Rise Above Steel Co. v. Liberty Mut. Ins. Co.

656 S.W.3d 577

RISE ABOVE STEEL COMPANY, LLC., Appellant,

v.LIBERTY MUTUAL INSURANCE COMPANY, Appellee.

No. 08-21-00127-CV

Court of Appeals of Texas, El Paso.

November 4, 2022

ATTORNEY FOR APPELLANT: Scott E. Hayes, Waddell Serafin Geary, Rechner Jenevein, P.C., 1717 Main Street, 25th Floor, Dallas, TX 75201-7341.

ATTORNEY FOR APPELLEE: Blue Hyatt, 4001 E. 42nd, Suite 101, Odessa, TX 79762.

Before Rodriguez, C.J., Palafox, J, and Ferguson, Judge, Ferguson, Judge (Sitting by Assignment)

OPINION

YVONNE T. RODRIGUEZ, Chief Justice Appellant, Rise Above Steel Company (Rise Above), raises one issue on appeal—"Did the trial court err in granting Liberty Mutual's motion for summary judgment?" Appellee, Liberty Mutual Insurance Company (Liberty Mutual), filed a hybrid motion for summary judgment, seeking no-evidence summary judgment on Rise Above's breach of contract and quantum meruit claims and traditional summary judgment on the basis of improper pass-through claim. The trial court granted summary judgment.

We agree with Rise Above and find the trial court erred in granting summary judgment. We reverse and remand the case for proceedings consistent with this opinion.

FACTUAL AND PROCEDURAL BACKGROUND

Rise Above seeks funds it alleges are due in connection with the construction of two wet sand storage buildings (the Atlas Project) in Winkler County. Rise Above is a construction company that erects steel frameworks primarily for commercial buildings. Rise Above entered into a subcontract agreement with Marquez Wrought Iron (Marquez), its general contractor, to provide labor and equipment in the erection of columns, beams, wind braces, and wall panels in the construction of the Atlas Project. When Marquez refused to pay the full amount due under the subcontract, Rise Above filed suit against Marquez and Atlas Sand Company (Atlas Sand), the project owner, and later filed an affidavit claiming a mechanic's or materialman's lien against the Atlas Project under Chapter 53 of the Texas Property Code. Thereafter, Atlas Sand, as principal, and Liberty Mutual, as surety, filed a bond to indemnify against the lien under Property Code chapter 53.

In September 2019, Rise Above filed its live pleading, its First Amended Original Petition, alleging breach of contract and quantum meruit claims against Marquez and a lien bond claim against Liberty Mutual, dropping Atlas Sand from the suit. Liberty Mutual filed its Special Exceptions and Original Answer, generally denying Rise Above's allegations; raising the affirmative defenses of estoppel, waiver, and failure to state a claim; and specially excepting to Rise Above's lien bond claim by asserting that (1) there is no cause of action against Liberty Mutual because there is no privity of contract to permit Rise Above's claim under the bond, and (2) Rise Above cannot make claims for interest, attorney's fees, and costs, due to a lack of standing to make such claims. In January 2020, Liberty Mutual filed its First Amended Answer, again asserting its general denial and affirmative defenses of estoppel, waiver, and failure to state a claim. In this First Amended Answer, Liberty Mutual raised additional affirmative defenses, stating Rise Above is barred from recovery on breach of contract because its contract was with Marquez, not Atlas Sand, and from recovery on quantum meruit due to its written contract with Marquez. Liberty Mutual also raised the affirmative defenses of unclean hands, offset, and standing for the first time in this pleading. Liberty Mutual did not raise special exceptions in its First Amended Answer.

Liberty Mutual filed its hybrid traditional and no-evidence motion for summary judgment in July 2020. The trial court granted summary judgment, without stating grounds, in October 2020.

STANDARD OF REVIEW

We review a trial court's granting of summary judgment de novo.

Herrera v. Resignato , 621 S.W.3d 835, 840 (Tex.App.—El Paso 2021, no pet.) (citing Merriman v. XTO Energy, Inc. , 407 S.W.3d 244, 248 (Tex. 2013) ). When, as in this case, a trial court's order granting summary judgment does not specifically state the grounds for granting the motion, we must affirm the judgment "if any of the grounds on which judgment is sought are meritorious." Id. (citing Neely v. Wilson , 418 S.W.3d 52, 60 (Tex. 2013) ).

Liberty Mutual moved for summary judgment against all Rise Above's claims on traditional and no-evidence grounds. Summary judgment is appropriate on a traditional motion when the movant shows no genuine issue of material fact exists and it is entitled to judgment as a matter of law. Id. (citing TEX.R.CIV.P. 166a ). In deciding whether a genuine issue precludes summary judgment, we must treat all evidence favorable to the non-movant as true and indulge every reasonable inference and resolve all doubts in its favor. Id. (citing Sw. Elec. Power Co. v. Grant , 73 S.W.3d 211, 215 (Tex. 2002) ). When a defendant conclusively negates at least one element of the plaintiff's cause of action or conclusively establishes all elements of an affirmative defense, the defendant is entitled to summary judgment. Id. (citing SmithKline Beecham Corp. v. Doe , 903 S.W.2d 347, 355 (Tex. 1995) ). Once such a motion is filed, the non-movant bears the burden of presenting evidence raising an issue of material fact as to each of the elements challenged. Id. (citing Rodriguez v. Cemex, Inc. , 579 S.W.3d 152, 160 (Tex.App.—El Paso 2019, no pet.) ). If a plaintiff fails to raise a genuine issue of material fact as to any challenged element, the trial court must grant the motion. Herrera , 621 S.W. 3d at 841 (citing Stierwalt v. FFE Transp. Servs., Inc. , 499 S.W.3d 181, 194 (Tex.App.—El Paso 2016, no pet.) ).

In a no-evidence motion, the movant claims the non-movant lacks any evidence on one or more of the elements essential to its cause of action, and summary judgment is proper when the non-movant fails to produce sufficient evidence to raise an issue of fact on each element challenged on which it has the burden of proof. Id. at 841 (citing TEX.R.CIV.P. 166a(i) and Hamilton v. Wilson , 249 S.W.3d 425, 426 (Tex. 2008)(per curiam) ). When the non-movant offers more than a scintilla of probative evidence in support of the challenged element(s), a fact issue is presented. Id. (citing King Ranch v. Chapman , 118 S.W.3d 742, 751 (Tex. 2003) ).

"[A]ll theories in support of or in opposition to a motion for summary judgment must be presented in writing to the trial court." Border Demo. & Enviro., Inc. v. Pineda , 535 S.W.3d 140, 151 (Tex.App.—El Paso 2017, no pet.). We cannot affirm a summary judgment on a ground not expressly presented in the motion for summary judgment. Id.

DISCUSSION

Traditional Motion for Summary Judgment

In its traditional motion, Liberty Mutual urged all Rise Above's claims were barred under Interstate Contracting Corp. v. City of Dallas because the general contractor was not involved in the suit and claimed summary judgment was proper because Rise Above's lack of a contract with Atlas Sand prohibited it from asserting claims against Atlas Sand and Liberty Mutual. See Interstate Contracting Corp. v. City of Dallas , 135 S.W.3d 605, 610 (Tex. 2004). Rise Above argues in its first sub-issue the trial court erred in granting traditional summary judgment because Interstate Contracting does not apply to this case. We agree with Rise Above.

Inapplicability of Interstate Contracting Corp. v. City of Dallas

The introduction to Liberty Mutual's motion for summary judgment states it is a motion on pass-through liability. Liberty Mutual argued Rise Above's lack of privity of contract with Atlas Sand bars any recovery by Rise Above against Liberty Mutual under a pass-through liability theory.

As the basis for its traditional motion, Liberty Mutual relied on Interstate Contracting to assert Rise Above's claims are barred. Liberty Mutual argued Marquez, the general contractor, had not agreed to take part in the suit, and the general contractor is an integral part of any pass-through claim, a claim presented through a contractor who has a contractual relationship with both the owner and the subcontractor. See Interstate Contracting , 135 S.W.3d at 610.

We do not disagree with Liberty Mutual's interpretations of the holdings of Interstate Contracting . See id. However, we question the applicability to the case at hand. Although Liberty Mutual recognized in its summary judgment motion that no pass-through claim had been presented by Rise Above, its traditional motion for summary judgment asserted Rise Above lacks standing to assert a pass-through claim and its pass-through claim is improperly pleaded. Rise Above did not have a pass-through breach of contract claim against Atlas Sands or Liberty Mutual when Liberty Mutual's motion was filed.¹ Rise Above's breach of contract claim was filed against Marquez. The claim against Liberty Mutual is a claim on a bond indemnifying a lien, and the Court stated in Interstate Contracting , "our recognition of pass-through claims does not ... affect the procedures for ... asserting claims on payment bonds .... [P]ass-through claims provide protections not afforded by the lien and payment bond statutes, and our recognition of pass-through claims does not disturb the existing statutory procedures and requirements." Id. at 618-19.

Liberty Mutual's traditional motion for summary judgment did not attempt to defeat Rise Above's lien bond claim or allege there is no genuine issue of material fact as to that claim. See TEX.R.CIV.P. 166a(c). Liberty Mutual's entire traditional motion for summary judgment is based on a non-existent claim of pass-through liability. The trial court's granting of summary judgment under 166a(c) was error. We sustain Rise Above's first sub-issue.

No-Evidence Motion for Summary Judgment

In its no-evidence motion, Liberty Mutual challenged Rise Above's ability to produce evidence on existence of a contract with Atlas Sand and services provided to Atlas Sand upon...