Preview
FILED: ULSTER COUNTY CLERK 04/24/2024 05:47 PM INDEX NO. EF2024-1080
NYSCEF DOC. NO. 2 RECEIVED NYSCEF: 04/24/2024
EXHIBIT A
FILED: ULSTER COUNTY CLERK 04/24/2024 05:47 PM INDEX NO. EF2024-1080
NYSCEF DOC. NO. 2 RECEIVED NYSCEF: 04/24/2024
CERTIFIED EXEMPLIFIED COPY
THE STATE OF TEXAS
COUNTY OF TARRANT
I, Thomas A. Wilder , Clerk of the District Courts of said
County of Tarrant in the State Of Texas, do hereby certify that the within
and proceeding pages contain a full, complete, true and exact copy of the
SEE ATTACHED PAGE
in Cause No.141-347790-23, STROMBERG ARCHITECTURAL ,Plaintiff vs
THE LALO GROUP, INC., ET AL ,Defendant.
Given under my hand and seal of office, at Fort Worth, in said County of
Tarrant, State Of Texas, this date of April 18, 24.
A CERTIFIED COPY Thomas A. Wilder
ATTEST: 04/18/2024
THOMAS A. WILDER LERK OF THE DISTRICT COURTS
DISTRICT CLERK TARRANT COUNTY, TEXAS
TARRANT COUNTY, TEXAS
BY: /s/ Tanya Weiss
By: Deputy
THE STATE OF TEXAS
COUNTY OF TARRANT
I, JUDGE John P. Chupp , Judge of the 141st DISTRICT
COURT of the State Of Texas, presiding in the County Of Tarrant, do hereby
certify that the Deputy Clerk whose name appears to be signed to the above
certificate, is and was at the time of signing the same, the Deputy Clerk
of said District Court therein mentioned, and as such was the proper person
to make said certificate, and that the same is in due form.
Given under my hand officially this date of April 18, 2024.
-?~-
--~'-____:::/
__ ~ _ _-,---,-------' Judge
141st District Court
Tarrant County, Texas
THE STATE OF TEXAS
-COUNTY OF TARRANT
i
I, Thomas A. Wilder , Clerk of the District Courts,
Tarrant County,Texas, do hereby certify JUDGE~J~o~h~n=-:P~-~C~h~u~P~P:<----------
Judge of the 141st DISTRICT COURT of Tarrant County,Texas, is, and was, at
time of signing same, the duly elected, qualified and acting Judge of said
Court herein mentioned and as such was the proper person to make said
certificate, and that the same is in due form.
Given under my hand and seal of office, at Fort waft, in said Tarrant,
State Of Texas, this date of April 18, 2024.
A CERTIFIED COPY
ATTEST: 04/18/2024 Thomas A. Wilder
THOMAS A. WILDER
DISTRICT CLERK
ERK OF THE DISTRICT COURTS
TARRANT COUNTY, TEXAS TARRANT COUNTY, TEXAS
BY: /s/ Tanya Weiss
By: Deputy
FILED: ULSTER COUNTY CLERK 04/24/2024 05:47 PM INDEX NO. EF2024-1080
NYSCEF DOC. NO. 2 RECEIVED NYSCEF: 04/24/2024
Tarrant County District Clerk Page: 1
Certified Exemplified Copy Date: 04/18/2024
Cause Number: 141-347790-23 Time: 10:19
* This page is attached hereto and incorporated herein for all purposes,
the two separate belong together and incorporated each other.
*ORDER GRANTING PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT AND FINAL
JUDGMENT CONFIRMING ARBITRATION AWARD
A CERTIFIED COPY
ATTEST: 04/18/2024
THOMAS A. WILDER
DISTRICT CLERK
TARRANT COUNTY, TEXAS
BY: /s/ Tanya Weiss
FILED: ULSTER COUNTY CLERK 04/24/2024 05:47 PM INDEX NO. EF2024-1080
NYSCEF DOC. NO. 2 RECEIVED NYSCEF: 04/24/2024
FILED
TARRANT COUNTY
3/28/2024 2:37 PM
141-347790-23 THOMAS A. WILDER
DISTRICT CLERK
141-347790-23 FILED
TARRANT COUNTY
3/12/2024 1:47 PM
THOMAS A. WILDER
CAUSE NO. 141-347790-23 DISTRICT CLERK
STROMBERG ARCHITECTURAL § IN·THE DISTRICT COURT
PRECAST, INC. §
§
Plaintiff, §
§
v. § 141 st JUDICIAL DISTRICT
§
THE LALO GROUP, INC. and §
HUDSON MERIDIAN CONSTRUCTION §
GROUP,LLC §
§
Defendants. § TARRANT COUNTY, TEXAS
ORDER GRANTING PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT AND
FINAL JUDGMENT CONFIRMING ARBITRATION AWARD
Came to be considered Plaintiff's Motion for Default Judgment and Motion for
Confirmation of Arbitration Award (the "Motion") filed by Plaintiff, Stromberg Architectural
?recast, Inc. ("Stromberg" and/or "Plaintiff'), in which Plaintiff moved the Court to enter a
default judgment against Defendants, The Lalo Group, Inc. ("Lalo" or "Defendant Lalo") and
Hudson Meridian Construction Group, LLC ("Hudson Meridian" or "Defendant Hudson
Meridian") (hereinafter, collectively at times referred to as "Defendants"), and confirm the
arbitration award attached to the Motion as Exhibit B.
After considering Plaintiff's Motion, the evidence, and the pleadings on file, the Court
FINDS:
I. The Court has jurisdiction over the parties and the claims asserted therein;
2. Service of process was properly achieved in this matter;
3. Defendants' deadlines to answer or otherwise appear in this lawsuit have passed;
ORDER GRANTING MOTION FOR DEFAULT JlJDGl\tENT & FINAL JUDGMENT CONFIRMING
A CERTIFIED COPY
ARBITRATION AWARD PAGE 1 OF4 ATTEST: 04/18/2024
THOMAS A. WILDER
DISTRICT CLERK
TARRANT COUNTY, TEX
BY: /s/ Tanya Weiss
FILED: ULSTER COUNTY CLERK 04/24/2024 05:47 PM INDEX NO. EF2024-1080
NYSCEF DOC. NO. 2 RECEIVED NYSCEF: 04/24/2024
4. As of the date of this judgment, Defendants have not filed an answer or otherwise
made an appearance in this lawsuit, nor responded to the Motion;
5. The returns of service for Defendants have been on file with the Clerk of this Court
for more than ten (10) days exclusive of the date of filing;
6. The factual allegations in Plaintiff's Original Petition and Motion to Confirm
Arbitration Award are deemed admitted against Defendants;
7. The pleadings, affidavits, and documents submitted by Plaintiff are sufficient
evidence of its damages against Defendants;
8. The arbitration award attached to the Motion as Exhibit B (hereinafter referred to as
the "Arbitration Award"), which is adopted and incorporated herein, is correct;
9. That more than 90 days have passed since Defendants were served with the
Arbitration Award and no application to modify, correct, or vacate the Arbitration Award has been
filed;
10. That Plaintiff is entitled to a Judgment conforming to the Arbitration Award as
referenced below; and
11. That Plaintiffs Motion is hereby GRANTED;
IT IS THEREFORE ORDERED, ADJUDGED, AND DECREED:
1. That judgment by default be entered in favor of Plaintiff against Defendants;
2. That judgment be entered in favor of Plaintiff against Defendants which conforms
to the Arbitration A ward;
3. That Defendants take nothing against Plaintiff for any and all claims which could
have been asserted in this lawsuit;
4. That Plaintiff recover from Defendant Lalo the principal sum of$1,798,585.42;
ORDER GRANTING MOTION FOR DEFAULT JUDGMENT & FINAL JUDGMENT CONFIR!\1ING
A CERTIFIED COPY
ARBITRATION AWARD PAGE20F4 ATTEST: 04/18/2024
THOMAS A. WILDER
DISTRICT CLERK
TARRANT COUNTY, TEX
BY: /s/ Tanya Weiss
FILED: ULSTER COUNTY CLERK 04/24/2024 05:47 PM INDEX NO. EF2024-1080
NYSCEF DOC. NO. 2 RECEIVED NYSCEF: 04/24/2024
5. That Plaintiff recover nothing from Defendant Hudson Meridian;
6. That Plaintiff further recover from Defendant Lalo the sum of $19,084.58, for the
attorneys' fees and costs incurred by Plaintiff to confirm the above-referenced arbitration award,
plus an additional amount of$ 1,820.00 in obtaining confirmation of the Award;
7. That Plaintiff further recover from Defendant Lalo post-award interest of $246.38
per day beginning October 28, 2023 until the Arbitration Award is paid or caused to be paid by
Defendant Lalo, which as of March 12, 2024 (230 days at $246.38 per day) amounts to at least
$56,667.40, and continues to accrue at $246.38 per day through the date the judgment is signed
below;
8. That Plaintiff is entitled to recover post-judgment interest from Defendant Lalo on
the total amount of the judgment amounts awarded hereinabove, at the rate of 5% per annum from
the date this judgment is signed until paid;
9. That Plaintiff further recover from any applicable Defendant the sum of at least
$25,000.00 in the event any party appeals this judgment to the Court of Appeals and Plaintiff
prevails at the appellate level, together with the sum of at least $15,000.00 if Defendant
unsuccessfully files, or Plaintiff successfully files, a petition for review to the Supreme Court of
Texas, and an additional $15,000.00 if such petition is granted and Plaintiff prevail at the
Supreme Court level;
10. That Plaintiff is entitled to all writs and process as may be necessary to collect
upon this judgment, including execution, garnishment, abstracts of judgment, and other writs in
process, and that Plaintiff recover from Defendant Lalo all costs and attorneys' fees incurred in
pursuing collection of this judgment; and
11. This judgment, having disposed of all parties and all claims, 1s final and
ORDER GRANTING MOTION FOR DEFAULT JUDGI\1ENT & FINAL JUDGI\IENT CONFIRI\11NG
A CERTIFIED COPY
ARBITRATION AWARD PAGE30F4 ATTEST: 04/18/2024
THOMAS A. WILDER
DISTRICT CLERK
TARRANT COUNTY, TEX
BY: /s/ Tanya Weiss
FILED: ULSTER COUNTY CLERK 04/24/2024 05:47 PM INDEX NO. EF2024-1080
NYSCEF DOC. NO. 2 RECEIVED NYSCEF: 04/24/2024
appealable.
SIGNED this ~f'dayof ~ L--:-w-24.
-==/--?~
/;;:DOE PRESIDING
ORDER GRANTING MOTION FOR DEFAULT JUDGJ\1ENT & FINAL JUDGJ\1ENT CONFIRJ\1ING
A CERTIFIED COPY
AR BIT RATION AWARD PAGE 4 OF4 ATTEST: 04/18/2024
THOMAS A. WILDER
DISTRICT CLERK
TARRANT COUNTY, TEX
BY: /s/ Tanya Weiss
FILED: ULSTER COUNTY CLERK 04/24/2024 05:47 PM INDEX NO. EF2024-1080
NYSCEF DOC. NO. 2 RECEIVED NYSCEF: 04/24/2024
Exhibit B
A CERTIFIED COPY
ATTEST: 04/18/2024
THOMAS A. WILDER
DISTRICT CLERK
TARRANT COUNTY, TEX
BY: /s/ Tanya Weiss
FILED: ULSTER COUNTY CLERK 04/24/2024 05:47 PM INDEX NO. EF2024-1080
NYSCEF DOC. NO. 2 RECEIVED NYSCEF: 04/24/2024
AMERICAN ARBITRATION ASSOCIATION
Construction Industry Arbitration Rules
LALO GROUP, INC. §
Claimant/Counter-Respondent, §
§
v. §
§
STROMBERG ARCHITECTURAL §
PRECAST,INC. §
Respondent/Counter-Claimant, § CASE NO. 01-19-0000-1305
§
v. §
§
HUDSON MERIDIAN §
CONSTRUCTION GROUP, LLC §
Claimant/Counter-Respondent. §
§
FINAL AWARD
I, the undersigned Arbitrator, having been designated in accordance with the Construction Industry
Arbitration Rules of the American Arbitration Association (AAA) as amended and effective July
1, 2015 (Rules), the arbitration agreement contained in the "General Terms and Conditions of
Sale" dated September 12, 2017 as entered into between Lalo Group, Inc. (Lalo) and Stromberg
Architectural Precast, Inc. (Stromberg), and having been duly sworn and having heard and
considered the pleadings, proofs and allegations submitted by Lalo, Stromberg and Hudson
Meridian Construction Group, LLC (Hudson) (collectively Parties) including, the evidence
admitted and sworn testimony of the witnesses presented at the final evidentiary hearing (Final
Hearing), applicable Texas law, arguments of counsel, pre-hearing and post-hearing briefs and
attorneys' fees affidavits submitted by the Parties, do hereby reason, find and AWARD as follows:
INTRODUCTION
Final Hearing
The Final Hearing was conducted on April 25-29, 2022, in person in Dallas, Texas, April 3-4,
2023, by Zoom, and April 10-14, 2023, in-person in Dallas, Texas. During the Final Hearing,
opening statements were heard and witnesses were called, sworn, and presented testimony and
evidence under oath. All testimony and exhibits offered, and not withdrawn, were admitted. I
considered objections made to evidence offered so that the objectionable evidence was given the
appropriate weight, if any, but all was admitted. Pursuant to Rule R-40, the Final Hearing closed
on August 28, 2023, after all post-hearing submittals were timely filed by counsel for the Parties.
AAA No OJ 190001305 FINAL AWARD Page I of26 A CERTIFIED COPY
ATTEST: 04/18/2024
THOMAS A. WILDER
DISTRICT CLERK
TARRANT COUNTY, TEX
BY: /s/ Tanya Weiss
FILED: ULSTER COUNTY CLERK 04/24/2024 05:47 PM INDEX NO. EF2024-1080
NYSCEF DOC. NO. 2 RECEIVED NYSCEF: 04/24/2024
Brief Factual Background
This dispute arises out of the construction of a mixed-use building located at 587 Main Street in
New Rochelle, New York (Project). The Project architect, PS&S (Architect), drafted
specifications for the GFRC panels (GFRC Specifications). The Project owner, RXR 587 Main
Owner LLC (Owner), contracted with Hudson as the construction manager of the Project. In turn,
Hudson contracted with Lalo pursuant to the "Subcontract" dated September 17, 2017 (Hudson
Lalo Subcontract) to, among other things, furnish and install certain glass fiber reinforced concrete
(GFRC) panels for the exterior facade of the Project. Subsequently, Lalo contracted with Stromberg
to manufacture and supply the GFRC panels pursuant to the following documents: "Quantity and
Quality Confirmation," (Confirmation Sheet) "Continuation Sheet," "Schedule of Values,"
untitled cover sheet (Cover Sheet), "Procedures for Customer Confirmation & Deposit"
(Procedures Sheet), "Invoice," and "General Terms and Conditions of Sale" (General Terms)
dated September 12, 2017 and signed by Luis Martinez, on behalf of Lalo, on September 18, 2017
(collectively Lalo Stromberg PO or PO).
Claimants' Breach of Contract Claims
Lalo and Hudson (collectively Claimants) have asserted a claim for breach of contract, alleging
that Stromberg failed to produce a GFRC product compliant with the GFRC Specifications;
requirements set forth in the Lalo Stromberg PO, as modified by the Joint Check Agreement; and
the course of performance of the Parties following the execution of the Lalo Stromberg PO and
JCA. Specifically, Claimants assert Stromberg's failure to produce a GFRC mock-up panel that
complied with the GFRC Specifications, and the rejection by the Architect and Hudson of both
mock-up panels submitted by Stromberg led to Stromberg's termination for cause.
Stromberg's Affirmative Defenses
Stromberg has asserted numerous affirmative defenses to Claimants' breach of contract claim: (1)
Claimants' claims are barred by their prior material breach of the Lalo Stromberg PO; (2) the
damages sought by Lalo and Hudson are barred/limited by the provisions of the General Terms;
(3) Claimants acts or omissions caused their alleged injuries; (4) the damages sought by Claimants
were proximately caused or producingly caused, in whole or in part, by the acts, omissions, fault,
negligence, responsibility or other conduct on the part of Lalo, Hudson, third parties (including
the Architect and/or Owner), and/or responsible third parties for whom Stromberg is not legally
responsible; (5) Claimants' claims are barred in whole or in part by the doctrine of discharge in
that Lalo and Hudson materially breached the Lalo Stromberg PO by failing to fully perform all
of their contractual obligations and Stromberg is therefore discharged from performing under the
PO; (6) Claimants' claims are barred in whole or in part by the affirmative defense of justification;
(7) Claimants' claims are barred in whole or in part by the doctrine of unclean hands; (8) to the
extent Claimants suffered or sustained any loss, injury or damage, the same was directly and
proximately caused and contributed to by the conduct, acts, or omissions of Lalo and Hudson,
thereby completely or partially barring recovery; (9) Claimants' damages, if any, are barred
because of failure to mitigate their damages; (I 0) the damage amounts claimed by Lalo and
Hudson are neither just, nor true, in whole or in part, because all lawful offsets, payments, and
credits have not been granted; (11) Claimants' claims are barred in whole or in part because Lalo
failed to perform all conditions precedent in that Lalo and Hudson failed to perform all of their
contractual obligations with Stromberg including payments and compliance with the General
Case No. 01-19-0000-1305 Page 2 of26 A CERTIFIED COPY
ATTEST: 04/18/2024
THOMAS A. WILDER
DISTRICT CLERK
TARRANT COUNTY, TEX
BY: /s/ Tanya Weiss
FILED: ULSTER COUNTY CLERK 04/24/2024 05:47 PM INDEX NO. EF2024-1080
NYSCEF DOC. NO. 2 RECEIVED NYSCEF: 04/24/2024
Terms; (12) Claimants' claims are barred in whole or in part by the affirmative defense of fraud;
(13) Claimants' claims are barred in whole or in material part by the affirmative defense of
estoppel, including but not necessarily limited to estoppel by conduct, estoppel by contract,
equitable estoppel, waiver, and !aches; (xiv) Claimants are not entitled to recover attorneys' fees
in that Claimants have failed to properly present a claim for attorneys' fees as required under
Chapter 38 of the TEXAS CIVIL PRACTICE & REMEDIES CODE; and (xv) Stromberg asserts the
statutory limitations on awards of pre-judgment interest as provided in Chapter 304 of the TEXAS
FINANCE CODE including the statutory limitations on interest rates and time periods for which pre-
judgment and post-judgment interest may be allowed (despite neither Hudson nor Lalo seeking an
interest) through their claims.
Stromberg's Counterclaims against Lalo and Hudson
Stromberg asserts the following causes of action against Lalo and Hudson: (I) breach of contract;
(2) promissory estoppel; (3) fraudulent inducement; (4) violation of the Prompt Payment Act; (5)
violation of the Texas Trust Fund Act; (6) common law fraud; and (7) money had and received
(collectively Stromberg's Affirmative Claims).
Lalo's and Hudson's Affirmative Defenses
Hudson has asserted the following affirmative defenses: (I) Stromberg's Affirmative Claims are
barred because Stromberg did not properly or fully perform its obligations under the relevant
agreements, and because it materially breached the Lalo Stromberg PO; and (2) Hudson never
agreed to the terms of the Lalo Stromberg PO Stromberg and therefore Hudson cannot be held
liable for attorneys' fees and related expenses under the PO. Lalo's affirmative defenses to
Stromberg's Affirmative Claims, if any, are contained within Lalo's general defenses to
Stromberg's Affirmative Claims.
FINDINGS
General
The evidence, testimony, and arguments from all Parties in this dispute requires initial findings
regarding what the terms of the Lalo Stromberg PO were on September 18, 2017, when signed by
Lalo and whether the terms of the PO thereafter have been modified, supplemented, contradicted
or waived.
All Parties have acknowledged this dispute involved the sale of goods, and therefore the Texas
Uniform Commercial Code equivalent of model UCC Article 2, which is found in Chapter 2 of
the TEXAS BUSINESS AND COMMERCE CODE (Texas UCC) must be considered in addition to Texas
common law.
Incorporation of GFRC Specifications
Lalo and Hudson have asserted that the GFRC Specifications where incorporated into the
Stromberg Lalo PO when signed by Lalo given that: (1) before Lalo signed the PO, Lalo sent
Stromberg a copy of the GFRC Specifications and Stromberg sent Lalo comments in response; (2)
the blank line in front of the word "Specifications" on the Cover Page of the PO confirmed that
Stromberg had previously reviewed the GFRC Specifications before Lalo signed the PO; and (3)
Case No. 0J-19-0000-1305 Page 3 of26 A CERTIFIED COPY
ATTEST: 04/18/2024
THOMAS A. WILDER
DISTRICT CLERK
TARRANT COUNTY, TEX
BY: /s/ Tanya Weiss
FILED: ULSTER COUNTY CLERK 04/24/2024 05:47 PM INDEX NO. EF2024-1080
NYSCEF DOC. NO. 2 RECEIVED NYSCEF: 04/24/2024
Stromberg's lack of objection to the previously circulated GFRC Specifications, other than the
portions that Stromberg struck after their initial review, and Stromberg's proceeding with the
submittal process, subjecting themselves to the Architect's review of the samples, accepting the
Architect's rejections, and moving on to producing subsequent samples.
The paragraph entitled "GENERAL" within the General Terms of the Lalo Stromberg PO states
in pertinent part (collectively (Merger Clause)):
THIS CONTRACT AND THESE TERMS SUPERSEDE ANY PREVIOUS
AGREEMENTS AND APPLIES TO ANY MATERIALS PREVIOUSLY DELIVERED
AND/OR YET TO BE DELIVERED.
This contract constitutes the entire agreement between the parties hereto, and there are no
understandings, representation, or warranties of any kind except those expressly set forth
herein.
To the extent that Claimants' arguments relate to conduct that occurred prior to Lalo signing the
Stromberg Lalo PO, the incorporation of GFRC Specifications is barred by the Merger Clause
wherein Stromberg and Lalo agreed that no other understandings, representations or previous
agreements were to be incorporated into the Stromberg Lalo PO.
To the extent that Claimants' arguments relate to Stromberg's conduct that occurred after Lalo
signed the PO related to the submittal process, the Architect's review and rejection of the samples,
and production of samples, these arguments are analyzed pursuant to the Texas UCC as discussed
in detail below.
To the extent that these arguments relate to incorporation of the GFRC specification by reference,
Texas law does not require any specific language to effectively incorporate an extrinsic document
by reference, but the contract must plainly refer to the other document or otherwise show that the
parties intended for the other document to become part of or incorporated into the contract. 1
The Cover Sheet, it states in pertinent part:
"[W]e have devised a list of the information needed before we can begin the
submittal process."
This language is followed by a list of seven categories of information each with a check box (in
the form of a line) and all but one of the check boxes is unchecked except for the information
category described as "Other - Signed Order Confirmation, Deposit."
The unchecked box related to the information category described as "Specifications" on the Cover
Page may indeed confirm that Stromberg had previously been provided with a copy of the GFRC
Specifications however receiving and reviewing a document prior to entering into the PO or
1
Relevant case law cited by the Parties includes: In re 24R. Inc., 324 S.W.3d 564,567 (Texas 2010); Santander Consumer USA, Inc. v. Mata, No.
03-14-00782-CV, 2017 WL 1208767 at *3, 2017 Tex. App. LEXIS 2631 at *6 (Tex. App.-Austin Mar. 29, 2017, no pet.) (mem. op.); Bob
Montgomery Chevrolet, Inc. v. Dent Zone Cos., 409 S.W.3d 181, 189 (Tex. App.-Dallas 2013, no pet.) (citing Owen v. Hendricks, 433 S.W.2d
164, 167 (Tex. 1968)) (emphasis added); Trico Marine Sen·s., Inc., 73 S.W.3d 545, at 549 (Tex. App. 2002).
Case No. 01-19-0000-1305 Page 4 of26 A CERTIFIED COPY
ATTEST: 04/18/2024
THOMAS A. WILDER
DISTRICT CLERK
TARRANT COUNTY, TEX
BY: /s/ Tanya Weiss
FILED: ULSTER COUNTY CLERK 04/24/2024 05:47 PM INDEX NO. EF2024-1080
NYSCEF DOC. NO. 2 RECEIVED NYSCEF: 04/24/2024
indicating a need to review such a document is not equivalent to nor does it plainly refer to the
GFRC Specifications as being incorporated or otherwise show that Lalo and Stromberg intended
for the GFRC Specifications to be incorporated into the Lalo Stromberg PO.
Likewise, Stromberg's lack of objection to the GFRC Specifications circulated before Lalo signed
the PO (other than the portions that Stromberg struck after their initial review), is not equivalent
to nor does it plainly refer to the GFRC Specifications as being incorporated or otherwise show
that Lalo and Stromberg intended for the GFRC Specifications to be incorporated by reference
into the PO at the time Lalo signed the PO.
Accordingly, I find that find the preponderance of material and relevant evidence proves that on
September 18, 2017, when Lalo signed the Lalo Stromberg PO, such PO did not incorporate the
GFRC Specifications by reference.
Joint Check Agreement
Lalo, Hudson and Stromberg entered into a "Joint Check Agreement" dated October 16, 2017
(JCA).
The "Schedule of Values" within the Lalo Stromberg PO states in pertinent part (Merger Clause):
These terms and conditions may NOT be altered, supplemented or amended by the
use of any buyer document or purchase order. Any attempt to alter, supplement or
amend this document or to enter an order for product or services that are subject to
additional or altered terms and conditions shall be null and void, unless otherwise
agreed to in a written agreement signed by both Buyer and Stromberg.
The Parties do not dispute that the JCA is a written agreement signed by both Lalo and Stromberg
subsequent to Lalo's signing the P0. 2
Accordingly, I find the preponderance of material and relevant evidence proves that the JCA
constitutes a valid amendment to the Lalo Stromberg PO.
Lalo and Hudson have asserted that the JCA, in particular Paragraph 5, incorporates by reference
the version of the GFRC Specifications that Stromberg reviewed and marked up prior to entering
into the Lalo Stromberg PO.
The preamble of the JCA states:
Subcontractor and Contractor have an agreement where in Subcontractor is
furnishing certain materials and/or labor to the above project. Contractor is the
general contractor on said project. Supplier has agreed to supply certain materials
and/or labor to Subcontractor for use one the above project if Contractor will issue
payment for said materials directly to Supplier. In consideration of the foregoing
and the benefit of the project which will result from the delivery of the materials by
2
While the evidence does not contain a copy of JCA reflecting Hudson's signature, Hudson provided testimony of its involvement in the preparation
of the JCA and its issuance of several checks to Stromberg pursuant to the JCA and additionally acknowledgement that is enforceable.
Case No. 01-19-0000-1305 Page 5 of26 A CERTIFIED COPY
ATTEST: 04/18/2024
THOMAS A. WILDER
DISTRICT CLERK
TARRANT COUNTY, TEX
BY: /s/ Tanya Weiss
FILED: ULSTER COUNTY CLERK 04/24/2024 05:47 PM INDEX NO. EF2024-1080
NYSCEF DOC. NO. 2 RECEIVED NYSCEF: 04/24/2024
Supplier and in order to assure Supplier of prompt and full payment, it is agreed as
follows ....
Within the JCA, "Contractor" is defined as Hudson, "Subcontractor" is defined as Lalo, and
"Supplier" is defined as Stromberg. The term "specifications" is not defined.
Paragraph 5 of the JCA states:
Supplier will furnish the materials, labor and equipment to Subcontractor in
accordance with the specifications and directions of subcontractor.
As noted above, Texas law does not require any specific language to effectively incorporate an
extrinsic document by reference, but the contract must plainly refer to the other document or
otherwise show that the parties intended for the other document to become part of or incorporated
into the contract.
I find that the preamble to the JCA evidences that the Parties intended for the JCA to assure
Stromberg of prompt and full payment and evidences no intent that the Parties were amending the
agreement under which "Supplier has agreed to supply certain materials and/or labor to
Subcontractor" via incorporation by reference of the GFRC Specifications.
I further find that Paragraph 5 of the JCA does not constitute a plain reference to the GFRC
Specifications as being incorporated or otherwise show that Hudson, Lalo and Stromberg intended
for the GFRC Specifications to be incorporated into the JCA by reference.
Accordingly, I find the preponderance of material and relevant evidence proves that the JCA does
not modify the Lalo Stromberg PO to incorporate the GFRC Specifications by reference.
ucc
Generally, Lalo and Hudson have asserted that various provisions of the Texas UCC modify and
expand the Stromberg Lalo PO to include a requirement for Stromberg to submit a mock-up panel
meeting the Architect's approved sample for color, texture and finish and that Stromberg was
terminated for failure to deliver a mock-up panel consistent with the Architect's approved sample.
Final Expression/ Complete and Exclusive Statement
Lalo and Hudson assert the Lalo Stromberg PO should be considered partially, but not fully,
integrated because several critical terms related to fabrication and processes about the
manufacturing of the GFRC panels by Stromberg are missing from the Lalo Stromberg PO and
therefore the PO cannot reasonably be understood to be an exclusive statement of the Parties'
agreement despite the presence of the Merger Clause, and Stromberg's course of performance is
necessary to explain that the totality of the Parties' agreement included theses critical terms.
Stromberg asserts that Lalo Stromberg PO is plain and unambiguous and must be enforced as
written without considering extrinsic evidence bearing on the Parties' subjective intent and when
Case No. 01-19-0000-1305 Page 6 of26 A CERTIFIED COPY
ATTEST: 04/18/2024
THOMAS A. WILDER
DISTRICT CLERK
TARRANT COUNTY, TEX
BY: /s/ Tanya Weiss
FILED: ULSTER COUNTY CLERK 04/24/2024 05:47 PM INDEX NO. EF2024-1080
NYSCEF DOC. NO. 2 RECEIVED NYSCEF: 04/24/2024
a contract can be given a definite and certain meaning, it is not ambiguous despite parties
advancing competing constructions. 3
While the parol evidence rule under Texas common law and the parol evidence rule under the
Texas UCC are similar, they are not identical. Accordingly, I find that the analysis should be
conducted primarily under the Texas UCC.
Texas UCC, Section 2.202 states:
Terms with respect to which the confirmatory memoranda of the parties agree or
which are otherwise set forth in a writing intended by the parties as a final
expression of their agreement with respect to such terms as are included therein
may not be contradicted by evidence of any prior agreement or of a
contemporaneous oral agreement but may be explained or supplemented
(1) by course of performance, course of dealing, or usage of trade (Section
1.303); and
(2) by evidence of consistent additional terms unless the court finds the writing to
have been intended also as a complete and exclusive statement of the terms of the
agreement.
Section 2.202 requires a multifactor analysis. First, there needs to be a determination whether
the Lalo Stromberg PO is "intended by the parties as a final expression of their agreement to
such terms as are included therein" and if it is, then there needs to be a determination whether
the PO is "intended also as a complete and exclusive statement of the terms of the agreement."
As noted above, Lalo and Hudson agree that the Lalo Stromberg PO is partially integrated, or
in the terminology of the Texas UCC, that the PO is a final expression, but Lalo and Hudson
assert the PO is not a fully integrated, or in the terminology of the Texas UCC, that the PO is
not a complete and exclusive statement while Stromberg asserts the opposite.
Texas case law applying the Texas UCC provides general guidance that a fully integrated
written agreement is a final and complete expression of all the terms agreed upon by the
parties while a partially integrated agreement is a final and complete expression of all the
terms addressed in that written agreement, but is not a final and complete expression of all the
terms the parties have agreed upon and a court considers the surrounding circumstances in
determining whether, and to what degree, an agreement is integrated. 4
Lalo and Stromberg assert that the following evidences that critical terms related to fabrication
and processes about the manufacturing of the GFRC panels by Stromberg were missing from the
Lalo Stromberg PO when signed by Lalo and because these critical terms are missing, the PO
cannot reasonably be understood to be an exclusive statement of the parties' agreement despite the
presence of the Merger Clause: ( 1) the description of the color and texture are not filled in on the
3
See Devon Energy Prod. Co .. l.P. , •. Sheppard, No. 20-0904, 2023 WL 2438927, at •7 (Texas Mar. 10, 2023).
4
See Morgan Bldgs. & Spas, Inc. v. Humane Soc'y o/Sourheast Tex., 249 S.W.3d 480,486 (Tex. App.-Beaumont 2008, no pet.).
Case No. 01-19-0000-1305 Page 7 of26 A CERTIFIED COPY
ATTEST: 04/18/2024
THOMAS A. WILDER
DISTRICT CLERK
TARRANT COUNTY, TEX
BY: /s/ Tanya Weiss
FILED: ULSTER COUNTY CLERK 04/24/2024 05:47 PM
Preview
FILED: ULSTER COUNTY CLERK 04/24/2024 05:47 PM INDEX NO. EF2024-1080 NYSCEF DOC. NO. 2 RECEIVED NYSCEF: 04/24/2024 EXHIBIT A FILED: ULSTER COUNTY CLERK 04/24/2024 05:47 PM INDEX NO. EF2024-1080 NYSCEF DOC. NO. 2 RECEIVED NYSCEF: 04/24/2024 CERTIFIED EXEMPLIFIED COPY THE STATE OF TEXAS COUNTY OF TARRANT I, Thomas A. Wilder , Clerk of the District Courts of said County of Tarrant in the State Of Texas, do hereby certify that the within and proceeding pages contain a full, complete, true and exact copy of the SEE ATTACHED PAGE in Cause No.141-347790-23, STROMBERG ARCHITECTURAL ,Plaintiff vs THE LALO GROUP, INC., ET AL ,Defendant. Given under my hand and seal of office, at Fort Worth, in said County of Tarrant, State Of Texas, this date of April 18, 24. A CERTIFIED COPY Thomas A. Wilder ATTEST: 04/18/2024 THOMAS A. WILDER LERK OF THE DISTRICT COURTS DISTRICT CLERK TARRANT COUNTY, TEXAS TARRANT COUNTY, TEXAS BY: /s/ Tanya Weiss By: Deputy THE STATE OF TEXAS COUNTY OF TARRANT I, JUDGE John P. Chupp , Judge of the 141st DISTRICT COURT of the State Of Texas, presiding in the County Of Tarrant, do hereby certify that the Deputy Clerk whose name appears to be signed to the above certificate, is and was at the time of signing the same, the Deputy Clerk of said District Court therein mentioned, and as such was the proper person to make said certificate, and that the same is in due form. Given under my hand officially this date of April 18, 2024. -?~- --~'-____:::/ __ ~ _ _-,---,-------' Judge 141st District Court Tarrant County, Texas THE STATE OF TEXAS -COUNTY OF TARRANT i I, Thomas A. Wilder , Clerk of the District Courts, Tarrant County,Texas, do hereby certify JUDGE~J~o~h~n=-:P~-~C~h~u~P~P:<---------- Judge of the 141st DISTRICT COURT of Tarrant County,Texas, is, and was, at time of signing same, the duly elected, qualified and acting Judge of said Court herein mentioned and as such was the proper person to make said certificate, and that the same is in due form. Given under my hand and seal of office, at Fort waft, in said Tarrant, State Of Texas, this date of April 18, 2024. A CERTIFIED COPY ATTEST: 04/18/2024 Thomas A. Wilder THOMAS A. WILDER DISTRICT CLERK ERK OF THE DISTRICT COURTS TARRANT COUNTY, TEXAS TARRANT COUNTY, TEXAS BY: /s/ Tanya Weiss By: Deputy FILED: ULSTER COUNTY CLERK 04/24/2024 05:47 PM INDEX NO. EF2024-1080 NYSCEF DOC. NO. 2 RECEIVED NYSCEF: 04/24/2024 Tarrant County District Clerk Page: 1 Certified Exemplified Copy Date: 04/18/2024 Cause Number: 141-347790-23 Time: 10:19 * This page is attached hereto and incorporated herein for all purposes, the two separate belong together and incorporated each other. *ORDER GRANTING PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT AND FINAL JUDGMENT CONFIRMING ARBITRATION AWARD A CERTIFIED COPY ATTEST: 04/18/2024 THOMAS A. WILDER DISTRICT CLERK TARRANT COUNTY, TEXAS BY: /s/ Tanya Weiss FILED: ULSTER COUNTY CLERK 04/24/2024 05:47 PM INDEX NO. EF2024-1080 NYSCEF DOC. NO. 2 RECEIVED NYSCEF: 04/24/2024 FILED TARRANT COUNTY 3/28/2024 2:37 PM 141-347790-23 THOMAS A. WILDER DISTRICT CLERK 141-347790-23 FILED TARRANT COUNTY 3/12/2024 1:47 PM THOMAS A. WILDER CAUSE NO. 141-347790-23 DISTRICT CLERK STROMBERG ARCHITECTURAL § IN·THE DISTRICT COURT PRECAST, INC. § § Plaintiff, § § v. § 141 st JUDICIAL DISTRICT § THE LALO GROUP, INC. and § HUDSON MERIDIAN CONSTRUCTION § GROUP,LLC § § Defendants. § TARRANT COUNTY, TEXAS ORDER GRANTING PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT AND FINAL JUDGMENT CONFIRMING ARBITRATION AWARD Came to be considered Plaintiff's Motion for Default Judgment and Motion for Confirmation of Arbitration Award (the "Motion") filed by Plaintiff, Stromberg Architectural ?recast, Inc. ("Stromberg" and/or "Plaintiff'), in which Plaintiff moved the Court to enter a default judgment against Defendants, The Lalo Group, Inc. ("Lalo" or "Defendant Lalo") and Hudson Meridian Construction Group, LLC ("Hudson Meridian" or "Defendant Hudson Meridian") (hereinafter, collectively at times referred to as "Defendants"), and confirm the arbitration award attached to the Motion as Exhibit B. After considering Plaintiff's Motion, the evidence, and the pleadings on file, the Court FINDS: I. The Court has jurisdiction over the parties and the claims asserted therein; 2. Service of process was properly achieved in this matter; 3. Defendants' deadlines to answer or otherwise appear in this lawsuit have passed; ORDER GRANTING MOTION FOR DEFAULT JlJDGl\tENT & FINAL JUDGMENT CONFIRMING A CERTIFIED COPY ARBITRATION AWARD PAGE 1 OF4 ATTEST: 04/18/2024 THOMAS A. WILDER DISTRICT CLERK TARRANT COUNTY, TEX BY: /s/ Tanya Weiss FILED: ULSTER COUNTY CLERK 04/24/2024 05:47 PM INDEX NO. EF2024-1080 NYSCEF DOC. NO. 2 RECEIVED NYSCEF: 04/24/2024 4. As of the date of this judgment, Defendants have not filed an answer or otherwise made an appearance in this lawsuit, nor responded to the Motion; 5. The returns of service for Defendants have been on file with the Clerk of this Court for more than ten (10) days exclusive of the date of filing; 6. The factual allegations in Plaintiff's Original Petition and Motion to Confirm Arbitration Award are deemed admitted against Defendants; 7. The pleadings, affidavits, and documents submitted by Plaintiff are sufficient evidence of its damages against Defendants; 8. The arbitration award attached to the Motion as Exhibit B (hereinafter referred to as the "Arbitration Award"), which is adopted and incorporated herein, is correct; 9. That more than 90 days have passed since Defendants were served with the Arbitration Award and no application to modify, correct, or vacate the Arbitration Award has been filed; 10. That Plaintiff is entitled to a Judgment conforming to the Arbitration Award as referenced below; and 11. That Plaintiffs Motion is hereby GRANTED; IT IS THEREFORE ORDERED, ADJUDGED, AND DECREED: 1. That judgment by default be entered in favor of Plaintiff against Defendants; 2. That judgment be entered in favor of Plaintiff against Defendants which conforms to the Arbitration A ward; 3. That Defendants take nothing against Plaintiff for any and all claims which could have been asserted in this lawsuit; 4. That Plaintiff recover from Defendant Lalo the principal sum of$1,798,585.42; ORDER GRANTING MOTION FOR DEFAULT JUDGMENT & FINAL JUDGMENT CONFIR!\1ING A CERTIFIED COPY ARBITRATION AWARD PAGE20F4 ATTEST: 04/18/2024 THOMAS A. WILDER DISTRICT CLERK TARRANT COUNTY, TEX BY: /s/ Tanya Weiss FILED: ULSTER COUNTY CLERK 04/24/2024 05:47 PM INDEX NO. EF2024-1080 NYSCEF DOC. NO. 2 RECEIVED NYSCEF: 04/24/2024 5. That Plaintiff recover nothing from Defendant Hudson Meridian; 6. That Plaintiff further recover from Defendant Lalo the sum of $19,084.58, for the attorneys' fees and costs incurred by Plaintiff to confirm the above-referenced arbitration award, plus an additional amount of$ 1,820.00 in obtaining confirmation of the Award; 7. That Plaintiff further recover from Defendant Lalo post-award interest of $246.38 per day beginning October 28, 2023 until the Arbitration Award is paid or caused to be paid by Defendant Lalo, which as of March 12, 2024 (230 days at $246.38 per day) amounts to at least $56,667.40, and continues to accrue at $246.38 per day through the date the judgment is signed below; 8. That Plaintiff is entitled to recover post-judgment interest from Defendant Lalo on the total amount of the judgment amounts awarded hereinabove, at the rate of 5% per annum from the date this judgment is signed until paid; 9. That Plaintiff further recover from any applicable Defendant the sum of at least $25,000.00 in the event any party appeals this judgment to the Court of Appeals and Plaintiff prevails at the appellate level, together with the sum of at least $15,000.00 if Defendant unsuccessfully files, or Plaintiff successfully files, a petition for review to the Supreme Court of Texas, and an additional $15,000.00 if such petition is granted and Plaintiff prevail at the Supreme Court level; 10. That Plaintiff is entitled to all writs and process as may be necessary to collect upon this judgment, including execution, garnishment, abstracts of judgment, and other writs in process, and that Plaintiff recover from Defendant Lalo all costs and attorneys' fees incurred in pursuing collection of this judgment; and 11. This judgment, having disposed of all parties and all claims, 1s final and ORDER GRANTING MOTION FOR DEFAULT JUDGI\1ENT & FINAL JUDGI\IENT CONFIRI\11NG A CERTIFIED COPY ARBITRATION AWARD PAGE30F4 ATTEST: 04/18/2024 THOMAS A. WILDER DISTRICT CLERK TARRANT COUNTY, TEX BY: /s/ Tanya Weiss FILED: ULSTER COUNTY CLERK 04/24/2024 05:47 PM INDEX NO. EF2024-1080 NYSCEF DOC. NO. 2 RECEIVED NYSCEF: 04/24/2024 appealable. SIGNED this ~f'dayof ~ L--:-w-24. -==/--?~ /;;:DOE PRESIDING ORDER GRANTING MOTION FOR DEFAULT JUDGJ\1ENT & FINAL JUDGJ\1ENT CONFIRJ\1ING A CERTIFIED COPY AR BIT RATION AWARD PAGE 4 OF4 ATTEST: 04/18/2024 THOMAS A. WILDER DISTRICT CLERK TARRANT COUNTY, TEX BY: /s/ Tanya Weiss FILED: ULSTER COUNTY CLERK 04/24/2024 05:47 PM INDEX NO. EF2024-1080 NYSCEF DOC. NO. 2 RECEIVED NYSCEF: 04/24/2024 Exhibit B A CERTIFIED COPY ATTEST: 04/18/2024 THOMAS A. WILDER DISTRICT CLERK TARRANT COUNTY, TEX BY: /s/ Tanya Weiss FILED: ULSTER COUNTY CLERK 04/24/2024 05:47 PM INDEX NO. EF2024-1080 NYSCEF DOC. NO. 2 RECEIVED NYSCEF: 04/24/2024 AMERICAN ARBITRATION ASSOCIATION Construction Industry Arbitration Rules LALO GROUP, INC. § Claimant/Counter-Respondent, § § v. § § STROMBERG ARCHITECTURAL § PRECAST,INC. § Respondent/Counter-Claimant, § CASE NO. 01-19-0000-1305 § v. § § HUDSON MERIDIAN § CONSTRUCTION GROUP, LLC § Claimant/Counter-Respondent. § § FINAL AWARD I, the undersigned Arbitrator, having been designated in accordance with the Construction Industry Arbitration Rules of the American Arbitration Association (AAA) as amended and effective July 1, 2015 (Rules), the arbitration agreement contained in the "General Terms and Conditions of Sale" dated September 12, 2017 as entered into between Lalo Group, Inc. (Lalo) and Stromberg Architectural Precast, Inc. (Stromberg), and having been duly sworn and having heard and considered the pleadings, proofs and allegations submitted by Lalo, Stromberg and Hudson Meridian Construction Group, LLC (Hudson) (collectively Parties) including, the evidence admitted and sworn testimony of the witnesses presented at the final evidentiary hearing (Final Hearing), applicable Texas law, arguments of counsel, pre-hearing and post-hearing briefs and attorneys' fees affidavits submitted by the Parties, do hereby reason, find and AWARD as follows: INTRODUCTION Final Hearing The Final Hearing was conducted on April 25-29, 2022, in person in Dallas, Texas, April 3-4, 2023, by Zoom, and April 10-14, 2023, in-person in Dallas, Texas. During the Final Hearing, opening statements were heard and witnesses were called, sworn, and presented testimony and evidence under oath. All testimony and exhibits offered, and not withdrawn, were admitted. I considered objections made to evidence offered so that the objectionable evidence was given the appropriate weight, if any, but all was admitted. Pursuant to Rule R-40, the Final Hearing closed on August 28, 2023, after all post-hearing submittals were timely filed by counsel for the Parties. AAA No OJ 190001305 FINAL AWARD Page I of26 A CERTIFIED COPY ATTEST: 04/18/2024 THOMAS A. WILDER DISTRICT CLERK TARRANT COUNTY, TEX BY: /s/ Tanya Weiss FILED: ULSTER COUNTY CLERK 04/24/2024 05:47 PM INDEX NO. EF2024-1080 NYSCEF DOC. NO. 2 RECEIVED NYSCEF: 04/24/2024 Brief Factual Background This dispute arises out of the construction of a mixed-use building located at 587 Main Street in New Rochelle, New York (Project). The Project architect, PS&S (Architect), drafted specifications for the GFRC panels (GFRC Specifications). The Project owner, RXR 587 Main Owner LLC (Owner), contracted with Hudson as the construction manager of the Project. In turn, Hudson contracted with Lalo pursuant to the "Subcontract" dated September 17, 2017 (Hudson Lalo Subcontract) to, among other things, furnish and install certain glass fiber reinforced concrete (GFRC) panels for the exterior facade of the Project. Subsequently, Lalo contracted with Stromberg to manufacture and supply the GFRC panels pursuant to the following documents: "Quantity and Quality Confirmation," (Confirmation Sheet) "Continuation Sheet," "Schedule of Values," untitled cover sheet (Cover Sheet), "Procedures for Customer Confirmation & Deposit" (Procedures Sheet), "Invoice," and "General Terms and Conditions of Sale" (General Terms) dated September 12, 2017 and signed by Luis Martinez, on behalf of Lalo, on September 18, 2017 (collectively Lalo Stromberg PO or PO). Claimants' Breach of Contract Claims Lalo and Hudson (collectively Claimants) have asserted a claim for breach of contract, alleging that Stromberg failed to produce a GFRC product compliant with the GFRC Specifications; requirements set forth in the Lalo Stromberg PO, as modified by the Joint Check Agreement; and the course of performance of the Parties following the execution of the Lalo Stromberg PO and JCA. Specifically, Claimants assert Stromberg's failure to produce a GFRC mock-up panel that complied with the GFRC Specifications, and the rejection by the Architect and Hudson of both mock-up panels submitted by Stromberg led to Stromberg's termination for cause. Stromberg's Affirmative Defenses Stromberg has asserted numerous affirmative defenses to Claimants' breach of contract claim: (1) Claimants' claims are barred by their prior material breach of the Lalo Stromberg PO; (2) the damages sought by Lalo and Hudson are barred/limited by the provisions of the General Terms; (3) Claimants acts or omissions caused their alleged injuries; (4) the damages sought by Claimants were proximately caused or producingly caused, in whole or in part, by the acts, omissions, fault, negligence, responsibility or other conduct on the part of Lalo, Hudson, third parties (including the Architect and/or Owner), and/or responsible third parties for whom Stromberg is not legally responsible; (5) Claimants' claims are barred in whole or in part by the doctrine of discharge in that Lalo and Hudson materially breached the Lalo Stromberg PO by failing to fully perform all of their contractual obligations and Stromberg is therefore discharged from performing under the PO; (6) Claimants' claims are barred in whole or in part by the affirmative defense of justification; (7) Claimants' claims are barred in whole or in part by the doctrine of unclean hands; (8) to the extent Claimants suffered or sustained any loss, injury or damage, the same was directly and proximately caused and contributed to by the conduct, acts, or omissions of Lalo and Hudson, thereby completely or partially barring recovery; (9) Claimants' damages, if any, are barred because of failure to mitigate their damages; (I 0) the damage amounts claimed by Lalo and Hudson are neither just, nor true, in whole or in part, because all lawful offsets, payments, and credits have not been granted; (11) Claimants' claims are barred in whole or in part because Lalo failed to perform all conditions precedent in that Lalo and Hudson failed to perform all of their contractual obligations with Stromberg including payments and compliance with the General Case No. 01-19-0000-1305 Page 2 of26 A CERTIFIED COPY ATTEST: 04/18/2024 THOMAS A. WILDER DISTRICT CLERK TARRANT COUNTY, TEX BY: /s/ Tanya Weiss FILED: ULSTER COUNTY CLERK 04/24/2024 05:47 PM INDEX NO. EF2024-1080 NYSCEF DOC. NO. 2 RECEIVED NYSCEF: 04/24/2024 Terms; (12) Claimants' claims are barred in whole or in part by the affirmative defense of fraud; (13) Claimants' claims are barred in whole or in material part by the affirmative defense of estoppel, including but not necessarily limited to estoppel by conduct, estoppel by contract, equitable estoppel, waiver, and !aches; (xiv) Claimants are not entitled to recover attorneys' fees in that Claimants have failed to properly present a claim for attorneys' fees as required under Chapter 38 of the TEXAS CIVIL PRACTICE & REMEDIES CODE; and (xv) Stromberg asserts the statutory limitations on awards of pre-judgment interest as provided in Chapter 304 of the TEXAS FINANCE CODE including the statutory limitations on interest rates and time periods for which pre- judgment and post-judgment interest may be allowed (despite neither Hudson nor Lalo seeking an interest) through their claims. Stromberg's Counterclaims against Lalo and Hudson Stromberg asserts the following causes of action against Lalo and Hudson: (I) breach of contract; (2) promissory estoppel; (3) fraudulent inducement; (4) violation of the Prompt Payment Act; (5) violation of the Texas Trust Fund Act; (6) common law fraud; and (7) money had and received (collectively Stromberg's Affirmative Claims). Lalo's and Hudson's Affirmative Defenses Hudson has asserted the following affirmative defenses: (I) Stromberg's Affirmative Claims are barred because Stromberg did not properly or fully perform its obligations under the relevant agreements, and because it materially breached the Lalo Stromberg PO; and (2) Hudson never agreed to the terms of the Lalo Stromberg PO Stromberg and therefore Hudson cannot be held liable for attorneys' fees and related expenses under the PO. Lalo's affirmative defenses to Stromberg's Affirmative Claims, if any, are contained within Lalo's general defenses to Stromberg's Affirmative Claims. FINDINGS General The evidence, testimony, and arguments from all Parties in this dispute requires initial findings regarding what the terms of the Lalo Stromberg PO were on September 18, 2017, when signed by Lalo and whether the terms of the PO thereafter have been modified, supplemented, contradicted or waived. All Parties have acknowledged this dispute involved the sale of goods, and therefore the Texas Uniform Commercial Code equivalent of model UCC Article 2, which is found in Chapter 2 of the TEXAS BUSINESS AND COMMERCE CODE (Texas UCC) must be considered in addition to Texas common law. Incorporation of GFRC Specifications Lalo and Hudson have asserted that the GFRC Specifications where incorporated into the Stromberg Lalo PO when signed by Lalo given that: (1) before Lalo signed the PO, Lalo sent Stromberg a copy of the GFRC Specifications and Stromberg sent Lalo comments in response; (2) the blank line in front of the word "Specifications" on the Cover Page of the PO confirmed that Stromberg had previously reviewed the GFRC Specifications before Lalo signed the PO; and (3) Case No. 0J-19-0000-1305 Page 3 of26 A CERTIFIED COPY ATTEST: 04/18/2024 THOMAS A. WILDER DISTRICT CLERK TARRANT COUNTY, TEX BY: /s/ Tanya Weiss FILED: ULSTER COUNTY CLERK 04/24/2024 05:47 PM INDEX NO. EF2024-1080 NYSCEF DOC. NO. 2 RECEIVED NYSCEF: 04/24/2024 Stromberg's lack of objection to the previously circulated GFRC Specifications, other than the portions that Stromberg struck after their initial review, and Stromberg's proceeding with the submittal process, subjecting themselves to the Architect's review of the samples, accepting the Architect's rejections, and moving on to producing subsequent samples. The paragraph entitled "GENERAL" within the General Terms of the Lalo Stromberg PO states in pertinent part (collectively (Merger Clause)): THIS CONTRACT AND THESE TERMS SUPERSEDE ANY PREVIOUS AGREEMENTS AND APPLIES TO ANY MATERIALS PREVIOUSLY DELIVERED AND/OR YET TO BE DELIVERED. This contract constitutes the entire agreement between the parties hereto, and there are no understandings, representation, or warranties of any kind except those expressly set forth herein. To the extent that Claimants' arguments relate to conduct that occurred prior to Lalo signing the Stromberg Lalo PO, the incorporation of GFRC Specifications is barred by the Merger Clause wherein Stromberg and Lalo agreed that no other understandings, representations or previous agreements were to be incorporated into the Stromberg Lalo PO. To the extent that Claimants' arguments relate to Stromberg's conduct that occurred after Lalo signed the PO related to the submittal process, the Architect's review and rejection of the samples, and production of samples, these arguments are analyzed pursuant to the Texas UCC as discussed in detail below. To the extent that these arguments relate to incorporation of the GFRC specification by reference, Texas law does not require any specific language to effectively incorporate an extrinsic document by reference, but the contract must plainly refer to the other document or otherwise show that the parties intended for the other document to become part of or incorporated into the contract. 1 The Cover Sheet, it states in pertinent part: "[W]e have devised a list of the information needed before we can begin the submittal process." This language is followed by a list of seven categories of information each with a check box (in the form of a line) and all but one of the check boxes is unchecked except for the information category described as "Other - Signed Order Confirmation, Deposit." The unchecked box related to the information category described as "Specifications" on the Cover Page may indeed confirm that Stromberg had previously been provided with a copy of the GFRC Specifications however receiving and reviewing a document prior to entering into the PO or 1 Relevant case law cited by the Parties includes: In re 24R. Inc., 324 S.W.3d 564,567 (Texas 2010); Santander Consumer USA, Inc. v. Mata, No. 03-14-00782-CV, 2017 WL 1208767 at *3, 2017 Tex. App. LEXIS 2631 at *6 (Tex. App.-Austin Mar. 29, 2017, no pet.) (mem. op.); Bob Montgomery Chevrolet, Inc. v. Dent Zone Cos., 409 S.W.3d 181, 189 (Tex. App.-Dallas 2013, no pet.) (citing Owen v. Hendricks, 433 S.W.2d 164, 167 (Tex. 1968)) (emphasis added); Trico Marine Sen·s., Inc., 73 S.W.3d 545, at 549 (Tex. App. 2002). Case No. 01-19-0000-1305 Page 4 of26 A CERTIFIED COPY ATTEST: 04/18/2024 THOMAS A. WILDER DISTRICT CLERK TARRANT COUNTY, TEX BY: /s/ Tanya Weiss FILED: ULSTER COUNTY CLERK 04/24/2024 05:47 PM INDEX NO. EF2024-1080 NYSCEF DOC. NO. 2 RECEIVED NYSCEF: 04/24/2024 indicating a need to review such a document is not equivalent to nor does it plainly refer to the GFRC Specifications as being incorporated or otherwise show that Lalo and Stromberg intended for the GFRC Specifications to be incorporated into the Lalo Stromberg PO. Likewise, Stromberg's lack of objection to the GFRC Specifications circulated before Lalo signed the PO (other than the portions that Stromberg struck after their initial review), is not equivalent to nor does it plainly refer to the GFRC Specifications as being incorporated or otherwise show that Lalo and Stromberg intended for the GFRC Specifications to be incorporated by reference into the PO at the time Lalo signed the PO. Accordingly, I find that find the preponderance of material and relevant evidence proves that on September 18, 2017, when Lalo signed the Lalo Stromberg PO, such PO did not incorporate the GFRC Specifications by reference. Joint Check Agreement Lalo, Hudson and Stromberg entered into a "Joint Check Agreement" dated October 16, 2017 (JCA). The "Schedule of Values" within the Lalo Stromberg PO states in pertinent part (Merger Clause): These terms and conditions may NOT be altered, supplemented or amended by the use of any buyer document or purchase order. Any attempt to alter, supplement or amend this document or to enter an order for product or services that are subject to additional or altered terms and conditions shall be null and void, unless otherwise agreed to in a written agreement signed by both Buyer and Stromberg. The Parties do not dispute that the JCA is a written agreement signed by both Lalo and Stromberg subsequent to Lalo's signing the P0. 2 Accordingly, I find the preponderance of material and relevant evidence proves that the JCA constitutes a valid amendment to the Lalo Stromberg PO. Lalo and Hudson have asserted that the JCA, in particular Paragraph 5, incorporates by reference the version of the GFRC Specifications that Stromberg reviewed and marked up prior to entering into the Lalo Stromberg PO. The preamble of the JCA states: Subcontractor and Contractor have an agreement where in Subcontractor is furnishing certain materials and/or labor to the above project. Contractor is the general contractor on said project. Supplier has agreed to supply certain materials and/or labor to Subcontractor for use one the above project if Contractor will issue payment for said materials directly to Supplier. In consideration of the foregoing and the benefit of the project which will result from the delivery of the materials by 2 While the evidence does not contain a copy of JCA reflecting Hudson's signature, Hudson provided testimony of its involvement in the preparation of the JCA and its issuance of several checks to Stromberg pursuant to the JCA and additionally acknowledgement that is enforceable. Case No. 01-19-0000-1305 Page 5 of26 A CERTIFIED COPY ATTEST: 04/18/2024 THOMAS A. WILDER DISTRICT CLERK TARRANT COUNTY, TEX BY: /s/ Tanya Weiss FILED: ULSTER COUNTY CLERK 04/24/2024 05:47 PM INDEX NO. EF2024-1080 NYSCEF DOC. NO. 2 RECEIVED NYSCEF: 04/24/2024 Supplier and in order to assure Supplier of prompt and full payment, it is agreed as follows .... Within the JCA, "Contractor" is defined as Hudson, "Subcontractor" is defined as Lalo, and "Supplier" is defined as Stromberg. The term "specifications" is not defined. Paragraph 5 of the JCA states: Supplier will furnish the materials, labor and equipment to Subcontractor in accordance with the specifications and directions of subcontractor. As noted above, Texas law does not require any specific language to effectively incorporate an extrinsic document by reference, but the contract must plainly refer to the other document or otherwise show that the parties intended for the other document to become part of or incorporated into the contract. I find that the preamble to the JCA evidences that the Parties intended for the JCA to assure Stromberg of prompt and full payment and evidences no intent that the Parties were amending the agreement under which "Supplier has agreed to supply certain materials and/or labor to Subcontractor" via incorporation by reference of the GFRC Specifications. I further find that Paragraph 5 of the JCA does not constitute a plain reference to the GFRC Specifications as being incorporated or otherwise show that Hudson, Lalo and Stromberg intended for the GFRC Specifications to be incorporated into the JCA by reference. Accordingly, I find the preponderance of material and relevant evidence proves that the JCA does not modify the Lalo Stromberg PO to incorporate the GFRC Specifications by reference. ucc Generally, Lalo and Hudson have asserted that various provisions of the Texas UCC modify and expand the Stromberg Lalo PO to include a requirement for Stromberg to submit a mock-up panel meeting the Architect's approved sample for color, texture and finish and that Stromberg was terminated for failure to deliver a mock-up panel consistent with the Architect's approved sample. Final Expression/ Complete and Exclusive Statement Lalo and Hudson assert the Lalo Stromberg PO should be considered partially, but not fully, integrated because several critical terms related to fabrication and processes about the manufacturing of the GFRC panels by Stromberg are missing from the Lalo Stromberg PO and therefore the PO cannot reasonably be understood to be an exclusive statement of the Parties' agreement despite the presence of the Merger Clause, and Stromberg's course of performance is necessary to explain that the totality of the Parties' agreement included theses critical terms. Stromberg asserts that Lalo Stromberg PO is plain and unambiguous and must be enforced as written without considering extrinsic evidence bearing on the Parties' subjective intent and when Case No. 01-19-0000-1305 Page 6 of26 A CERTIFIED COPY ATTEST: 04/18/2024 THOMAS A. WILDER DISTRICT CLERK TARRANT COUNTY, TEX BY: /s/ Tanya Weiss FILED: ULSTER COUNTY CLERK 04/24/2024 05:47 PM INDEX NO. EF2024-1080 NYSCEF DOC. NO. 2 RECEIVED NYSCEF: 04/24/2024 a contract can be given a definite and certain meaning, it is not ambiguous despite parties advancing competing constructions. 3 While the parol evidence rule under Texas common law and the parol evidence rule under the Texas UCC are similar, they are not identical. Accordingly, I find that the analysis should be conducted primarily under the Texas UCC. Texas UCC, Section 2.202 states: Terms with respect to which the confirmatory memoranda of the parties agree or which are otherwise set forth in a writing intended by the parties as a final expression of their agreement with respect to such terms as are included therein may not be contradicted by evidence of any prior agreement or of a contemporaneous oral agreement but may be explained or supplemented (1) by course of performance, course of dealing, or usage of trade (Section 1.303); and (2) by evidence of consistent additional terms unless the court finds the writing to have been intended also as a complete and exclusive statement of the terms of the agreement. Section 2.202 requires a multifactor analysis. First, there needs to be a determination whether the Lalo Stromberg PO is "intended by the parties as a final expression of their agreement to such terms as are included therein" and if it is, then there needs to be a determination whether the PO is "intended also as a complete and exclusive statement of the terms of the agreement." As noted above, Lalo and Hudson agree that the Lalo Stromberg PO is partially integrated, or in the terminology of the Texas UCC, that the PO is a final expression, but Lalo and Hudson assert the PO is not a fully integrated, or in the terminology of the Texas UCC, that the PO is not a complete and exclusive statement while Stromberg asserts the opposite. Texas case law applying the Texas UCC provides general guidance that a fully integrated written agreement is a final and complete expression of all the terms agreed upon by the parties while a partially integrated agreement is a final and complete expression of all the terms addressed in that written agreement, but is not a final and complete expression of all the terms the parties have agreed upon and a court considers the surrounding circumstances in determining whether, and to what degree, an agreement is integrated. 4 Lalo and Stromberg assert that the following evidences that critical terms related to fabrication and processes about the manufacturing of the GFRC panels by Stromberg were missing from the Lalo Stromberg PO when signed by Lalo and because these critical terms are missing, the PO cannot reasonably be understood to be an exclusive statement of the parties' agreement despite the presence of the Merger Clause: ( 1) the description of the color and texture are not filled in on the 3 See Devon Energy Prod. Co .. l.P. , •. Sheppard, No. 20-0904, 2023 WL 2438927, at •7 (Texas Mar. 10, 2023). 4 See Morgan Bldgs. & Spas, Inc. v. Humane Soc'y o/Sourheast Tex., 249 S.W.3d 480,486 (Tex. App.-Beaumont 2008, no pet.). Case No. 01-19-0000-1305 Page 7 of26 A CERTIFIED COPY ATTEST: 04/18/2024 THOMAS A. WILDER DISTRICT CLERK TARRANT COUNTY, TEX BY: /s/ Tanya Weiss FILED: ULSTER COUNTY CLERK 04/24/2024 05:47 PM