Motion for Summary Judgment in Zion Builders Limited Liability Company d/b/a Zion Builders VS. Eric Garduno a/k/a Eric Garduno and Karen Garduno| Trellis.Law

On May 01, 2019 a Motion,Ex Parte was filed involving a dispute between Zion Builders Limited Liability Company D B A Zion Builders, and Eric Garduno A K A Eric Garduno, Garduno, Karen, for Other Civil Case >$100,000 but <$200,000 in the District Court of Montgomery County.

Preview
Received and E-Filed for Record
4/8/2021 5:37 PM
Melisa Miller, District Clerk
Montgomery County, Texas
Deputy Clerk, Kayla Adams

CAUSE NO. 19-05-06051

ZION BUILDERS LIMITED § IN THE DISTRICT COURT OF
LIABILITY COMPANY D/B/A ZION §
BUILDERS §
Plaintiff, Counter-Defendant §
§
V. § MONTGOMERY COUNTY, TEXAS
§
ERIK GARDUNO A/K/A ERIC §
GARDUNO AND KAREN GARDUNO §
Defendants, Counter- Plaintiffs. § 457th JUDICIAL DISTRICT

DEFENDANTS ERIK GARDUNO AND KAREN GARDUNO’S
AMENDED MOTION FOR PARTIAL SUMMARY JUDGMENT

COMES NOW, Defendants Erik Garduno and Karen Garduno (collectively “Gardunos”),

and files this their Amended Motion for Partial Summary Judgment as to Plaintiff Zion Builders

Limited Liability Company d/b/a Zion Builders’ (“Plaintiff” or “Zion”) breach of contract, suit on

sworn account, and quantum meruit claims, and in support hereof would respectfully show the

Court the following:

I. SUMMARY

1. Zion expressly waived and released all claims against the Gardunos, including, but

not limited to, claims for payment by (1) executing the Conditional Waiver and Release on Final

Payment; (2) accepting final payment from Brenham National Bank; and (3) executing the Waiver

and Release of Lien. The Gardunos are entitled to summary judgment as a matter of law and Zion’s

claims should be dismissed.

2. This case arises out of a construction contract between Zion and the Gardunos

regarding the construction of the residential property located in Montgomery County at 28792

Shirley Court, Magnolia, Texas 77355. Zion’s Original Petition asserts causes of action for breach
of contract, suit on sworn account, and quantum meruit based on the Gardunos’ alleged failure to

pay $11,442.89 Zion claims is still owed on the construction contract.

3. There is no genuine issue of material fact that Zion waived its claims for additional

payment from the Gardunos. Indeed, the evidence demonstrates that Zion refunded the Gardunos

$10,000.00 on December 10, 2018—months after closing, in a good faith effort to pay the

Gardunos back for the overpayments Zion received.

4. Additionally, Zion has not and cannot produce any evidence establishing the

required elements of its claims. Accordingly, the Gardunos are entitled to summary judgment as a

matter of law as to Zion’s claims for breach of contract, suit on sworn account, and quantum meruit

causes of action.

II. SUMMARY JUDGMENT EVIDENCE

5. In support of their Amended Motion for Partial Summary Judgment, the Gardunos

attach the following items as Exhibits A through L and hereby incorporate all into this Motion by

reference.

EXHIBIT A: Declaration of Karen Garduno;

EXHIBIT A-1: Closing Disclosures;

EXHIBIT A-2: Email dated February 1, 2018;

EXHIBIT A-3: Email dated September 18, 2018;

EXHIBIT A-4: Email Chain;

EXHIBIT A-5: Email dated October 8, 2018 with attached Change Order;

EXHIBIT A-6: Email dated October 9, 2018 with attached Change Order;

EXHIBIT A-7: Email dated October 10, 2018 with attached Change Order;

EXHIBIT A-8: Disbursement Authorization dated October 19, 2018;

2
EXHIBIT A-9: Email dated November 27, 2018 with attached Spreadsheet;

EXHIBIT A-10: Text Message;

EXHIBIT A-11: Text Message;

EXHIBIT A-12: Check dated December 10, 2018;

EXHIBIT B: Residential Construction Agreement;

EXHIBIT C: Celina Cereceres Deposition dated June 29, 2020;

EXHIBIT D: Celina Cereceres Expert Report;

EXHIBIT E: HOA Application;

EXHIBIT F: Change Order Confirmation Agreement, dated November 9, 2018;

EXHIBIT G: Construction Loan Draw Summaries;

EXHIBIT H: Zion’s Transaction Detail by Account dated April 23, 2019;

EXHIBIT I: Waiver and Release of Lien;

EXHIBIT J: Erik Garduno Deposition dated June 23, 2020;

EXHIBIT K: Frank Jones Expert Report;

EXHIBIT L: Email dated August 2, 2017.

The Gardunos respectfully refer the Court to the attached exhibits in support of this Motion. TEX.

R. EVID. 801e(3); TEX. R. CIV. P. 203.6(b).

III. FACTUAL BACKGROUND

6. On August 21, 2017, the Gardunos entered into a contract with Zion (the

“Contract”) to construct the residential property located in Montgomery County at 28792 Shirley

Court, Magnolia, Texas 77355, more specifically described as Block 1, Lot 20 (the “Home”). See

Ex. B (Residential Construction Agreement).

3
7. The Contract’s original bid was for $400,000.00, which included a builder’s flat fee

of $60,000.00. See Ex. B, at 1, 5, 6. The Contract was a “cost plus” contract, meaning the Gardunos

were to pay the actual construction costs plus Zion’s builder’s flat fee. See Ex. B.

8. To help finance the construction project, the Gardunos took out a loan with

Brenham National Bank (“Brenham Bank”). See Ex. A (K. Garduno Decl.) ¶5; see also Ex. A-1

(Closing Disclosures). The original amount for the construction loan was $476,517.00, with

$76,517.00 being attributable to the purchase of the land. See Ex. A ¶5; see also Ex. C (C.

Cereceres Dep., June 29, 2020), at 39:02-09. Therefore, $400,000.00 was allocated to fund the

Home’s construction. See Ex. A ¶5; see also Ex. C, at 39:02-09; see also Ex. D (C. Cereceres

Expert Report).

9. Immediately after construction began, the Gardunos began to have problems with

Zion and Tyler Logeman (“Logeman”). While the roof was being installed, Mr. Logeman told the

Gardunos the Home was over budget. See Ex. A ¶6; see also Ex. A-2 (Email dated Feb. 1, 2018).

In reliance on Mr. Logeman’s representations the Gardunos took on additional debt to fund the

Home’s construction and began to pay for many of the Home’s items themselves. See Ex. A ¶6.

10. In May of 2018, Mr. Logeman told the Gardunos the Home was actually going to

come in about $20,000.00 under budget and that he would start taking bids to have a pool installed.

See Ex. A ¶7. Relying on this representation, the Gardunos went through their Homeowners

Association (“HOA”) to get approval for pool installation and got the pool plans approved. See

Ex. E (HOA Application). Subsequently, Mr. Logeman backed out of the pool installation, stating

that he was afraid it would cause budget overages. See Ex. A ¶7; see also Ex. A-3 (Email dated

Sept. 18, 2018).

4
11. On September 30, 2018 and October 1, 2018, Mr. Logeman emailed the Gardunos

advising them to increase their loan by $50,000.00 so that they could close out by October 19. See

Ex. A; see also Ex. A-4 (Email Chain). On October 8, 2018, Mr. Logeman sent the Gardunos an

email attaching a change order for $70,000.00, which he lowered to $50,000.00 without support.

See Ex. A; see also Ex. A-5 (Email dated Oct. 8, 2018); see also Ex. A-6 (Email dated Oct. 9,

2018); see also Ex. C, at 23:23 – 24:04. Mr. Logeman assured the Gardunos that he would make

a draw for the increased loan funds but instead of using it to build a pool, Logeman and Zion would

pay these funds to the Gardunos at closing so the Gardunos could install a pool later. See Ex. A

¶8. Mr. Logeman stated that at the Home’s closing he would sign over the balance he owes the

Gardunos, telling the Gardunos that this was a common practice in the industry and to trust him.

See id. ¶8. The Gardunos, again believing Mr. Logeman, executed and submitted the $50,000.00

change order to Brenham Bank, increasing their loan. See Ex. A; see also Ex. A-7 (Email dated

Oct. 10, 2018); see also Ex. A-1; see also Ex. F (Change Order Confirmation Agreement, dated

Nov. 9, 2018).

12. Over the course of construction, Zion made draws on the construction loan in order

to pay for the work it allegedly completed. See Ex. G (Construction Loan Draw Summaries). On

October 19, 2018, for the final draw request, Mr. Logeman, as owner and manager of Zion, signed

a Conditional Waiver and Release on Final Payment covering the final payment to Zion for all

labor services, equipment, or materials furnished to the Home. See Ex. A; see also Ex. A-8

(Disbursement Authorization dated Oct. 19, 2018), at 3.

13. Based on Zion’s disbursement requests and lien waiver, Brenham Bank distributed

the entire amount of the Gardunos’ construction loan, $450,000.00, to Zion. See Ex. H (Zion’s

5
Transaction Detail by Account dated Apr. 23, 2019); see also Ex. C, at 52:17 – 53:01; see also Ex.

A; see also Ex. A-8, at 2.

14. On November 9, 2018, the Gardunos closed on their Home, converting their loan

with Brenham Bank into a mortgage. See Ex. A; see also Ex. A-1. Despite Mr. Logeman’s

assurances to pay the Gardunos the excess construction funds, he did not sign over the balance

owed to the Gardunos. See Ex. A ¶9. In fact, Mr. Logeman was not even present at the scheduled

closing of the Home. See id. Rather, he decided to appear earlier than scheduled to execute his

portion of the closing documents, the Change Order Confirmation Agreement, and the Waiver and

Release of Lien, completely avoiding the Gardunos altogether. See id.

15. That same day, the parties executed a Change Order Confirmation Agreement to

reflect the additional $50,000.00 for the change order. See Ex. F. Mr. Logeman, as owner and

manager of Zion, and in accordance with the terms of the Contract, also executed a “Waiver and

Release of Lien” swearing that Zion was paid in full for all services, labor, and/or materials

performed or furnished to the Home. See Ex. I (Waiver and Release of Lien); see also Ex. B ¶9.

Further, Mr. Logeman swore that he “absolutely and forever waives and releases all claims of

every kind against” the Gardunos in connection with Zion’s work on the Home. See Ex. I.

A. Defects in Construction

16. In November of 2018, after Zion made the final construction draw, the Gardunos

moved into the Home. See Ex. A ¶10. However, upon occupying the Home, the Gardunos

discovered a litany of problems with Zion’s work as its construction failed to conform to the plans

and specifications of the Home, including, but not limited to:

• The Home’s concrete driveway is improperly laid and has cracks throughout, which
causes repeated water pooling. See Ex. J (E. Garduno Dep., June 23, 2020), at 126:01-
03; 159:18 – 160:02.

6
• The grading near the driveway and garage door allows water to flood the driveway,
including to a level that water enters the garage See id., at 73:04 – 75:24.

• The sidewalk leading up to the Home’s front door is higher in elevation than the
Home’s level causing water to pond between the Home and the walkway. See id., at
76:25 – 77:08, 78:02-08.

• The lack of grading near the septic tank causes the area to consistently flood. See Ex.
A ¶10; see also Ex. K (F. Jones Expert Report).

• The custom-made iron front door frame is installed improperly, causing the door to
scratch the wood flooring anytime it is opened or closed. See Ex. J, at 162:17 – 163:05.

• The custom-made iron back door frame is also improperly installed. See id., at 161:21
– 162:04.

• The bamboo hard wood floors are installed incorrectly and have cupping due to
excessive moisture on the floor or lack of proper moisture proofing. The flooring is
wedged upwards and buckles in places throughout the Home, most noticeably near the
front door. See Ex. A ¶10; see also Ex. K.

• The garage door opener was installed incorrectly with the left door control opening the
right door and vice versa. See Ex. A ¶10; see also See Ex. J, at 165:03-06.

• The rear patio’s gas fireplace does not work because the gas was never hooked up. See
Ex. J, at 190:25 – 191:07.

17. Moreover, Zion hired a subcontractor to install the HVAC unit but failed to hire a

plumber to finish out the gas and heat lines. See Ex. J, at 165:07 – 166:04. Zion also caused damage

to the ceiling of the Gardunos’ children’s bathroom which has not been repaired and the tiles in

the master bath and children’s bathroom were not laid properly or according to the plans submitted

by the Gardunos’ interior designer. See Ex. A ¶10; see also Ex. K. Furthermore, the cabinets in the

kitchen remain uneven, with some being broken or split and need to be replaced. See Ex. A ¶10;

see also Ex. K.

B. Construction Draws Exceed Actual Construction Costs for the Home

18. During construction, Mr. Logeman provided the Gardunos with various

spreadsheets relating to the Gardunos’ budget for the Home, the actual construction costs incurred,

7
and the total cost for constructing the Home. See Ex. L (Email dated Aug. 2, 2017); see also Ex.

A; see also Ex. A-9 (Email dated Nov. 27, 2018). On November 27, 2018, after closing, Mr.

Logeman sent the Gardunos the final budget spreadsheet with the total construction cost for the

Home being $412,821.26 (actual construction costs + builders fee). See Ex. A; see also Ex. A-9;

see also Ex. C, at 24:21-23, 40:20-24, 45:10-14. Mr. Logeman also provided the Gardunos with a

Transaction Detail by Account after construction was complete. See Ex. H.

19. Analysis of Zion’s accounting and supporting documentation by the Gardunos’

expert witness accountant, Celina Cereceres, CPA, found that Zion’s draws from the construction

loan exceeded the construction costs and builders fee by $64,091.37 and that Zion was overpaid.

See Ex. C, at 24:24 – 25:02, 63:22 – 64:05, 66:03-07; see also Ex. D. Specifically, Ms. Cereceres

found:

• During the entire construction of the Home, the total amount in construction draws
exceeded the total expenses incurred. See Ex. C, at 22:01-17. Most notably, for January
30, 2018, total draws equaled $201,172.93, while expenses only totaled $90,975.71 for
a difference of $110,197.22. See id., at 22:01-06.

• Zion’s own final budget spreadsheet reflects the total cost for constructing the Home
as $412,821.26, which is less than the $450,000.00 Zion drew. See id., at 23:15 – 24:11,
24:21 – 25:02.

• In Zion’s Transaction Detail by Account, there are overages in the amount of
$64,091.37 due to the Gardunos. See id., at 63:22 – 64:05, 66:03-07. This includes
$10,605.16 in credits due to the Gardunos; $11,543.14 in constructions costs charged
after the closing date; and $51,634.22 in unsupported or questioned costs. See Ex. D.

20. Further, on December 10, 2018 Mr. Logeman delivered a $10,000.00 check to the

Gardunos in a “good faith” effort to begin paying the Gardunos back for the excess monies he

drew and promised to return. See Ex. A; see also Ex. A-10 (Text Message); see also Ex. A-12

(Check dated Dec. 10, 2018). Despite Zion’s claims that it is now owed money, Mr. Logeman and

8
Zion acknowledge with this check that additional monies are owed to the Gardunos. See Ex. A;

see also Ex. A-10; see also Ex. A-11 (Text Message); see also Ex. A-12.

IV. PROCEDURAL HISTORY

21. On May 1, 2019, Plaintiff/Counter-Defendant Zion filed its Original Petition

against Defendants/Counter-Plaintiffs Gardunos alleging breach of contract, suit on sworn

account, and quantum meruit.

22. On June 3, 2019, the Gardunos filed their Original Answer. That same day the

Gardunos also filed their Original Counterclaim against Counter-Defendants Zion and Tyler

Logeman, individually, alleging negligence, negligent misrepresentation, negligent hiring and

supervision, Texas Deceptive Trade Practices Act violations, fraud, breach of contract, and breach

of warranties.

23. On September 4, 2020, the Gardunos filed their Second Amended Counterclaim

against Counter-Defendants Zion and Tyler Logeman, individually, alleging negligence, negligent

misrepresentation, negligent hiring and supervision, Texas Deceptive Trade Practices Act

violations, fraud, fraud in a real estate transaction, breach of contract, and breach of warranties.

24. On December 11, 2020, the Gardunos filed their Motion for Partial Summary

Judgment as to Plaintiff Zion’s breach of contract, suit on sworn account, and quantum meruit

claims. The Court set the Gardunos’ Motion for Partial Summary Judgment for submission on

Friday, January 8, 2020 at 9:00 a.m. On January 4, 2021, Plaintiff/Counter-Defendant Zion and

Counter-Defendant Tyler Logeman filed their Response to the Gardunos’ Partial Motion for

Summary Judgment.

25. On January 6, 2021, the Gardunos filed their Motion for Leave to File their First

Supplemental Answer.

9
26. On January 20, 2021, the Gardunos filed their Reply in Support of their Motion for

Partial Summary Judgment as to Plaintiff Zion’s claims arguing Plaintiff Zion’s reliance on Rule

185 is not supported by the law or the record and that the Gardunos are not required to file a

verified denial in their Answer because Zion has not complied with Rule 185. See Defs.’ Reply ¶¶

3-8.

27. On January 26, 2021, this Court granted the Gardunos’ Motion for Leave, allowing

the Gardunos leave to amend or supplement their First Amended Answer. On February 8, 2021,

the Gardunos filed their Second Amended Answer, asserting verified denials to Plaintiff Zion’s

purported sworn account and all of Plaintiff Zion’s claims and allegations related to the alleged

account in Plaintiff Zion’s Original Petition pursuant to Rules 93(10) and 185 of the Texas Rules

of Civil Procedure. The Gardunos also attached the Declarations of Defendants/Counter-Plaintiffs

Erik Garduno and Karen Garduno in support of their verified denials.

V. TRADITIONAL SUMMARY JUDGMENT

A. Traditional Summary Judgment Standard

28. Under Rule 166a(c) of the Texas Rules of Civil Procedure, summary judgment is

proper if the movant demonstrates that no genuine issue of material fact exists and that it is entitled

to judgment as a matter of law. TEX. R. CIV. P. 166a(c); Randall’s Food Markets, Inc. v. Johnson,

891 S.W.2d 640, 644 (Tex. 1995); Houston v. Clear Creek Basin Authority, 589 S.W.2d 671 (Tex.

1979). If the movant seeks summary judgment on a claim for which the movant does not bear the

burden of proof, the movant may meet its burden by either conclusively negating at least one

essential element of the respondent’s claim or by pleading and conclusively establishing each

element of an affirmative defense to the claim. Randall's Food Mkts., 891 S.W.2d at 644. Put

simply, summary judgment for a defendant is proper if, as a matter of law, the plaintiff cannot

10
prevail on his claims. Butcher v. Scott, 906 S.W.2d 14, 15 (Tex. 1995) (per curiam); see also TEX.

R. CIV. P. l66a(b).

29. Here, there is no genuine issue of material fact that Zion has waived any claim for

additional funds from the Gardunos. In fact, the evidence and uncontroverted expert testimony

demonstrates that rather than being owed additional payment Zion was grossly overpaid, receiving

funds itwas not entitled to under the Contract. As such, the Gardunos are entitled to summary

judgment as to Zion’s claims for breach of contract, suit on sworn account, and quantum meruit.

B. Zion Builders LLC Expressly Waived and Released its Claims

30. Zion’s claims should be dismissed as a matter of law because it expressly waived

and released all claims against the Gardunos, including, but not limited to, its claims for payment.

Specifically, Zion expressly waived and released all claims by executing the Conditional Waiver

and Release on Final Payment, as well as the Waiver and Release of Lien, and accepting final

payment.

31. In their Second Amended Answer the Gardunos plead the affirmative defenses of

waiver and accord and satisfaction. See DEFS.’ 2ND AM. ANS ¶¶ 8, 11. Waiver is the intentional

relinquishment of a known right or intentional conduct inconsistent with claiming that right. Sun

Exploration & Prod. Co. v. Benton, 728 S.W.2d 35, 37 (Tex. 1987). Waiver can be proven by (a)

the party’s express renunciation of the right, or (b) silence or inaction for so long a period as to

show an intention to yield a known right. Tenneco Inc. v. Enterprise Products Co., 925 S.W.2d

640, 643 (Tex. 1996). “A release is a writing that provides that a duty or obligation owed to one

party to the release is discharged, either immediately or upon the occurrence of a condition.” Lyda

Swinerton Builders, Inc. v. Cathay Bank, 409 S.W.3d 221, 230 (Tex. App.—Houston [14th Dist.]

2013, pet. denied) (Citations omitted). “Releases are subject to the usual rules of contract

11
construction. As in other instances of contract construction, our primary concern is to ascertain the

intent of the parties at the time of the execution of the alleged release as expressed in the release.”

Id. Texas law holds that a release operates to “extinguish the claim or cause of action as effectively

as would a prior judgment between the parties.” Dresser Indus., Inc. v. Page Petroleum, 853

S.W.2d 505, 508 (Tex. 1993). Indeed, the effect of the release is to surrender the cause of action.

Lloyd v. Ray, 606 S.W.2d 545 (Tex. App.—San Antonio 1980, writ ref’d n.r.e.).

32. On October 19, 2018, Mr. Logeman, acting for Zion, signed a Conditional Waiver

and Release on Final Payment covering the final payment to Zion for all labor, services, equipment,

or materials furnished to the Home. See Ex. A-8, at 3. Pursuant to the final waiver and release, the

moment Brenham Bank paid Zion, the Conditional Waiver and Release on Final Payment became

effective with Zion fully and finally waiving and releasing “any claim for payment, and any rights

under any similar ordinance, rule, or statute related to claim or payment rights for persons in” Mr.

Logeman’s position. See Ex. A-8, at 3; see also TEX. PROP. CODE § 53.284(d).

33. Zion executed the Conditional Waiver and Release on Final Payment with the

intention of receiving the final amounts owed to it. See Addicks Services, Inc. v. GGP-Bridgeland,

LP, 596 F.3d 286, 298 (5th Cir. 2010) (The purpose of a Final Waiver is to “settle fully and finally

any potential liens or claims outstanding when the parties agree that the project has been completed

and all debts have been paid.”). By accepting the final payment from Brenham Bank, Zion intended

for the language in the Conditional Waiver and Release on Final Payment to become effective,

intentionally relinquishing and releasing any claims for payment. Thus, despite Zion’s claims that

it is now owed additional monies, the evidence shows Zion intended to fully and finally release

and waive any claims for payment when it executed the Conditional Waiver and Release on Final

Payment and subsequently accepted the final payment.

12
34. Zion’s intentional relinquishment and release of all claims is further evidenced by

its execution of the Waiver and Release of Lien, nearly a month after executing the Conditional

Waiver and Release on Final Payment. See Ex. I. On November 9, 2018, Mr. Logeman, as owner

and manager of Zion, and in accordance with the terms of the Contract, executed a “Waiver and

Release of Lien” swearing in the presence of a notary that Zion had been paid in full for all services,

labor, and/or materials performed or furnished to the Home. See Ex. I; see also Ex. B ¶9. Further,

Logeman “absolutely and forever waives and releases all claims of every kind against” the

Gardunos in connection with Zion’s work on the Home. See Ex. I.

35. The evidence establishes Zion intentionally relinquished its known right to any

claims for payment by (1) executing the Conditional Waiver and Release on Final Payment; (2)

accepting final payment from Brenham National Bank; and (3) executing the Waiver and Release

of Lien almost a month later. Thus, the Gardunos are entitled to summary judgment as a matter of

law as to Zion’s claims.

C. Zion’s Draws Exceed the Construction Costs and Builder’s Fee

36. There is no genuine issue of material fact Zion’s draws from the construction loan

exceed the total costs of construction and builder’s fee under the Contract. The Contract between

the Parties was a “cost plus” construction contract. See Ex. B. Pursuant to the Contract, the contract

price equaled the total of the actual construction costs plus a $60,000.00 builder’s fee. See Ex. C,

at 19:02-14. Contrary to Zion’s claims that it is owed additional payment, the evidence and

uncontroverted expert testimony demonstrates that Zion received funds it was not entitled to under

the Contract, included unsupported construction costs, was grossly overpaid, and owes the

Gardunos these excess funds. See Ex. C, at 22:01-17, 23:15 – 24:11, 24:24 – 25:02, 63:22 – 64:05,

66:05-07; see also Ex. A-10; Ex. A-11; Ex. A-12. There is no genuine issue of material fact that

13
Zion received funds itwas not entitled to under the Contract, was grossly overpaid, and is not

owed additional payment.

D. Zion’s Partial Refund of Overpayments Demonstrates Waiver of its Claims

37. Zion’s intentional relinquishment of its claims for additional monies is further

evidenced through Zion’s continued acknowledgment of its errors, the overages it withdrew, and

Mr. Logeman’s “good faith” effort to pay back a portion of the overpayments it wrongfully

received. Waiver may be either express or indicated by conduct that is inconsistent with an intent

to claim the right. Cal-Tex Lumber Co., Inc. v. Owens Handle Co., Inc., 989 S.W.2d 802, 812 (Tex.

App.—Tyler, 1999). “Waiver is largely a matter of intent, and for implied waiver to be found

through a party’s actions, intent must be clearly demonstrated by the surrounding facts and

circumstances.” Jernigan v. Langley, 111 S.W.3d 153, 156 (Tex. 2003).

38. Over the course of construction, Zion drew funds from the construction loan to pay

for the alleged work it completed on the Home. See Ex. G. In total, Zion withdrew $450,000.00

from Brenham Bank, the entire amount of the construction loan. See Ex. H; see also Ex. C, at

52:17 – 53:01; see also Ex. A-8, at 2.

39. Throughout construction and afterwards, Mr. Logeman consistently acknowledged

the overages Zion was drafting and represented to the Gardunos that he would refund them for

said overages. See Ex. A; see also Ex. A-10; see also Ex. A-11. For example, with regard to the

excess pool money, Mr. Logeman assured the Gardunos that he would make a draw for the

additional loan money but would pay these funds to the Gardunos so that they could have the pool

installed later. See Ex. A ¶8. Moreover, on December 10, 2018, after closing, Zion and Logeman

acknowledged its overages and attempted to make a “good faith” effort to pay back a portion of

the overpayments it wrongfully received. See Ex. A-10; see also Ex. A-12. Zion’s payment to the

Gardunos shows an intentional relinquishment and waiver of any claims for additional monies.
14
Accordingly, the surrounding facts and circumstances establish Zion’s intentional relinquishment

of its claims for payment and the Gardunos are entitled to summary judgment as a matter of law

as to Zion’s claims.

E. Zion’s Suit on Sworn Account Claim Fails as a Matter of Law.

40. The Gardunos are entitled to summary judgment on Plaintiff Zion’s suit on sworn

account claim because the summary judgment evidence negates one or more essential elements of

Zion’s suit on sworn account claim.

41. A suit on sworn account must be based on a systematic record, supported by

affidavit, to the effect that the claim is, within the affiant’s knowledge, just and true, that it is due,

and that all just and lawful offsets, payments, and credits have been allowed. TEX. R. CIV. P. 185.

The supporting affidavit must be by the plaintiff, his agent, or his attorney, and state that (1) the

claim is within the knowledge of the affiant, (2) that the claim is just and true, (3) the account is

due, and (4) all just and lawful offsets, payments and credits have been allowed. See TEX. R. CIV.

P. 185; Livingston Ford Mercury, Inc. v. Haley, 997 S.W.2d 425, 430 (Tex. App.—Beaumont

1999, no pet.). When there is a deficiency in the plaintiff’s sworn account, the account will not

constitute prima facie evidence of the debt. See Mega Builders, Inc. v. Am. Door Products, Inc.,

01-12-00196-CV, 2013 WL 1136584, at *6 (Tex. App.—Houston [1st Dist.] Mar. 19, 2013, no

pet.); Enernational Corp. v. Exploitation Eng’rs, Inc., 705 S.W.2d 749, 750 (Tex. App.—Houston

[1st Dist.] 1986, writ ref’d n.r.e.). It is within the Court’s discretion to determine whether a

pleading is sufficient on its face to constitute a sworn account. Price v. Pratt, 647 S.W.2d 756, 757

(Tex. App.—Corpus Christi 1983, no writ).

15
42. Here, Plaintiff Zion’s Original Petition and Tyler Logeman’s Affidavit 1 are

deficient as a matter of law. The Petition and Affidavit fail to show that a systematic record has

been kept and fail to itemize the charges and credits related to Zion’s services. The Petition and

Affidavit allege the Gardunos paid Plaintiff $48,557.11 and that the Gardunos still owe $11,442.89

to Zion. See PL.’S ORIGINAL PET. 3-5; see also PL.’S ORIGINAL PET., Ex. A ¶¶ 3, 4 (stating the

“Gardunos paid $48,557.11 as is reflected in the spreadsheet attached hereto as Exhibit 2”).

However, Zion did not attach any spreadsheets to the Affidavit or any documents even showing a

systematic record or an account. See PL.’S ORIGINAL PET., Ex. A. Rather, only the Contract is

attached to the affidavit which is insufficient to meet the requirements of Rule 185. See Howard

v. Weisberg, 583 S.W.2d 920, 921 (Tex. App.—Dallas 1979) (A statement or invoice must be set

forth in the pleadings or incorporated by an attached exhibit which clearly identifies the nature of

the item constituting the sworn account); see also Juarez v. Dunn, 567 S.W.2d 223, 226 (Tex. Civ.

App.—El Paso 1978, writ ref’d n. r. e.). Moreover, the Affidavit does not state that Zion’s claim

is “just and true,” that the account is due, or that Zion has allowed “all just and lawful offsets,

payments, and credits.” See PL.’S ORIGINAL PET., Ex. A; see also Long, 2014 WL 4104100 at *13;

see also Clifton, 2007 WL 2493517 at *2. Because Zion’s Petition and Affidavit are deficient, they

do not constitute prima facie evidence of its claim.

43. Instead, there is no genuine issue of material fact that Zion has waived any claim

for additional funds from the Gardunos. As shown above, the evidence and uncontroverted expert

testimony demonstrates that rather than being owed additional payment Zion was grossly overpaid,

receiving funds it was not entitled to under the Contract. As such, the Gardunos are entitled to

summary judgment as to Zion’s suit on sworn account claim.

1
In support of its suit on sworn account claim, Zion attaches Tyler Logeman’s affidavit to its Original Petition as
Exhibit A. However, no statement of account or the referenced spreadsheet is attached to Logeman’s affidavit.

16
VI. NO EVIDENCE SUMMARY JUDGMENT

A. No-Evidence Summary Judgment Standard

44. After an adequate time for discovery, a party may move for summary judgment on

the grounds that there is no evidence of one or more specified elements of a claim or defense on

which the adverse party would have the burden of proof at trial, and where the respondent produces

no summary judgment evidence raising a genuine issue of material of facts on those elements, a

no-evidence summary judgment must be granted. See TEX. R. CIV. P. 166a(i); LMB, Ltd. v.

Moreno, 201 S.W.3d 686, 688 (Tex. 2006). “The trial court must grant the motion unless the

nonmovant presents more than a scintilla of evidence raising a fact issue on the challenged

elements.” Flameout Design & Fabrication, 994 S.W.2d 830, 834 (Tex. App.—Houston [1st Dist.]

1999, no pet.). Less than a scintilla of evidence would exist when the evidence is so weak as to do

no more than create a mere surmise or suspicion of a fact. See Kindred v. Con/Chew, Inc., 650

S.W.2d 61, 63 (Tex. 1983). A no-evidence motion for summary judgment pursuant to TEX. R. CIV.

P. 166a(i) is essentially a pre-trial directed verdict. General Mills Restaurants, Inc. v. Texas Wings,

Inc., 12 S.W.3d 827, 832, 833 (Tex. App.—Dallas 2000, no pet.). Notably, the rule does not require

that discovery be completed, but only that an adequate time for discovery has passed. In Re

Mohawk Rubber Co., 982 S.W.2d 494, 498 (Tex. App.—Texarkana 1998, no pet.). Since filing

this lawsuit Zion has conducted written discovery to the Gardunos, received over 2,500 pages of

document production, received the Gardunos’ construction expert’s report, deposed Erik Garduno,

and deposed the Gardunos’ accounting expert witness. There can be no dispute that Zion has had

a sufficient time to conduct discovery in this matter.

17
B. Plaintiff Zion has No Evidence Supporting its Breach of Contract Claim.

45. To prevail on a claim for breach of contract, Zion must establish the following

elements: (1) the existence of a valid contract; (2) performance or tendered performance by the

plaintiff; (3) breach of the contract by the defendant; and (4) damages sustained by the plaintiff as

a result of the breach. See S. Elec. Servs., Inc. v. City of Houston, 355 S.W.3d 319, 323-24 (Tex.

App.—Houston [1st Dist.] 2011, pet. denied).

46. Here, there is no evidence that the Gardunos breached the Contract or that any such

breach was the proximate cause of any alleged damages. Therefore, summary judgment should be

entered in favor of the Gardunos with respect to Zion’s breach of contract claim.

C. Plaintiff Zion has No Evidence Supporting its Suit on Sworn Account Claim.

47. To prevail on a claim for sworn account, Zion must establish: (1) a sale and delivery

of goods or services; (2) the charges on account are just, i.e., the prices are charged in accordance

with an agreement or, in the absence of agreement, are usual, customary, and reasonable prices;

and (3) the amount remains unpaid. TEX. R. CIV. P. 185; see Solano v. Syndicated Office Sys., 225

S.W.3d 64, 67 (Tex. App.—El Paso 2005, no pet.); see also Thorp v. Adair & Myers, 809 S.W.2d

306, 307 (Tex. App.—Houston [14th Dist.] 1991, no writ). Under Rule 185 of the Texas Rules of

Civil Procedure, a plaintiff’s petition on a sworn account must contain a systematic, itemized

statement of the goods or services sold, must reveal offsets made to the account, and must be

supported by an affidavit stating that the claim is within the affiant’s knowledge, “just and true.”

TEX. R. CIV. P. 185.

48. Here, Plaintiff Zion has not and cannot produce competent summary judgment

evidence that the charges on Zion’s account are just or that any amount owed to Zion remains

unpaid. Zion’s Original Petition and Tyler Logeman’s Affidavit fail to show that a systematic

18
record has been kept and fail to itemize the charges and credits related to Zion’s services. In fact,

while Zion’s Original Petition references an “account” attached to Mr. Logeman’s affidavit, this

“account” or “spreadsheet” was not attached to the affidavit. See ZION’S ORIG. PET. Ex. A.

Moreover, the Affidavit does not state that Zion’s claim is “just and true,” that the account is due,

or that Zion has allowed “all just and lawful offsets, payments, and credits.” See PL.’S ORIGINAL

PET., Ex. A. Rather, the summary judgment evidence conclusively establishes (1) Zion charged

the Gardunos for amounts not in accordance with the Contract; (2) these charges were not usual,

customary, and reasonable prices; and (3) Zion was actually overpaid for its services.

49. Therefore, summary judgment should be entered in favor of the Gardunos with

respect to Zion’s suit on sworn account claim.

D. Plaintiff Zion has No Evidence Supporting its Quantum Meruit Claim.

50. “A party generally cannot recover under quantum meruit when there is a valid

contract covering the services

Case Info

Judge

Santini, Vincenzo J Track Judge’s New Case

Case No.

(Subscribe to View)

Document Filed Date

April 08, 2021

Case Filing Date

May 01, 2019

County

Parties

Christopher L Johnson Attorney for the Defendant
Eric Garduno a/k/a Eric Garduno Defendant
Garduno, Karen Defendant
JOSEPH K WATTS Attorney for the Plaintiff
Pro Se Attorney for the Plaintiff
Zion Builders Limited Liability Company d/b/a Zion Builders Plaintiff
Justin Kornegay Attorneys for Defendants
Caroline Bossier Attorneys for Defendants
Robert Freehill Attorneys for Defendants
Jacqueline Smith Attorneys for Plaintiffs

For full print and download access, please subscribe at https://www.trellis.law/.

Motion,Ex Parte: Zion Builders Limited Liability Company d/b/a Zion Builders VS. Eric Garduno a/k/a Eric Garduno and Karen Garduno

Preview

Related Topics

Case Info

Parties