COURT OF APPEALS
SECOND DISTRICT OF TEXAS
FORT WORTH
NO. 02-17-00109-CV
CHILDRESS ENGINEERING APPELLANT
SERVICES, INC.
V.
NATIONWIDE MUTUAL APPELLEE
INSURANCE COMPANY, AS
SUBROGEE TO MERITAGE
HOMES OF TEXAS, L.L.C.
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FROM THE 67TH DISTRICT COURT OF TARRANT COUNTY
TRIAL COURT NO. 067-264677-13
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MEMORANDUM OPINION1
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In three issues, Appellant Childress Engineering Services, Inc. (Childress)
appeals the trial court’s grant of Appellee Nationwide Mutual Insurance
Company’s (Nationwide) motion for summary judgment. We reverse.
1
See Tex. R. App. P. 47.4.
Background
This suit arises from allegations of a faulty foundation constructed in
Lindsay Kirk’s home. Kirk entered into a contract to purchase a home from
Meritage Homes of Texas, L.L.C. (Meritage) in 2008. In the years that followed,
Kirk experienced several issues with her new home and in 2011, Kirk sued
Meritage for negligence, breach of contract, breach of warranty, violations of the
Deceptive Trade Practices Act, and fraud, alleging in part that the foundation was
not properly designed or built. During the Kirk lawsuit, Meritage requested that
Childress, who designed the foundation, and Tealstone Concrete, Inc., who built
the foundation, provide it a defense and indemnify it against Kirk’s claims. Both
subcontractors declined to do so. In 2012, Kirk and Meritage settled that lawsuit
with an agreement that Meritage would pay $150,000 to Kirk.
Nationwide, as subrogee to Meritage, filed the instant suit against
Childress and Tealstone in March 2013 seeking to recover the $150,000 it had
paid to Kirk. Tealstone quickly settled with Nationwide, agreed to pay $100,000,
and was dismissed from the suit in August 2014. In its petition, Nationwide
asserted that Meritage and Childress entered into a contract in October 2002 that
called for Childress to provide the design and engineering specifications for
homes that Meritage was building in Dallas and Fort Worth and that the contract
remained in force through the events giving rise to the instant suit.
In July 2014, Nationwide filed its first motion for traditional summary
judgment in this suit. Attached to the motion was an affidavit by Bradley M.
2
Gordon, an attorney who initially defended Meritage in the Kirk lawsuit. In his
affidavit, Gordon asserted that Childress provided the engineering services for
the Kirk home pursuant to an October 29, 2002 contract that he attached to his
affidavit (the October 2002 Contract). While the October 2002 Contract identified
Childress as the subcontractor, it identified “Legacy/Monterey Homes, L.P. dba
Legacy Homes and MTH Homes—Texas, L.P., DBA Hammonds Homes”
(Legacy)—not Meritage—as the contractor. It also provided that the scope of
work would be defined in an “exhibit A,” but exhibit A was not included in the
summary judgment evidence. Gordon’s affidavit did not explain any link between
Legacy and Meritage, nor did it explain the absence of exhibit A.
Childress objected to Nationwide’s summary judgment evidence, including
Gordon’s affidavit and his attachment of the October 2002 Contract. Childress
lodged a hearsay objection and argued that Gordon “[did] not properly introduce
the Subcontract[] into evidence,” and that “Gordon [was] not shown to be the
custodian of records of the Subcontract between Meritage Homes of Texas, LLC
and Childress” and, therefore, “there [was] no basis for Gordon to testify that true
and correct copies of the Subcontracts” were attached to the affidavit. The trial
court sustained this objection and granted Childress’s motion to strike the
October 2002 Contract.
During the time that Nationwide’s first motion for summary judgment was
pending, Childress had filed a motion to dismiss Nationwide’s claims in which it
argued that Nationwide had failed to comply with the requirements of section
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150.002 of the civil practice and remedies code by failing to file a certificate of
merit. See Tex. Civ. Prac. & Rem. Code Ann. § 150.002 (West 2011) (requiring
the filing of a certificate of merit with the complaint in an action for damages
arising out of the provision of professional services by a licensed or registered
professional). The trial court denied Childress’s motion to dismiss, and Childress
appealed the trial court’s denial to this court in an interlocutory appeal. This court
affirmed the trial court’s denial in February 2015 and remanded the case to the
trial court for further proceedings. See Childress Eng’g Servs., Inc. v. Nationwide
Mut. Ins. Co., 456 S.W.3d 725, 730 (Tex. App.—Fort Worth 2015, no pet.).
Upon remand, Nationwide filed a new motion for partial summary judgment
in December 2015 and attached copies of the claims made by Kirk in her petition,
amended petition, statement of claims, and amended statement of claims in the
Kirk lawsuit; the same affidavit by Gordon that it had filed with its 2014 summary
judgment motion, referring to Legacy as the contractor but without the October
2002 Contract attached; and an affidavit of Gregory Ave, an attorney who had
represented Nationwide in its defense of Meritage in the Kirk lawsuit. This time,
Nationwide attached the October 2002 Contract as its own exhibit and declared
in the motion that it was “[a] true and correct copy of Meritage’s subcontractor
agreement with Childress.” Again, the contract did not identify Meritage as a
party to the contract, nor did it include exhibit A. And, again, no explanation was
provided either in the motion or the attached documents and affidavits as to the
connection, if any, between Legacy and Meritage or the absence of exhibit A.
4
Less than a week later, Nationwide filed a supplemental traditional motion
for partial summary judgment. In its supplemental motion, Nationwide provided
evidence of the settlement between Meritage and Kirk in 2011, attaching a
second affidavit by Gordon. Neither the motion nor the affidavit addressed the
discrepancies in the October 2002 Contract.
Childress filed objections to the evidence attached to Nationwide’s initial
and supplemental motions for traditional summary judgment, including the
following objection to the October 2002 Contract:
Exhibit E purports to be a copy of a Subcontract Agreement between
Legacy/Monterey Homes, L.P., dba Legacy Homes and MTH
Homes—Texas, L.P., dba Hammonds Homes and Childress
Engineering. Defendant objects to and moves to strike Exhibit E
because Plaintiff does not properly introduce the Subcontract into
evidence and therefore it constitutes hearsay pursuant to Texas
Rule of Evidence 801(d). No exceptions to the hearsay rule under
Texas Rule of Evidence 802(6) have been offered.
In its response to Nationwide’s motions, Childress asserted that three fact
issues existed that precluded summary judgment: (1) whether Meritage was a
party to the “purported” subcontract agreement, pointing out that the named party
to the contract was “Legacy/Monterey Homes, L.P., dba Legacy Homes and
MTH Homes—Texas, L.P., dba Hammonds Homes,” not Meritage, and that
Meritage had not provided evidence linking Meritage to that entity; (2) whether
the subcontract agreement applied to Kirk’s home; (3) whether the settlement
entered into between Meritage and Kirk was reasonable; and (4) whether Kirk’s
damages were proximately caused by Childress’s work.
5
Nationwide filed a reply asserting, among other things, that the October
2002 Contract was not hearsay, but Nationwide did not address Childress’s
points that Meritage was not identified as a party to the contract or that the
contract did not define the scope of work to be covered. In a surreply, Childress
repeated its assertion that there was no evidence connecting Meritage or the Kirk
home to the contract. In a rebuttal to Childress’s surreply, Nationwide argued
that Childress admitted it designed the foundation of the Kirk home in trial
exhibits, but did not assert that Childress had admitted that the October 2002
Contract applied to that work.
By order dated March 16, 2016, the trial court granted Nationwide’s
motions for partial summary judgment and overruled Childress’s objections to
Nationwide’s summary judgment evidence. A final judgment was signed
January 3, 2017, reaffirming the trial court’s previous grant of summary judgment
in Nationwide’s favor. This appeal followed.
Discussion
Childress brings three issues on appeal. In its first issue, Childress argues
that the trial court erred in granting summary judgment because Nationwide
failed to establish that Meritage, Nationwide’s insured, was a party to the October
2002 Contract and that the October 2002 Contract applied to the design and
construction of the foundation of Kirk’s home. Because we hold that Nationwide
did not conclusively establish either of those facts, both essential elements of its
6
claim, we reverse the trial court’s judgment and need not reach Childress’s
remaining two issues. See Tex. R. App. P. 47.1.
In a summary judgment case, the issue on appeal is whether the movant
met the summary judgment burden by establishing that no genuine issue of
material fact exists and that the movant is entitled to judgment as a matter of law.
Tex. R. Civ. P. 166a(c); Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding,
289 S.W.3d 844, 848 (Tex. 2009). We review a summary judgment de novo.
Travelers Ins. Co. v. Joachim, 315 S.W.3d 860, 862 (Tex. 2010). ). A plaintiff is
entitled to summary judgment on a cause of action if it conclusively proves all
essential elements of the claim. See Tex. R. Civ. P. 166a(a), (c); MMP, Ltd. v.
Jones, 710 S.W.2d 59, 60 (Tex. 1986).
We take as true all evidence favorable to the nonmovant, and we indulge
every reasonable inference and resolve any doubts in the nonmovant’s favor.
20801, Inc. v. Parker, 249 S.W.3d 392, 399 (Tex. 2008); Provident Life &
Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003). We consider the
evidence presented in the light most favorable to the nonmovant, crediting
evidence favorable to the nonmovant if reasonable jurors could and disregarding
evidence contrary to the nonmovant unless reasonable jurors could not. Mann
Frankfort, 289 S.W.3d at 848. We must consider whether reasonable and fair-
minded jurors could differ in their conclusions in light of all of the evidence
presented. See Wal-Mart Stores, Inc. v. Spates, 186 S.W.3d 566, 568 (Tex.
2006); City of Keller v. Wilson, 168 S.W.3d 802, 822–24 (Tex. 2005). The
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summary judgment will be affirmed only if the record establishes that the movant
has conclusively proved all essential elements of the movant’s cause of action or
defense as a matter of law. City of Houston v. Clear Creek Basin Auth., 589
S.W.2d 671, 678 (Tex. 1979).
Nationwide’s claims center upon the enforcement of the indemnity clause
contained in the October 2002 Contract. In order to succeed on those claims,
Nationwide must show that Meritage was a party to the contract and that the
scope of the contract included the foundation-design work on Kirk’s home (which
Childress does not dispute it performed). See, e.g., Rice v. Metro. Life Ins. Co.,
324 S.W.3d 660, 666 (Tex. App.—Fort Worth 2010, no pet.) (listing the elements
of an action for breach of contract, including the existence of a valid contract
between the parties). The October 2002 Contract does not identify Meritage as a
party to the contract. In its trial court filings and its briefs before this court,
Nationwide has offered no explanation of a link between the party identified in the
contract—Legacy—and Meritage. Although at oral argument, counsel for
Nationwide asserted that Legacy changed its name, at some point, to Meritage
Homes, L.L.C., no evidence of this purported fact appears in the summary
judgment record. We cannot consider as evidence statements by counsel to
facts outside the record. See Quorum Int’l v. Tarrant Appraisal Dist., 114 S.W.3d
568, 572 (Tex. App.—Fort Worth 2003, pet. denied) (“We cannot look outside the
record in an effort to discover relevant facts omitted by the parties; rather, we are
bound to determine this case on the record as filed.”).
8
At the time the summary judgment was granted in this case, exhibit A was
still not a part of the summary judgment record. Thus, the scope of work to be
covered by the contract remained wholly undefined. Without the scope of the
work defined, there is no link between the October 2002 Contract and the work
Childress performed on Kirk’s home.2
By failing to show any connection Meritage may have had with the October
2002 Contract and whether the scope of the contract included Childress’s design
of the foundation of Kirk’s home, Nationwide has not conclusively proved the
essential elements of its claims, precluding a summary judgment in its favor.
See Tex. R. Civ. P. 166a(c); Mann, 289 S.W.3d at 848. We therefore reverse the
trial court’s judgment and remand the case to the trial court.
Conclusion
Having sustained Childress’s first issue and held that the trial court erred in
granting Nationwide’s motion for traditional summary judgment, we reverse the
2
At oral argument, counsel for Nationwide claimed that Childress admitted
at some point during the proceedings that the October 2002 Contract was with
Meritage and applied to the work performed at the Kirk home, even claiming that
Childress had at some point filed as an attachment a copy of the October 2002
Contract with the elusive exhibit A attached. But in our review of the record
before us, we have found no such admission and we have found no copy of the
October 2002 Contract with exhibit A attached submitted by either party. In its
pleadings, Childress frequently referred to the contract as an “alleged” or
“purported” contract, and at no point did Childress refer to the October 2002
Contract in such a way as to constitute a judicial admission that it applied to
Childress’s work on the Kirk home. See Regency Advantage Ltd. P’ship v. Bingo
Idea-Watauga, Inc., 936 S.W.2d 275, 278 (Tex. 1996) (“A judicial admission must
be a clear, deliberate, and unequivocal statement.”).
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trial court’s judgment and remand the case to the trial court for further
proceedings. See Tex. R. App. P. 43.2(d), 43.3.
/s/ Bonnie Sudderth
BONNIE SUDDERTH
CHIEF JUSTICE
PANEL: SUDDERTH, C.J.; GABRIEL and KERR, JJ.
DELIVERED: December 7, 2017
10