recovering under an unjust enrichment theory. The trial court apparently agreed and, in its judgment, awarded Builders Carpet $10,225 in contract damages or, alternatively quantum meruit damages, and attorney's fees, but made no award to the Bonnemas on the unjust enrichment claim. The Bonnemas appealed.
In their first issue, the Bonnemas contend the trial court erred in granting JNOV on the jury's finding of zero contract damages and awarding contract damages.
A trial court may disregard a jury's verdict and render judgment notwithstanding the verdict only if no evidence supports the jury's finding. See Bullard v. Lynde, 292 S.W.3d 142, 144 (Tex. App.-Dallas 2009, no pet.). We review the evidence in the light most favorable to the jury's verdict under well-established standards that govern a "no-evidence" or legal sufficiency review. City of Keller v. Wilson, 168 S.W.3d 802, 823 (Tex. 2005). The jury's findings must not be disturbed if more than a scintilla of evidence supports them. See Int'l Armament Corp. v. King, 686 S.W.2d 595, 597 (Tex. 1985). More than a scintilla of evidence exists if the evidence furnishes some reasonable basis for differing conclusions by reasonable minds about the existence of a vital fact. Rocor Int'l, Inc. v. Nat'l Union Fire Ins. Co., 77 S.W.3d 253, 262 (Tex. 2002).
In response to Question 1, the jury found the Bonnemas and Builders Carpet entered into an agreement for Builders Carpet to provide and install flooring in the Bonnemas' home. In Question 12, the jury found the Bonnemas failed to pay Builders Carpet for the flooring it installed and sealed. Question 14 asked the jury to determine Builders Carpet's damages that resulted from the failure to reimburse for the flooring it installed and sealed. Damages were defined as loss of benefit of the bargain, i.e. "[t]he difference, if any between the value of [sic] agreed to by the parties and the value received by Builders Carpet Design Center, Inc. for installing and sealing the flooring." The jury answered "$0."
Evidence at trial included the affidavit of Jordan Goodwyn. Goodwyn is the son of the owner of Builders Carpet and was the sales representative who handled the transaction with the Bonnemas. In his affidavit, Goodwyn testified Builders Carpet had an agreement with Sterling Design to install and seal the floors in the Bonnemas' house; the contract was based on a proposal Goodwyn prepared and submitted to Sterling Design. Goodwyn testified that Builders Carpet "complied with its contractual obligations and invoiced Sterling Design for the goods and services it provided at [the Bonnemas' house]." Further, Goodwyn attested that "Sterling Design paid Builders Carpet for these goods and services." Attached to Goodwyn's affidavit were (1) Goodwyn's proposal, which included the black galaxy tile; (2) invoices that included the black galaxy tile; and (3) copies of two checks from Sterling Design, one of which included a payment for the black galaxy tile. More than a scintilla of evidence exists to support the jury's finding of zero contract damages. Although Goodwyn contradicted his affidavit in testimony at trial, reasonable and fair-minded people could disregard that evidence. We sustain the Bonnemas' first issue. Our resolution of this issue makes it unnecessary to address the Bonnemas' fifth issue.
In their second issue, the Bonnemas contend the trial court erred in granting judgment and awarding damages on Builders Carpet's quantum meruit claim because (1) the jury found a contract existed between the parties and (2) the answers to the quantum merit questions were conditioned on finding no contract existed. We agree.
Question 15 asked jurors if Builders Carpet performed compensable work for the Bonnemas. Jurors were instructed to answer the question if they answered "no" to Question 1; otherwise, they were instructed not to answer the question. The jury answered "yes" to Question 1, finding the parties had an agreement, but despite the instruction, went on to answer Question 15 and then answered the corresponding damage question.
Initially, we note that a jury's answers to conditionally submitted issues should be disregarded as mere voluntary findings when the requisites of the conditional submission were not met or fulfilled. Am. Recreational Mkts. Gen. Ag., Inc. v. Hawkins, 846 S.W.2d 476, 478 (Tex. App.-Houston [14th Dist.] 1993, no pet.). Here, the quantum meruit questions were conditioned on a "no" answer to whether the parties had an agreement. The jury answered "yes" to that question. Consequently, the condition in Question 15 was not met, and the trial court should have disregarded the jury's answers to Questions 15 and 16. Moreover, recovery under the theory of quantum meruit is prohibited if an express contract covers the services or materials for which the claimant seeks recovery. Gentry v. Squires Constr., Inc., 188 S.W.3d 396, 402-03 (Tex. App.-Dallas 2006, no pet.). Here, the jury found the parties had an agreement that covered the services and materials in this case. In its responsive brief, Builders Carpet asserts that Truly v. Austin, 744 S.W.2d 934, 937 (Tex. 1988), provides for an exception that allows "a breaching plaintiff to recover in quantum meruit" in building or construction contracts. Here, however, the jury found Builders Carpet did not breach the contract; consequently, the exception does not apply. Because Builders Carpet cannot recover under a quantum meruit theory as a matter of law, the jury's answers to those questions were immaterial and should have been disregarded. See Spencer v. Eagle Star Ins. Co. of Am., 876 S.W.2d 154, 157 (Tex. 1994) ("A question is immaterial when it should not have been submitted, or when it was properly submitted but has been rendered immaterial by other findings."); Basic Cap. Mgmt. v. Dynex Comm'l, Inc., 254 S.W.3d 508, 513 (Tex. App.-Dallas 2008, pet. granted) (same). We sustain the second issue.
In their sixth issue, the Bonnemas contend the trial court erred in awarding Builders Carpet attorney's fees. Having concluded the trial court erred in rendering judgment in the amount of $10,225 on Builders Carpet's counterclaim for breach of contract claim, or alternatively, for quantum meruit, we likewise reverse the attorney's fee award in favor of Builders Carpet.
Turning to the Bonnemas' affirmative claim, in their third issue, they contend the trial court erred in granting Builders Carpet's JNOV on the unjust enrichment claim. In its motion for partial JNOV, Builder's Carpet asserted that because the jury found a contract existed, the Bonnemas were not entitled to receive unjust enrichment as a matter of law.
Generally speaking, when a valid, express contract covers the subject matter of the parties' dispute, there can be no recovery under a quasi-contract theory, such as unjust enrichment. Fortune Prod. Co. v. Conoco, Inc., 52 S.W.3d 671, 684 (Tex. 2000); DeClaire v. G B Mcintosh Family Ltd. P'ship, 260 S.W.3d 34, 49 (Tex. App.-Houston [1st Dist.] 2008, no pet.). This is because parties should be bound by their express agreements, and when a valid agreement already addresses the matter, recovery under an equitable theory is generally inconsistent with the express terms of the agreement. Conoco, 52 S.W.3d at 684; see also Edwards v. Mid-Continent Office Distribs., L.P., 252 S.W.3d 833, 837 (Tex. App.-Dallas 2008, pet. denied) ("The doctrine of unjust enrichment applies the principles of restitution to disputes that are not governed by a contract between the parties."). The Texas Supreme Court, however, has recognized an exception to this rule when overpayment was made under a valid contract. Sw. Elec. Power Co. v. Burlington N. R.R. Co., 966 S.W.2d 467, 469-70 (Tex. 1998).
Here, the jury found Builder's Carpet had been unjustly enriched by retaining proceeds paid for the work it was to perform at the Bonnema's house. In arriving at an amount, the jury was instructed to consider only the following elements: (1) the reasonable and necessary cost to perform the work on the Bonnemas' home that Builders Carpet failed to perform and (2) the amount Builders Carpet overcharged the Bonnemas.
At trial, the Bonnemas presented evidence that the flooring in their home amounted to approximately 4,800 square feet, although they were charged for 6,885 square feet of flooring. Goodwyn said his measurement was correct and included ten to fifteen percent waste that occurs when cutting the tiles. However, he testified that because Mr. Bonnema was "being difficult," he agreed to reduce the total flooring to 6,205 square feet (the amount without waste) and credit the Bonnemas. The corresponding invoice, which was paid in full, reflects an overage amount that is within $65 of the amount awarded by the jury. Additionally, Goodwyn unequivocably testified that he mistakenly overcharged the Bonnemas by failing to exclude the black galaxy tile from the total amount of floors that were sealed. Goodwyn's testimony is more than some evidence that Builders Carpet had overcharged the Bonnemas and had been unjustly enriched by retaining proceeds paid for the work at the Bonnemas' house. Accordingly, the trial court erred in disregarding the jury's finding awarding damages to the Bonnemas for unjust enrichment. We sustain the third issue.
In their fourth issue, the Bonnemas contend the trial court erred in failing to award them attorney's fees based upon the jury's finding of unjust enrichment. Although the Bonnemas do not direct us to any agreement or statutory authority in their brief, their petition sought attorneys fees under section 38.001 of the Texas Civil Practice and Remedies Code. section 38.001 authorizes a person to recover reasonable attorney's fees in eight instances, one of which is a suit on an "oral or written contract." See Tex. Civ. Prac. Rem. Code Ann. § 38.001(1)-(8) (Vernon 2008). section 38.001 does not provide for recovery of fees and costs on an unjust enrichment claim. The jury found Builders Carpet did not breach the contract with the Bonnemas; consequently, we conclude the Bonnemas cannot recover their attorney's fees. See Mobil Producing Tex. N.M., Inc. v. Cantor, 93 S.W.3d 916, 920 (Tex. App.-Corpus Christi 2002, no pet.) (rejecting claim for attorney's fees for unjust enrichment under section 38.001 when plaintiff's breach of contract action failed in action to recover overpayment of revenues).
In reaching this conclusion, we reject the Bonnemas' suggestion that Angelo Broadcasting, Inc. v. Satellite Music Network, Inc., 836 S.W.2d 726, 736 (Tex. App.-Dallas 1992, writ denied), overruled on other grounds by Hines v. Hash, 843 S.W.2d 464, 469-70 (Tex. 1992), and French v. Moore, 169 S.W.3 1, 17-18 (Tex. App.-Houston [1st Dist.] 2004, no pet.), mandate a different result. Neither case allowed the award of attorney's fees under section 38.001 for unjust enrichment. In Angelo, this Court reversed an attorney's fee award after reversing the plaintiff's recovery for unjust enrichment. See Angelo Broadcasting, 836 S.W.2d at 736. In French, the court of appeals concluded the party had failed to comply with procedural requirements of section 38.002. To the extent the French opinion contains any suggestion that a party could recover attorney's fees for unjust enrichment under section 38.001, it relies on an opinion addressing a quantum meruit claim, not unjust enrichment. See French, 169 S.W.3d at 17 (citing Caldwell Hurst v. Myers, 714 S.W.2d 63, 65 (Tex. App.-Houston [14th Dist]. 1986, writ ref'd)). We overrule the fourth issue.
The Bonnemas also cite an unpublished Austin Court of Appeals case that relied on the Myers case to support a proposition that the claim for unjust enrichment did not preclude an award of attorney's fees under section 38.001(8). Chitsey v. Lockshin, No. 03-00-00663-CV, 2001 WL 1337576, at *7 (Tex. App.-Austin Nov. 1, 2001, pet. denied). As stated previously, Myers addressed a claim of quantum meruit, not unjust enrichment.
We reverse the trial court's judgment awarding damages in the amount of $10,225 and attorney's fees to Builder's Carpet and render judgment that Builder's Carpet take nothing on its claims. Further, because there is some evidence to support the jury's findings on unjust enrichment, we reverse the trial court's judgment and render judgment that the Bonnemas recover $2,239.41 in damages from Builder's Carpet. We remand to the trial court to render a judgment consistent with this opinion, including a calculation of any pre-and post-judgment interest that may be required by law.