Motion for Summary Judgment in MEGA BUILDERS INC (D/B/A MEGA & ASSOCIAT vs. BELL ENTERPRISES INC| Trellis.Law

On August 19, 2014 a Motion-Secondary was filed involving a dispute between Mega Builders Inc, and Bell Enterprises Inc, Bell Tech Enterprises Inc, Trimcos Llc, for CONTRACT in the District Court of Harris County.

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NO. 201447565

MEGA BUILDERS, INC. IN THE DISTRICT COURT
D/B/A Mega & Associates
Plaintiff

Bell Tech Enterprises, Inc., OF HARRIS COUNTY,
And
Trimcos,
Defendants 215th JUDICIAL DISTRICT

PLAINTIFF MEGA BUILDERS, INC.’S OPPOSITION TO MOTIONS OF
BELL TECH ENTERPRISES FOR SUMMARY JUDGMENT AND TO
REMOVE PLAINTIFF’S AFFIDAVITS OF CONSTITUTIONAL AND
STATUTORY LIEN.

PLAINTIFF’S OBJECTION TO BELL TECH ENTERPRISE’S AFFIDAVITS IN
SUPPORT OF ITS MOTIONS

TO THE HONORABLE JUDGE ELAINE H. PALMER, PRESIDING:

Plaintiff MEGA BUILDERS, INC., (“Mega”) opposes Defendant Bell

Tech, Inc. , (“Bell Tech”) conjoined motions: (1) Defendant’s Motion for

Summary Judgment and (2) Defendant Bell Tech Enterprises, Inc.’s Summary

Motion to Remove Invalid or Unenforceable Lien, (the “Motions”) and objects to

consideration as evidence the “Affidavits” and documents tendered in support of

the Motions. Because the Motions relate to the liability of Bell Tech and its

1
property as a responsible party for Mega’s debt claim for construction on Bell

Tech’s property, and to Plaintiff’s entitlement to Texas Constitutional and M & M

liens on that property, this opposition covers both aspects.

Summary of Mega’s Opposition

In this Court Plaintiff sued Bell Tech project owner and Trimcos

LLC (“Trimcos”) because Mega was not paid sums it was due on a commercial

construction project owned by Bell Tech. To secure its claim, Plaintiff timely

noticed, filed and served demands and affidavits claiming statutory mechanic’s and

materialman’s liens and Texas Constitutional liens on the project property.Its suit

seeks a money judgment and judicial foreclosure of the liens.

construction project is the subject of two contracts one from

Raffy Bell to Trimcos, and one from Trimcos to Mega. The BellTrimcos contract

is an exhibit to the Mukerji and Bell statements, which as will be shortly seen are

deficient as affirmative summary motion evidence, but which nevertheless

presents their judicial admission that the two contracts contain the identical price

and scope of work to the TrimcosMega Contract The Court will notice that the

BellTrimcos and TrimcosMega contracts are for the exact same amount of

money, $3,700,000 and for the same work. Further Trimcos in the TrimcosMega

The Trimcos Mega Contract is attached to Plaintiff’s Original Petition and authenticated by the affidavit of
D.J. Mody, Plaintiff’s President.
contract designated Mega’s role on the Bell Tech Office as “SUBCONTRACTOR

AS GENERAL CONTRACTOR”.

From those two elements alone the Court may reasonably draw the

inferences in favor of Mega, the nonmovant is required in summary

proceeding that Mega is “A” General Contractor on the job and that the “Sham

Contact” doctrine and Texas Property Code provisions relating to sham contractin

are applicable. Both the Property Code, § 53.001(7) and 53.026(a) explicitly

and the law of principal and agent provide the privity of contract

Mega however also has direct evidence of Bell Tech, through Raffy

Bell designating Trimcos as its agent and recognizing Mega as an original

contactor on its project. The affidavit of D.J. Mody recites that he had several

conversations (either person to person or by telephone) with Raffy Bell in which

Raffy Bell in words or substance stated that he had appointed Trimcos to be his

agent to obtain Mega’s contract, and that he wished that he had not placed Trimcos

in the chain as he believed that it had no general contracting experience or abilities

or had delayed or diverted funds that passed through its hands. And it is further

Property Code §53.001 (7) "Original contractor" means a person contracting with an owner either directly
r through the owner's agent.

Property Code §53.026 (a)(3).
SHAM CONTRACT. (a) A person who labors, specially fabricatesmaterials, or furnishes labor or materials
under a direct contractual relationship with another person is considered to be in direct contractual relationship
with the owner and has a lien as an original contractor, if: . . .
(3) the owner contracted with the other person for the construction or repair of a house, building, or improvements
and the contract was made without good faithintention of the partiesthat the other person was to perform the
contract.
patent as affirmed by D.J. Mody’s affidavit, that Mega had actual knowledge of the

owner of the project in order to do the work it contracted to do. Texas law is clear

under the circumstances shown: Trimcos, which added its credit to Bell Tech, Bell,

and Bell Tech are liable to Mega under the law of agency for sums due Mega.See

Eppler, Guerin & Turner, Inc. v. Kasmir, 683 S.W.2d 737, 738 39 (Tex. App.

Dallas 1985, writ ref'd n.r.e.) Hideca Petroleum v. Tampimex Oil Int'l, 740 S.W.2d

838, 842 (Tex. App. Houston [1st Dist.] 1987, no writ).

OBJECTION TO CONSIDERATION
OF BELL AND MUKERJI “AFFIDAVITS” AS EVIDENCE

BUT FIRST Mega must, lest it risk being waived, interpose its

substantive hearsay and lack of authentication objections to Bell Tech’s evidence

in support of its Motions. In support of the Motions Bell Tech offers the supposed

affidavits of Raffy Bell and Santosh Mukerji in which Mr. Bell calls himself the

President of Bell Tech Enterprises, Inc. and Mr. Mukerji calls himself the President

of Trimcos, LLC. oth statements for they are not affidavits fail for substantive

reason to provide competent summary judgment or summary proceeding evidence

upon which Bell Tech may rely. The Bell and Mukerji statements fail for a simple

Objection to lack of swearing of the alleged witness is a substantive defect in the affidavit.
It is made at
this time so that itis not waived. Summary judgment evidence must be presented in a form that would be
admissible at trial. Hou Tex, Inc. v. Landmark Graphics, 26 S.W.3d 103, 112 (Tex. App. Houston [14th Dist.] 2000,
no pet.). There is confusion whether defects in the form of authentication of attachments and of the affidavit itself in
support of a motion for summary judgment are waived without a proper objection in the trial court. See Mansions in
the Forest, L.P. v. Montgomery Cnty 65 S.W.3d 314, 317 (Tex. 2012).
reason the parties whose statements they claim to be is not shown to have been

sworn as a witness by the Notary. They are hearsay. This defect is fatal to their

consideration.

An affidavit may not be considered as summary judgment evidence

unless it meets the statutory requirements of an affidavit. Mansions in the Forest,

L.P. v. Montgomery Cnty 65 S.W.3d 314, 317 (Tex. 2012). Among those

statutory requirements is the requirement that the affidavit be BY THE AFFIANT

"sworn to before an officer authorized to administer oaths, and officially certified

to by the officer under his seal of office." The Bell and Mukerji statements each

begin with the recitation that the notary had sworn not Bell or Mukerji but a third

person, rending all statements inadmissible hearsay as to their statements or

contentions made against the interests of Mega Builders, Inc.

The attachments to the Bell and Mukerji statements fair no better

except as statements or admissions by a party opponen making them useful to

Mega but not to Bell Tech. Under the summary judgment standard, copies of

documents must be authenticated in order to constitute competent summary

judgment evidence. Simply attaching a document to a pleading does not make the

document admissible as evidence, dispense with proper foundational evidentiary

requirements, or relieve a litigant of complying with other admissibility

A form of order sustaining Mega’s objecti on to the Bell and Mukerji statements accompanies this response
requirements. Ceramic Tile Intern., Inc. v. Balusek, 137 S.W.3d 722, 725 (Tex.

App.San Antonio 2004, no pe t.). A properly sworn affidavit stating that the

attached documents are true and correct copies of the original is required to

authenticate the copies so they may be considered as summary judgment evidence.

Republic Nat'l Leasing Corp. v. Schindler, 717 S.W.2d 606, 607 (Tex. 1986) (per

curiam).

The rule of Republic was modified as to using a party’s document

production against the producing party by T.R.Civ. Rule 193.7 but not vis versa

when the party producing the document without authentication seeks to rely upon

it. Blanche v. First Nationwide Mortg. Corp., 74 S.W.3d 444, 451 52 (Tex. App.

Dallas 2002, no pet.)[“ . . . A party cannot authenticate documents for use in its

own favor by merely producing it in response to a discovery request”.] See also

See TRE 902(10).

Without an ffidavit the writing as well as the document are nothing

but hearsay. The statements however are judicial admission by Bell Tech that

may be used against it. Holy Cross Church of God in Christ v. Wolf, 44 S.W.3rd

562, 568 (Tex. 2001).
Opposition the Motions

The Motions contend that Mega is not entitled to the protections of the

Texas Constitution’s provision of a Constitutional Lien, and that its statutory lien

was untimely to claim an M & M lien as Mega, is a “subcontractor”. Bell Tech

also argues that the notices that Mega did provide were technically inadequate or

untimely. The Motions contend that Trimcos was “THE” general contractor and

Mega a subcontractor and not an “original contractor” on Bell Tech’s project that

Mega lacks privity with Bell Tech and that Mega “settled” its claim in an

instrument they attach as Exhibit B to the Mukerji statement. These contentions

are unsound.

The Texas Property Code explicitly recognizes that there can be more

than one original contractor By statute, and by decisional authority , Texas

recognize that when, as here, the owner entered into a “sham contract ” privity of

contract is provided by the Statute, Section 53.026, which specifically provides

that where a sham contract exists, the legal fiction of lack of privity is to be

ignored and the subcontractor is deemed to be an original contractor . See CVN

By addressing the Motions on their merits, Mega is not withdrawing its objections to the Motion’s lack of
admissible evidence.

Texas Prop. Code Sec. 53.002. MORE THAN ONE ORIGINAL CONTRACTOR. On any work there
may be more than one original contractor for purposes of this chapter

The test is whether the price and work between the alleged sham general contractor and that of the true
“subcontractor as general contractor” are equivalent. See Tex. Prop. Code 53.026 (a)(3).
Group, Inc. v. Delgado, 95 S.W.3d 234, 246 47 (Tex.2002) Trinity Drywall

Systems, LLC v. Toka Gen. Contrs., Ltd., 416 SW 3d 201, 210 (Tex.App. El

Paso, 2013 pet filed Because the Trinity opinion so fully covers the issues and

covers them so well its reasoning is adopted herein. For the Court’s ready

erence, a copy of the Trinity Opinion is part of the appendix to this opposition.

First the Trinity Court observed the importance of the Sham Contract

octrine and enactment of Property Code Sec. 53.026 in Texas:

Although relatively few courts have interpreted Section 53.026, case
law establishes that the "sham contracts" provision was designed to elevate a
subcontractor or materialman to an original contractor where the original
contractor acquired such status by virtue of a sham relationship with the
owner. See Col Paint Mfg. Co. v. American Indem. Co. , 517 S.W.2d
270, 273 (Tex.1974) (construing predecessor statute to Section 53.026); see
also First Nat'l Bank, 517 S.W.2d at 265 (same); In re Waterpoint Int'l,
LLC, 330 F.3d 339, 348 (5th Cir.2003) (noting that the sham contracts
provision protects subcontractors and materialmen from situations where the
original contractors are no more than an "alter ego" of the owners).
Therefore, the effect of Section 53.026 is to change and improve a
bcontractor or materialman's position in the construction contract chain.

Then rejecting contrary arguments, the Trinity Court explicitly rejected Bell Tech’s

rivity of contract argument that a “subcontractor/as general contractor” lacks the

privity of contract with the owner to establish itself as a general or original

Sec. 53.026. SHAM CONTRACT. (a) A person who labors, specially fabricates materials, or furnishes labor
or materials under a direct contractual relationship with another person is considered to be in direct
contractual relationship with the owner and has a lien as an original contractor, if:
(3) the owner contracted with the other person for the construction or repair of a house, building, or improvements
and the contract was made without good faithintention of the partiesthat the other person was to perform the
contract.
contractor under the Property Code and Texas Constitution. Relying both on

common law agency principles and Property Code §53.026 (7), The Court held:

Section 53.026 specifically provides that where a sham contract exists, the
legal fiction is to be ignored and the subcontractor is deemed to be an
original contractor. TEX. PROP.CODE ANN. §53.026 (West 2007). This is
consistent with the practice the Legislature sought to eliminate by enacting
Section 53.026's statutory predecessor. See Col Paint Mfg. Co ., 517
S.W.2d at 273 (stating that it was common practice for owners to enter into
sham contracts to ensure that the persons they contracted with would be
subcontractors, and therefore, those subcontractors could not enjoy the
advantages of being an original contractor). Accordingly, under the sham
contracts provision, a subcontractor is placed in direct privity with the
property owner for purposes of the mechanic's and materialman's lie
statutes. See Col Paint Mfg. Co., 517 S.W.2d at 273; Shaw,544 S.W.2d
at 500; In re Waterpoint, 330 F.3d at 348. As a result, by changing a
subcontractor's position in the construction contract chain, the statutory
provisions allow a subcontractor hired under a sham contract to assert and
enforce a constitutional lien because he is deemed to have a direct
contractual relationship with the owner. See TEX. PROP.CODE ANN. §
53.001(7) (West 2007); Col Paint Mfg. Co., 517 S.W.2d at 273; First
Nat'l Bank, 517 S.W.2d at 265.

at 211 212.

Here with the Bell Trimcos contract price at $3,700,000 and the

TrimcosMega contract price at $3,700,000, can there be any doubt that the Bell

Trimcos contract was in the words of Tex. Prop. Code §53.026 (a) (3) one, “ made

without good faith intention of the parties that the other person was to perform the

contract” Mega believes at trial that the Court and finder of fact will so conclude

In these summary proceedings however the Court must deny the Motions unless it
is able to say the contrary with perfect confidence that the BellTrimcos contract

was to be a true construction contract for Trimcos the work. The Court

cannot, and must therefore deny the Motions.

There is also direct evidence of Bell Tech, through Raffy Bell

designating Trimcos as its agent and recogniz Mega as an original contactor on

its project. The affidavit of D.J. Mody recites that he had several conversations

(either prson to person or by telephone) with Raffy Bell in which Raffy Bell in

words or substance stated that he had appointed Trimcos to be his agent to obtain

Mega’s contract for the project and that he wished that he had not placed Trimcos

in the chain as he believed that it had no general contracting experience or abilities.

And it is further patent that Mega had actual knowledge of the owner of the

project in order to do the work it contracted to do, as affirmed by D.J. Mody’s

affidavit. Texas law is clear under the circumstances shown Bell, Bell Tech and

Trimcos are liable to Mega under the law of agency for the sums due Mega.See

Eppler, Guerin & Turner, Inc. v. Kasmir, 683 S.W.2d 737, 738 39 (Tex. App.

Dallas 1985, writ ref'd n.r.e.) Hideca Petroleum v. Tampimex Oil Int'l, 740 S.W.2d

838, 842 (Tex. App. Houston [1st Dist.] 1987, no writ).
RESPONSE TO MOTION TO STRIKE LIEN AFFIDAVIT
ON TECHNICAL NOTICE DEFECT CLAIMS

The Motions assert that Plaintiff’s affidavit is technically defective

urging that only the strictest compliance with the minutia is sufficient to perfect

such a lien. Bell Tech is dead wrong in that assertion.

As Justice Jennings of the First Court of Appeals recently observed

all that is required to sustain a lien is substantial compliance with notice rules

keeping with the purpose of protecting mechanic and material suppliers from non

payment.

Texas courts have generally recognized that certain statutory requirements
pertaining to the securing of a lien under chapter 53 are to be reviewed for
substantial compliance. See Mustang Tractor & Equip. Co. v. Hartford
Accident & Indem. Co., 263 S.W.3d 437, 440 (Tex. App.Austin 2008, pet.
denied) ("The mechanic's and materialman's lien statutes, as well as the
relevant case law, mandate that a lien affidavit should not be judged by a
strict standard but by whether the claimant substantially complied with the
statutory requirements."); Occidental Neb. Fed. Sav. Bank v. East End Glass
, 773 S.W.2d 687, 688 (Tex. App.San Antonio 1989, no writ) ("For
purposes of perfection, only substantial compliance is required in order to
fulfill the requirements of the mechanic's and materialman's lien statutes.");
see also First Nat'l Bank in Dallas v. Whirlpool Corp., 517 S.W.2d 262, 269
(Tex. 1974) ("It is well settled that the mechanic's and materialman's lien
statutes of this State will be liberally construed for the purpose of protecting
laborers and materialmen.")

LTF Real Estate Company, Inc. v. D&D Utility Supply, LLC, No. 01 00244 CV
(Tex. App. Mar. 21, 2013). A copy of the opinion is attached to the
appendix.
Notices may be combined, and lodged in such sequences as may be

reasonably intended to comply with preservation of rights substantially comply

with chapter 53's notice requirements. See Arias v. Brookstone, L.P., 265 S.W.3d

459, 466 (Tex. App.Houston [1st Dist.] 2007, pet. denied) (concluding that

notification of affidavit required by section 53.055 could be provided before lien

actually filed. The Movants have attached as exhibits both the notice letter, exhibit

5 and the lien filed and their “Statements” contending an accord had occurred

conclusively demonstrate that in advance of th affidavit that Mega Builders was

making claim for its unpaid sums

While Mr. Bell and Mr. Mukerji contend in their inadmissible

Statements that they did not receive the notices, the affidavit of the undersigned

attorney affirms that both the letter and post recording affidavit claiming lien were

mailed to the address shown with evidence of mailing and that Bell Tech’s agent,

Trimcos’ received it The statute requires only mailing, not proof of receipt for

an obvious reason a defaulting owner or party could simply refuse its mail

defeating the purposes of the M & M lien rights

OPPOSITION TO MOTION FOR SUMMARY JUDGMENT

Bell Tech moved for traditional summary judgment. Bell Tech asserts

that it is not liable for the unpaid sums claimed by Mega Builders, Inc. advancing

Trimcos refused to claim the firstnotice, a copy of the returned envelop isan attachment to counsel’s
affidavit.
matters of affirmative defense on which it bears the burden of proof and risk of

non persuasion. We have already seen that the summary judgment proof to support

its claimed “accord and satisfaction defense” is invalid, that the “sham contract”

statute and case law as well as the law of principal and agent, supply the element of

privity of contract and create strong inferences in Mega’s favor that it is an original

contractor owed sums secured by Constitutional and Statutory liens claimed by its

affidavit What is left is Bell Tech’s affirmative defense of accord and

satisfaction.

However the documents on which Defendant relies for this defense

show that sums remained due and owed after application of the claimed,

“satisfaction” amount The memorandum on which Bell Tech’s accord and

satisfaction/ release is based, states

These matters are all discussed supra and referenced here to make clear that they are applicable to deny the
Motions on the merits.

Bell Tech’s Motion on grounds of “quantum meruit” is more properly to be considered a special exception
to which the re pleading rules apply. If the Court sustains the Motions as to part of Plaintiff’s Original Petition on
the grounds of inapplicability of Quantum Meruit to the suit, Plaintiff here moves and seeks leave to file an amended
petition to address such objections. See Parker v. Barefield, 205 S.W.3d 119 (Tex. 2006).
The reservation of rights (subject to . . . ) makes it clear that this is not a release or

an accord and satisfaction. Moreover Bell Tech’s statements in support of

summary judgment, even if they were dmissible fail to make the predicate case of

a bona fide dispute in amount so as to create the circumstances of an accord and

satisfaction

Lopez v. Munoz, Hockema & Reed, L.L.P. 22 S.W.3d 857, 863

(Tex. 2000), the Supreme Court put the defense in context. First it is an

affirmative defense. And second there must be a bona fide dispute over the debt

not just a refusal to pay it. As the court observed:

In other words, to prevail on its defense, MHR was required to present
summary judgment evidence that the Lopezes disputed the fee and
specifically and intentionally agreed to relinquish any claims they might
have had against MHR for its alleged overcharge. To knowingly relinquish
claims arising out of MHR's alleged overcharge the Lopezes would have to
know that an overcharge existed. There is no evidence in the record,
however, that there was a fee dispute between the Lopezes and MHR when
the Lopezes accepted the settlement. "A valid accord and satisfaction
requires that there initially be a legitimate dispute between the parties
about what was expected. Bueckner v. Hamel, 886 S.W.2d 368, 372
(Tex.App.Houston [1st Dist.] 1994, writ denied) [emphasis added]

The elements of accord and satisfaction are well established under Texas common law. There must be a new
contract, express or implied. Industrial Life Ins. v. Finley, 382 S.W.2d 100, 104 (Tex.1964). The evidence must
establish the existence of mutual assent between the parties. Jenkins v. Henry C. Beck Co., 449 S.W.2d 454, 455
(Tex. 1969). An accord is merely an agreement whereby one party agrees to give or perform and the other to accept
something other than or different from what he is,or considers himself to be, entitledto. A satisfactionis the
performance of such an agreement. Slaughter v. Temple Lumber Co., 307 S.W.2d 108, 114 (Tex.Civ.App.
Houston 1957, writ ref'd n.r.e.).
From the documents it is patent that there was no legitimate dispute, just non

payment.

CONCLUSION

For all of the several reasons advances, the Motions must be denied.

Respectfully submitted
February , 2015.
___ _____________
Barry A. Brown
SBOT NO. 03093000
Suite 1100, The Arena Tower
7322 Southwest Freeway
Houston, Texas 77074
Tel: 713 981 3880
Fax: 713 981 3881
mail: tebear05@msn.com
Attorney For: Mega Builders, Inc.

CERTIFICATE OF SERVICE

I hereby certify that I complied with Rule 21 and 21a,T.R.Civ.P. by serving
all counsel via e filing, fax or email to jcjuravich@aol.com on the date of filing,
/2015.
___ _____________
Barry A. Brown

Attachments
Appendix Cases

Trinity Drywall Systems, LLC v. Toka Gen. Contrs., Ltd.,
LTF Real Estate Company, INC. v. D&D Utility Supply, LLC
Affidavit of D.J. Mody with copy of Trimcos Mega contract
Affidavit of Barry Brown with copy ofevidence of mailing and receipt of notice attached

Order sustaining object to “affidavits of Bell and Mukerji.
Order denying motions

Case Info

Judge

ELAINE H PALMER Track Judge’s New Case

Case No.

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Document Filed Date

February 20, 2015

Case Filing Date

August 19, 2014

County

Parties

BELL ENTERPRISES INC Defendant
BELL TECH ENTERPRISES INC Defendant
BELL TECH ENTERPRISES INC BY SERVING ITS REGISTERED AGENT Registered Agent
BROWN, BARRY ALLAN Attorneys for Plaintiffs
BROWN, BARRY ALLAN Attorney for the Plaintiff
JURAVICH, JOHN C. Attorneys for Defendants
JURAVICH, JOHN C. Attorney for the Defendant
MEGA BUILDERS INC (D/B/A MEGA & ASSOCIATES) Cross Defendant
MEGA BUILDERS INC (D/B/A MEGA & ASSOCIATES) Plaintiff
TRIMCOS LLC Cross Plaintiff
TRIMCOS LLC Defendant
TRIMCOS LLC BY SERVING ANY OFFICER OR AGENT Registered Agent

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Motion-Secondary: MEGA BUILDERS INC (D/B/A MEGA & ASSOCIAT vs. BELL ENTERPRISES INC

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