Preview
Filed: 3/11/2022 4:01 PM
JOHN D. KINARD - District Clerk
Galveston County, Texas
Envelope No. 62548067
By: Rolande Kain
3/11/2022 4:36 PM
CAUSE NO. 20-CV-1704
RAYMOND D. JETT AND SUE E. JETT, § IN THE DISTRICT COURT OF
INDIVIDUALLY AND AS TRUSTEE §
OF THE SPARKS FAMILY LIVING TRUST §
§
Plaintiffs, §
§
v. § GALVESTON COUNTY, TEXAS
§
WIMBISH KELLY CONSTRUCTION, LLC §
D/B/A PUTNAM BUILDERS §
§
Defendant. § 122nd JUDICIAL DISTRICT
PLAINTIFFS’ RESPONSE TO DEFENDANTS’ TRADITIONAL
AND NO-EVIDENCE MOTION FOR SUMMARY JUDGMENT
TO THE HONORABLE JUDGE OF SAID COURT:
COME NOW, Plaintiffs, Raymond D. Jett and Sue E. Jett, Individually and as Trustee of
the Sparks Family Living Trust (“Plaintiffs” or the “Jetts”), with this Response to the Traditional
and No-Evidence Motion for Summary Judgment of Defendants, Wimbish Kelly Construction,
LLC d/b/a Putnam Builders (“Putnam”), Industrial Laminates Corporation d/b/a Ilcor Builders
(“Ilcor”), and Ilcor Homes, Inc. (“Ilcor Homes” and, collectively with Putnam and Ilcor,
“Defendants”). In support thereof, Plaintiffs would respectfully show this Court as follows:
I.
Introduction
1. Defendants’ Motion for Traditional Summary Judgment (the “Traditional Motion”)
must be denied because Defendants have failed to conclusively establish their accord and
satisfaction defense as a matter of law. At the very minimum, a fact issue exists as to whether there
was a clear and unmistakable communication which evidenced an agreement by the Jetts to
discharge Putnam’s obligation to construct the Home in accordance with the Plans, defined further
herein. Because a fact issue exists as to whether the alleged “new agreement” included a release
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Plaintiffs’ Response to Defendants’ Traditional and No-Evidence Motion for Summary Judgment
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of claims associated with Putnam’s original obligation, Defendants have not met their traditional
summary judgment burden to conclusively establish this defense beyond all reasonable doubt as a
matter of law.
2. Plaintiffs’ claim for violation of the Texas DTPA arises from certain deceptive acts
and practices which are extracontractual, namely: (i) various post-contractual assurances made by
the Defendants’ employees that the Plaintiffs would “get their stairs;” and, (ii) causing confusion
as to the source of the employees who were responsible for performing and overseeing the work
on their Project. Additionally, Plaintiffs’ negligence claim arises from Defendants’ failure to hire
and provide competent managers and superintendents to properly pursue and oversee the work for
Plaintiffs’ Project, as well as Defendants’ failure to comply with the minimum elevation standards
set forth in the Building Permit and Galveston County Floodplain Regulations. Because these
deceptive acts and failures do not arise from Putnam’s failure to perform any contractual duties,
they are not barred by the economic loss rule. Accordingly, Defendants’ Traditional Motion should
be denied on this ground as well.
3. Finally, Defendants’ Motion for No-Evidence Summary Judgment (the “No-
Evidence Motion”) must also be denied. Plaintiffs have presented legally sufficient evidence of
the reasonable and necessary cost to repair the Home and correct the defective slab height. This
evidence is in the form of expert testimony from Plaintiffs’ structural engineering expert, as well
as Plaintiffs’ expert on construction costs. Moreover, Plaintiffs are qualified to testify as lay people
as to the amount of actual out-of-pocket repairs they have incurred. To the extent further expert
testimony is needed to support the damages incurred due to these necessary repairs, the expert
designation deadline has now been extended to May 20, 2022, and Plaintiffs will likely be
supplementing their expert designation after additional discovery.
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4. Based on all of the foregoing, Defendants’ Traditional and No-Evidence Motion
for Summary Judgment should be denied.
II.
Factual Background
5. On or about May 3, 2019, Plaintiffs entered into a Residential Construction
Contract with Putnam (the “Contract”) for the construction of a custom home (the “Home”) on the
real property located at 145 Mary Lane, Bacliff, Texas 77518 (the “Property”). A true and correct
copy of the Contract is attached hereto as Exhibit “1”.
6. Defendants failed to construct the home in accordance with the “designs, allowance
items, amounts approved by Owner[s]1, and specifications agreed [and] signed . . .” (the “Plans”).
The Plans were included and made a part of the Contract as Exhibit D.2 A true and correct copy of
the Plans is attached hereto as Exhibit “2.” Defendants failed to abide by the requirements set
forth in the Plans that the Home be built three (3) feet above grade with stairs leading up to the
Home’s elevated front porch. A fair and accurate depiction of the Home as constructed by
Defendants is attached hereto as Exhibit “3”.
7. Putnam’s failure to abide by the Plans has not only deprived Plaintiffs of the home
they contracted with Putnam to provide, but it has also left the Home below the elevation and
required floodplain standards as stated in the Building Permit for the Property and the Galveston
County Floodplain Regulations. A true and correct copy of the Building Permit for the construction
of the Home (the “Project”) is attached hereto as Exhibit “4.” The only known elevation certificate
1
Capitalized terms not defined herein shall have the meaning ascribed to those terms in the Contract.
2
See Exhibit “1” at § 4 (Plans expressly incorporated into Defendants’ “SCOPE OF WORK”); see also Excerpts from
the Deposition of Kathy Wimbish, Putnam Builders’s corporate representative, attached hereto as Exhibit “8”, at
50:22–51:3 (conceding the Plans set forth as Exhibit D to the Contract are part of the Contract); 69:19–22 (same).
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Plaintiffs’ Response to Defendants’ Traditional and No-Evidence Motion for Summary Judgment
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that has been obtained for the Home confirms that the Home was constructed only about six (6)
inches above the crown of the street, rather than the eighteen (18) inches required by the Floodplain
Regulations and the thirty-six (36) inches above grade required by the Plans. A true and correct
copy of the Elevation Certificate is attached hereto as Exhibit “5.”
8. Throughout the construction, which began in or around July of 2019, the Jetts
continuously asked Defendants and their employees or representatives how they were going to get
their stairs because the finished floor of the Home looked level with the ground. See Affidavit of
Sue E. Jett attached hereto as Exhibit “7.” David Norcross, the Project Superintendent supplied
by Putnam and/or Ilcor and/or Ilcor Homes,3 constantly assured Plaintiffs not to worry and that
they “would get their stairs” every single time they asked.4 Towards the end of construction, in the
spring of 2020, it then became clear to the Jetts that they had been lied to. See Exhibit “3.” The
Jetts were not going to get the raised Victorian-style Home that they were continuously assured
they would eventually get.
9. At the completion of construction, Defendants sent the Jetts the Final Invoice in the
amount of $30,506.39. A true and correct copy of Final Invoice is attached hereto as Exhibit “6.”
At that point, no one from Putnam had acknowledged the as-built deviation from the Plans or
offered the Jetts any compensation for this unapproved material change. See Exhibit “7.” The Jetts
could not stomach paying the full amount of the Final Invoice because they were extremely
dissatisfied with the finished product Putnam provided. Id. As of March 2020, Plaintiffs also had
not yet obtained an elevation certificate or engaged any engineering professionals to understand
3
Ilcor and Ilcor Homes are referred to herein as the “Ilcor Entities.”
4
Excerpts of Sue Jett’s deposition testimony are also attached hereto as Exhibit “9.” See Exhibit “9,” at 17: 9–12
(“Every time I complained or asked about getting the steps or the elevation of the house he would say, “oh, you’re
going to get your steps. You’re going to get your steps, every single time.”).
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the full extent of the damage caused by the non-compliant slab height. See id., at ¶ 11; see also
Elevation Certificate attached hereto as Exhibit “5” dated July 18, 2020.
10. In response to the Final Invoice, Sue Jett called Kathy Wimbish, the President and
Corporate Representative for Putnam, to discuss her dissatisfaction with the Home and the
outstanding amount owed. Exhibit “9,” at 29:22–30:16. After some discussion regarding the
amount the Jetts were willing to pay towards the Final Invoice, Kathy Wimbish informed Sue Jett
that she would be willing to apply a $10,506.39 discount to the final price. Id. The discount was
not made contingent upon anything, and Kathy Wimbish conceded that there was no discussion of
any waiver or release of the Jetts’ claims related to the slab issue or otherwise. See Exhibit 9, at
39:13–19 (Q: “As part of that conversation, did you agree to release any claims related to the slab
height?” [Objection by counsel for Putnam] A: “I did not. I didn’t sign anything. I didn’t allude to
that fact. It was simply a discount, period.”); see also Exhibit “8,” at 129:1-25; 130:1-17 (Q: “Did
she say that she was going to release any claims associated with the slab height?” A: “No, she did
not.”). No negotiation regarding the Jetts’ release of claims took place,5 and Kathy Wimbish just
assumed that was the case. Exhibit “8,” at 130:11–17. Because it was not discussed or
memorialized in writing in any form or fashion, the Jetts did not assume that was the case and did
not intend to waive a claim that they had not yet had an opportunity to fully investigate.6 Plainly,
5
Exhibit “9,” at 40:4-17 (Q: “Whenever you paid the final invoice, did you—from your perspective, was that a final
settlement related to the slab height?” [objection] A: “No.” Q: “Did Kathy ever tell you that that was a final settlement
related to the slab height?” A: “No.” [objection] Q: “Did Kathy tell you anything about what she was offering you in
exchange for the discount?” [objection] A: “No.”).
6
Moreover, the discussion referenced above occurred orally over the phone, and there is no written memorialization
of any alleged terms associated with the slight discount. Thus, even if any discussion regarding Plaintiffs’ release of
claims had taken place, (which, Wimbish conceded did not), pursuant to Section 20 of the Contract, no oral discussion
could have “altered, amended, or modified [the Contract] except by Change Order or other agreement in writing and
signed by both [Defendants] and Owner.” Exhibit “1” at § 20.
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the Jetts did not intend to discharge Putnam Builders’ original obligation to construct the Home in
accordance with the Plans through the acceptance of the discounted Final Invoice.
11. As set forth in the Elevation Certificate, the Home’s slab height is about a foot
below the elevation required by the Galveston County Floodplain Regulations and about two and
a half feet below the elevation required by the Plans. Compare Exhibit “5” (Elevation Certificate)
with Exhibit “4” (the Building Permit) and Exhibit “2” (the Plans). The Jetts have since engaged
a structural engineering expert who recommends that the most durable and cost-effective way to
repair the non-compliant elevation, without inserting additional risk of foundation and other issues
in the future, is to demolish and reconstruct the Home. See Report of Amy Patrick attached hereto
as Exhibit “11.”7 The Jetts have also engaged a construction cost expert who has testified that the
reasonable cost of reconstructing the Home at the proper elevation is $584,230, taking into account
the 2021 cost of construction materials in the area. See Report of Mary Jo Poindexter and Excerpts
of Deposition Testimony attached hereto as Exhibits “13” and “14,” respectively.
12. After the Jetts moved into the Home, they discovered other problems with
Defendants’ construction for which they had to incur out-of-pocket costs to repair or will have to
incur out-of-pocket costs to repair. This includes: a plumbing leak in a wall which cost
approximately $1,000 to repair; the installation of leafless gutters that Defendants failed to provide
which cost $8,935; repairs to the door jambs at the front and back door of the Home which will
likely cost $3,136.17; and, issues with the interior doors because it appears they were not properly
secured to the walls and frames which will likely cost $3,455.77 to repair. Exhibit “7.” More
7
Plaintiffs have not undertaken Ms. Patrick’s repair recommendation to date due to litigation costs. Exhibit “7,” at ¶
15. However, the Jetts intend to proceed with these recommended repairs once they recover the amounts sought
through this litigation. Id.
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recently, the Jetts have also discovered cracks in the walls and the concrete floor of their front
porch. Id.
13. It also became known through this litigation that Putnam did not provide any of its
own employees to oversee the Jetts’ Project because Putnam has no employees.8 All of the
representatives who the Jetts dealt with, and who were tasked with overseeing the work for the
Project, were actually employees of the Ilcor Entities.9 This is despite the fact that many of these
representatives, including David Norcross and David Kehrer, held themselves out as
representatives of Putnam, had “@putnambuilders.com” email addresses, and even signed the
Contract on behalf of Putnam. See Exhibit “1.”
14. Moreover, these individuals, who were assigned as the Project Manager and Project
Superintendent for the Jetts’ Project, were terminated by Putnam and/or the Ilcor Entities at or near
the Project’s completion. David Kehrer was terminated on or about March 11, 2020 for not
following through with projects; not showing up to work; not responding to phone calls;
trespassing into a customer’s home and stealing various items; losing a truck owned by Ilcor and/or
containing an Ilcor logo; and, using a company credit card for personal purchases. See Termination
Notice and related documents attached hereto as Exhibit “16.”10 This was the person assigned as
the Jetts’ point of contact for Putnam throughout the construction of their Home. Putnam and/or
Ilcor also gave Mr. Kehrer warnings for similar issues in the months and year before Putnam
started its demolition and construction work for the Jetts. Id. David Norcross was also terminated
8
Exhibit “8,” at 14:21–25; 26:2–11.
9
A true and correct copy of the Employee Lease Agreement between Putnam Builders and the Ilcor Entities is attached
hereto as Exhibit “10.”
10
Kathy Wimbish refused to answer questions regarding the circumstances surrounding the termination of David
Kehrer and Davis Norcross during her deposition. Exhibit “8,” at 30: 5–31:11; 66:3–11.
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by Putnam on or about February 4, 2020. See Termination Note in Employee File attached hereto
as Exhibit “17.”
III.
Summary Judgment Evidence
15. In support of this Response, Plaintiffs rely on the following summary judgment
evidence that is attached and incorporated by reference as if set forth in this Response. The
evidence attached and offered as evidence in Response to Defendants’ Traditional and No-
Evidence Motion for Summary Judgment (the “Motion”) is as follows:
Exhibit “1” – The Contract;
Exhibit “2” – The Plans;
Exhibit “3” – Picture of the Home after Construction;
Exhibit “4” –Building Permit Dated May 31, 2019;
Exhibit “5” – Elevation Certificate for the Property;
Exhibit “6” – Final Invoice for the Project;
Exhibit “7” – Affidavit of Sue E. Jett;
Exhibit “8” – Excerpts of Deposition Testimony of Kathy Wimbish, Corporate
Representative of Putnam Builders;
Exhibit “9” – Excerpts of Deposition Testimony of Sue E. Jett;
Exhibit “10” – Employee Lease Agreement between Putnam Builders and the Ilcor
Entitles;
Exhibit “11” – Expert Report of Amy Patrick, P.E.;
Exhibit “12”– Excerpts of Deposition Testimony of Amy Patrick, P.E.;
Exhibit “13” – Expert Report of Mary Jo Poindexter, P.E.;
Exhibit “14”– Excerpts of Deposition Testimony of Mary Jo Poindexter, P.E.;
Exhibit “15”– Affidavit of Mary Jo Poindexter, P.E.
Exhibit “16”– Employee Termination Notice and related documents for David
Kehrer; and,
Exhibit “17” – Employee Termination Note in Employee File for David Norcross.
IV.
Argument and Authorities
A. Summary Judgment Standard
1. Traditional Summary Judgment Standard
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16. To succeed on a traditional motion for summary judgment as to its causes of action
or affirmative defenses, the defendant has the burden of showing there are no genuine issues of
material fact as to its affirmative defenses and that it is entitled to summary judgment as a matter
of law. Tex. R. Civ. P. 166a(c). “Under Texas summary judgment law, the party moving for
summary judgment carries the burden of establishing that no material fact issue exists and that it
is entitled to judgment as a matter of law.” M.D. Anderson Hosp. & Tumor Inst. v. Willrich, 28
S.W.3d 22, 23–24 (Tex. 2000)(internal citation omitted). A defendant moving for summary
judgment on its affirmative defense has the burden to conclusively establish that defense. See
Exxon Mobil Corp. v. Rincones, 520 S.W.3d 572, 593 (Tex. 2017)(internal citation omitted). “A
matter is conclusively proven if ordinary minds could not differ as to the conclusion to be drawn
from the evidence.” Lujan v. Navistar Fin. Corp., 433 S.W.3d 699, 704 (Tex. App.—Houston [1st
Dist.] 2014, no pet.)(internal citation omitted).
17. As Defendants acknowledge, the Court must take as true all evidence favorable to
the non-movant, and every reasonable inference must be indulged in favor of the non-movant and
any doubt resolved in its favor. Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548–49 (Tex.
1985)(internal citation omitted).
18. Here, Defendants have failed to conclusively establish their affirmative defenses of
accord and satisfaction and the economic loss rule. Summary judgment on the accord and
satisfaction defense is precluded by the fact question that exists regarding whether the Jetts
intended to discharge Putnam’s original obligation when they accepted the discounted Final
Invoice. Moreover, the Defendants have failed to conclusively establish as a matter of law that the
economic loss rule bars the Plaintiffs’ negligence and DTPA claims because those claims arise
from extra-contractual duties and representations.
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2. No-Evidence Summary Judgment Standard
19. Under Rule 166a(i), a motion for summary judgment shifts the burden of proof
from the movant to the non-movant. Esco Oil & Gas, Inc. v. Sooner Pipe & Supply Corp., 962
S.W.2d 193, 197 n. 3 (Tex. App.—Houston [14th Dist.] 1998, no pet.). Once the burden has
shifted, “[a] no-evidence summary judgment is improper if the nonmovant presents more than a
scintilla of probative evidence to raise a material fact question in response to the motion.” Tesoro
Petroleum Corp. v. Nabors Drilling USA, Inc., 106 S.W.3d 118, 124 (Tex. App.—Houston [1st
Dist.] 2002, no pet.)(internal citation omitted). “More than a scintilla of evidence exists when the
evidence presented arises to a level where reasonable and fair-minded people could differ in their
conclusions.” Id. (citing Burroughs Wellcome Co. v. Crye, 907 S.W.2d 497, 499 (Tex.1995)).
Furthermore, in considering a no evidence motion for summary judgment, the evidence is also
reviewed in a light most favorable to the non-movant, disregarding all contrary evidence and
inferences. See King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 750-51 (Tex. 2003).
20. Here, more than a scintilla of evidence supports the breach, causation, and damages
elements of Plaintiffs’ breach of contract claim. Plaintiffs sustained a legal injury when they were
provided a home which substantially deviated from that which was agreed to in the Contract and
the Plans. Plaintiffs have provided legally sufficient evidence of the reasonable cost of repair which
will be necessary to obtain the specifications, character, and quality of home Defendants were
contractually obligated to provide.
21. Accordingly, Defendants’ Motion must be denied.
B. Defendants have failed to conclusively establish their accord and satisfaction
affirmative defense.
22. The defense of accord and satisfaction involves the creation of a new contract to
discharge an existing obligation. Benton v. Contractor’s Supplies, Inc., No. 12-20-00207-CV,
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2021 WL 4613867, at *8 (Tex. App.—Tyler Oct. 6, 2021)(citing
Honeycutt v. Billingsley, 992 S.W.2d 570, 576 (Tex. App.Houston [1st Dist.] 1999, pet. denied)).
Required elements of the new contract include:
(1) the parties agree to discharge the existing obligation; (2) the parties agree that
one party will perform and the other will accept something different from what each
expected from the existing obligation; (3) the parties unmistakably communicate
that the different performance will discharge the existing obligation; (4) the
agreement to discharge the existing obligation is plain, definite, certain, clear, full,
explicit, and not susceptible of any other interpretation; and (5) the parties’
agreement must be accompanied by acts and declarations that the creditor is “bound
to understand.”
Id. (emphasis added); see also Parker Drilling Co. v. Romfor Supply Co., 316 S.W.3d 68, 73 (Tex.
App.—Houston [14th Dist.] 2010, pet. denied)(“To create an enforceable contract, there must be
a clear and definite offer followed by a clear and definite acceptance in accordance with the offer’s
terms.”)(internal citations omitted).
23. Here, there is contradictory evidence as to first, third, fourth, and fifth elements of
the accord and satisfaction affirmative defense. For instance, the Jetts’ understanding from the
March 10, 2020 telephone conversation was that the discount on the Final Invoice was being
offered without any additional strings attached. See Exhibit “7,” at ¶¶ 9, 11; see also Exhibit “9”
at 39:13–17. Kathy Wimbish, Putnam’s Corporate Representative, conceded that there was no
discussion concerning the issue, but testified that it was her unilateral assumption that the discount
would also be accompanied by a discharge of the original obligation and a release of future claims.
Exhibit “8,” at 130:11–17 (Q: “Did [Ms. Jett] say that she was going to release any claims
associated with the slab height?” A: “No, she did not.” Q: “Okay. Did - - ” A: “But I made that
assumption.”).
24. “[F]or this defense to prevail, there must be a dispute and an unmistakable
communication to the creditor that tender of the reduced sum is upon the condition that acceptance
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will satisfy the underlying obligation.” Lopez v. Munoz, Hockema & Reed, L.L.P., 22 S.W.3d 857,
863 (Tex. 2000)(internal citation omitted)(emphasis added)(holding that initial acceptance of
lesser portion of settlement was not inconsistent with plaintiffs’ later assertion that they were
entitled to more).11 “Evidence offered in support of the defense must demonstrate both parties
agreed the amount paid by the debtor to the creditor fully satisfied the entire claim.” Richardson
v. Allstate Texas Lloyd’s, 235 S.W.3d 863, 865 (Tex. App.—Dallas 2007, no pet.)(internal citation
omitted)(emphasis in original).
25. While Defendants insist that the Plaintiffs’ acceptance of the discount, alone,
conclusively establishes the accord and satisfaction defense, this fact alone is not enough because
it only establishes one side of the alleged new agreement. The other component of the alleged new
agreement that Defendants must conclusively establish is an agreement, acknowledgment, or
understanding by the Jetts that the discount was conditioned upon a release of the Jetts’ claims
related to the insufficient slab elevation. There is contradictory evidence relating to this critical
component of the alleged “new agreement.” In fact, both sides concede that a release of Putnam’s
existing obligation was never once discussed amongst the Jetts and Putnam, nor was it
memorialized in a written document, such as a mutually signed change order, or otherwise. Exhibit
“8,” at 129:25–130:23.
26. When considering whether a contract was formed, there must be evidence of mutual
assent and a meeting of the minds. Id. at 75. “The term ‘meeting of the minds’ refers to the parties
mutual understanding and assent to the expression of their agreement.” Principal Life Ins. Co. v.
Revalen Dev., LLC, 358 S.W.3d 451, 455 (Tex. App.—Dallas 2012, pet. denied)(internal citations
11
“The parties must specifically and intentionally agree to the discharge of one of the parties’ existing obligations.”
Id.
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omitted). “The parties must agree to the same thing, in the same sense, at the same time.” Id.12
Courts are not to consider one party’s subjective state of mind. Parker Drilling Co., 316 S.W.3d
at 75 (“The determination of a meeting of the minds is based on the objective standard of what the
parties said and did, not on their subjective states of mind.”).
27. As set forth above, the only evidence Defendants have shown relating to any release
of Putnam’s obligation to properly construct the slab is Wimbish’s own subjective understanding
and silent assumption. A release, waiver, or accord was not even discussed as part of the
conversation concerning the discounted Final Invoice. See Exhibit “7” and Exhibit “9.” Simply,
the discussion relating to a small discount on the Final Invoice alone is not sufficient to
conclusively establish a “meeting of the minds” as to consent or agreement by the Jetts to release
Putnam of its original obligation to construct the Home in accordance with the Contract and
certainly does not rise to the level of a “clear, plain, and definite unmistakable communication”
which is necessary to prove the accord and satisfaction defense.13
28. For instance, in Benton v. Contractor’s Supplies, Inc., the court considered this
defense in the context of a payment dispute between a subcontractor and supplier on a construction
project. 2021 WL 4613867, at *6. The defendant/subcontractor argued that an accord and
satisfaction had been reached following a conversation in which the supplier informed the
subcontractor that it would seek direct payment from the general contractor on the project for
12
[A] contract must at least be sufficiently definite to confirm that both parties actually intended to be contractually
bound, [a]nd even when that intent is clear, the agreement’s terms must also be sufficiently definite to enable a court
to understand the parties’ obligations, and to give an appropriate remedy if they are breached.” Fischer v. CTMI,
L.L.C., 479 S.W.3d 231, 237 (Tex. 2016).
13
Defendants also argue that the original Contract was for Putnam “to build a house for a certain amount taking into
account change orders and changes of whatever type.” Motion, at ¶ 22. This is legally and factually inaccurate because
the Contract did not allow changes of “whatever type.” The Contract is clear and unambiguous that, pursuant to
Section 20, no oral discussion could have “altered, amended, or modified [the Contract] except by Change Order or
other agreement in writing and signed by both [Defendants] and Owner.” Exhibit “1.” There is no such writing relating
to the unapproved deviation in the slab elevation.
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amounts outstanding. Id.at *6. The Tyler Court of Appeals held that the evidence of this
conversation was insufficient to raise a fact issue under several of the defendant’s affirmative
defenses, including its accord and satisfaction defense, because it did not indicate that the supplier
was extinguishing the subcontractor’s original obligation to pay for the materials it had ordered.
Id. at *6–8. “If true, [the plaintiff/supplier’s] statement to [the defendant/subcontractor] merely
indicated that Contractor’s would try to collect the money it was owed directly from [the general
contractor], not that Contractor’s would no longer attempt to collect the monies it was owed by
[the subcontractor].” Id. at *7.
29. Similarly, here, there is nothing to indicate that when the Jetts accepted a
$10,506.39 discount, they expected it to fully resolve an issue they had not yet had an opportunity
to investigate. When the discussion occurred, the Jetts had not engaged any professionals to
understand the full extent of the damages they had incurred due to the non-compliant slab elevation
and the increased risk of flooding. Exhibit “7.”14 At that point, the Jetts had not even obtained an
elevation certificate, which would later reveal that the Home was not only not constructed in
accordance with the Plans, but it was also constructed contrary to the Building Permit and the
Galveston County Floodplain Regulations. Exhibit “5.”
30. Because there is insufficient and contradictory evidence of any communication,
much less an unmistakable one, that the Jetts agreed or understood that there would be any strings
attached to the discounted Final Invoice, Defendants have failed to conclusively establish their
accord and satisfaction affirmative defense as a matter of law.
14
See also Exhibit “9,” at 39:20–40:3. The Jetts also were not represented by an attorney at that time. Exhibit “9,” at
18:25-19:1.
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C. Defendants have failed to conclusively establish that the economic loss rule bars
Plaintiffs’ DTPA and negligence claims as a matter of law.
40. “The economic loss rule generally precludes recovery in tort for economic losses
resulting from a party’s failure to perform under a contract when the harm consists only of the
economic loss of a contractual expectancy.” Hilburn v. Storage Tr. Properties, LP, 586 S.W.3d
501, 507 (Tex. App.—Houston [14th Dist.] 2019, no pet.)(internal citations omitted). But the
Texas Supreme Court has clarified that the rule “does not bar all claims arising out of a contract
setting.” Id. In Chapman Custom Homes, Inc. v. Dallas Plumbing Co., the Texas Supreme Court
confirmed “a party [cannot] avoid tort liability to the world simply by entering into a contract with
one party, [otherwise the] economic loss rule [would] swallow all claims between contractual and
commercial strangers.” Chapman Custom Homes, Inc. v. Dallas Plumbing Co., 445 S.W.3d 716,
718 (Tex. 2014)(per curiam)(citing Sharyland Water Supply Corp. v. City of Alton, 354 S.W.3d
407, 419 (Tex.2011)). “The key is whether the defendant owes a duty independent from the
contractual duty.” Hilburn, 586 S.W.3d at 509–10.
41. In Chapman Custom Homes, Inc., for instance, the Texas Supreme Court held that
a plumber who had contracted with the builder to install a plumbing system in a house also
assumed an implied duty not to flood or otherwise damage the house while performing its contract.
445 S.W.3d at 718. The Court further held that this duty was independent of any obligation
undertaken in the subcontract with the builder, and the damages caused by flooding the home
extended beyond the economic loss of any benefit anticipated from the contract. Id. at 719.
Therefore, the Court held that the economic loss rule did not bar the plaintiff’s negligence claim.
Id.
42. Similarly, in Hilburn v. Storage Tr. Properties, LP, the Fourteenth Court of Appeals
held that the defendant storage company failed to conclusively establish that the economic loss
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rule barred the plaintiff’s claims for violation of the DTPA. 586 S.W.3d at 510. There, the contents
of the plaintiff’s storage units were removed and thrown away in the weeks following a flood. Id.
at 504. Days after the flood, the storage company had contacted the plaintiff about the need to
remove or dispose of personal items that were damaged, but when the plaintiff explained that he
could not do so by the time requested because of a family medical emergency, he was told “not to
worry.” Id. at 505. Two weeks later, the plaintiff was told that he needed to immediately remove
and/or recover the contents of his units because the locks had been cut and items were being thrown
away. Id. By the time the plaintiff could make it to his units, much of his property had been
disposed. Id.
43. In considering whether the economic loss rule barred the plaintiff’s estoppel and
DTPA claims, the Fourteenth Court of Appeals noted that the plaintiff alleged the storage company
made representations regarding the disposition of his property that were not related to its duty to
comply with the storage contract. Id. at 510. The courted noted that the plaintiff had alleged a
promise—"not to worry about moving his possessions—along with action by Storage Trust
inconsistent with Storage Trust’s intention to clear out the storage units—accepting the rent after
the storage units had been flooded.” Id. Under those facts, the court reasoned that these contentions
were not related to a contractual duty, but rather, were common law duties that arose from
renunciation of a purported known right, (“inducing Hilburn not to move his property by telling
him he did not need to worry and promising not to dispose of his property.”). Thus, the court held
that the storage company did not conclusively establish that the plaintiff’s estoppel and DTPA
claims were barred by the economic loss rule as a matter of law. Id.; see also Marinecorp Int’l,
Ltd. v. Chopper Grp., LLC, No. 01-14-00707-CV, 2016 WL 1382168, at *4 (Tex. App.—Houston
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[1st Dist.] Apr. 7, 2016, pet. denied)(holding that DTPA claim was not barred where it was based
on breach of warranty of suitability which was a duty independent of any contractual duties).15
44. Similarly, here, the Jetts’ DTPA and negligence claims arise from extracontractual
duties. As to the DTPA claim, one basis for that claim is the post-contractual assurances made by
Putnam’s Superintendent in which the Jetts were told not to worry and that “they would get their
stairs” on numerous occasions. Exhibit “7.” Early on in the construction process, the Jetts were
concerned that the construction substantially deviated from the Plans, but each time they raised
the issue with a Putnam representative, they were assured that as the construction progressed the
apparent issue would be resolved. Id. These assurances and representations arose separately from
the Contract and similarly induced the Jetts’ renunciation of a known right—i.e., not to worry
about the construction’s deviation from the Plans because Putnam promised that any apparent
breach would be remedied in the future. These representations proved to be false, and the Jetts
never received their stairs or their elevated porch as promised. Id. The confusion caused by these
assurances prevented the Jetts from stepping in and demanding strict compliance with the Contract
Plans early on in the construction process when the repair costs would have been much less.
Because these assurances went beyond Putnam’s original Contract obligation by causing the Jetts
to incur additional damages as the noncompliant construction progressed, this basis of Plaintiffs’
DTPA claim is not barred by the economic loss rule.
45. Another basis of the Jetts’ DTPA claim is the confusion Defendants caused as to
the source of the employees who were tasked with overseeing the Project.16 Both David Kehrer
15
Moreover, the economic loss rule is typically applied as a bar to an unintentional tort. See Fuller v. Le Brun, 616
S.W.3d 31, 45 (Tex. App.—Houston [14th Dist.] 2020, pet. denied)(holding that economic loss rule did not bar
plaintiff’s fraud claim as a matter of law).
16
See Sue E. Jett’s Responses to Interrogatories Nos. 5, 6, 7, 9, 10, and 11 served on August 12, 2021.
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and David Norcross, the Project Manager and Project Superintendent, were held out as agents and
representatives of Putnam. Exhibit “7.” They were the Jetts’ primary point of contact throughout
the Project, and Mr. Norcross even signed the Contract on behalf of Putnam. The Jetts did not learn
until after this litigation commenced that Putnam has no employees, and these representatives were
all actually employed through Ilcor. Exhibit “8,” at 14:21–25; 26:2–11; see also Exhibit “10.”
Thus, the confusion caused by staffing the management functions for Plaintiffs’ Project with
people who were not actually employees of Putnam Builders is also separate and distinct from
Putnam’s contractual obligations owed pursuant to the Contract. Accordingly, this basis of
Plaintiffs’ DTPA claim is also not barred by the economic loss rule.
46. Finally, as to Plaintiffs’ negligence claim, this claim also arises from the failure of
Defendants to perform various common law duties. For instance, one basis of Plaintiffs’
negligence claim is Defendants’ negligent hiring and supervision of the contractors it engaged to
manage the Project. This failure is further evidenced by the fact that the Project Manager and
Superintendent were both terminated just as the Jetts’ Project was ending. See Exhibits “16” and
“17.” Plaintiffs’ negligence claim is also based on Defendants’ failure to comply with the
Galveston County Floodplain Regulations and the Building Permit that was issued in the
performance of the construction work. See Exhibit F to Defendants’ Motion. This obligation does
not arise from the Contract, but again, is an implied duty that arises from the common law.
47. Based on the foregoing, because Plaintiffs’ DTPA and negligence claims arise from
representations and duties which are extracontractual, there is at the very least a fact question as
to whether they are barred by the economic loss rule.
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D. Plaintiffs have presented more than a scintilla of evidence demonstrating that
Defendants’ breach of the Contract has caused Plaintiffs to sustain a legal injury.
48. Defendants claim that Plaintiffs have failed to present sufficient evidence of the
fourth and fifth elements of their breach of contract claim—breach and damages.17 This contention
must be rejected because Defendants do not dispute that the Home was not constructed in
accordance with the Plans,18 and Plaintiffs have presented legally sufficient evidence of necessary
remedial costs in order to correct the noncompliant slab elevation, as well as their out-of-pocket
costs for other necessary repairs unrelated to the slab.
49. “A nonbreaching party is generally entitled to all its actual damages necessary to
put it in the same economic position it would have been in had the contract not been
breached.” Tacon Mech. Contractors, Inc. v. Grant Sheet Metal, Inc., 889 S.W.2d 666, 670 (Tex.
App.—Houston [14th Dist.] 1994, writ denied). The goal in measuring damages for a breach of
contract claim is to provide just compensation for the loss or damage sustained as a result of breach.
Mays v. Pierce, 203 S.W.3d 564, 577–78 (Tex. App.—Houston [14th Dist.] 2006, pet.
denied)(internal citation omitted). One measure of damages for the breach of a construction
contract is remedial damages, “which is the cost to complete or repair less the unpaid balance on
the contract price.” McGinty v. Hennen, 372 S.W.3d 625, 627 (Tex. 2012)(per curiam)(internal
citations omitted). The Jetts have sustained a legal injury despite that they have not yet started the
17
The essential elements of a breach of contract claim are as follows: (1) there is a valid, enforceable contract; (2) the
plaintiff is a proper party to sue for breach of the contract; (3) the plaintiff performed, tendered performance of, or
was excused from performing, its contractual obligations; (4) the defendant breached the contract; and, (5) the
defendant’s breach caused the plaintiff injury. See B&W Sup. V. Beckman, 305 S.W.3d 10, 16 (Tex. App.—Houston
[1st Dist.] 2009, pet. denied) (elements 1, 3–5); Mandell v. Hamman Oil & Ref. Co., 822 S.W.2d 153, 161 (Tex.
App.—Houston [1st Dist.] 1991, writ denied (element 2).
18
Exhibit “8,” at 98: 15-17. Defendants dispute whether there was a new agreement reached which discharged
Putnam’s original obligation to construct the Home in accordance with the Plans.
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repair work that has been recommended by their structural engineering expert—i.e., that the repair
work has not already been performed does not render the injury “anticipatory” in nature.
50. For instance, in R.B. Hardy & Sons, Inc. v. Hoyer Glob. (USA), Inc., the plaintiff
sued the defendant for breaching a construction contract to pave a particular piece of land. No. 01-
09-00041-CV, 2010 WL 2305753, at *1 (Tex. App.—Houston [1st Dist.] June 10, 2010, pet.
denied). The plaintiff alleged that the defendants’ work was deficient in several respects, and at
trial, the plaintiff presented evidence that the estimated repair costs exceeded $650,000 because
the project would have to be completely redone. Id. As to the damages question, the jury was
instructed “to consider ‘remedial damages,’ which were defined as ‘the reasonable and necessary
cost to repair the paving project, whether already incurred or to be incurred in the future.’” Id. at
*5. The jury awarded the plaintiff a portion of the remedial damages requested, which was
presumed to have been based on one of the recommendations for repairs that were not yet
completed, and the First Court of Appeals affirmed the judgment in favor of the plaintiff. Id. at *6.
Thus, the fact that the plaintiff’s remedial damages had not yet been incurred was not a bar to
recovery as a matter of law.
51. Similarly, here, the fact that the Jetts have not yet started the repairs recommended
by Ms. Patrick is not a bar to recovery, nor does it mean that they have yet to have sustained a
legal injury. To the contrary, the Jetts’ breach of contract action accrued when they were delivered
the Home which deviated from what they had asked Putnam to build, as reflected in the Plans. The
Jetts have presented legally sufficient evidence that Defendants breached the Contract. Compare
Exhibit “2” with Exhibit “3;” see also Exhibit “7” and Exhibit “9.” The Jetts have further presented
evidence of the reasonable repair based on the opinion of their structural engineering expert.
During her deposition and in her report, Ms. Patrick explained that based on her experience,
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“reconstruction is [the] more cost-effective method for ensuring a durable repair” after explaining
the numerous problems she has encountered in the Houston and Galveston area after structures
have been raised. Exhibits “11” and “12,” at 47:16. Mary Jo Poindexter, Plaintiffs’ expert on
construction costs, has also presented evidence of the reasonable cost of reconstruction. Exhibit
“13” and “14.”19 Ms. Poindexter testified that the reasonable cost of reconstruction is $584,230
and that in coming to this conclusion, she relied on the RS Means construction estimating software,
Preview
Filed: 3/11/2022 4:01 PM JOHN D. KINARD - District Clerk Galveston County, Texas Envelope No. 62548067 By: Rolande Kain 3/11/2022 4:36 PM CAUSE NO. 20-CV-1704 RAYMOND D. JETT AND SUE E. JETT, § IN THE DISTRICT COURT OF INDIVIDUALLY AND AS TRUSTEE § OF THE SPARKS FAMILY LIVING TRUST § § Plaintiffs, § § v. § GALVESTON COUNTY, TEXAS § WIMBISH KELLY CONSTRUCTION, LLC § D/B/A PUTNAM BUILDERS § § Defendant. § 122nd JUDICIAL DISTRICT PLAINTIFFS’ RESPONSE TO DEFENDANTS’ TRADITIONAL AND NO-EVIDENCE MOTION FOR SUMMARY JUDGMENT TO THE HONORABLE JUDGE OF SAID COURT: COME NOW, Plaintiffs, Raymond D. Jett and Sue E. Jett, Individually and as Trustee of the Sparks Family Living Trust (“Plaintiffs” or the “Jetts”), with this Response to the Traditional and No-Evidence Motion for Summary Judgment of Defendants, Wimbish Kelly Construction, LLC d/b/a Putnam Builders (“Putnam”), Industrial Laminates Corporation d/b/a Ilcor Builders (“Ilcor”), and Ilcor Homes, Inc. (“Ilcor Homes” and, collectively with Putnam and Ilcor, “Defendants”). In support thereof, Plaintiffs would respectfully show this Court as follows: I. Introduction 1. Defendants’ Motion for Traditional Summary Judgment (the “Traditional Motion”) must be denied because Defendants have failed to conclusively establish their accord and satisfaction defense as a matter of law. At the very minimum, a fact issue exists as to whether there was a clear and unmistakable communication which evidenced an agreement by the Jetts to discharge Putnam’s obligation to construct the Home in accordance with the Plans, defined further herein. Because a fact issue exists as to whether the alleged “new agreement” included a release Page 1 of 24 Plaintiffs’ Response to Defendants’ Traditional and No-Evidence Motion for Summary Judgment 593572v.1 S7201/00001 of claims associated with Putnam’s original obligation, Defendants have not met their traditional summary judgment burden to conclusively establish this defense beyond all reasonable doubt as a matter of law. 2. Plaintiffs’ claim for violation of the Texas DTPA arises from certain deceptive acts and practices which are extracontractual, namely: (i) various post-contractual assurances made by the Defendants’ employees that the Plaintiffs would “get their stairs;” and, (ii) causing confusion as to the source of the employees who were responsible for performing and overseeing the work on their Project. Additionally, Plaintiffs’ negligence claim arises from Defendants’ failure to hire and provide competent managers and superintendents to properly pursue and oversee the work for Plaintiffs’ Project, as well as Defendants’ failure to comply with the minimum elevation standards set forth in the Building Permit and Galveston County Floodplain Regulations. Because these deceptive acts and failures do not arise from Putnam’s failure to perform any contractual duties, they are not barred by the economic loss rule. Accordingly, Defendants’ Traditional Motion should be denied on this ground as well. 3. Finally, Defendants’ Motion for No-Evidence Summary Judgment (the “No- Evidence Motion”) must also be denied. Plaintiffs have presented legally sufficient evidence of the reasonable and necessary cost to repair the Home and correct the defective slab height. This evidence is in the form of expert testimony from Plaintiffs’ structural engineering expert, as well as Plaintiffs’ expert on construction costs. Moreover, Plaintiffs are qualified to testify as lay people as to the amount of actual out-of-pocket repairs they have incurred. To the extent further expert testimony is needed to support the damages incurred due to these necessary repairs, the expert designation deadline has now been extended to May 20, 2022, and Plaintiffs will likely be supplementing their expert designation after additional discovery. Page 2 of 24 Plaintiffs’ Response to Defendants’ Traditional and No-Evidence Motion for Summary Judgment 593572v.1 S7201/00001 4. Based on all of the foregoing, Defendants’ Traditional and No-Evidence Motion for Summary Judgment should be denied. II. Factual Background 5. On or about May 3, 2019, Plaintiffs entered into a Residential Construction Contract with Putnam (the “Contract”) for the construction of a custom home (the “Home”) on the real property located at 145 Mary Lane, Bacliff, Texas 77518 (the “Property”). A true and correct copy of the Contract is attached hereto as Exhibit “1”. 6. Defendants failed to construct the home in accordance with the “designs, allowance items, amounts approved by Owner[s]1, and specifications agreed [and] signed . . .” (the “Plans”). The Plans were included and made a part of the Contract as Exhibit D.2 A true and correct copy of the Plans is attached hereto as Exhibit “2.” Defendants failed to abide by the requirements set forth in the Plans that the Home be built three (3) feet above grade with stairs leading up to the Home’s elevated front porch. A fair and accurate depiction of the Home as constructed by Defendants is attached hereto as Exhibit “3”. 7. Putnam’s failure to abide by the Plans has not only deprived Plaintiffs of the home they contracted with Putnam to provide, but it has also left the Home below the elevation and required floodplain standards as stated in the Building Permit for the Property and the Galveston County Floodplain Regulations. A true and correct copy of the Building Permit for the construction of the Home (the “Project”) is attached hereto as Exhibit “4.” The only known elevation certificate 1 Capitalized terms not defined herein shall have the meaning ascribed to those terms in the Contract. 2 See Exhibit “1” at § 4 (Plans expressly incorporated into Defendants’ “SCOPE OF WORK”); see also Excerpts from the Deposition of Kathy Wimbish, Putnam Builders’s corporate representative, attached hereto as Exhibit “8”, at 50:22–51:3 (conceding the Plans set forth as Exhibit D to the Contract are part of the Contract); 69:19–22 (same). Page 3 of 24 Plaintiffs’ Response to Defendants’ Traditional and No-Evidence Motion for Summary Judgment 593572v.1 S7201/00001 that has been obtained for the Home confirms that the Home was constructed only about six (6) inches above the crown of the street, rather than the eighteen (18) inches required by the Floodplain Regulations and the thirty-six (36) inches above grade required by the Plans. A true and correct copy of the Elevation Certificate is attached hereto as Exhibit “5.” 8. Throughout the construction, which began in or around July of 2019, the Jetts continuously asked Defendants and their employees or representatives how they were going to get their stairs because the finished floor of the Home looked level with the ground. See Affidavit of Sue E. Jett attached hereto as Exhibit “7.” David Norcross, the Project Superintendent supplied by Putnam and/or Ilcor and/or Ilcor Homes,3 constantly assured Plaintiffs not to worry and that they “would get their stairs” every single time they asked.4 Towards the end of construction, in the spring of 2020, it then became clear to the Jetts that they had been lied to. See Exhibit “3.” The Jetts were not going to get the raised Victorian-style Home that they were continuously assured they would eventually get. 9. At the completion of construction, Defendants sent the Jetts the Final Invoice in the amount of $30,506.39. A true and correct copy of Final Invoice is attached hereto as Exhibit “6.” At that point, no one from Putnam had acknowledged the as-built deviation from the Plans or offered the Jetts any compensation for this unapproved material change. See Exhibit “7.” The Jetts could not stomach paying the full amount of the Final Invoice because they were extremely dissatisfied with the finished product Putnam provided. Id. As of March 2020, Plaintiffs also had not yet obtained an elevation certificate or engaged any engineering professionals to understand 3 Ilcor and Ilcor Homes are referred to herein as the “Ilcor Entities.” 4 Excerpts of Sue Jett’s deposition testimony are also attached hereto as Exhibit “9.” See Exhibit “9,” at 17: 9–12 (“Every time I complained or asked about getting the steps or the elevation of the house he would say, “oh, you’re going to get your steps. You’re going to get your steps, every single time.”). Page 4 of 24 Plaintiffs’ Response to Defendants’ Traditional and No-Evidence Motion for Summary Judgment 593572v.1 S7201/00001 the full extent of the damage caused by the non-compliant slab height. See id., at ¶ 11; see also Elevation Certificate attached hereto as Exhibit “5” dated July 18, 2020. 10. In response to the Final Invoice, Sue Jett called Kathy Wimbish, the President and Corporate Representative for Putnam, to discuss her dissatisfaction with the Home and the outstanding amount owed. Exhibit “9,” at 29:22–30:16. After some discussion regarding the amount the Jetts were willing to pay towards the Final Invoice, Kathy Wimbish informed Sue Jett that she would be willing to apply a $10,506.39 discount to the final price. Id. The discount was not made contingent upon anything, and Kathy Wimbish conceded that there was no discussion of any waiver or release of the Jetts’ claims related to the slab issue or otherwise. See Exhibit 9, at 39:13–19 (Q: “As part of that conversation, did you agree to release any claims related to the slab height?” [Objection by counsel for Putnam] A: “I did not. I didn’t sign anything. I didn’t allude to that fact. It was simply a discount, period.”); see also Exhibit “8,” at 129:1-25; 130:1-17 (Q: “Did she say that she was going to release any claims associated with the slab height?” A: “No, she did not.”). No negotiation regarding the Jetts’ release of claims took place,5 and Kathy Wimbish just assumed that was the case. Exhibit “8,” at 130:11–17. Because it was not discussed or memorialized in writing in any form or fashion, the Jetts did not assume that was the case and did not intend to waive a claim that they had not yet had an opportunity to fully investigate.6 Plainly, 5 Exhibit “9,” at 40:4-17 (Q: “Whenever you paid the final invoice, did you—from your perspective, was that a final settlement related to the slab height?” [objection] A: “No.” Q: “Did Kathy ever tell you that that was a final settlement related to the slab height?” A: “No.” [objection] Q: “Did Kathy tell you anything about what she was offering you in exchange for the discount?” [objection] A: “No.”). 6 Moreover, the discussion referenced above occurred orally over the phone, and there is no written memorialization of any alleged terms associated with the slight discount. Thus, even if any discussion regarding Plaintiffs’ release of claims had taken place, (which, Wimbish conceded did not), pursuant to Section 20 of the Contract, no oral discussion could have “altered, amended, or modified [the Contract] except by Change Order or other agreement in writing and signed by both [Defendants] and Owner.” Exhibit “1” at § 20. Page 5 of 24 Plaintiffs’ Response to Defendants’ Traditional and No-Evidence Motion for Summary Judgment 593572v.1 S7201/00001 the Jetts did not intend to discharge Putnam Builders’ original obligation to construct the Home in accordance with the Plans through the acceptance of the discounted Final Invoice. 11. As set forth in the Elevation Certificate, the Home’s slab height is about a foot below the elevation required by the Galveston County Floodplain Regulations and about two and a half feet below the elevation required by the Plans. Compare Exhibit “5” (Elevation Certificate) with Exhibit “4” (the Building Permit) and Exhibit “2” (the Plans). The Jetts have since engaged a structural engineering expert who recommends that the most durable and cost-effective way to repair the non-compliant elevation, without inserting additional risk of foundation and other issues in the future, is to demolish and reconstruct the Home. See Report of Amy Patrick attached hereto as Exhibit “11.”7 The Jetts have also engaged a construction cost expert who has testified that the reasonable cost of reconstructing the Home at the proper elevation is $584,230, taking into account the 2021 cost of construction materials in the area. See Report of Mary Jo Poindexter and Excerpts of Deposition Testimony attached hereto as Exhibits “13” and “14,” respectively. 12. After the Jetts moved into the Home, they discovered other problems with Defendants’ construction for which they had to incur out-of-pocket costs to repair or will have to incur out-of-pocket costs to repair. This includes: a plumbing leak in a wall which cost approximately $1,000 to repair; the installation of leafless gutters that Defendants failed to provide which cost $8,935; repairs to the door jambs at the front and back door of the Home which will likely cost $3,136.17; and, issues with the interior doors because it appears they were not properly secured to the walls and frames which will likely cost $3,455.77 to repair. Exhibit “7.” More 7 Plaintiffs have not undertaken Ms. Patrick’s repair recommendation to date due to litigation costs. Exhibit “7,” at ¶ 15. However, the Jetts intend to proceed with these recommended repairs once they recover the amounts sought through this litigation. Id. Page 6 of 24 Plaintiffs’ Response to Defendants’ Traditional and No-Evidence Motion for Summary Judgment 593572v.1 S7201/00001 recently, the Jetts have also discovered cracks in the walls and the concrete floor of their front porch. Id. 13. It also became known through this litigation that Putnam did not provide any of its own employees to oversee the Jetts’ Project because Putnam has no employees.8 All of the representatives who the Jetts dealt with, and who were tasked with overseeing the work for the Project, were actually employees of the Ilcor Entities.9 This is despite the fact that many of these representatives, including David Norcross and David Kehrer, held themselves out as representatives of Putnam, had “@putnambuilders.com” email addresses, and even signed the Contract on behalf of Putnam. See Exhibit “1.” 14. Moreover, these individuals, who were assigned as the Project Manager and Project Superintendent for the Jetts’ Project, were terminated by Putnam and/or the Ilcor Entities at or near the Project’s completion. David Kehrer was terminated on or about March 11, 2020 for not following through with projects; not showing up to work; not responding to phone calls; trespassing into a customer’s home and stealing various items; losing a truck owned by Ilcor and/or containing an Ilcor logo; and, using a company credit card for personal purchases. See Termination Notice and related documents attached hereto as Exhibit “16.”10 This was the person assigned as the Jetts’ point of contact for Putnam throughout the construction of their Home. Putnam and/or Ilcor also gave Mr. Kehrer warnings for similar issues in the months and year before Putnam started its demolition and construction work for the Jetts. Id. David Norcross was also terminated 8 Exhibit “8,” at 14:21–25; 26:2–11. 9 A true and correct copy of the Employee Lease Agreement between Putnam Builders and the Ilcor Entities is attached hereto as Exhibit “10.” 10 Kathy Wimbish refused to answer questions regarding the circumstances surrounding the termination of David Kehrer and Davis Norcross during her deposition. Exhibit “8,” at 30: 5–31:11; 66:3–11. Page 7 of 24 Plaintiffs’ Response to Defendants’ Traditional and No-Evidence Motion for Summary Judgment 593572v.1 S7201/00001 by Putnam on or about February 4, 2020. See Termination Note in Employee File attached hereto as Exhibit “17.” III. Summary Judgment Evidence 15. In support of this Response, Plaintiffs rely on the following summary judgment evidence that is attached and incorporated by reference as if set forth in this Response. The evidence attached and offered as evidence in Response to Defendants’ Traditional and No- Evidence Motion for Summary Judgment (the “Motion”) is as follows: Exhibit “1” – The Contract; Exhibit “2” – The Plans; Exhibit “3” – Picture of the Home after Construction; Exhibit “4” –Building Permit Dated May 31, 2019; Exhibit “5” – Elevation Certificate for the Property; Exhibit “6” – Final Invoice for the Project; Exhibit “7” – Affidavit of Sue E. Jett; Exhibit “8” – Excerpts of Deposition Testimony of Kathy Wimbish, Corporate Representative of Putnam Builders; Exhibit “9” – Excerpts of Deposition Testimony of Sue E. Jett; Exhibit “10” – Employee Lease Agreement between Putnam Builders and the Ilcor Entitles; Exhibit “11” – Expert Report of Amy Patrick, P.E.; Exhibit “12”– Excerpts of Deposition Testimony of Amy Patrick, P.E.; Exhibit “13” – Expert Report of Mary Jo Poindexter, P.E.; Exhibit “14”– Excerpts of Deposition Testimony of Mary Jo Poindexter, P.E.; Exhibit “15”– Affidavit of Mary Jo Poindexter, P.E. Exhibit “16”– Employee Termination Notice and related documents for David Kehrer; and, Exhibit “17” – Employee Termination Note in Employee File for David Norcross. IV. Argument and Authorities A. Summary Judgment Standard 1. Traditional Summary Judgment Standard Page 8 of 24 Plaintiffs’ Response to Defendants’ Traditional and No-Evidence Motion for Summary Judgment 593572v.1 S7201/00001 16. To succeed on a traditional motion for summary judgment as to its causes of action or affirmative defenses, the defendant has the burden of showing there are no genuine issues of material fact as to its affirmative defenses and that it is entitled to summary judgment as a matter of law. Tex. R. Civ. P. 166a(c). “Under Texas summary judgment law, the party moving for summary judgment carries the burden of establishing that no material fact issue exists and that it is entitled to judgment as a matter of law.” M.D. Anderson Hosp. & Tumor Inst. v. Willrich, 28 S.W.3d 22, 23–24 (Tex. 2000)(internal citation omitted). A defendant moving for summary judgment on its affirmative defense has the burden to conclusively establish that defense. See Exxon Mobil Corp. v. Rincones, 520 S.W.3d 572, 593 (Tex. 2017)(internal citation omitted). “A matter is conclusively proven if ordinary minds could not differ as to the conclusion to be drawn from the evidence.” Lujan v. Navistar Fin. Corp., 433 S.W.3d 699, 704 (Tex. App.—Houston [1st Dist.] 2014, no pet.)(internal citation omitted). 17. As Defendants acknowledge, the Court must take as true all evidence favorable to the non-movant, and every reasonable inference must be indulged in favor of the non-movant and any doubt resolved in its favor. Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548–49 (Tex. 1985)(internal citation omitted). 18. Here, Defendants have failed to conclusively establish their affirmative defenses of accord and satisfaction and the economic loss rule. Summary judgment on the accord and satisfaction defense is precluded by the fact question that exists regarding whether the Jetts intended to discharge Putnam’s original obligation when they accepted the discounted Final Invoice. Moreover, the Defendants have failed to conclusively establish as a matter of law that the economic loss rule bars the Plaintiffs’ negligence and DTPA claims because those claims arise from extra-contractual duties and representations. Page 9 of 24 Plaintiffs’ Response to Defendants’ Traditional and No-Evidence Motion for Summary Judgment 593572v.1 S7201/00001 2. No-Evidence Summary Judgment Standard 19. Under Rule 166a(i), a motion for summary judgment shifts the burden of proof from the movant to the non-movant. Esco Oil & Gas, Inc. v. Sooner Pipe & Supply Corp., 962 S.W.2d 193, 197 n. 3 (Tex. App.—Houston [14th Dist.] 1998, no pet.). Once the burden has shifted, “[a] no-evidence summary judgment is improper if the nonmovant presents more than a scintilla of probative evidence to raise a material fact question in response to the motion.” Tesoro Petroleum Corp. v. Nabors Drilling USA, Inc., 106 S.W.3d 118, 124 (Tex. App.—Houston [1st Dist.] 2002, no pet.)(internal citation omitted). “More than a scintilla of evidence exists when the evidence presented arises to a level where reasonable and fair-minded people could differ in their conclusions.” Id. (citing Burroughs Wellcome Co. v. Crye, 907 S.W.2d 497, 499 (Tex.1995)). Furthermore, in considering a no evidence motion for summary judgment, the evidence is also reviewed in a light most favorable to the non-movant, disregarding all contrary evidence and inferences. See King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 750-51 (Tex. 2003). 20. Here, more than a scintilla of evidence supports the breach, causation, and damages elements of Plaintiffs’ breach of contract claim. Plaintiffs sustained a legal injury when they were provided a home which substantially deviated from that which was agreed to in the Contract and the Plans. Plaintiffs have provided legally sufficient evidence of the reasonable cost of repair which will be necessary to obtain the specifications, character, and quality of home Defendants were contractually obligated to provide. 21. Accordingly, Defendants’ Motion must be denied. B. Defendants have failed to conclusively establish their accord and satisfaction affirmative defense. 22. The defense of accord and satisfaction involves the creation of a new contract to discharge an existing obligation. Benton v. Contractor’s Supplies, Inc., No. 12-20-00207-CV, Page 10 of 24 Plaintiffs’ Response to Defendants’ Traditional and No-Evidence Motion for Summary Judgment 593572v.1 S7201/00001 2021 WL 4613867, at *8 (Tex. App.—Tyler Oct. 6, 2021)(citing Honeycutt v. Billingsley, 992 S.W.2d 570, 576 (Tex. App.Houston [1st Dist.] 1999, pet. denied)). Required elements of the new contract include: (1) the parties agree to discharge the existing obligation; (2) the parties agree that one party will perform and the other will accept something different from what each expected from the existing obligation; (3) the parties unmistakably communicate that the different performance will discharge the existing obligation; (4) the agreement to discharge the existing obligation is plain, definite, certain, clear, full, explicit, and not susceptible of any other interpretation; and (5) the parties’ agreement must be accompanied by acts and declarations that the creditor is “bound to understand.” Id. (emphasis added); see also Parker Drilling Co. v. Romfor Supply Co., 316 S.W.3d 68, 73 (Tex. App.—Houston [14th Dist.] 2010, pet. denied)(“To create an enforceable contract, there must be a clear and definite offer followed by a clear and definite acceptance in accordance with the offer’s terms.”)(internal citations omitted). 23. Here, there is contradictory evidence as to first, third, fourth, and fifth elements of the accord and satisfaction affirmative defense. For instance, the Jetts’ understanding from the March 10, 2020 telephone conversation was that the discount on the Final Invoice was being offered without any additional strings attached. See Exhibit “7,” at ¶¶ 9, 11; see also Exhibit “9” at 39:13–17. Kathy Wimbish, Putnam’s Corporate Representative, conceded that there was no discussion concerning the issue, but testified that it was her unilateral assumption that the discount would also be accompanied by a discharge of the original obligation and a release of future claims. Exhibit “8,” at 130:11–17 (Q: “Did [Ms. Jett] say that she was going to release any claims associated with the slab height?” A: “No, she did not.” Q: “Okay. Did - - ” A: “But I made that assumption.”). 24. “[F]or this defense to prevail, there must be a dispute and an unmistakable communication to the creditor that tender of the reduced sum is upon the condition that acceptance Page 11 of 24 Plaintiffs’ Response to Defendants’ Traditional and No-Evidence Motion for Summary Judgment 593572v.1 S7201/00001 will satisfy the underlying obligation.” Lopez v. Munoz, Hockema & Reed, L.L.P., 22 S.W.3d 857, 863 (Tex. 2000)(internal citation omitted)(emphasis added)(holding that initial acceptance of lesser portion of settlement was not inconsistent with plaintiffs’ later assertion that they were entitled to more).11 “Evidence offered in support of the defense must demonstrate both parties agreed the amount paid by the debtor to the creditor fully satisfied the entire claim.” Richardson v. Allstate Texas Lloyd’s, 235 S.W.3d 863, 865 (Tex. App.—Dallas 2007, no pet.)(internal citation omitted)(emphasis in original). 25. While Defendants insist that the Plaintiffs’ acceptance of the discount, alone, conclusively establishes the accord and satisfaction defense, this fact alone is not enough because it only establishes one side of the alleged new agreement. The other component of the alleged new agreement that Defendants must conclusively establish is an agreement, acknowledgment, or understanding by the Jetts that the discount was conditioned upon a release of the Jetts’ claims related to the insufficient slab elevation. There is contradictory evidence relating to this critical component of the alleged “new agreement.” In fact, both sides concede that a release of Putnam’s existing obligation was never once discussed amongst the Jetts and Putnam, nor was it memorialized in a written document, such as a mutually signed change order, or otherwise. Exhibit “8,” at 129:25–130:23. 26. When considering whether a contract was formed, there must be evidence of mutual assent and a meeting of the minds. Id. at 75. “The term ‘meeting of the minds’ refers to the parties mutual understanding and assent to the expression of their agreement.” Principal Life Ins. Co. v. Revalen Dev., LLC, 358 S.W.3d 451, 455 (Tex. App.—Dallas 2012, pet. denied)(internal citations 11 “The parties must specifically and intentionally agree to the discharge of one of the parties’ existing obligations.” Id. Page 12 of 24 Plaintiffs’ Response to Defendants’ Traditional and No-Evidence Motion for Summary Judgment 593572v.1 S7201/00001 omitted). “The parties must agree to the same thing, in the same sense, at the same time.” Id.12 Courts are not to consider one party’s subjective state of mind. Parker Drilling Co., 316 S.W.3d at 75 (“The determination of a meeting of the minds is based on the objective standard of what the parties said and did, not on their subjective states of mind.”). 27. As set forth above, the only evidence Defendants have shown relating to any release of Putnam’s obligation to properly construct the slab is Wimbish’s own subjective understanding and silent assumption. A release, waiver, or accord was not even discussed as part of the conversation concerning the discounted Final Invoice. See Exhibit “7” and Exhibit “9.” Simply, the discussion relating to a small discount on the Final Invoice alone is not sufficient to conclusively establish a “meeting of the minds” as to consent or agreement by the Jetts to release Putnam of its original obligation to construct the Home in accordance with the Contract and certainly does not rise to the level of a “clear, plain, and definite unmistakable communication” which is necessary to prove the accord and satisfaction defense.13 28. For instance, in Benton v. Contractor’s Supplies, Inc., the court considered this defense in the context of a payment dispute between a subcontractor and supplier on a construction project. 2021 WL 4613867, at *6. The defendant/subcontractor argued that an accord and satisfaction had been reached following a conversation in which the supplier informed the subcontractor that it would seek direct payment from the general contractor on the project for 12 [A] contract must at least be sufficiently definite to confirm that both parties actually intended to be contractually bound, [a]nd even when that intent is clear, the agreement’s terms must also be sufficiently definite to enable a court to understand the parties’ obligations, and to give an appropriate remedy if they are breached.” Fischer v. CTMI, L.L.C., 479 S.W.3d 231, 237 (Tex. 2016). 13 Defendants also argue that the original Contract was for Putnam “to build a house for a certain amount taking into account change orders and changes of whatever type.” Motion, at ¶ 22. This is legally and factually inaccurate because the Contract did not allow changes of “whatever type.” The Contract is clear and unambiguous that, pursuant to Section 20, no oral discussion could have “altered, amended, or modified [the Contract] except by Change Order or other agreement in writing and signed by both [Defendants] and Owner.” Exhibit “1.” There is no such writing relating to the unapproved deviation in the slab elevation. Page 13 of 24 Plaintiffs’ Response to Defendants’ Traditional and No-Evidence Motion for Summary Judgment 593572v.1 S7201/00001 amounts outstanding. Id.at *6. The Tyler Court of Appeals held that the evidence of this conversation was insufficient to raise a fact issue under several of the defendant’s affirmative defenses, including its accord and satisfaction defense, because it did not indicate that the supplier was extinguishing the subcontractor’s original obligation to pay for the materials it had ordered. Id. at *6–8. “If true, [the plaintiff/supplier’s] statement to [the defendant/subcontractor] merely indicated that Contractor’s would try to collect the money it was owed directly from [the general contractor], not that Contractor’s would no longer attempt to collect the monies it was owed by [the subcontractor].” Id. at *7. 29. Similarly, here, there is nothing to indicate that when the Jetts accepted a $10,506.39 discount, they expected it to fully resolve an issue they had not yet had an opportunity to investigate. When the discussion occurred, the Jetts had not engaged any professionals to understand the full extent of the damages they had incurred due to the non-compliant slab elevation and the increased risk of flooding. Exhibit “7.”14 At that point, the Jetts had not even obtained an elevation certificate, which would later reveal that the Home was not only not constructed in accordance with the Plans, but it was also constructed contrary to the Building Permit and the Galveston County Floodplain Regulations. Exhibit “5.” 30. Because there is insufficient and contradictory evidence of any communication, much less an unmistakable one, that the Jetts agreed or understood that there would be any strings attached to the discounted Final Invoice, Defendants have failed to conclusively establish their accord and satisfaction affirmative defense as a matter of law. 14 See also Exhibit “9,” at 39:20–40:3. The Jetts also were not represented by an attorney at that time. Exhibit “9,” at 18:25-19:1. Page 14 of 24 Plaintiffs’ Response to Defendants’ Traditional and No-Evidence Motion for Summary Judgment 593572v.1 S7201/00001 C. Defendants have failed to conclusively establish that the economic loss rule bars Plaintiffs’ DTPA and negligence claims as a matter of law. 40. “The economic loss rule generally precludes recovery in tort for economic losses resulting from a party’s failure to perform under a contract when the harm consists only of the economic loss of a contractual expectancy.” Hilburn v. Storage Tr. Properties, LP, 586 S.W.3d 501, 507 (Tex. App.—Houston [14th Dist.] 2019, no pet.)(internal citations omitted). But the Texas Supreme Court has clarified that the rule “does not bar all claims arising out of a contract setting.” Id. In Chapman Custom Homes, Inc. v. Dallas Plumbing Co., the Texas Supreme Court confirmed “a party [cannot] avoid tort liability to the world simply by entering into a contract with one party, [otherwise the] economic loss rule [would] swallow all claims between contractual and commercial strangers.” Chapman Custom Homes, Inc. v. Dallas Plumbing Co., 445 S.W.3d 716, 718 (Tex. 2014)(per curiam)(citing Sharyland Water Supply Corp. v. City of Alton, 354 S.W.3d 407, 419 (Tex.2011)). “The key is whether the defendant owes a duty independent from the contractual duty.” Hilburn, 586 S.W.3d at 509–10. 41. In Chapman Custom Homes, Inc., for instance, the Texas Supreme Court held that a plumber who had contracted with the builder to install a plumbing system in a house also assumed an implied duty not to flood or otherwise damage the house while performing its contract. 445 S.W.3d at 718. The Court further held that this duty was independent of any obligation undertaken in the subcontract with the builder, and the damages caused by flooding the home extended beyond the economic loss of any benefit anticipated from the contract. Id. at 719. Therefore, the Court held that the economic loss rule did not bar the plaintiff’s negligence claim. Id. 42. Similarly, in Hilburn v. Storage Tr. Properties, LP, the Fourteenth Court of Appeals held that the defendant storage company failed to conclusively establish that the economic loss Page 15 of 24 Plaintiffs’ Response to Defendants’ Traditional and No-Evidence Motion for Summary Judgment 593572v.1 S7201/00001 rule barred the plaintiff’s claims for violation of the DTPA. 586 S.W.3d at 510. There, the contents of the plaintiff’s storage units were removed and thrown away in the weeks following a flood. Id. at 504. Days after the flood, the storage company had contacted the plaintiff about the need to remove or dispose of personal items that were damaged, but when the plaintiff explained that he could not do so by the time requested because of a family medical emergency, he was told “not to worry.” Id. at 505. Two weeks later, the plaintiff was told that he needed to immediately remove and/or recover the contents of his units because the locks had been cut and items were being thrown away. Id. By the time the plaintiff could make it to his units, much of his property had been disposed. Id. 43. In considering whether the economic loss rule barred the plaintiff’s estoppel and DTPA claims, the Fourteenth Court of Appeals noted that the plaintiff alleged the storage company made representations regarding the disposition of his property that were not related to its duty to comply with the storage contract. Id. at 510. The courted noted that the plaintiff had alleged a promise—"not to worry about moving his possessions—along with action by Storage Trust inconsistent with Storage Trust’s intention to clear out the storage units—accepting the rent after the storage units had been flooded.” Id. Under those facts, the court reasoned that these contentions were not related to a contractual duty, but rather, were common law duties that arose from renunciation of a purported known right, (“inducing Hilburn not to move his property by telling him he did not need to worry and promising not to dispose of his property.”). Thus, the court held that the storage company did not conclusively establish that the plaintiff’s estoppel and DTPA claims were barred by the economic loss rule as a matter of law. Id.; see also Marinecorp Int’l, Ltd. v. Chopper Grp., LLC, No. 01-14-00707-CV, 2016 WL 1382168, at *4 (Tex. App.—Houston Page 16 of 24 Plaintiffs’ Response to Defendants’ Traditional and No-Evidence Motion for Summary Judgment 593572v.1 S7201/00001 [1st Dist.] Apr. 7, 2016, pet. denied)(holding that DTPA claim was not barred where it was based on breach of warranty of suitability which was a duty independent of any contractual duties).15 44. Similarly, here, the Jetts’ DTPA and negligence claims arise from extracontractual duties. As to the DTPA claim, one basis for that claim is the post-contractual assurances made by Putnam’s Superintendent in which the Jetts were told not to worry and that “they would get their stairs” on numerous occasions. Exhibit “7.” Early on in the construction process, the Jetts were concerned that the construction substantially deviated from the Plans, but each time they raised the issue with a Putnam representative, they were assured that as the construction progressed the apparent issue would be resolved. Id. These assurances and representations arose separately from the Contract and similarly induced the Jetts’ renunciation of a known right—i.e., not to worry about the construction’s deviation from the Plans because Putnam promised that any apparent breach would be remedied in the future. These representations proved to be false, and the Jetts never received their stairs or their elevated porch as promised. Id. The confusion caused by these assurances prevented the Jetts from stepping in and demanding strict compliance with the Contract Plans early on in the construction process when the repair costs would have been much less. Because these assurances went beyond Putnam’s original Contract obligation by causing the Jetts to incur additional damages as the noncompliant construction progressed, this basis of Plaintiffs’ DTPA claim is not barred by the economic loss rule. 45. Another basis of the Jetts’ DTPA claim is the confusion Defendants caused as to the source of the employees who were tasked with overseeing the Project.16 Both David Kehrer 15 Moreover, the economic loss rule is typically applied as a bar to an unintentional tort. See Fuller v. Le Brun, 616 S.W.3d 31, 45 (Tex. App.—Houston [14th Dist.] 2020, pet. denied)(holding that economic loss rule did not bar plaintiff’s fraud claim as a matter of law). 16 See Sue E. Jett’s Responses to Interrogatories Nos. 5, 6, 7, 9, 10, and 11 served on August 12, 2021. Page 17 of 24 Plaintiffs’ Response to Defendants’ Traditional and No-Evidence Motion for Summary Judgment 593572v.1 S7201/00001 and David Norcross, the Project Manager and Project Superintendent, were held out as agents and representatives of Putnam. Exhibit “7.” They were the Jetts’ primary point of contact throughout the Project, and Mr. Norcross even signed the Contract on behalf of Putnam. The Jetts did not learn until after this litigation commenced that Putnam has no employees, and these representatives were all actually employed through Ilcor. Exhibit “8,” at 14:21–25; 26:2–11; see also Exhibit “10.” Thus, the confusion caused by staffing the management functions for Plaintiffs’ Project with people who were not actually employees of Putnam Builders is also separate and distinct from Putnam’s contractual obligations owed pursuant to the Contract. Accordingly, this basis of Plaintiffs’ DTPA claim is also not barred by the economic loss rule. 46. Finally, as to Plaintiffs’ negligence claim, this claim also arises from the failure of Defendants to perform various common law duties. For instance, one basis of Plaintiffs’ negligence claim is Defendants’ negligent hiring and supervision of the contractors it engaged to manage the Project. This failure is further evidenced by the fact that the Project Manager and Superintendent were both terminated just as the Jetts’ Project was ending. See Exhibits “16” and “17.” Plaintiffs’ negligence claim is also based on Defendants’ failure to comply with the Galveston County Floodplain Regulations and the Building Permit that was issued in the performance of the construction work. See Exhibit F to Defendants’ Motion. This obligation does not arise from the Contract, but again, is an implied duty that arises from the common law. 47. Based on the foregoing, because Plaintiffs’ DTPA and negligence claims arise from representations and duties which are extracontractual, there is at the very least a fact question as to whether they are barred by the economic loss rule. Page 18 of 24 Plaintiffs’ Response to Defendants’ Traditional and No-Evidence Motion for Summary Judgment 593572v.1 S7201/00001 D. Plaintiffs have presented more than a scintilla of evidence demonstrating that Defendants’ breach of the Contract has caused Plaintiffs to sustain a legal injury. 48. Defendants claim that Plaintiffs have failed to present sufficient evidence of the fourth and fifth elements of their breach of contract claim—breach and damages.17 This contention must be rejected because Defendants do not dispute that the Home was not constructed in accordance with the Plans,18 and Plaintiffs have presented legally sufficient evidence of necessary remedial costs in order to correct the noncompliant slab elevation, as well as their out-of-pocket costs for other necessary repairs unrelated to the slab. 49. “A nonbreaching party is generally entitled to all its actual damages necessary to put it in the same economic position it would have been in had the contract not been breached.” Tacon Mech. Contractors, Inc. v. Grant Sheet Metal, Inc., 889 S.W.2d 666, 670 (Tex. App.—Houston [14th Dist.] 1994, writ denied). The goal in measuring damages for a breach of contract claim is to provide just compensation for the loss or damage sustained as a result of breach. Mays v. Pierce, 203 S.W.3d 564, 577–78 (Tex. App.—Houston [14th Dist.] 2006, pet. denied)(internal citation omitted). One measure of damages for the breach of a construction contract is remedial damages, “which is the cost to complete or repair less the unpaid balance on the contract price.” McGinty v. Hennen, 372 S.W.3d 625, 627 (Tex. 2012)(per curiam)(internal citations omitted). The Jetts have sustained a legal injury despite that they have not yet started the 17 The essential elements of a breach of contract claim are as follows: (1) there is a valid, enforceable contract; (2) the plaintiff is a proper party to sue for breach of the contract; (3) the plaintiff performed, tendered performance of, or was excused from performing, its contractual obligations; (4) the defendant breached the contract; and, (5) the defendant’s breach caused the plaintiff injury. See B&W Sup. V. Beckman, 305 S.W.3d 10, 16 (Tex. App.—Houston [1st Dist.] 2009, pet. denied) (elements 1, 3–5); Mandell v. Hamman Oil & Ref. Co., 822 S.W.2d 153, 161 (Tex. App.—Houston [1st Dist.] 1991, writ denied (element 2). 18 Exhibit “8,” at 98: 15-17. Defendants dispute whether there was a new agreement reached which discharged Putnam’s original obligation to construct the Home in accordance with the Plans. Page 19 of 24 Plaintiffs’ Response to Defendants’ Traditional and No-Evidence Motion for Summary Judgment 593572v.1 S7201/00001 repair work that has been recommended by their structural engineering expert—i.e., that the repair work has not already been performed does not render the injury “anticipatory” in nature. 50. For instance, in R.B. Hardy & Sons, Inc. v. Hoyer Glob. (USA), Inc., the plaintiff sued the defendant for breaching a construction contract to pave a particular piece of land. No. 01- 09-00041-CV, 2010 WL 2305753, at *1 (Tex. App.—Houston [1st Dist.] June 10, 2010, pet. denied). The plaintiff alleged that the defendants’ work was deficient in several respects, and at trial, the plaintiff presented evidence that the estimated repair costs exceeded $650,000 because the project would have to be completely redone. Id. As to the damages question, the jury was instructed “to consider ‘remedial damages,’ which were defined as ‘the reasonable and necessary cost to repair the paving project, whether already incurred or to be incurred in the future.’” Id. at *5. The jury awarded the plaintiff a portion of the remedial damages requested, which was presumed to have been based on one of the recommendations for repairs that were not yet completed, and the First Court of Appeals affirmed the judgment in favor of the plaintiff. Id. at *6. Thus, the fact that the plaintiff’s remedial damages had not yet been incurred was not a bar to recovery as a matter of law. 51. Similarly, here, the fact that the Jetts have not yet started the repairs recommended by Ms. Patrick is not a bar to recovery, nor does it mean that they have yet to have sustained a legal injury. To the contrary, the Jetts’ breach of contract action accrued when they were delivered the Home which deviated from what they had asked Putnam to build, as reflected in the Plans. The Jetts have presented legally sufficient evidence that Defendants breached the Contract. Compare Exhibit “2” with Exhibit “3;” see also Exhibit “7” and Exhibit “9.” The Jetts have further presented evidence of the reasonable repair based on the opinion of their structural engineering expert. During her deposition and in her report, Ms. Patrick explained that based on her experience, Page 20 of 24 Plaintiffs’ Response to Defendants’ Traditional and No-Evidence Motion for Summary Judgment 593572v.1 S7201/00001 “reconstruction is [the] more cost-effective method for ensuring a durable repair” after explaining the numerous problems she has encountered in the Houston and Galveston area after structures have been raised. Exhibits “11” and “12,” at 47:16. Mary Jo Poindexter, Plaintiffs’ expert on construction costs, has also presented evidence of the reasonable cost of reconstruction. Exhibit “13” and “14.”19 Ms. Poindexter testified that the reasonable cost of reconstruction is $584,230 and that in coming to this conclusion, she relied on the RS Means construction estimating software,