H.L. Zumwalt Constr. v. Rd. Repair, LLc

From the 111th Judicial District Court, Webb County, Texas Trial Court No. 2015CVQ002791D2 Honorable Monica Z. Notzon, Judge Presiding

Sitting: Rebeca C. Martinez, Chief Justice, Beth Watkins, Justice, Liza A. Rodriguez, Justice

MEMORANDUM OPINION

Liza A. Rodriguez, Justice

This appeal arises from a contractual dispute between H.L. Zumwalt Construction, Inc. and Road Repair, LLC ("Road Repair") relating to a Texas Department of Transportation ("TxDOT") highway construction project. The jury found that Zumwalt and Road Repair had an oral contract for the performance of 85.25 stations of preparation of right-of-way ("prep row") work at $15, 000.00 per station and that Zumwalt breached that oral contract. Zumwalt appeals from the over one-million-dollar judgment rendered against it, arguing that there is no evidence to support Road Repair's claim for breach of an oral contract. Because we agree there is no evidence to support Road Repair's claim, we reverse.

Background

The highway project at the center of the parties' dispute started in 2010 when TxDOT entered into a contract with Ballenger Construction Co. ("Ballenger") for the construction of the Loop 20 Highway Project ("the Project") in Webb County, Texas. Ballenger secured payment and performance bonds for its work, and its surety on those bonds was Liberty Mutual. Ballenger subsequently defaulted on the Project, and Liberty Mutual, as surety, was required to complete the Project for TxDOT.

Liberty Mutual approached Jeff DuBose, the owner of Road Repair, to bid for completion of the Project. However, Road Repair was a subcontractor and thus not capable of completing the entire Project. Because DuBose had a previous relationship with Henry Zumwalt, DuBose approached him and asked if H.L. Zumwalt Construction, Inc. ("Zumwalt") could submit a bid as the general contractor so that Road Repair could obtain work as a subcontractor. Zumwalt agreed. DuBose testified that he went to the bidding conference because he "was invited by Liberty [Mutual] personally" and "had the experience with these types of projects."

DuBose prepared the bid for Zumwalt and was the only person at the bidding conference representing Zumwalt and Road Repair. DuBose testified at trial that when a company bids on a "takeover" project, the bidding contractors are invited to the Project site because "there's a lot of exposure when it comes to interpretation of what is complete and what is not complete." DuBose testified that during this process, he learned that many items described as having already been completed by the previous contractor, Ballenger, were not in fact completed.

One such uncompleted item was preparation of right of way or "prep row" work. Prep row is clean-up work, including hauling off debris. DuBose testified that prep row is paid "by the station," which in this Project was "a 100-foot increment." According to DuBose, prep row is "paid by the length" and "it doesn't matter the width." DuBose testified that on the Project, there were "85.25 stations." DuBose testified prep row "can be something as little as trimming the trees along the fence line," or it can include removing old railroad track underneath the dirt and returning the ground to its natural state. DuBose walked the Project to identify what prep row work was necessary.

Zumwalt won the bid for completion of the Project and entered into a contract with Liberty Mutual. Zumwalt then entered into a written subcontract with Road Repair. The written subcontract between Zumwalt and Road Repair provided that "the items of work to be performed by the Subcontractor [Road Repair] as required under this Subcontract and the above general contract and the prices the Subcontractor is to receive and which prices shall constitute full and complete payment to Subcontractor, are as follows":

Bid Item	Description	Quantity/Unit of Measure	Unit Price	Total
1002002002	PREPARING ROW	85.25/STA	1, 173.00	99, 998.25
1042009	REMOVING CONC (RIPRAP)	303.32/SQYD	35.00	10, 616.20
1042017	REMOVING CONC (DRIVEWAYS)	743.89/SQYD	5.65	4, 202.98
1042022	REMOVING CONC (CURB AND GUTTER)	154.00/LNFT	3.50	539.00
1682001	VEGETATIVE WATERING	1245.00/MG	18.00	22, 410.00
4002005	CEM STABIL BKFL	2966.68/CUYD	69.00	204, 700.92
5002001005	MOBILIZATION AND PROJECT MANAGEMENT	1.00/LUMP	154, 406.93	154, 406.93
5062009012	ROCK FILTER DAMS (REMOVE)	195.00/LNFT	15.00	2, 925.00
5082016012	CONSTRUCTION EXITS (INSTALL) (TY1)	139.00/SQYD	10.00	1, 390.00
5062019012	CONSTRUCTION EXITS (REMOVE)	139.00/SQYD	110.00	15, 290.00
5062034012	TEMPORARY SEDIMENT CONTROL FENCE	2915.00/LNFT	4.00	11, 660.00
5122008002	PORT CTB (FUR & INST) (LOW PROF) (TY1)	120.00/LNFT	70.00	8, 400.00
5122009002	PORT CTB (FUR & INST) (LOW PROF) (TY2)	40.00/LNFT	50.35	2, 014.00
5122026002	PORT CTB (MOVE) (LOW PROF) (TY1)	7080.00/LNFT	5.00	35, 400.00
5122027002	PORT CTB (MOVE) (LOW PROF) (TY2)	40.00/LNFT	150.00	6, 000.00
5122035002	PORT CTB (STKPL) (LOW PROF) (TY1)	680.00/LNFT	13.00	8, 840.00
5122036002	PORT CTB (STKPL) (LOW PROF) (TY2)	60.00/SQYD	13.00	780.00
57472001	GEOGRID BASE REINFORCEMENT (TY1)	6400.44/SQYD	4.00	25, 601.76
2472060033	FL BS (CMP IN PLC) (TY E GR 4) (FNAL POS)	64.18/CUYD	45.00	2, 888.10
2472120033	FL BS (RDWY DEL) (TY E GR 4) (IN VEH)	1840.88/SQYD	45.00	82, 839.60
2602054002	LIME TRT (NEW BASE) (10”)	19731.53/SQYD	5.50	108, 523.42
96082007	UNIQUE CO ITEM 7 - MOBILIZATION	1.00/EA	5, 900.00	5, 900.00
L-3 2602002002	LIME HYDRATED (LIME SLURRY)	22.00/TON	700.00	15, 400.00
L-4	LIME TRT (EXISTING BASE) 12”	4500.00/SQYD	5.50	24, 750.00
L-6	SURVEY PROJECTION ACCORD[ANCE] WITH TXDOT SPECIFICATIONS GENERAL REQUIREMENTS AND CONVENANCE	1.00/LS	50, 000.00	50, 000.00
TOTAL	898, 476.16

(emphasis added).

Pursuant to the subcontract, Road Repair "agree[d] that [it] has full notice and knowledge of the provisions of such general contract, including all provisions affecting the work to be done by [Road Repair] hereunder." Further, the subcontract stated that

[a]ll work to be done by [Road Repair] shall be performed strictly in accordance with the terms of such general contract and the plans and specifications governing same; and the terms of such general contract and the appurtenant plans and specifications are made a part of this subcontract as fully as