Town & Cnty. P'ship v. Dyad Constr., L.P.

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TOWN & COUNTY PARTNERSHIP, Appellant v. DYAD CONSTRUCTION, L.P., Appellee

No. 14-22-00339-CV

Court of Appeals of Texas, Fourteenth District

May 18, 2023

On Appeal from the 215th District Court Harris County, Texas Trial Court Cause No. 2017-11642-A

Panel consists of Zimmerer, Spain, and Hassan Justices.

MEMORANDUM OPINION

Meagan Hassan, Justice.

Appellant Town & Country Partnership ("Town &amp Country") entered into a contract with appellee Dyad Construction, L.P. ("Dyad"), in which Dyad agreed to construct several retail buildings. After the project was complete, Town & Country made repeated repairs to correct water leaks in one of the newly-constructed buildings. Town & Country sued Dyad in 2017, asserting the water leaks were caused by construction defects.

Dyad filed a third-party petition adding five subcontractors to the lawsuit.

Dyad and one of the subcontractors filed separate motions seeking summary judgment on Town & Country's claims. The trial court granted both motions and, after a severance, Town & Country appealed. For the reasons below, we affirm.

Background

Factual Background

Town & Country owns a retail development in west Houston. In 2007, Town & Country hired Dyad to construct three new buildings and a parking garage at the development site for a total price of approximately $13 million. The parties signed American Institute of Architects ("AIA") Document A101-1997 to effectuate their agreement. AIA Document A101-1997 incorporated by reference AIA Document A201-1997 which set out the "General Conditions of the Contract for Construction" (together with Document A101, the "Agreement").^[1]

The construction project was completed in 2009. A "Certificate of Substantial Completion" was issued on January 30, 2009, which stated that the work "is sufficiently complete in accordance with the Contract Documents so that the Owner can occupy or utilize the Work for its intended use." The Certificate of Substantial Completion also stated that Dyad's work was subject to a one-year warranty that commenced on the date of Substantial Completion.

In 2010, a water leak was discovered in one of the newly-constructed buildings. Town & Country engaged a company to investigate and determine the cause of the leak the leak was repaired in November 2010. Additional leaks in the same building were reported and, each time, Town &amp Country engaged the same company to investigate and make repairs. From November 2010 through November 2013, ten water leaks were repaired in a single building - however, no two leaks were repaired at the same location. According to an affidavit from Diane Daleo, Town & Country's representative, she did not have "reason to think that the leaks we were experiencing at the Building were caused by anything other than normal building settlement or sealant failures."

In December 2013, a water leak was discovered at a previously-repaired location. Town & Country retained a new company, TDC Waterproofing & Restoration, LLC, to investigate the leak. That same month, TDC provided Town & Country with its report which, according to Daleo, "was the first indication that waterproof barrier defects existed underneath the exterior cladding of the Building." TDC recommended that Town & Country undertake an additional destructive demolition investigation on the building.

Town & Country retained American Construction Investigations ("ACI") to perform destructive testing of the building's exterior and interior in January 2014. ACI provided Town & Country with its initial report in March 2014. According to Daleo, this report was the first time Town & Country "knew or had reasonable means to discover that Dyad had caused the Building to be constructed with latent defects." Daleo said she informed Dyad of the water penetration issues and, in June 2014, a Dyad representative was present for a leak investigation.

In October 2014, Town & Country formally notified Dyad via letter "of the latent defect issues and investigation findings by both ACI and TDC." The letter requested that Dyad make available funds to cover the repair and remediation costs. In a second letter dated April 2015, Town & Country notified Dyad and its insurance carrier that repairs had been commenced and that Town & Country intended to seek reimbursement from Dyad.

After the repairs and remediation were complete, Town & Country sent Dyad a third letter in October 2016, against requesting a reimbursement. Town & Country received a written response from Dyad's counsel approximately one month later, in which Dyad "denied liability for the latent defects, refused to honor its warranty, and refused to pay for the costs Town & Country incurred related to the investigation, repair, and remediation caused by those latent defects."

Underlying Proceedings

Town & Country sued Dyad in February 2017 and asserted claims for breach of contract and breach of express warranty. Dyad responded and filed a third-party petition adding five defendants to the suit, including Texas Exterior Systems, LLC ("TES"). TES was a subcontractor on the construction project.

Town & Country filed a first amended petition in January 2020. In this petition, Town & Country alleged that Dyad's work on the project included three specific omissions: (1) the failure to install a Tyvek waterproofing system in the building walls; (2) the failure to install "end dams with kick out flashing"; and (3) the failure to "install weep holes in the window reveals." According to Town & Country, these omissions "created a trough for the water to flow from the exterior of the windows into the interior of the buildings." Town & Country's first amended petition also added a claim for breach of the implied warranty of good and workmanlike manner. Finally, Town & Country pleaded the doctrine of fraudulent concealment, alleging that Dyad "knew the cause of the water penetration at the buildings but failed to disclose it" and "took steps to conceal its wrongdoing."

TES filed a combined traditional and no-evidence summary judgment motion. See Tex. R. Civ. P. 166(c), (i). In its motion, TES asserted that (1) Town & Country's claims were barred by the applicable statute of limitations, and (2) the discovery rule did not render Town & Country's claims timely.

Dyad also filed a combined traditional and no-evidence summary judgment motion. See Tex. R. Civ. P. 166(c), (i). Like TES, Dyad asserted that Town & Country's claims were untimely and that the discovery rule did not apply. Dyad also argued that Town & Country could not produce any evidence to support the elements of its fraudulent concealment counter-defense.

On February 22, 2021, the trial court signed an order granting TES's summary judgment motion. Town & Country filed a notice of appeal with respect to that judgment. This court dismissed the appeal for want of jurisdiction, concluding that "[t]he order being appealed does not dispose of all the parties and claims." Town & Country P'ship v. Dyad Constr., L.P., No. 14-21-00162-CV, 2021 WL 2252142, at *1 (Tex. App.-Houston [14th Dist.] June 3, 2021, no pet.) (mem. op.).

After the appeal was dismissed, the trial court signed an order granting Dyad's summary judgment motion on December 17, 2021. Dyad and TES subsequently filed a joint motion to sever Town & Country's claims against Dyad. The trial court signed an April 11, 2022 order granting the joint motion to sever, creating a final judgment. Town & Country filed a notice of appeal.

Analysis

On appeal, Town & Country challenges the trial court's orders granting TES's and Dyad's summary judgment motions. Specifically, Town & Country asserts:

1. Dyad and TES failed to conclusively establish that Town & Country's claims were barred by the applicable statute of limitations;

2. the trial court erred to the extent it determined that the implied warranty of good and workmanlike manner was superseded by the Agreement's express warranties; and

3. Town & Country brought forth sufficient evidence to maintain its breach of contract claim and fraudulent concealment counter-defense.

We address these contentions individually, beginning with the summary judgment standard of review.

I. Standard of Review

Where, as here, the trial court's summary judgment does not state the grounds for its ruling, we affirm the judgment if any of the grounds advanced is meritorious. Carr v. Brasher, 776 S.W.2d 567, 569 (Tex. 1989); Salas v. Fluor Daniel Servs. Corp., 616 S.W.3d 137, 144 (Tex. App.-Houston [14th Dist.] 2020, pet. denied). We review the propriety of a summary judgment de novo. Lujan v. Navistar, Inc., 555 S.W.3d 79, 84 (Tex. 2018). The party seeking summary judgment may raise both no-evidence and traditional grounds in a single motion. Binur v. Jacobo, 135 S.W.3d 646, 651 (Tex. 2004); Salas, 616 S.W.3d at 144.

In a no-evidence summary judgment motion, the movant asserts that there is no evidence of one or more essential elements of the claims for which the nonmovant bears the burden of proof at trial. See Tex. R. Civ. P. 166a(i); see also Timpte Indus., Inc. v. Gish, 286 S.W.3d 306, 310 (Tex. 2009). The trial court must grant the motion unless the nonmovant produces summary judgment evidence raising a genuine issue of material fact. Tex.R.Civ.P. 166a(i). The nonmovant is "not required to marshal its proof; its response need only point out evidence that raises a fact issue on the challenged elements." Hamilton v. Wilson, 249 S.W.3d 425, 426 (Tex. 2008) (per curiam) (internal quotation omitted). A fact issue exists if the nonmovant brings forth evidence that would enable reasonable and fair-minded jurors to differ in their conclusions. See City of Keller v. Wilson, 168 S.W.3d 802, 822 (Tex. 2005).

For a traditional summary...