ACCEPTED
02-17-00252-CV
SECOND COURT OF APPEALS
FORT WORTH, TEXAS
NO. 02-17-00252-CV 12/20/2017 7:03 PM
DEBRA SPISAK
CLERK
In The Second Court Of Appeals
Fort Worth, Texas 2nd COURT
FILED IN
OF APPEALS
FORT WORTH, TEXAS
12/20/2017 7:03:52 PM
LANTEK COMMUNICATIONS, INC., et al., DEBRA SPISAK
Clerk
Appellant-Cross Appellee
v.
HAMILTON PECK,
Appellee-Cross Appellant.
From the 141st Judicial District Court, Tarrant County, Texas
Honorable John P. Chupp presiding, Cause No. 141-286694-16
BRIEF OF APPELLEE-CROSS APPELLANT HAMILTON PECK
KATHERINE ELRICH
Texas Bar No. 24007158
kelrich@cobbmartinez.com
KELLY B. GIBBONS
Texas Bar No. 24055548
kgibbons@cobbmartinez.com
COBB MARTINEZ WOODWARD PLLC
1700 Pacific Avenue, Suite 3100
Dallas, Texas 75201
(214) 220-5200
(214) 220-5299 (Fax)
—and—
JOHN W. BOWDICH
Texas Bar No. 00796233
jbowdich@bowdichlaw.com
BOWDICH & ASSOCIATES, PLLC
10440 N. Central Expy., Suite 1540
Dallas, Texas 75231
(214) 307-9500 Telephone
(214) 307-5137 Facsimile
ATTORNEYS FOR APPELLEE-CROSS APPELLANT
HAMILTON PECK
Oral Argument Requested
IDENTITY OF PARTIES AND COUNSEL
PARTY COUNSEL
Lantek Communications, Byron Henry
Appellant-Cross Appellee byron.henry@solidcounsel.com
Andrea K. Bouressa
Lantek Communications II, LLC, andrea.bouressa@solidcounsel.com
Lantek Audio Video Scheef & Stone, L.L.P.
Communications, LLC, 2600 Network Boulevard, Suite 400
Domingo Mayorga, and Frisco, Texas 75034
Ester Mayorga, 214.472.2100 Telephone
Cross Appellees 214.472.2150 Facsimile
(appellate counsel)
Christopher Vickers
cvickers@vickerslaw.net
Vickers Kempf, PLLC
6508 Colleyville Blvd., Suite 100
Colleyville, Texas 76034
817.421.3961 Telephone
817.251.0505 Facsimile
(trial counsel)
2
PARTY COUNSEL
Hamilton Peck, Katherine K. Elrich
Appellees-Cross Appellant kelrich@cobbmartinez.com
Kelly B. Gibbons
kgibbons@cobbmartinez.com
Cobb Martinez Woodward PLLC
1700 Pacific Avenue, Suite 3100
Dallas, Texas 75201
214.220.5200 Telephone
214.220.5299 Facsimile
(appellate counsel)
John W. Bowdich
Texas Bar No. 00796233
jbowdich@bowdichlaw.com
Bowdich & Associates, PLLC
10440 N. Central Expy., Suite 1540
Dallas, Texas 75231
214.307.9500 Telephone
214.307.5137 Facsimile
(trial and appellate counsel)
3
TABLE OF CONTENTS
Page (s)
IDENTITY OF PARTIES AND COUNSEL ............................................................ 2
TABLE OF CONTENTS ........................................................................................... 4
INDEX OF AUTHORITIES...................................................................................... 7
STATEMENT OF THE CASE ................................................................................ 12
STATEMENT REGARDING ORAL ARGUMENT ............................................. 13
ISSUES PRESENTED............................................................................................. 14
RECORD REFERENCES ....................................................................................... 15
INTRODUCTION ................................................................................................... 16
STATEMENT OF FACTS ...................................................................................... 16
A. Hamilton Peck’s shareholder dispute against Lantek. ........................ 16
B. The Settlement Agreement. ................................................................. 17
C. Lantek’s award of the Phase 3 Subcontract. ....................................... 18
D. Lantek refused to pay Peck for the full Phase 3 scope of work.
............................................................................................................. 22
E. Further litigation ensued based on the interpretation of the
Settlement Agreement. ........................................................................ 23
F. The trial court agreed with Peck’s interpretation of the
Settlement Agreement and granted summary judgment in
favor of Peck. ...................................................................................... 24
SUMMARY OF THE ARGUMENT ...................................................................... 25
APPELLEE’S ARGUMENT IN RESPONSE TO APPELLANT’S
CHALLENGE .......................................................................................................... 26
A. Standard of Review. ............................................................................ 26
B. The trial court correctly awarded Peck summary judgment on
his breach of contract claim and correctly denied Lantek’s
request for summary judgment on its declaratory judgment
action. .................................................................................................. 28
1. Texas law on general contract interpretation. ........................... 29
2. Law regarding integration of agreements. ................................ 30
4
3. The writings constituting the agreements at issue
here. ........................................................................................... 31
a. The Phase 3 Subcontract language. ................................ 33
b. The Settlement Agreement language.............................. 35
4. Headings do not control. The substance of the
provision is controlling. ............................................................ 37
5. Surrounding circumstances may be considered. ....................... 39
6. Peck’s interpretation does not treat the exclusion of
change order language as mere surplusage. .............................. 47
C. The trial court correctly awarded Peck his attorney’s fees
under Chapter 38. ................................................................................ 50
CROSS-APPELLANT’S ARGUMENT ................................................................. 53
A. The trial court erred in granting the Lantek Parties summary
judgment on Peck’s fraud claims. ....................................................... 53
1. Standard of Review. .................................................................. 55
2. Peck’s counterclaims for Fraud and Fraud in the
Inducement. ............................................................................... 55
The Lantek Parties made a material
misrepresentation to Peck. .............................................. 56
The misrepresentation was false. .................................... 58
When the Lantek Parties made the representation,
they knew the representation was false or made the
representation recklessly without any knowledge of
the truth and as a positive assertion. ............................... 59
The Lantek Parties intended Peck to act upon its
misrepresentations. ......................................................... 60
Peck justifiably relied on the Lantek Parties’
misrepresentations. ......................................................... 62
Peck was injured as a result of the Lantek Parties’
misrepresentations. ......................................................... 65
3. Peck’s counterclaims for Fraud by Nondisclosure. .................. 66
The Lantek Parties deliberately failed to disclose
material facts to Peck. ..................................................... 68
5
The Lantek Parties had a duty to disclose material
facts to Peck. ................................................................... 68
The Lantek Parties failed to disclose material facts
to Peck, who was ignorant of the facts and did not
have an equal opportunity to discover them. .................. 69
The Lantek Parties intended Peck to act or to refrain
from acting. ..................................................................... 70
Peck relied on the Lantek Parties’ nondisclosure
and was injured. .............................................................. 71
CONCLUSION AND PRAYER ............................................................................. 71
RULE 9.4 CERTIFICATE OF COMPLIANCE ..................................................... 74
CERTIFICATE OF SERVICE ................................................................................ 74
6
INDEX OF AUTHORITIES
Page(s)
Cases
1001 McKinney Ltd. v. Credit Suisse First Boston Mortg. Capital,
192 S.W.3d 20 (Tex. App.—Houston [14th Dist.] 2005, pet.
denied)................................................................................................................. 62
Barrett v. Ferrell,
550 S.W.2d 138 (Tex. Civ. App.—Tyler 1977, writ ref’d n.r.e.)....................... 41
Burleson State Bank v. Plunkett,
27 S.W.3d 605 (Tex. App.—Waco 2000, pet. denied)....................................... 57
Byrd v. Smyth,
590 S.W.2d 772 (Tex. Civ. App.—El Paso 1979, no writ) ................................ 41
Cantey Hanger, LLP v. Byrd,
467 S.W.3d 477 (Tex. 2015) ........................................................................26, 63
Chase Manhattan Bank v. First Marion Bank,
437 F.2d 1040 (5th Cir. 1971) ......................................................................40, 41
Citizens Nat’l Bank v. Allen Rae Invs., Inc.,
142 S.W.3d 459 (Tex. App.—Fort Worth 2004, no pet.)................................... 68
City of Fort Worth v. Gene Hill Equipment Co.,
761 S.W.2d 816 (Tex. App.—Fort Worth 1988, no writ) .................................. 42
City of Keller v. Wilson,
168 S.W.3d 802 (Tex. 2005) ........................................................................27, 28
Coastal Bank SSB v. Chase Bank of Tex., N.A.,
135 S.W.3d 840 (Tex. App.—Houston [1st Dist.] no pet.) ................................ 62
Coker v. Coker,
650 S.W.2d 391 (Tex. 1983) .............................................................................. 49
7
Cook Composites, Inc. v. Westlake Styrene Corp.,
15 S.W.3d 124 (Tex. App.—Houston [14th Dist.] 2000, pet.
dism’d) ................................................................................................................ 40
Coterill-Jenkins v. Tex. Med. Ass’n Health Care Liab. Claim Trust,
383 S.W.3d 581 (Tex. App.—Houston [14th Dist.] 2012, pet.
denied)................................................................................................................. 40
Crossland Acquisition, Inc. v. HNTB Corp.,
2016 Tex. App. LEXIS 8855 (Tex. App.—Houston [14th Dist.],
Aug. 16, 2016, pet. denied)................................................................................. 39
Enter. Leasing Co. v. Barrios,
156 S.W.3d 547 (Tex. 2004) ........................................................................37, 38
Exxon Corp. v. Emerald Oil & Gas Co.,
348 S.W.3d 194 (Tex. 2011) .............................................................................. 56
Forbau v. Aetna Life Ins. Co.,
876 S.W.2d 132 (Tex. 1994) (op. on reh’g) .................................................27, 29
Formosa Plastics Corp. USA v. Presidio Eng’rs & Contrs.,
960 S.W.2d 41 (Tex. 1998)................................................................................. 60
Grant Thornton LLP v. Prospect High Income Fund,
314 S.W.3d 913 (Tex. 2010) .............................................................................. 62
Hannon, Inc. v. Scott,
2011 Tex. App. LEXIS 3624 (Tex. App.—Fort Worth, May 12,
2011, pet. denied)..........................................................................................56, 63
Hasse v. Glazner,
62 S.W.3d 795 (Tex. 2001)................................................................................. 56
ISG State Operations, Inc. v. Nat’l Heritage Ins. Co.,
234 S.W.3d 711 (Tex. App.—Eastland 2007, no pet.) ....................................... 30
KMI Cont’l Offshore Prod. Co. v. ACF Petroleum Co.,
746 S.W.2d 238 (Tex. App.—Houston [1st Dist.] 1987, writ
denied)................................................................................................................. 39
8
LeBlanc v. Riley,
2009 Tex. App. LEXIS 2204 (Tex. App.—Fort Worth April 2,
2009, no pet.) ...................................................................................................... 52
Lenape Resources Corp. v. Tennessee Gas Pipeline Co.,
925 S.W.2d 565 (Tex. 1996) .............................................................................. 29
Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding,
289 S.W.3d 844 (Tex. 2009) .............................................................................. 26
McCamish v. F.E. Appling Interests,
991 S.W.2d 787 (Tex. 1999) .............................................................................. 62
Merriman v. XTO Energy, Inc.,
407 S.W.3d 244 (Tex. 2013) ........................................................................26, 67
Miller v. Kennedy & Minshew, Prof’l Corp.,
142 S.W.3d 325 (Tex. App.—Fort Worth 2003, pet. denied) ......................56, 62
Moreau v. Otis Elevator Co.,
531 F.2d 311 (5th Cir. 1976) .............................................................................. 42
Morgan Bldgs. & Spas, Inc. v. Humane Soc’y of Se. Tex.,
249 S.W.3d 480 (Tex. App.—Beaumont 2008, no pet.) .................................... 31
Ogden v. Dickinson State Bank,
662 S.W.2d 330 (Tex. 1983) .............................................................................. 30
Phillips v. Inexco Oil Co.,
540 S.W.2d 546 (Tex. Civ. App.—Tyler 1976, writ ref’d n.r.e.)....................... 29
Plains Expl. & Prod. Co. v. Torch Energy Advisors, Inc.,
473 S.W.3d 296 (Tex. 2005) .............................................................................. 39
Portland Gasoline Co. v. Superior Mktg. Co.,
243 S.W.2d 823 (Tex. 1951) (overruled on other grounds) ............................... 30
Reservoir Sys. v. TGS-NOPEC Geophysical Co., L.P.,
335 S.W.3d 297 (Tex. App.—Houston [14th Dist.] 2010, pet.
denied)................................................................................................................. 57
9
Robertson v. Home State County Mutual Ins. Co.,
348 S.W.3d 273 (Tex. App.—Fort Worth 2011, pet. denied) (en
banc) ..............................................................................................................29, 30
Royal Indem. Co. v. Marshall,
378 S.W.2d 364 (Tex. Civ. App.—Austin 1964), rev’d on other
grounds, 388 S.W.2d 176 (Tex. 1965) ............................................................... 40
RSI Int’l, I v. CTC Transp., Inc.,
291 S.W.3d 104 (Tex. App.—Fort Worth 2009, no pet.)................................... 27
RSUI Indem. Co. v. Lynd Co.,
466 S.W.3d 113 (Tex. 2015) .............................................................................. 37
Schlumberger Tech. Corp. v. Swanson,
959 S.W.2d 171 (Tex. 1997) .............................................................................. 67
Seagull Energy E&P, Inc. v. Eland Energy, Inc.,
207 S.W.3d 342 (Tex. 2006) .............................................................................. 26
Smart v. Tower Land & Inv. Co.,
597 S.W.2d 333 (Tex. 1980) .............................................................................. 30
Spoljaric v. Percival Tours, Inc.,
708 S.W.2d 432 (Tex. 1986) ..................................................................60, 67, 70
Stine v. Stewart,
80 S.W.3d 586 (Tex. 2002) (per curiam)............................................................ 26
Sun Oil Co. v. Madeley,
626 S.W.2d 726 (Tex. 1981) .............................................................................. 39
Tawes v. Barnes,
340 S.W.3d 419 (Tex. 2011) ........................................................................26, 27
Timpte Indus. v. Gish,
286 S.W.3d 306 (Tex. 2009) .............................................................................. 27
Trenholm v. Ratcliff,
646 S.W.2d 927 (Tex. 1983) .............................................................................. 56
10
Statutes
LOCAL GOV’T CODE §281.046(e) ............................................................................. 42
TEX. CIV. PRAC. & REM. CODE §38.001.............................................................51, 52
Other Authorities
David R. Dow, The Confused State of the Parol Evidence Rule in
Texas, 355 TEX. L. REV. 457, 459 (1994) ........................................................... 31
TEX. DISC. R. OF PROF. CONDUCT 4.01 .................................................................... 63
RESTATEMENT (SECOND) OF CONTRACTS § 202 ...........................................29, 40, 41
RESTATEMENT (SECOND) OF CONTRACTS § 209 ....................................................... 30
RESTATEMENT (SECOND) OF CONTRACTS § 213 ....................................................... 30
RESTATEMENT (SECOND) OF CONTRACTS § 219 ....................................................... 42
RESTATEMENT (SECOND) OF CONTRACTS § 228 ....................................................... 30
TEX. R. APP. P. 38.1 ................................................................................................. 52
TEX. R. CIV. P. 166a ................................................................................................. 66
11
STATEMENT OF THE CASE
Nature of the Case: This is a breach of contract case due to Lantek
Communications, Inc.’s (“Lantek”) failure to pay the
total amount due and owing on a settlement agreement
with Hamilton Peck. (1 CR 24-119).
Course of Proceedings: Lantek initiated the proceedings by filing a declaratory
judgment action seeking a declaration from the trial
court regarding the interpretation of the parties’
settlement agreement. (1 CR 6-9). Peck filed a
counterclaim against the Lantek entities for breach of
contract and against the Lantek entities and Domingo
and Ester Mayorga (“Lantek Parties”) for fraud based
on Lantek’s failure to pay the total amount due and
owing on the parties’ settlement agreement. (1 CR 40-
52). Both the Lantek Parties and Peck filed amended
pleadings but the gist of their dispute remained the
same. (1 CR 24-39, 124-126, 197-218, 219-297; 3 CR
1335-1417). Both sides moved for summary judgment.
(1 CR 127-196, 724-1018, 2 CR 1025-1054).
Trial Court: The Honorable John P. Chupp, 141st Judicial District
Court, Tarrant County, Texas.
Trial Court Disposition: The trial court denied Lantek’s motion for summary
judgment on its interpretation of the settlement
agreement, granted summary judgment in favor of
Peck on his breach of contract claim and granted
summary judgment in favor of the Lantek Parties on
Peck’s fraud counterclaims. (1 CR 723, 4 CR 1826-
1828). The parties stipulated to the amount of damages
and attorney’s fees. (4 CR 1829-1831). On June 20,
2017, the trial court entered a final judgment in favor
of Peck and against Lantek in the amount of
$547,529.65, less $40,215.50 for payments Peck
previously received. (4 CR 1832-1834). The trial court
also awarded the stipulated amount of attorney’s fees,
prejudgment interest, post-judgment interest, and court
costs. (4 CR 1833-1834).
12
STATEMENT REGARDING ORAL ARGUMENT
Hamilton Peck respectfully requests that this Court set this appeal for oral
argument. This appeal concerns whether the trial court properly granted summary
judgment in favor of Hamilton Peck and properly denied Lantek summary judgment
on Lantek’s failure to pay the full amount due and owing to Peck on the parties’
settlement agreement, as well as whether the trial court erred in granting the Lantek
Parties’ no-evidence motion for summary judgment on Peck’s fraud claims. Oral
argument would help clarify for this Court why Peck’s interpretation is the only
reasonable interpretation of the settlement and, alternatively, how the Lantek Parties
committed fraud.
13
ISSUES PRESENTED
1. Lantek’s Appellant’s Issues Re-stated:
a. The trial court correctly granted summary judgment in favor of
Hamilton Peck for Lantek’s breach of the settlement agreement and
correctly denied summary judgment in favor of Lantek because the
unambiguous language of the settlement agreement required Peck to be
paid 10% of the original scope of work contemplated in a phase 3
subcontract of the DFW Terminal B Project (up to a maximum of
$1,000,000.00).
b. Alternatively, if the language in the settlement agreement is ambiguous,
this Court should reverse and remand rather than reverse and render as
Lantek’s interpretation of the contractual provision at issue is not a
reasonable interpretation to permit this court to reverse and render a
decision.
c. If the Court affirms the trial court’s judgment on Peck’s breach of
settlement agreement claim, Peck is entitled to his attorney’s fees under
Chapter 38 and as stipulated by the parties.
2. Peck’s Cross-Appellant’s Issue:
a. If this Court were to hold that the trial court erred in granting summary
judgment in favor of Peck on his breach of settlement agreement claim,
then the trial court also erred in granting the Lantek Parties’ summary
judgment on Peck’s fraud counterclaims because: (1) the Lantek Parties
never challenged Peck’s fraud by non-disclosure counterclaim in its no-
evidence motion for summary judgment, and (2) there was sufficient
evidence in the record to raise a genuine issue of material fact on each
of the challenged elements of all of Peck’s fraud counterclaims.
14
RECORD REFERENCES
The record on appeal consists of a four-volume Clerk’s Record and a one-
volume Reporter’s Record. The Clerk’s Record will be cited “(__ CR __).” The
Reporter’s Record will be cited as “(RR __).”
15
INTRODUCTION
The central issue on appeal is whether the trial court properly granted
summary judgment in favor of Hamilton Peck and properly denied Lantek’s request
for summary judgment on Lantek’s failure to pay the full amount due and owing to
Peck based on the parties’ settlement agreement.
STATEMENT OF FACTS
A. Hamilton Peck’s shareholder dispute against Lantek.
Hamilton Peck was a founding shareholder of Lantek, a design/build
contractor for audio/visual system integration and structured cablings. Sometime in
late 2012, Peck’s business relationship with the company and its co-founder,
Domingo Mayorga, deteriorated. (4 CR 1678-1687). Peck was ultimately forced to
sue Lantek and Mayorga for breach of contract, breach of fiduciary duties, breach of
corporate trust and claim for malicious suppression of dividends, violation of the
Texas Business Organizations Code, accounting, fraud and negligent
misrepresentation – all stemming from Mayorga’s conduct related to Lantek and
Peck’s 50% ownership in Lantek at the time. (4 CR 1679). After protracted
litigation, mediation and continued settlement negotiations, the parties entered into
a Rule 11 Settlement Agreement (“the Settlement Agreement”). (4 CR 1070-1077,
1679, 1688-1697).
16
B. The Settlement Agreement.
The Settlement Agreement provided that the Lantek Parties would pay Peck
the amount of $5,000,000 in exchange for Peck’s ownership in Lantek based on
Lantek’s value at the time, as well as provide Peck with an additional conditional
payment of up to $1,000,000. (3 CR 1070, 4 CR 1679). This conditional payment
was included in the Settlement Agreement to compensate Peck for the expected
profits from a third phase of an entire project Peck procured for Lantek prior to
Peck’s resignation from Lantek. (4 CR 1679-1681).
More specifically, Peck procured the DFW Terminal B Project in 2011 and
2012 when he was running Lantek’s business and sales operations. (4 CR 1681).
The DFW Terminal B Project was divided into and contracted out in three phases.
(3 CR 1041, 4 CR 1681-1682). While Peck procured the rights to all three phases
for Lantek, he resigned during Phase 1 and was not an employee of Lantek for either
Phase 2 or Phase 3. (4 CR 1681-1682). The amounts awarded under Phase 1 and
Phase 2 of the DFW Terminal B Project were reflected in the value of the company,
for which Peck was compensated in selling his 50% interest under Section 1 of the
Settlement Agreement. (3 CR 1070-1071, 4 CR 1679-1687). Section 2 of the
Settlement Agreement included a conditional payment to Peck for the expected
profits from Phase 3 of the DFW Terminal B Project. (3 CR 1070, 4 CR 1679, 1689-
1690).
17
More specifically, Section 2 provided that should Lantek receive the Phase 3
contract as anticipated based on the initial award of the DFW Terminal B Project,
Peck was entitled to a conditional payment to compensate Peck for the increased
value of Lantek as a result of the Phase 3 contract, as well as to compensate Peck for
his previous efforts in procuring the DFW Terminal B Project. (4 CR 1679). The
amount of the conditional payment in the Settlement Agreement, as shown by its
terms and the circumstances surrounding the settlement, was 10% of the original
(also known as “base”) scope of work for Phase 3 that was performed by Lantek,
which was described as the “initial contract price” of the Phase 3 contract. (4 CR
1679). Specifically, the parties agreed:
(4 CR 1679).
C. Lantek’s award of the Phase 3 Subcontract.
As anticipated, Lantek ultimately procured a subcontract for Phase 3 of the
DFW Terminal B Project from the general contractor, Manhattan Construction
Company/MBJ3 (“Phase 3 Subcontract”). (3 CR 1079-1126). The “Project Scope
18
of Work” provision in the Phase 3 Subcontract coincides with the scope of work
described in Section 2(a) of the Settlement Agreement. (2 CR 329-330, 393-394,
396, 500, 502, 3 CR 1070, 1111-1126).
The Phase 3 Subcontract defines the “scope of work” to be performed by
Lantek as the work set out in Exhibit A to the Phase 3 Subcontract. (2 CR 329, 393-
394, 3 CR 1087, 1110-1126). Additionally, the Phase 3 Subcontract explains the
payment for this Phase 3 work. (3 CR 1086, 1121-1125). While Section B of the
Phase 3 Subcontract provides for a subcontract amount of $402,155, Section B also
states that this amount is “subject to additions and deductions for the changes agreed
upon in writing as hereinafter set forth or as otherwise authorized hereinafter.” (3
CR 1086). Further, the Phase 3 Subcontract defines the $402,155 amount as a
“Partial Funding” or “Early Start Enabling” amount. (3 CR 1121).
(3 CR 1121). In fact, the Phase 3 Subcontract includes two further sections
describing the remainder of the subcontract price for the original scope of work –
both a Guaranteed Maximum Price (GMP) section for the scope of work in the sum
of $9,190,545, which includes a General Conditions section with a Guaranteed
19
Maximum Price (GMP) in the sum of $1,400,915. (3 CR 1121). Specifically, the
Guaranteed Maximum Price Contract clause provides:
(3 CR 1121). The General Conditions GMP Phase 3 provision states:
The Project Scope of Work – Communications (Exhibit “A” to Phase 3
Subcontract), Section 4, “Recap of Contract Amount” includes a spreadsheet with
the breakdown of the GMP of $1,400,915 for General Conditions for Phase 3, and
GMP of $9,190,545 for the Phase 3 Scope of Work. (3 CR 1122-1125). The GMP
of $9.1 million is the total initial contract price for Lantek’s scope of work for Phase
3 of the DFW Terminal B Project pursuant to the Phase 3 Subcontract. (1 CR 393-
394; 3 CR 1081).
The Phase 3 Subcontract defines “Early Start Enabling” as a “portion of the
values anticipated . . . for the communications scope of work” for the purpose of
20
achieving “an early start for enabling activities in Phase 3.” (3 CR 1121) (emphasis
added). The immediately-following paragraphs in the Phase 3 Subcontract go on to
state that the initial maximum price for the scope of work is $9,190,545 for the
Guaranteed Maximum Price (“GMP”), including $1,400,915 for Phase 3 General
Conditions GMP. (3 CR 1121). As shown above, the Phase 3 Subcontract noted that
the GMP pricing was the price of the scope of work where it states that “[p]ricing is
based on 100% IFC construction documents (drawings and specifications) dated
April 9, 2014, and DCN #1, DCN #2, DCN #3.”1 (3 CR 1121). Moreover, the
proposal documents show a total Phase 3 pricing of $9,190,545.47. (4 CR 1613).
The Settlement Agreement stated that Peck would receive “10% of the ‘initial
contract price (including all base contract(s) for the scope of work defined above. .
.”’) in Section 2(b). (3 CR 1070) (emphasis added). The scope of work in the
Settlement Agreement is defined as follows in Section 2(a):
1
The term “100% IFC (“Issued for Construction”) documents and DCN #1, DCN #2, DCN #3
(“Design Change Notices”)” comprise the initial scope of work set out in Exhibit “A” to the Phase
3 Subcontract and coincides with section 2(a) of the Settlement Agreement. (1 CR 393-394; 2 CR
503, 3 CR 1070, 1111-1126).
21
(3 CR 1070). The Phase 3 Subcontract confirms that the price for the scope of work
is $9,190,545 when it links the price back to the scope of work by stating the
following:
(3 CR 1121). Of the full contract price for the original scope of work, Lantek’s
subcontractors (Vanguard Electrical, Siemens, and Ford AV) performed
$3,564,891.54 for 100% of IFC, as well as $43,602.50 for DCN #1 and $16,104.06
for DCN #3, leaving the portion directly performed by Lantek as $5,565,946.90. (3
CR 1123-1126). Pursuant to the Settlement Agreement, Lantek was required to pay
Peck 10% of that amount, or $556,594.69.
D. Lantek refused to pay Peck for the full Phase 3 scope of work.
Lantek paid Peck on a fraction of what was owed to Peck under the Settlement
Agreement for the Phase 3 scope of work. See App.’s Br. at 12; see also (4 CR
1829). More specifically, Lantek paid Peck 10% of the $402,155, “Early Start
Enabling” or partial funding amount. Id. Lantek justified its decision based on a
scheme devised by Lantek to modify the Settlement Agreement in such a way to
attempt at shielding the bulk of the funds awarded for the Phase 3 work. (4 CR
1678-87). With full knowledge that the bulk of the amount due on the Subcontract
would be broken out into a document entitled “change order,” Lantek attempted to
exclude all “change orders” from the Settlement Agreement. (4 CR 1689-1725).
22
But Lantek’s attempt failed. Although Lantek modified the parties’ Settlement
Agreement to exclude change orders from payment, the Settlement Agreement still
allows for Peck’s full payment based on the Settlement Agreement’s scope of work
reference, the integrated language of the Phase 3 Subcontract, and the industry
meaning of change order.
E. Further litigation ensued based on the interpretation of the Settlement
Agreement.
On July 26, 2016, Lantek initiated this lawsuit seeking a declaratory judgment
to interpret the contractual provisions in the Settlement Agreement. (1 CR 6-21).
Peck answered and also pled counterclaims for affirmative relief for breach of
contract, fraud, exemplary damages and Chapter 38 attorney’s fees. (1 CR 22-23,
219-297). The Lantek Parties and Peck filed multiple amended pleadings but the
gist of the dispute remained the same. (1 CR 24-39, 124-126, 197-218, 219-297, 3
CR 1055-1068, 1335-1417, 4 CR 1742-1825). The parties disputed the meaning of
Section 2 of the Settlement Agreement and whether the Lantek Parties committed
fraud in negotiating the Settlement Agreement. Lantek initially sought partial
summary judgment on its declaratory judgment action concerning its interpretation
of the Settlement Agreement. (1 CR 127-196). On March 30, 2017, the trial court
denied Lantek’s request for partial summary judgment. (1 CR 723). Both sides filed
subsequent motions for summary judgment, which the trial court heard on May 11,
2017. (2 CR 724-1018, 3 CR 1025-1054; RR 1-93).
23
F. The trial court agreed with Peck’s interpretation of the Settlement
Agreement and granted summary judgment in favor of Peck.
On May 12, 2017, the trial court granted Peck’s traditional motion for
summary judgment on Peck’s breach of contract counterclaim and no-evidence
motions for summary judgment on Lantek’s affirmative defenses. (4 CR 1826-
1827). The court also granted the Lantek Parties’ traditional and no-evidence
motions for summary judgment on Peck’s fraud counterclaims. (4 CR 1828). The
parties then entered into a Stipulation and Rule 11 Agreement stipulating to the
damages and attorney’s fees based on the trial court’s rulings on the summary
judgment. (4 CR 1829-1831). The parties stipulated that Peck’s actual and total
damages for his breach of contract claim against Lantek are $547,529.652 less the
$40,215.50 previously paid to Peck for a total net damages of $507,314.15. (4 CR
1829). The parties also stipulated to trial attorney’s fees of $111,428.50 through the
date of judgment, along with additional amounts due for court costs and interest and
conditional amounts for post-judgment and appellate work. (4 CR 1829-1830). On
June 30, 2017, the trial court entered a Final Judgment. (4 CR 1832-1834). Both
Lantek and Peck filed notices of appeal. (4 CR 1841-1845).
2
After the trial court granted summary judgment, the parties did not wish to litigate the amount
due and owing to Peck based on 10% of the $9.1 million Phase 3 Subcontract. (4 CR 1829).
Although the total due to Peck was $556,594.69 based on 10% of the work directly performed by
Lantek under the Phase 3 Subcontract, the parties reached an agreement and stipulated that Lantek
would pay Peck a total of $547,529.65 for his damages for Lantek’s breach of the settlement
agreement. (4 CR 1829); see also supra section C at p. 22.
24
SUMMARY OF THE ARGUMENT
Lantek takes an unjustifiably over-simplified approach to interpreting the
Settlement Agreement, ignoring provisions in the agreement leading to an
unreasonable and absurd result. The trial court understood this and properly
reviewed the entire agreement to give effect to the true intention of the parties as
expressed in the Settlement Agreement in awarding Peck summary judgment on his
breach of contract claim. This Court should reach the same conclusion as the trial
court based on long-standing rules of contract interpretation and affirm the trial
court’s award of summary judgment in favor of Peck and affirm the trial court’s
denial of summary judgment for Lantek.
However, if this Court were to somehow find that the Settlement Agreement
is ambiguous or that Lantek’s interpretation is correct and reverse the trial court’s
summary judgment on the breach of Settlement Agreement, Peck seeks a reversal of
the trial court’s order granting the Lantek Parties’ summary judgment on Peck’s
fraud counterclaims. Peck presented sufficient evidence to raise a fact question on
each element of his fraud counterclaims showing that they committed fraud to induce
Peck to agree to the modifications in the Settlement Agreement that attempt to shield
Lantek from paying 10% on the entire original scope of work. Thus, the trial court’s
order granting summary judgment on Peck’s fraud counterclaims should be reversed
and remanded.
25
APPELLEE’S ARGUMENT IN RESPONSE TO APPELLANT’S
CHALLENGE
A. Standard of Review.
This Court reviews the trial court’s award of a traditional summary judgment
under a de novo standard of review and a no-evidence summary judgment under the
same legal sufficiency standard as directed verdicts. Cantey Hanger, LLP v. Byrd,
467 S.W.3d 477, 481 (Tex. 2015) (traditional summary judgment); Merriman v.
XTO Energy, Inc., 407 S.W.3d 244, 248 (Tex. 2013) (no-evidence summary
judgment). When both parties move for summary judgment and the trial court grants
one motion and denies the other, the reviewing court should review both parties’
summary judgment evidence and determine all questions of law. Mann Frankfort
Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009). The
reviewing court should render the judgment that the trial court should have rendered.
Id.
Additionally, the construction of an unambiguous contract is a question of law
for the court, which should also be considered under a de novo standard of review.
Tawes v. Barnes, 340 S.W.3d 419, 425 (Tex. 2011). “When discerning the
contracting parties’ intent, courts must examine the entire agreement and give effect
to each provision so that none is rendered meaningless.” Id. (citing Seagull Energy
E&P, Inc. v. Eland Energy, Inc., 207 S.W.3d 342, 345 (Tex. 2006); Stine v. Stewart,
80 S.W.3d 586, 589 (Tex. 2002) (per curiam)). “No single provision taken alone
26
will be given controlling effect; rather, all provisions must be considered in reference
to the whole instrument.” Tawes, 340 S.W.3d at 425 (citation omitted). Even if the
parties differ on the interpretation of a contract, it does not follow that the contract
is ambiguous. See Forbau v. Aetna Life Ins. Co., 876 S.W.2d 132, 133-134 (Tex.
1994) (op. on reh’g); see also see also RSI Int’l, I v. CTC Transp., Inc., 291 S.W.3d
104, 107 (Tex. App.—Fort Worth 2009, no pet.) (holding unambiguous a coinsurance
provision). Furthermore, “[i]n order for an ambiguity to exist when the parties
advance conflicting interpretations, both interpretations must be reasonable.” Id. at
107.
In reviewing a no-evidence summary judgment, the appellate court must
consider all other evidence in the light most favorable to the party against whom the
summary judgment was rendered, crediting evidence favorable to that party if
reasonable jurors could, and disregarding contrary evidence unless reasonable jurors
could not. Timpte Indus. v. Gish, 286 S.W.3d 306, 310 (Tex. 2009); City of Keller
v. Wilson, 168 S.W.3d 802, 827 (Tex. 2005). Therefore, this Court must affirm a no-
evidence summary judgment if the record shows one of the following: (1) there is
no evidence on the challenged element, (2) the evidence offered to prove the
challenged element is no more than a scintilla, (3) the evidence establishes the
opposite of the challenged element, or (4) the court is barred by law or the rules of
27
evidence from considering the only evidence offered to prove the challenged
element. City of Keller, 169 S.W.3d at 810.
Under these standards and as shown in more detail below, this Court must
affirm the traditional summary judgment in favor of Peck because: (1) the trial court
properly construed the unambiguous Settlement Agreement and determined Peck
was entitled to payment on the full initial contract price awarded to Lantek under the
Scope of Work section of the Phase 3 Subcontract; and (2) Lantek did not present
evidence of, and did not challenge on appeal, all of the essential elements of Lantek’s
affirmative defenses to preclude Peck from receiving summary judgment.
B. The trial court correctly awarded Peck summary judgment on his breach
of contract claim and correctly denied Lantek’s request for summary
judgment on its declaratory judgment action.
Lantek is correct when it states that the enforceability of the Settlement
Agreement is not in dispute, and the damages and attorney’s fees have been
stipulated by the parties. See App.’s Br. at 17. The parties’ dispute, however, is how
much Lantek owes Peck as agreed upon in the Settlement Agreement. Lantek’s over-
simplification of the issues and selective reliance on only portions of the agreement
are completely unfounded and should be rejected by this Court, as was rejected by
the trial court, based on long-standing rules of contract interpretation.
28
1. Texas law on general contract interpretation.
“In construing a written contract, [a court’s] primary concern is to ascertain the
true intentions of the parties as expressed in the written instrument.” Lenape
Resources Corp. v. Tennessee Gas Pipeline Co., 925 S.W.2d 565, 574 (Tex. 1996);
see also Phillips v. Inexco Oil Co., 540 S.W.2d 546, 548-49 (Tex. Civ. App.—Tyler
1976, writ ref’d n.r.e.) (holding “[t]he primary concern of the courts is to ascertain
and give effect to the true intention of the parties. To achieve this object the courts
will examine and consider the entire writing, seeking as best they can to harmonize
and give effect to all of the provisions of the contract so that none will be rendered
meaningless.”).
The rules of contract construction and interpretation also require that courts
read all parts of a contract as a whole such that “no one phrase, sentence, or section of
a contract should be isolated from its setting and considered apart from the other
provisions.” See Forbau v. Aetna Life Ins. Co., 876 S.W.2d 132, 133-134 (Tex. 1994)
(op. on reh’g); see also Robertson v. Home State County Mutual Ins. Co., 348 S.W.3d
273, 277 (Tex. App.—Fort Worth 2011, pet. denied) (en banc) (upholding summary
judgment on an unambiguous contract and rejecting appellant’s attempt to isolate the
term “domestic employees” from “not entitled to workers compensation benefits,”
which phrase played a “pivotal role in determining who qualified as a ‘domestic
employee.’”); R ESTATEMENT (S ECOND ) OF C ONTRACTS § 202(2) (1981).
29
Each part must be considered in relation to every other part so that the effect
of each part on the others may be determined. See Smart v. Tower Land & Inv. Co.,
597 S.W.2d 333, 337 (Tex. 1980). Courts should harmonize those provisions that
appear to be in conflict as needed to reflect the true intentions of the parties. See
Ogden v. Dickinson State Bank, 662 S.W.2d 330, 332 (Tex. 1983). Finally, a
“reasonable interpretation will be preferred to an unreasonable one.” Portland
Gasoline Co. v. Superior Mktg. Co., 243 S.W.2d 823, 824 (Tex. 1951) (overruled on
other grounds); see also Robertson, 348 S.W.3d at 277-81 (upholding summary
judgment and finding that employee’s interpretation of contract terms was
unreasonable).
2. Law regarding integration of agreements.
An agreement is “integrated” when the contracting parties adopt a writing or
writings as the final and complete expression of the agreement. See ISG State
Operations, Inc. v. Nat’l Heritage Ins. Co., 234 S.W.3d 711, 719 n.10 (Tex. App.—
Eastland 2007, no pet.) (citing R ESTATEMENT (S ECOND ) OF C ONTRACTS § 228
(1932)). The court determines whether there is an integrated agreement before
questions of interpretation or application of the parol evidence rule. See
R ESTATEMENT (S ECOND ) OF C ONTRACTS § 209(2) (1981). But “whether a
writing has been adopted as an integrated agreement is . . . to be determined in
accordance with all relevant evidence.” Id. § 209 cmt. c. & § 213 cmt. b.
30
Once a threshold determination has been made that a written contract, to some
extent at least, represents an integrated agreement, the next step is to determine
whether the written contract is fully or partially integrated. David R. Dow, The
Confused State of the Parol Evidence Rule in Texas, 355 T EX . L. R EV . 457, 459
(1994). A fully integrated written agreement is a “final and complete expression of
all the terms agreed upon by the parties.” See Morgan Bldgs. & Spas, Inc. v. Humane
Soc’y of Se. Tex., 249 S.W.3d 480, 486 (Tex. App.—Beaumont 2008, no pet.). “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.” Id. “A court considers the surrounding
circumstances in determining whether, and to what degree, an agreement is
integrated.” Id.
3. The writings constituting the agreements at issue here.
The Settlement Agreement expressly refers to and necessarily incorporates
another writing as part of the parties’ agreement to supply the amount of an
additional payment to Peck. More specifically, Section 2 of the Settlement
Agreement provides:
31
(3 CR 1070, 4 CR 1679).
Through this section, the parties specifically intended to integrate Lantek’s
Phase 3 Subcontract as Section 2(b) states the “initial contract price” of the Phase 3
Subcontract was to be the basis of the 10% “additional conditional payment to Peck.”
(3 CR 1070, 4 CR 1679). Further, and importantly here, Section 2(b) states that the
“initial contract price” was to be based on “all base contract(s) for the scope of work
defined above.” (4 CR 1679) (emphasis added). Thus, determination of such
contract price for the scope of work necessarily requires:
(a) a comparison of the “scope of work” in “all base contract(s)” of
the Phase 3 Subcontract with the “scope of work” defined in the
Settlement Agreement at Section 2(a) of the Settlement
Agreement, and
(b) a determination of the contract price for that scope of work as
provided by the Phase 3 Subcontract.
Consequently, the parties’ fully integrated agreement to be interpreted by the Court
includes both the Settlement Agreement and the Phase 3 Subcontract.
32
a. The Phase 3 Subcontract language.
Turning to the Phase 3 Subcontract, the language in that subcontract defines
the “scope of work” to be performed by Lantek as the work set out in Exhibit A to
the Phase 3 Subcontract. (3 CR 1087, 1110-1126). The Phase 3 Subcontract also
explains the payment for this Phase 3 work and noted that “[p]ricing is based on
100% IFC construction documents (drawings and specifications) dated April 9,
2014, and DCN #1, DCN #2, DCN #3.”3 (3 CR 1086, 1121-1125). Although Lantek
would have this Court ignore certain portions of the Phase 3 Subcontract to
determine the amount of the “initial contract price” for calculating the 10% payment
to Peck, a review of the entire Phase 3 Subcontract provides that the initial contract
price was the full GMP for the scope of the work identified in the Phase 3
Subcontract. (2 CR 329-331, 393-394, 3 CR 1086, 1121). As such, the “initial
contract price” amount used to calculate Peck’s 10% additional conditional payment
under the Settlement Agreement integrated with the Phase 3 Subcontract is the GMP
for the scope of work awarded.
The following three sections of the Phase 3 Subcontract confirm that the GMP
amount for the scope of work of the Phase 3 Subcontract must be the “initial contract
3
The term “100% IFC (“Issued for Construction”) documents and DCN #1, DCN #2, DCN #3
(“Design Change Notices”)” comprise the initial scope of work set out in in Exhibit “A” to the
Phase 3 Subcontract and coincides with section 2(a) of the Settlement Agreement. (1 CR 393-
394; 2 CR 503, 3 CR 1070, 1111-1126, 4 CR 1613).
33
price” set forth in the Settlement Agreement: (1) Section B Subcontract Amount (3
CR 1086), (2) Ex. A – Recap of Contract Amount (3 CR 1121), and (3) Ex. A –
breakout of specific tasks and the costs associated therewith included in the scope of
work. (3 CR 1122-1125).
First, Section B Subcontract Amount provides that Lantek is to receive
$402,155 plus additions and deductions agreed upon in writing. (3 CR 1086).
Relying solely on this section of the Phase 3 Subcontract, Lantek advocates for an
interpretation that limits the initial contract price to $402,155 and ignores the
language calling for “additions and deductions agreed upon in writing.” See App.’s
Br. at 18. Lantek’s argument that this $402,155 figure is the initial contract price
also ignores the provision that defines this figure as “partial funding” for a limited
amount of the scope of work to be performed in the Phase 3 Subcontract and
identifies it as an “Early Start Enabling” amount. (3 CR 1121).
Second, Exhibit A to the Phase 3 Subcontract entitled “Project Scope of Work
Communications” identifies the entire scope of work for the Phase 3 Subcontract
and provides for the full initial contract amount. (3 CR 1111-1126). In Section 4 of
Exhibit A, the full initial contract amount is set forth under “Recap of Contract
Amount.” (3 CR 1121). There are three amounts listed in this section: (1) Early Start
Enabling (Partial Funding) – $402,155; (2) Guaranteed Maximum Price (“GMP”) of
the Contract – $9,190,545 and (3) General Conditions GMP Phase 3 – $1,400,915.
34
The “Early Start Enabling” is defined as a “portion of the values anticipated . . . for
the communications scope of work” for the purpose of achieving “an early start for
enabling activities in Phase 3.” (3 CR 1121) (emphasis added). The activities
included in this partial funding amount were “BIM work, Demolition and Make
Safe.” (3 CR 1121).
Finally, a review of breakout included in Exhibit A of the Phase 3 Subcontract
shows the initial contract price is $9,190,545.47. (3 CR 1124-1125). This portion
of the Phase 3 Subcontract shows the breakdown of all the work being performed
for the original scope of work and cost associated therewith to reach the grand total
GMP for Phase 3 of $9,190,545. (3 CR 1122-1125).
The Recap of Contract Amount section clearly shows the fallacy of Lantek’s
position. Lantek is erroneously relying only on an amount that is for a very limited
part of the scope of the work of the Phase 3 Subcontract – not the scope of the work
contemplated in the entire Phase 3 subcontract, which is the scope of work identified
in the Settlement Agreement.
b. The Settlement Agreement language.
Turning to the Settlement Agreement, the Settlement Agreement provided
that Peck would receive “10% of the ‘initial contract price (including all base
contract(s) for the scope of work defined above. . .”’) in Section 2(b). (3 CR 1070)
35
(emphasis added). The scope of work in the Settlement Agreement is defined as
follows in Section 2(a):
(3 CR 1070). The Phase 3 Subcontract confirms that the price for the scope of work
is $9,190,545 when it links the price back to the scope of work by stating the
following:
(1 CR 328-331, 393-396, 2 CR 499-501, 3 CR 1121). Thus, the unambiguous
language of the Settlement Agreement demonstrates that the additional payment
owed to Peck was not limited to the partial funding of $402,155, but comprises the
amount set out in Phase 3 Subcontract for the entire scope of work – $9,190,545. (3
CR 1070, 1121). This interpretation was confirmed by the General Contractor for
the Project, Keith Cooper the representative of Manhattan Construction Company
and MBJ3, who testified that the scope of work defined in the Settlement Agreement
at Section 2(a) matches the Project Scope of Work in the Phase 3 Subcontract. (1
CR 396).
Simply put, Lantek’s position must be rejected because it ignores the totality
of the language in Section 2 of the Settlement Agreement and ignores the integrated
36
language of the Phase 3 Subcontract that specifies that the Project Scope of Work
awarded to Lantek contains the GMP of $9,190,545.
4. Headings do not control. The substance of the provision is
controlling.
Additionally, Lantek attempts to limit the full initial contract price to the Early
Start Enabling (partial funding) price by pointing to the fact that the funds beyond
the $402,155 were paid out through a document titled “Change Order.” See App.’s
Br. At 17-22. In so arguing, Lantek would have this Court ignore the substance of
Subcontract Change Order No. 001 (the document relied upon by Lantek to qualify
as a “change order” pursuant to the Settlement Agreement), to avoid paying Peck
his 10% on the remainder of the contract price associated with the original scope of
the work performed. See App.’s Br. at 17-22. While a court may consider the title
of a section contained in a contract when interpreting that contract, “greater weight
must be given to the operative contractual clauses of the agreement.” RSUI Indem.
Co. v. Lynd Co., 466 S.W.3d 113, 121 (Tex. 2015). Thus, “titles and headings are
not determinative, and when they are inconsistent with the plain meaning of the
provision’s operative language,” the court gives greater weight to the operative
language. Id.
For example, in Enterprise Leasing v. Barrios, the Texas Supreme Court
construed a rental car agreement that contained a section with the heading of
“Damage to Rented Car.” Enter. Leasing Co. v. Barrios, 156 S.W.3d 547, 548-49
37
(Tex. 2004). That section read as follows:
DAMAGE TO RENTED CAR: Renter is responsible for and
agrees to pay to Owner the retail value of replacing and/or
repairing all losses and damages to the rented car including “loss
of use” during the period it is unavailable for rental use . . .
regardless of fault or negligence of the Renter or any person, and
regardless if damages are an act of God.
Id. The car was stolen while being rented. Id. Reversing the lower court, the court
held that the contract unambiguously required the renter to reimburse Enterprise if
the car was stolen, regardless of the section’s heading in the contract, which only
referred to “damages,” because the content of which clearly related to all “loss of
use” by Enterprise. Id.
Here, the trial court correctly construed the substance of the document rather
than limiting its construction to the heading of the document. Although the
document was titled “Subcontract Change Order,” the contract document did not
change the scope of work set out in the Phase 3 Subcontract as confirmed by the
General Contractor for the DFW Terminal B Project, Manhattan/MBJ. (3 CR 1128-
1129). Despite Lantek suggesting the “change order” was issued for additional
work, the document did not change the amount of work to be performed. See App.’s
Br. at 20; see also (3 CR 1081-1082, 1128-1129). The document merely set forth
the payment for the GMP for the scope of work identified in Exhibit A of the Phase
3 Subcontract, less the Early Start Enabling Partial Funding amount of $402,155. (3
CR 1128-1129). Thus, the substance of the document shows it is not a “change
38
order,” as that term is defined by the construction industry and as explained more
fully in the following section.
5. Surrounding circumstances may be considered.
To correctly interpret the meaning of “change order,” it is important to consider
the industry meaning of the term and the surrounding circumstances when the parties
entered into the Settlement Agreement. The Texas Supreme Court has stated that
ambiguity need not exist to permit the trial court to look at extrinsic evidence of
circumstances surrounding the formation and execution of the agreement. See Sun
Oil Co. v. Madeley, 626 S.W.2d 726, 731–32 (Tex. 1981). If, in the light of
surrounding circumstances, the language of the contract appears to be capable of only
a single meaning, the court can then confine itself to the writing. Id.
“The circumstances to be considered are not the parties’ statements of what
they intended the contract to mean, but circumstances known to the parties at the time
they entered into the contract, such as what the industry considered to be the norm or
reasonable and prudent.” KMI Cont’l Offshore Prod. Co. v. ACF Petroleum Co., 746
S.W.2d 238, 241 (Tex. App.—Houston [1st Dist.] 1987, writ denied); see also Plains
Expl. & Prod. Co. v. Torch Energy Advisors, Inc., 473 S.W.3d 296, 305 (Tex. 2005)
(holding that “[c]onsideration of the surrounding facts and circumstances is simply an
aid in the construction of [a] contract’s language . . . .”); Crossland Acquisition, Inc.
v. HNTB Corp., 2016 Tex. App. LEXIS 8855, at *21 (Tex. App.—Houston [14th
39
Dist.], Aug. 16, 2016, pet. denied) (mem op.) (examining contracts in light of
circumstances surrounding their execution); see also Cook Composites, Inc. v.
Westlake Styrene Corp., 15 S.W.3d 124, 132 (Tex. App.—Houston [14th Dist.] 2000,
pet. dism’d) (holding “[w]e are free to examine prior negotiations and all other
relevant incidents bearing on the intent of the parties . . . .”).
Such surrounding circumstances include the requirement that courts construe
commercial contracts in accordance with the customs and practices of the industry
and locale(s) to which the contract relates. See R ESTATEMENT (S ECOND ) OF
C ONTRACTS § 202(5). Evidence that might otherwise be excluded by operation of
the parol evidence rule may be admissible to show industry custom or trade usage,
which are presumed to be a “backdrop” against which all commercial contracts are
drafted. See Chase Manhattan Bank v. First Marion Bank, 437 F.2d 1040, 1046 (5th
Cir. 1971); see also Royal Indem. Co. v. Marshall, 378 S.W.2d 364, 370 (Tex. Civ.
App.—Austin 1964) (approving the trial court’s admission of expert testimony
regarding the meaning of certain terms and industry practices among automobile
dealers), rev’d on other grounds, 388 S.W.2d 176 (Tex. 1965).
As the Settlement Agreement references and integrates a construction contract
and refers to a construction industry term (a “change order”), evidence to explain the
meaning of technical terms is admissible. See Coterill-Jenkins v. Tex. Med. Ass’n
Health Care Liab. Claim Trust, 383 S.W.3d 581, 588 (Tex. App.—Houston [14th
40
Dist.] 2012, pet. denied); see also Byrd v. Smyth, 590 S.W.2d 772, 774–75 (Tex. Civ.
App.—El Paso 1979, no writ); Barrett v. Ferrell, 550 S.W.2d 138, 141–42 (Tex. Civ.
App.—Tyler 1977, writ ref’d n.r.e.) Because such evidence does not contradict or
vary the written instrument, but rather, places the court in the position of the parties
when they made the contract, it enables the court to appreciate the force of the words
the parties used in reducing it to writing. See Chase Manhattan, 437 F. 2d at 1048. It
is received where doubt arises upon the face of the instrument as to its meaning, not
to enable the court to hear what the parties said, but to enable it to understand what
they wrote, as they understood it at the time. Id. (citation omitted) Such evidence is
explanatory, and must be consistent with the terms of the contract. Id. “Technical
terms and words of art [should be] given their technical meaning when used in a
transaction within their technical field.” R ESTATEMENT (S ECOND ) OF
C ONTRACTS § 202(3)(b) (1981).4
4
For example, in Sivert v. Continental Oil Co., the court of civil appeals considered the
admissibility of extrinsic evidence regarding the meaning of the terms “secondary recovery” and
“waterflood,” which the parties used in a written unitization agreement. See 497 S.W.2d 482, 489
(Tex. Civ. App.—San Antonio 1973, writ ref’d n.r.e.). Noting that “Texas courts have consistently
permitted this type of testimony,” the court of civil appeals found that the trial court did not err in
permitting two petroleum engineers to testify as to the meaning of the terms. Id. The court
explained that, because the terms “secondary recovery” and “waterflood” were technical terms
peculiarly applicable to the oil industry, the extrinsic evidence was not parol evidence tending to
vary the terms of the written agreement, but was explanatory of such technical terms used in the
unitization agreement. Id.
41
A “usage of trade” can refer either to a habitual or customary practice in a
particular trade or location, or to a meaning ascribed to a word or phrase that is
commonly understood by those in a particular trade or location. See R ESTATEMENT
(S ECOND ) OF C ONTRACTS § 219 cmt. a. Evidence that might otherwise be
excluded by operation of the parol evidence rule may be admissible to show the scope
of the work or transaction contemplated by the contract. See Moreau v. Otis Elevator
Co., 531 F.2d 311, 313 (5th Cir. 1976). A “change order” is the customary method
for changing the scope of work or the terms of an agreement in the construction
industry. For example, in City of Fort Worth v. Gene Hill Equipment Co., this Court
construed the City’s agreement with one of its contractors to determine if the
contractor was required to submit a “change order” when the he discovered abnormal
excavation conditions. City of Fort Worth v. Gene Hill Equipment Co., 761 S.W.2d
816, 817 (Tex. App.—Fort Worth 1988, no writ). This Court referred to the “change
order” as an instrument to authorize “compensation for additional work.” Id. at 820.5
Here, there are three important circumstances surrounding the Settlement
Agreement that are pertinent. First is the fact that the work on the DFW Terminal B
Project was divided into and contracted out in three phases. While Peck procured the
5
See also, e.g., TEX. LOCAL GOV’T CODE §281.046(e) (entitled “Contracts” and providing, inter
alia, that “after a contract is awarded, an authority decides that additional work is needed or that
the character or type of work or facilities should be changed, the board may authorize change
orders to the contract. . . .”).
42
rights to all three phases for Lantek, he resigned during the first Phase and was not an
employee of Lantek for either Phase 2 or Phase 3. (2 CR 496, 4 CR 1681-1683). The
Phase 1 Subcontract did not include an early start enabling partial funding component
and only included a guaranteed maximum price for the scope of work provided. (2
CR 505-506, 594-631). On June 5, 2014, a little over a year after Peck resigned (and
approximately one year before the Settlement Agreement), Lantek obtained the Phase
2 Subcontract. The Phase 2 Subcontract included an early start enabling partial
funding component and a document called a change order to authorize the remaining
portion of the GMP for the entirety of the original scope of work for Phase 2. (2 CR
509, 517-574).
Armed with this knowledge of the partial funding aspect of the Phase 2
Subcontract, Lantek attempted to deceive Peck into accepting the conditional
additional payment based on the “early start enabling, partial funding” rather than the
entire GMP for the scope of work by excluding change orders from the definition of
Phase 3. But Lantek’s scheme failed because of the industry meaning of the term
“change order” and the language of both the four corners of the Settlement Agreement
and integration of the Phase 3 Subcontract. Such full understanding of the
circumstances and entire integrated contract language prevent reading the document
titled “Subcontract Change Order” No. 001 from being interpreted as an exclusion to
the initial contract price, both because of the terms of the Phase 3 Subcontract set out
43
supra as well as the fact that such “change order” does not contain any change in the
scope of work, but rather acts as the mechanism to release the remaining GMP for the
scope of work in the Phase 3 Subcontract.
To emphasize such surrounding circumstances, and to place the Court in the
position of the parties when they agreed to the Settlement Agreement and enable the
Court to appreciate the force of the words the Parties used in the Settlement
Agreement, the definition of change order must be examined. While Lantek relies
solely on the title of Subcontract Change Order No. 001, and not the substance, Keith
Cooper (a Vice President of Manhattan Construction Company with decades of
experience managing multi-million and even billion dollar projects, including the last
eight years managing the DFW Terminal Project for MBJ3) testified that such
document is in fact, not a change order, which is consistent with the authority cited
supra.
Mr. Cooper testifies that the following two definitions accurately define a
change order when used in the context of a construction agreement:
44
(1 CR 389). Mr. Cooper also testified that in the context of the DFW Terminal B
Project, a change order would have to involve an activity or scope outside the scope
determined by the IFC (issued for construction) and DCN (design change notices)
used to bid and award the contract. (1 CR 389-390).
Mr. Cooper testified regarding Subcontract Change Order No. 001 (the
document relied on by Lantek to qualify as a “change order” pursuant to the
Settlement Agreement), that such document does not change the scope of work set
out in the Phase 3 Subcontract and does not change the IFC, but rather just releases
the remainder of the GMP (contract price) for the original scope of work. (1 CR
45
395, 420-421, 467).6 To be completely clear that Subcontract Change Order No.
001 was not a change order and only titled as one, Cooper agreed:
(1 CR 408).
The final circumstance to put the Court in the same position as the parties in
construing the Settlement Agreement revolves around Lantek’s request to “clarify”
the definition of Phase 3 in the Settlement Agreement after all material terms were
agreed. Specifically, following mediation at which the amount of the settlement was
determined, but the method of payment and additional terms were not, Lantek
(including its owners Ester and Domingo Mayorga) approved a series of settlement
offers communicated to Peck via email between attorneys for the parties. (2 CR
6
By contrast, Mr. Cooper continued to testify that a change order would deviate from the original
scope of work, include a PCCO (project change) and include a CE (cost event) all of which is
included in Subcontract Change Order No. 002 which is attached to his Affidavit as Exhibit “A-
3” and Deposition at Exhibit 4 at “A-3.” (1 CR 395).
46
634-644). In all of these email offers, Ester Mayorga admitted the amount of the
additional conditional payment to Peck in Section 2 of the Settlement Agreement
(10% of the initial contract price) never changed. (2 CR 634-638, 649-711).
Nothing in the surrounding circumstances indicated that any changes to Section 2 of
the Settlement Agreement were made to alter how much Peck was to be paid – 10%
of the initial contract price for the original scope of work for Phase 3.
6. Peck’s interpretation does not treat the exclusion of change order
language as mere surplusage.
Lantek’s argument that Peck treats the phrase “excluding all change orders”
as mere surplusage is simply wrong. See App.’s Br. at 19-22. First, as shown above,
the document titled “Subcontract Change Order No. 001,” upon which Lantek relies
to justify limiting Peck’s payment is not a “change order” as that term is defined by
industry standards. See supra sections B(4) and B(5).
Second, even if this Court were to construe Subcontract Change Order No.
001 as a “change order” that is excluded from the Settlement Agreement, the
Settlement Agreement’s “initial contract price” language necessitates that Peck is to
be paid 10% of the full initial contract price for the original scope of work as set
forth in the Phase 3 Subcontract – which is $9,190,545. (3 CR 1070-1071, 1121).
There is no need to even look at the change order to determine the initial contract
price. The initial contract price is found in the Phase 3 Subcontract.
47
Furthermore, Lantek’s reliance on the timing of the payments to Peck to
determine the amount Peck was entitled to receive does not support Lantek’s
position that the parties agreed to the partial funding amount of $402,155 as the base
price by which the 10% payment would be calculated. See App.’s Br. a 20-21.
Lantek was obligated to pay 10% on the full initial contract price for the scope of
work contemplated in the Phase 3 Subcontract – nothing more and nothing less. (3
CR 1070). Should Lantek not complete all the work awarded to it for the $9.1
million GMP, that does not lessen the amount Peck was to receive. (3 CR 1070-
1071). Additionally, the Settlement Agreement called for Lantek to pay the 10%
amount in eight equal quarterly payments, with the first payment due 30 days
following payment of Lantek’s first pay application, followed by seven consecutive
quarterly payments thereafter. (3 CR 1070). Those quarterly payments were based
on the $9.1 million GMP, less the amount of work to be performed by Lantek’s
subcontractors (Vanguard Electrical, Siemens, and Ford AV), leaving the portion
directly performed by Lantek as $5,565,946.90. (3 CR 1123-1126). Pursuant to the
Settlement Agreement, Lantek was required to pay Peck 10% of that amount, or
$556,594.69. (3 CR 1070).
Thus, Peck’s interpretation does not treat the “excluding all change orders”
language as mere surplusage, as Lantek suggests. Rather, Peck’s interpretation is
the only reasonable interpretation considering all the language in the parties’
48
agreement. As shown more fully above, under no circumstances is Lantek’s
interpretation of the agreement reasonable to allow this Court to reverse and render
and at best, if there is an ambiguity in the agreement, this Court can only reverse and
remand to the trial court.7 See e.g., Coker v. Coker, 650 S.W.2d 391, 394-395 (Tex.
1983) (reversing trial court’s summary judgment upon a finding of ambiguity in the
terms of the parties’ agreement).
In sum, based on consideration of (a) the four corners of the Settlement
Agreement establishing that Peck was to be paid 10% of the contract price for the
original scope of work, (b) the integrated Phase 3 Subcontract language on the
Project Scope of Work and Guaranteed Maximum Price for such scope of work, (c)
the industry custom for the meaning of a change order, and (d) the surrounding
circumstances of the settlement, all provide for the reasonable interpretation that
Peck should be paid, not on the “early start enabling (partial funding)” amount of
$402,155, but instead on the portion of the $9.1 million performed by Lantek for the
Project Scope of Work.
Pursuant to the Scope of Work for the Phase 3 Subcontract, the full contract
price for the original scope of work (the GMP for 100% of IFC plus DCN Nos. 1-3)
7
Lantek asserts an alternative argument that the Settlement Agreement is ambiguous warranting
reversal. See App.’s Br. at 22-26. For the reasons set forth in Section B of this Appellee’s Brief,
Peck has shown that the Settlement Agreement is not ambiguous and Peck’s interpretation is the
only reasonable and correct interpretation.
49
is $9,190,545. (3 CR 1125). Of the full contract price for the original scope of work,
Lantek’s subcontractors (Vanguard Electrical, Siemens, and Ford AV) performed
$3,564,891.54 for 100% of IFC, as well as $43,602.50 for DCN #1 and $16,104.06
for DCN #3, leaving the portion directly performed by Lantek as $5,565,946.90. (3
CR 1123-1126). Pursuant to the Settlement Agreement, Lantek was required to pay
Peck 10% of that amount, or $556,594.69. Thus, the trial court correctly interpreted
the agreements to conclude that Lantek’s payment of 10% of the “early start enabling
(partial funding)” amount of $402,155 breached the Settlement Agreement.
C. The trial court correctly awarded Peck his attorney’s fees under Chapter
38.
Citing to the parties’ Release and Settlement Agreement, Lantek’s sole
argument in opposition of the trial court’s award of attorney’s fees is to wrongly
suggest that Peck released his claim for attorney’s fees in the Amended Mutual
Release Agreement that accompanied the parties’ Rule 11 Settlement Agreement.
See App.’s Br. at 26-28. Although the parties entered into a release in contemplation
of settling the previous claims, under no circumstances did the parties release their
Chapter 38 right to attorney’s fees for breach of the Settlement Agreement. (3 CR
1206-08).
More specifically, the Release is limited to the claims in the underlying
lawsuit – not a claim for breach of the Settlement Agreement:
50
(3 CR 1202). The release does not include a release of the party’s claim for breach
of the Settlement Agreement.
In an action for breach of contract, Texas law allows for the recovery of
reasonable attorney’s fees under Section 38.001 of the Texas Civil Practices &
Remedies Code. See TEX. CIV. PRAC. & REM. CODE §38.001. Peck sued for breach
of the Settlement Agreement and sought his attorney’s fees under Chapter 38. (3 CR
1055-1067). The Release did not limit Peck’s right to recover such fees.
Moreover, Lantek and Peck entered into a stipulation regarding the attorney’s
fees. (4 CR 1829-1831). That stipulation provided as follows as to attorney’s fees:
(4 CR 1829). Certainly, if the trial court’s award of summary judgment on the breach
of Settlement Agreement is reversed, then the Stipulation provides for an exception
to the award of attorney’s fees in the statement “[w]ithout waiving any appeal as to
51
liability.” Id. But the Stipulation expressly provides that “assuming the Order is not
overturned after any appeals and Lantek’s breach of contract is included in the final
judgment, Lantek stipulates that Peck is entitled to reasonable and necessary
attorneys’ fees from Lantek.” Id. (emphasis added). As such, Lantek has waived
its argument that Peck is somehow not entitled to his attorney’s fees for successfully
prosecuting his breach of the Settlement Agreement claim. For Lantek to now argue
that the parties’ Release in connection with the Settlement Agreement somehow
captures attorney’s fees to prosecute a breach of the Settlement Agreement is
completely absurd and wholly contrary to the very stipulation Lantek signed. Thus,
the trial court did not err in granting Peck his attorney’s fees for successfully
prosecuting the breach of Settlement Agreement claim.
In sum, the trial court correctly interpreted the Settlement Agreement in favor
of Peck based on well-settled principles of contract construction and correctly
awarded Peck his attorney’s fees for successfully prosecuting his breach of the
Settlement Agreement.8 Thus, this Court should affirm the trial court’s award of
8
Peck also moved for a no-evidence motion for summary judgment on Lantek’s affirmative
defenses of accord and satisfaction, arbitration and award, payment and release. (3 CR 1025,
1051-1054). Except for the affirmative defense of release, which Peck has addressed in the
Argument section C of his Appellee’s Brief, Lantek does not challenge the trial court’s award of
summary judgment on his other affirmative defenses. See App.’s Br. As such, Lantek has waived
any challenge to the no-evidence summary judgment on his affirmative defenses of accord and
satisfaction, arbitration and award and payment. See TEX. R. APP. P. 38.1(i); see also LeBlanc v.
Riley, No. 2-08-234-CV, 2009 Tex. App. LEXIS 2204, *12-13 (Tex. App.—Fort Worth April 2,
2009, no pet.).
52
summary judgment in favor of Peck on his breach of contract and attorney’s fees
claims. This Court should affirm the trial court’s denial of Lantek’s motion for
summary judgment on its declaratory judgment action. Alternatively, should the
Court find that the Settlement Agreement is ambiguous, this Court should reverse
and remand – not reverse and render, as Lantek’s interpretation is wholly
unreasonable as shown in detail above.
CROSS-APPELLANT’S ARGUMENT
A. The trial court erred in granting the Lantek Parties summary judgment
on Peck’s fraud claims9.
On the same day the trial court granted summary judgment in favor of Peck
on his counterclaim for breach of settlement agreement, the trial court also granted
summary judgment in favor of the Lantek Parties on Peck’s counterclaims for fraud
and fraud in the inducement10. (4 CR 1828). Alternatively, Peck pled claims for
fraud and fraud in the inducement. (3 CR 1064-1065, 3 CR 1344-1346, 4 CR 1751-
1753). To the extent this Court could reverse the trial court’s summary judgment on
the breach of contract claim, which Peck does not concede that such result should
occur, Peck has filed his notice of cross-appeal on the trial court’s summary
9
Peck adopts and incorporates the same Statement of Facts and Summary of Argument sections
in his Appellee’s Brief as part of his Cross-Appellant’s Brief.
10
The Lantek Parties did not move for no-evidence summary judgment on Peck’s counterclaim
for fraud by nondisclosure. See section __, infra. To the extent this court could find otherwise,
Peck has addressed the merits of this claim as well. Id.
53
judgment on his fraud counterclaims so that this Court may reverse the summary
judgment on such fraud counterclaims, as well. (4 CR 1843-1845).
Peck’s counterclaims are based on communications related to certain
language the Lantek Parties requested be added to the section concerning the
conditional additional payment in the Settlement Agreement. (3 CR 1344-1345).
This language was requested under the guise of seeking to “clarify” the Settlement
Agreement. (2 CR 639). Through this lawsuit, the Lantek Parties have sought to
use their clarification language to defraud Peck in an amount in excess of
$500,000.00. (2 CR 639). The Lantek Parties failed to disclose material facts known
only to them about the Phase 3 Subcontract upon which the settlement payment is
based. (2 CR 639, 641). The Lantek Parties knew of the unusual payment structure
involved; yet, it failed to disclose the details of such payment structure and instead,
used that information to create a substantially false impression to Peck through the
addition of the “initial” and “change order” terms. (2 CR 639, 641; 4 CR 1439-40; 4
CR 1680-81).
The Lantek Parties filed a no-evidence motion for summary judgment on
Peck’s fraud counterclaims for fraud and fraud in the inducement.11 (2 CR 724-
11
The Lantek Parties also asserted a traditional motion for summary judgment on what it called a
claim for “fraudulent representation” arguing that no such claim exists. (2 CR 735). This is the
only argument the Lantek Parties assert to support its attempt at a traditional motion for summary
judgment. (2 CR 724-736).
54
1018). Peck filed a response, including sufficient summary judgment evidence to
raise a genuine issue of material fact on each of the challenged elements of Peck’s
fraud counterclaims. (4 CR 1424-1741). The Lantek Parties filed no reply. Despite
producing sufficient summary judgment evidence to raise a genuine issue of material
fact on each of Peck’s fraud counterclaims, the trial court granted the Lantek Parties’
summary judgment on such counterclaims. (4 CR 1828). But as shown in more
detail below, the trial court erred in granting summary judgment on the
counterclaims for fraud and fraud in the inducement.
1. Standard of Review.
Peck adopts and incorporates the Standard of Review section on pages 26-28
of his Appellee’s Brief.
2. Peck’s counterclaims for Fraud and Fraud in the Inducement.
The trial court erred by granting the Lantek Parties’ no-evidence motion for
summary judgment on Peck’s claims for fraud and fraud in the inducement because
Peck presented sufficient summary judgment evidence to raise a genuine issue of
material fact on each element of those causes of action.
The elements of fraud and fraud in the inducement are:
(1) that a material misrepresentation was made; (2) that it was
false; (3) that when the speaker made it he knew it was false or
made it recklessly without any knowledge of the truth and as a
positive assertion; (4) that he made it with the intention that it
should be acted upon by the party; (5) that the party justifiably
relied upon it; [and] (6) that he thereby suffered injury.
55
See Exxon Corp. v. Emerald Oil & Gas Co., 348 S.W.3d 194, 217 (Tex. 2011)
(finding sufficient evidence of reliance and reversing trial court on directed verdict
on fraud claim); see also Trenholm v. Ratcliff, 646 S.W.2d 927, 930 (Tex. 1983)
(finding sufficient evidence of reliance and upholding jury verdict). “Fraudulent
inducement is a particular species of fraud that arises only in the context of a contract
and requires the existence of a contract as part of its proof. That is, with a fraud in
the inducement claim, the elements of fraud must be established as they relate to an
agreement between the parties.” Hasse v. Glazner, 62 S.W.3d 795, 798-99 (Tex.
2001).
The Lantek Parties made a material misrepresentation to
Peck.
“A fact is material if it would likely affect the conduct of a reasonable person
concerning the transaction in question.” Miller v. Kennedy & Minshew, Prof’l
Corp., 142 S.W.3d 325, 345 (Tex. App.—Fort Worth 2003, pet. denied) (upholding
fraud claim against clients who made material misrepresentations to attorney
regarding sale of stock to induce attorney into contingency fee agreement).
“Materiality thus centers on whether a reasonable person would attach importance to
and would be induced to act on the information in determining his choice of actions
in the transaction in question. Hannon, Inc. v. Scott, No. 02-10-00012-CV, 2011
Tex. App. LEXIS 3624, at *17-18 (Tex. App.—Fort Worth, May 12, 2011, pet.
56
denied) (citing Burleson State Bank v. Plunkett, 27 S.W.3d 605, 613 (Tex. App.—
Waco 2000, pet. denied) (finding that seller of store made misrepresentations to
buyer of store regarding store items to be included in the purchase and the store’s
revenue). “Even if a misrepresentation is not a party’s sole inducement for entering
into [a] contract, it may still be material so long as the party relied on it.” Reservoir
Sys. v. TGS-NOPEC Geophysical Co., L.P., 335 S.W.3d 297, 305 (Tex. App.—
Houston [14th Dist.] 2010, pet. denied).
Here, as shown in Peck’s summary judgment evidence, the Lantek Parties
knew of the unusual payment structure involved and used that information to create
a material and substantially false impression to Peck through the addition of the
terms “initial” and “excluding change order.” (2 CR 635, 4 CR 1439-40). The
Lantek Parties requested, not to change, but to “clarify” the definitions of the Phase
3 scope of work in the Settlement Agreement by excluding change orders. (2 CR
638, 4 CR 1680-1681, 1699-1700). The Lantek Parties explained the basis for the
requested clarification to exclude change orders as preventing Peck from being
compensated for additional work beyond the original scope when he did not procure
such work nor was an owner of Lantek at the time the work was procured. (4 CR
1680-1681).
57
The misrepresentation was false.
Through the Affidavit of Keith Cooper, Vice-President of Manhattan
Construction, Peck presented competent summary judgment evidence that the
Lantek Parties knew that the Phase 3 Subcontract would include an initial payment
for only a portion of the original scope of work known as the “Early Start Enabling
(Partial Funding)” and that the release of the remainder of the money for the original
scope of work would occur pursuant to a change order. (4 CR 1439-40). Cooper
further explained that the Phase 3 Subcontract would be similar to the Phase 2
Subcontract, with a Guaranteed Maximum Price (here, $9,190,545), preceded by an
initial contract amount (here, partial funding of $402,155). (4 CR 1439-40).
Importantly, Cooper testified Lantek knew that the remainder of the Guaranteed
Maximum Price would be paid through a document titled “Subcontract Change
Order.” (4 CR 1439-40). Thus, any representations by the Lantek Parties that the
terms “initial” and “excluding change order” were meant to clarify the scope of work
from the Phase 3 Subcontract or ensure that Peck was not paid on work in excess of
the original scope of work were patently false. (4 CR 1680-1681, 1699-1700). Peck
has presented sufficient evidence to raise a genuine issue of material fact as to
whether the Lantek Parties’ representations about the Phase 3 Subcontract award
were false.
58
When the Lantek Parties made the representation, they
knew the representation was false or made the
representation recklessly without any knowledge of the
truth and as a positive assertion.
Lantek knew that it would receive the “Early Start Enabling (Partial Funding)”
and that the remainder of the money for the original scope of work for the Phase 3
Subcontract would occur in a change order.12 (4 CR 1439-40). After Peck resigned
from Lantek, Lantek entered into the Phase 2 Subcontract for the Terminal B Project
on June 5, 2014. (4 CR 1681). When the Settlement Agreement was negotiated
between February 12, 2015 and May 7, 2015 Lantek had already completed Phase 1
and was in the process of completing Phase 2. (4 CR 1682-1683). Based on the
documents produced by Lantek, Lantek had already submitted its bid amount for the
original (also known as base) scope of work for Phase 3 prior to May 7, 2015. (4
CR 1440, 1602-1676, 1682). When the Lantek Parties stated that the “excluding
change orders” language was needed to prevent Peck from receiving 10% for any
12
The Lantek Parties argued in their no-evidence motion for summary judgment on Peck’s fraud
claims that “[e]ven if evidence were available to indicate what he alleges was said, it would be
inadmissible as if it occurred, it did so during settlement negotiations and is inadmissible under
Tex. Rules Evidence 408(a)(2) and Tex. Civ. Prac. & Rem. Code 154.073.” (2 CR 728). The
Lantek Parties’ arguments fail. Rule 408 provides that certain settlement evidence, as set forth in
the rule, is not admissible to “prove or disprove the validity or amount of a disputed claim.”
However, such settlement information is admissible “for other purposes.” Peck would be offering
the evidence, not to prove or disprove the amount of the disputed Rule 11 Agreement at that time,
but as evidence of fraud. Additionally, Section 154.073 of the Texas Civil Practice and Remedies
Code is inapplicable here, as the statements did not occur during mediation or any other settlement
process using a neutral third-party.
59
work beyond the original scope and for which he did not procure, the Lantek Parties
already knew the following:
Phase 2 Subcontract did not have the same payment structure as the
Phase 1 Contract; and
Phase 3 Subcontract would have a similar payment structure as Phase
2, and include an initial price for Early Start Enabling (a portion of the
original scope of work), followed by payment of the remainder of the
GMP for the original scope of work by a document titled a change
order.
(4 CR 1438-1440).
The Lantek Parties intended Peck to act upon its
misrepresentations.
The element of intent is proven when a defendant makes representations with
the “intent to deceive and with no intention of performing as represented.” Formosa
Plastics Corp. USA v. Presidio Eng’rs & Contrs., 960 S.W.2d 41, 48 (Tex. 1998)
(upholding fraud finding). While the failure to perform, standing alone, is not
necessarily evidence of a promisor’s intent not to perform when the promise is made,
that fact is a circumstance to be considered when other facts establish intent.
Spoljaric v. Percival Tours, Inc., 708 S.W.2d 432, 435 (Tex. 1986) (holding that
summary judgment on fraud claim that company’s president created incentive
program to induce two vice-presidents to stay and never intended to implement the
incentive program). As “intent to defraud is not susceptible to direct proof, it
invariably must be proven by circumstantial evidence.” Id. “Slight circumstantial
60
evidence” of fraud, when considered with the breach of a promise to perform, is
sufficient to support a finding of fraudulent intent. Id. (citations omitted).
Here, Ester Mayorga admitted in her deposition that in all of the versions of
the Settlement Agreement – from March 2, 2015 to May 7, 2015 – until the last two
versions, the amount to be paid to Peck remained the same – 10% of the initial
contract price. (2 CR 634-638, 649-711). For the last two iterations, which were
supposed to only “clarify” the definition of Phase 3 according to the emails between
each parties’ attorneys and not change the amount paid, Lantek’s attorneys refused
to allow Ms. Mayorga to answer questions about Lantek’s intent or understanding
of those two versions of the Settlement Agreement. (2 CR 638, 642-644). Lantek
then refused to comply with the Settlement Agreement and to pay Peck 10% of the
award for the initial scope of work which was already known to Lantek during the
negotiations. Based on the Lantek Parties’ knowledge of the Phase 3 Subcontract
with an initial contract price for only the early start enabling and subsequent release
of the remainder of the award by a change order in heading, and subsequent breach,
paying 10% on the partial funding for the early start enabling, Peck has presented
competent summary judgment evidence to raise a genuine issue of material fact as
to whether the Lantek Parties intended for Peck to rely on its misrepresentations. (4
CR 1684).
61
Peck justifiably relied on the Lantek Parties’
misrepresentations.
To prevail on a fraud claim, a party must show “actual and justifiable reliance
on the misrepresentation.” See Grant Thornton LLP v. Prospect High Income Fund,
314 S.W.3d 913, 923 (Tex. 2010). Although generally courts have acknowledged
that a third party’s reliance on an opposing attorney’s representation is not justified
when the representation takes place in an adversarial context, such general
propositions does not preclude justifiable reliance in all cases. See McCamish v.
F.E. Appling Interests, 991 S.W.2d 787, 794 (Tex. 1999). The issue of justifiable
reliance is a question for the factfinder. See 1001 McKinney Ltd. v. Credit Suisse
First Boston Mortg. Capital, 192 S.W.3d 20, 30 (Tex. App.—Houston [14th Dist.]
2005, pet. denied). “In determining whether . . . the justifiable reliance element is
met, [courts] consider the nature of the relationship and the contract.” Coastal Bank
SSB v. Chase Bank of Tex., N.A., 135 S.W.3d 840, 843 (Tex. App.—Houston [1st
Dist.] 840, 843, no pet.).
For example, in Miller v. Kennedy & Minshew, P.C., 142 S.W.3d 325, 345
(Tex. App.—Fort Worth 2003, pet. denied), this Court found justifiable reliance by
an attorney on representations that his client made to induce the attorney to agree to
a contingency fee arrangement, as opposed to an hourly fee arrangement.
Specifically, this Court reasoned, “the evidence shows that [the client] induced [the
attorney] to enter into the . . . contingent fee provision . . . by withholding from [the
62
attorney] the fact that [the client] had no intention of doing the very thing that would
give rise to his contractual duty to perform under the [contingency fee] provision . .
. . The evidence also shows that [the attorney] reasonably relied on [the client’s]
failure to disclose . . . .” Id. at 345.
Additionally, in Hannon, Inc. v. Scott, this Court held that the purchaser of a
store did not have to conduct an independent investigation or audit of the seller to
justifiably rely on the seller’s false and material representations. Hannon, Inc. v.
Scott, No. 02-10-00012-CV, 2011 Tex. App. LEXIS 3624, at *23-24 (Tex. App.—
Fort Worth May 12, 2011, pet denied) (mem op.). This Court reasoned, “[t]his is
because, in light of the record, [seller’s] misrepresentations about [certain items
seller said would be included in the sale of seller’s business and about the business’s
daily revenue] were not outlandish, preposterous, or so patently and obviously false
that [the buyer] had to have closed his eyes to avoid discovering their falseness, nor
were there any attendant ‘red flags’ indicating that [the buyer’s] actual reliance was
unjustified.” Id.
Here, the falsity of the Lantek Parties’ misrepresentations was not “obvious”
to Peck.13 (4 CR 1681-1686) Had the Lantek Parties not withheld from Peck their
13
While Peck has not asserted a claim against the Lantek Parties’ counsel, Peck does assert that,
as Lantek’s agents, Lantek’s counsel assisted Lantek in committing fraud against Peck. An
attorney is not automatically immune from suit from a non-client. See Cantey Hanger, LLP v.
Byrd, 467 S.W.3d 477, 483 (Tex. 2015) (holding that “an attorney's participation in ‘independently
fraudulent activities’ is considered ‘foreign to the duties of an attorney’ and is not shielded from
liability”) (citations omitted); see also TEX. DISC. R. OF PROF. CONDUCT 4.01 (precluding a lawyer
63
knowledge regarding the payment structure of the Phase 3 Subcontract, including
the initial payment for the Early Start Enabling (Partial Funding) and the remainder
of the GMP paid by change order, in contrast to the Phase 1 Subcontract, then Peck
would not have agreed to add the Lantek Parties’ proposed addition of “initial” or
“excluding change orders” to the Settlement Agreement. (4 CR 1678-87). As the
Lantek Parties used that language in the trial court to contradict the remaining
language in Section 2 of the Settlement Agreement and avoid paying Peck in excess
of $500,000, Peck relied on the Lantek Parties’ fraudulent representation to his
detriment. (4 CR 1678-87).
As the impression given by the Lantek Parties’ representations did not
contradict the express unambiguous terms of the Settlement Agreement, Peck’s
reliance was justified. The 10% additional payment to Peck provided in Section 2
of the Settlement Agreement was based on the “initial” “contract price” of the Phase
3 Contract based on “all base contract(s) for the scope of work defined above.” (4
CR 1437-1441). Therefore, when the Lantek Parties added “initial,” Peck believed
that to mean the price for the original scope of work based on the Phase 1
Subcontract, which would not contradict the language of the Settlement Agreement.
(4 CR 1678-87).
from making a false statement of material fact or law to a third person and precluding a lawyer
from failing to disclose a material fact to a third person when disclosure is necessary to avoid
knowingly assisting a fraudulent act perpetrated by the client).
64
Likewise, when the Lantek Parties requested that change orders be excluded
for the purpose of not paying Peck for work procured by Lantek after Peck left the
company, i.e., additions to the scope of work, the impression given by their
representation – that any change orders would be to enlarge the scope of work, not
that the payment of the remaining GMP for the original scope of work – did not
contradict the language in the Settlement Agreement. (4 CR 1678-87). The false
impressions given by the Lantek Parties’ representations were consistent with the
Settlement Agreement. (4 CR 1678-87). Thus, Peck’s reliance on such
representations in agreeing to Lantek’s requested additions of “initial” and “but
excluding change orders” was justified.
Peck was injured as a result of the Lantek Parties’
misrepresentations.
As shown above, Peck suffered injury in excess of $500,000 due to the Lantek
Parties’ misrepresentations. (4 CR 1439). Peck has raised a genuine issue of
material fact to support this element of his fraud and fraud in the inducement claims
against the Lantek Parties. Specifically, Peck presented as summary judgment the
Affidavit of Keith Cooper, also discussed above. Mr. Cooper testified that Lantek
knew that the initial contract amount of $402,155 was only a portion of the payment
to be made on the Phase 3 Subcontract. (4 CR 1439). Mr. Cooper testified that a
subsequent payment, in the form of a Guaranteed Maximum Price, of $9,190,545,
would be authorized via a document titled “Subcontract Change Order.” (4 CR
65
1439-40). Peck was injured because he received a payment for only 10% of the
$402,155, instead of 10% of the Guaranteed Maximum Price of $9,190,545, less the
amounts paid to Lantek’s subcontractors.14 (4 CR 1682-1686). If the Lantek Parties
had not misrepresented information about the clarifying language and that the initial
contract price would be authorized in a change order, Peck would not have suffered
injury. Peck has presented sufficient summary judgment evidence to raise a genuine
issue of material fact that he suffered injury as a result of the Lantek Parties’
misrepresentations.
3. Peck’s counterclaims for Fraud by Nondisclosure.
On May 4, 2017, Peck filed his third amended counterclaim pleading an
additional fraud claim – namely, his fraud by nondisclosure claim. (3 CR 1335-
1417). While the Lantek Parties filed a no-evidence motion for summary judgment
on Peck’s fraud and fraudulent inducement claims, the Lantek Parties never moved
for summary judgment on Peck’s claim for fraud by nondisclosure. (2 CR 724-736).
An appellate court cannot affirm a no-evidence motion for summary judgment on a
claim that was not challenged in the no-evidence motion for summary judgment.
See TEX. R. CIV. P. 166a(i) (providing that a no-evidence motion for summary
judgment must state “the elements as to which there is no evidence”); see also
14
Of that full contract price for the original scope of work, Lantek’s subcontractors (Vanguard
Electrical, Siemens, and Ford AV) performed $3,564,891.54 for 100% of IFC, as well as
$43,602.50 for DCN #1 and $16,104.06 for DCN #3, leaving Lantek’s portion as $5,565,946.90.
(3 CR 1123-1126).
66
Merriman v. XTO Energy, Inc., 407 S.W.3d 244, 248 (Tex. 2013) (holding that
nonmovant has the burden to produce summary judgment evidence on challenged
elements) (emphasis added). Thus, the trial court erred when it granted the Lantek
Parties’ summary judgment on Peck’s fraud by nondisclosure counterclaim because
the trial court granted more relief than the Lantek Parties requested. See id.
To the extent that this Court could hold that the Lantek Parties’ no-evidence
motion for summary judgment sufficiently challenged the fraud by non-disclosure
claim, summary judgment as to this claim was not proper because Peck presented
sufficient summary judgment evidence to raise a genuine issue of material fact as to
each element of his fraud by non-disclosure claim.
The elements of fraud by nondisclosure require (1) a deliberate failure to
disclose material facts, (2) by one who had a duty to disclose such facts, (3) to
another who was ignorant of the facts and did not have an equal opportunity to
discover them, (4) with the intent the listener act or refrain from acting, and (5) the
listener relies on the nondisclosure resulting in injury. Schlumberger Tech. Corp. v.
Swanson, 959 S.W.2d 171, 181 (Tex. 1997). “Slight circumstantial evidence” of
fraud, when considered with the breach of promise to perform, is sufficient to
support a finding of fraudulent intent. See Spoljaric v. Percival Tours, Inc., 708
S.W.2d 432, 435 (Tex. 1986).
67
The Lantek Parties deliberately failed to disclose material
facts to Peck.
As shown above, the circumstances surrounding the Lantek Parties’ fraud by
non-disclosure, including (1) adding the term “initial” to the term “contract price,”
based on the knowledge of the payment structure of the Phase 3 Subcontract having
an initial contract price that did not include the full amount for the original scope of
work (4 CR 1439, 1684); and (2) after the original scope for Phase 3 was added to
the Settlement Agreement, the Lantek Parties’ request to “clarify” that scope by
adding “excluding change orders” based on the knowledge and concealment that
the Phase 3 Subcontract would have the remainder of the GMP for the original
scope of work paid pursuant to a change order. (4 CR 1439-40, 1678-87). Thus,
Peck raised a genuine issue of material fact as to this element of his fraud by
nondisclosure claim.
The Lantek Parties had a duty to disclose material facts to
Peck.
A duty to disclose may arise in a commercial context in four situations: (a)
when there is a fiduciary relationship between the parties; (b) when one voluntarily
discloses information, the whole truth must be disclosed; (c) when one makes a
representation, new information must be disclosed when that new information makes
the earlier representation misleading or untrue; or (d) when one makes a partial
disclosure and conveys a false impression. Citizens Nat’l Bank v. Allen Rae Invs.,
68
Inc., 142 S.W.3d 459, 477 (Tex. App.—Fort Worth 2004, no pet.) (upholding fraud
by nondisclosure claim). A fraudulent non-disclosure can arise when one party does
not have equal access to information. See id.
As shown above, Peck produced sufficient summary judgment evidence to
raise a genuine issue of material fact that the Lantek Parties had a duty to disclose
material facts to Peck. Only Lantek was in a position to know that the payment
structure of the Phase 3 Subcontract Price, including the initial payment for the Early
Start Enabling (Partial Funding) and the remainder of the GMP paid by a document
titled change order, would differ from the payment structure for the Phase 1
Subcontract. (4 CR 1439-40, 4 CR 1678-87). The Lantek Parties excluded “change
orders” from the Settlement Agreement, to give Peck the false impression that
change order would not relate to the original scope of work where he would be
entitled to 10%, but an initial funding of an addition to the original scope of work
based on the industry meaning of the term change order. (4 CR 1680-81). Peck
produced competent summary judgment evidence to raise a fact issue as to the
Lantek Parties’ duty to disclose material facts to him.
The Lantek Parties failed to disclose material facts to Peck,
who was ignorant of the facts and did not have an equal
opportunity to discover them.
As stated above, the Lantek Parties failed to disclose to Peck complete
information concerning the funding structure for Phase 3 of the Subcontract. (4 CR
69
1680-81). Peck did not have the means to discover that information, as he did not
have equal access to it. (4 CR 1678-87). He was no longer an owner of the company
when the Settlement Agreement was signed, and he was no longer involved in any
respect with the project prior to the award of the Phase 2 Subcontract that was the
first to add an early start, partial funding component. (4 CR 1680-81). Peck has
presented sufficient summary judgment evidence to raise a genuine issue of material
fact as to whether the Lantek Parties failed to disclose material facts to Peck and as
to whether Peck was ignorant of the facts and did not have an equal opportunity to
discover them.
The Lantek Parties intended Peck to act or to refrain from
acting.
“Slight circumstantial evidence of fraud, when considered with the breach of
a promise to perform, is sufficient to support a finding of fraudulent intent.”
Spoljaric, 708 S.W.2d at 435. Here, looking to the circumstances surrounding the
parties’ execution of the Settlement Agreement, Peck has presented sufficient
summary judgment evidence to raise a genuine issue of material fact as to whether
the Lantek Parties intended Peck to refrain from obtaining complete information on
the funding for Phase 3 of the Subcontract. (4 CR 1437-41, 1680-81). The Lantek
Parties knew that Peck was under a false impression of how the funding would be
made, that Peck was no longer in a position to determine the complete information
70
regarding the funding, yet allowed Peck to remain under a false impression. (4 CR
1678-87).
Peck relied on the Lantek Parties’ nondisclosure and was
injured.
As shown in the fraud section above, Peck relied on the Lantek Parties’
nondisclosure and was injured. (4 CR 1678-87). See supra Section A(2)(e) and
A(2)(f). Although the Lantek Parties were in a position to know that the payment
structure of the Phase 3 Subcontract would differ from the payment structure for the
Phase 1 Subcontract, they inserted “initial” and “excluding change orders” to the
Settlement Agreement, without informing Peck of the unusual payment structure
used for the Phase 2 Subcontract. (4 CR 1680-81). The Lantek Parties’ failure to
provide all the information to Peck left Peck with the false impression that initial
contract price and excluding change orders only clarify that Peck would receive 10%
of the amount awarded for the original scope of work, rather than additions to that
original scope of work. (4 CR 1439, 1680-81).
CONCLUSION AND PRAYER
In conclusion, this Court must affirm the trial court’s summary judgment in
favor of Peck and affirm the trial court’s denial of Lantek’s motion for partial
summary judgment because the trial court properly construed the Settlement
Agreement and determined that Peck was entitled to 10% of the full amount initially
awarded to Lantek in the Phase 3 Subcontract for the original scope of work.
71
Additionally, the trial court correctly awarded attorney’s fees as such amounts were
stipulated and proper under Chapter 38 of the Texas Civil Practice & Remedies
Code. Thus, the trial court’s judgment should be affirmed for these reasons.
However, the trial court erred in granting the Lantek Parties’ summary judgment on
Peck’s fraud counterclaims. To the extent the Court reverses the summary judgment
on breach of contract, this Court should also reverse and remand in part as to Peck’s
fraud counterclaims.
Accordingly, Peck respectfully requests that this Court affirm the trial court’s
award of summary judgment in favor of Peck, affirm the trial court’s denial of
Lantek’s motion for partial summary judgment, award Peck the additional appellate
attorneys’ fees set forth in the trial court’s final judgment and award Peck his costs
on appeal. Peck also requests that the Court reverse in part the trial court’s judgment
as to the award of summary judgment in favor of the Lantek Parties on Peck’s fraud
counterclaims. Peck further requests such other relief to which he may be justly and
equitably entitled.
72
By: /s/ Katherine Elrich
KATHERINE K. ELRICH
Texas Bar No. 24007158
kelrich@cobbmartinez.com
KELLY B. GIBBONS
Texas Bar No. 24055548
kgibbons@cobbmartinez.com
COBB MARTINEZ WOODWARD PLLC
1700 Pacific Avenue, Suite 3100
Dallas, Texas 75201
(214) 220-5237 Telephone
(214) 220-5287 Facsimile
—and—
BOWDICH & ASSOCIATES, PLLC
John W. Bowdich
State Bar No. 00796233
jbowdich@bowdichlaw.com
10440 N. Central Expy., Suite 1540
Dallas, Texas 75231
(214) 307-9500 Telephone
(214) 307-5137 Facsimile
Attorneys for Appellee/Cross-Appellant
73
RULE 9.4 CERTIFICATE OF COMPLIANCE
This document complies with the typeface requirements of TEX. R. APP. P.
9.4(e) because it has been prepared in a conventional typeface no smaller than 14-
point for text and 12-point for footnotes. This document also complies with the
word-count limitations of TEX. R. APP. P. 9.4(i), if applicable, because it contains
13,449 words, excluding any parts exempted by TEX. R. APP. P. 9.4(i)(1).
Additionally, this Brief complies with the word count ordered by this Court pursuant
to the parties’ Agreed Briefing Schedule. More specifically, the portion of the Brief
pertaining to Appellee’s Brief contains 8,531 words. The portion of the Brief
relating to Cross-Appellant’s Brief contains 4,918 words.
/s/ Katherine Elrich
KATHERINE ELRICH
CERTIFICATE OF SERVICE
I certify that the foregoing document was electronically filed with the Clerk
of the Court using the electronic case filing system of the Court. I also certify that a
true and correct copy of the foregoing was served via e-service on the following
counsel of record on December 20, 2017.
Via Electronic Filing/Service
Byron Henry
byron.henry@solidcounsel.com
Andrea K. Bouressa
andrea.bouressa@solidcounsel.com
SCHEEF & STONE, L.L.P.
2600 Network Boulevard, Suite 400
Frisco, Texas 75034
Attorneys for Appellant/Cross-
Appellees
/s/ Katherine Elrich
KATHERINE ELRICH
74
APPENDIX
Tab A: Order Granting Plaintiffs’ Motion for Evidence and Traditional Partial
Summary Judgment (4 CR 1828)
Tab B: Final Judgment (4 CR 1832-1835)
TAB A
•• •
141-286694-16
LANTEK COMMUNICATIONS, INC.; § IN THE DISTRICT COURT
LANTEK COMMUNICATIONS II, LLC, §
LANTEK AUDIO VIDEO §
COMMUNICATIONS, LLC; DOMINGO § 141 ST JUDICIAL DISTRICT
MAYORGA and ESTER MAYORGA §
§
v §
§
HAMILTON PECK § TARRANT COUNTY, TEXAS
ORDER GRANTING PLAINTIFFS' MOTION FOR EVIDENCE
AND TRADITIONAL PARTIAL SUMMARY JUDGMENT
The Court considered Plaintiffs' Motion for No Evidence and Traditional Partial Summary
Judgment (the "Motion") and Defendant Hamilton Peck's·Response to Plaintiffs' Motion for No
Evidence and Traditional Partial Summruy Judgment and finds that, after consideration of all
competent summary judgment evidence presented, the papers and pleadings on file, and the
ru·guments of counsel, the Motion should be, in all things GRANTED.
IT IS THEREFORE ORDERED that the Motion is GRANTED.
SIGNED ON May 12,2017.
.::..../---
HONORABLEJOHNP. CHUPP
JUDGE, 141 5T JUDICIAL DISTRICT COURT
-=:!fCif E·MAILED
:iL.;:;J 5 b &""It 7
I J
TAB B
141-286694-16 FILED
TARRANT COUNTY
6f29/2017 2:50PM
THOMAS A. WILDER
DISTRICT CLERK
CAUSE NO. 141-286694-l(l
LAN'FEK CPMMUNJCAfiQNS. INC.:
LANTEK COMMUNlCATJONS ll, LLC.
LANTEK AUD10 VIDEO
COMtviUNlCATlONS, LLC; DOMINGO
MAYORGA and ESTEH MAYORGA.
PIa imij}.\·, t4P1 JUDICIAL DJST"R!Cl
v.
H AMtLTON P!:CK.
D(:fendanl. 'fARRANT.COUNTY; ti~.XAS
FJNAL ;JUDGMENT
Morionjbr Parr/a! Summary .Jt,dgment pursuant to the Orde1• Grcinting ?arliotSunlmbt;F ,lttd~ment
signed (>n May 12, 2017 (the "'Order on DetendanCs MSJ"}: having granted Ptaintili•f Motion tor
No Evidence and Traditional Partial Summary Judgment pursuanno the OiYier Oramin~ Plaim{IJ,~~
M()/ionfiw (sic] Evidence and 1i·odfliowrl Pm·rktf Sunmrm:i: JmiKcJitff!.nl sig11ed on M~\y !2, 2017
(the '·Oi·dcr on Plarntiff's MSJ"): and upon consideration of the Stipulmhm muiRnleiJ Agrt.wme-m
Hied by Defendant Hamifmn P~ck (''Defeildant'') i"cvniling party.. OJid rhe Courll'nakcsthe following.orders:
IT IS, ORDERED, AbJU[)GEDtmd DCCREEO lhin:
I. Judgment be 0ntered in favor {)f Defendant Hamilton Peck and against Phtintiff
L<1ntck Communications;; lnt:.;
2. JJcle11dant shaH have and recover from Plaintiff ;tctuaJ damages in t!1e amount of
$547529.65. less the offset amount of $40,215..50 f(.)r payments that Lairtek has
already made to P·eck, co1tditioneti upon the checks comJ;rising, such oftSct amount
being honored so dnlt sqch fimds are actu~1lly received by Peck;
:!Jf'C:;f
.
E 0~
--t...:::.J 7. J
3. Defendant shall have r should Defendan1 fife any response such ll)otlon. thnl do.es
not result in a material m<)dlficatitm to such Order or Jmf~pHc:nt or ll new
trial~
b. $35.000JJO in the event Plainlifffile:-; any Notice oF Ap:pt!nl wi.lh the Cnun
of AppeVCt miler
for e:oHection of any judgment, in whole or in part, that iS obtained by
Defendant.
The Court takes .ivdicial
.
notice of: nm:l finds thnt all of rhe attorneys'
.
fees awnnkd herdn
nrc usu~l, reasonable and necessary.
J'l' fS HJRTHER ORDERED that Defendant shall rc<;oVei· pre-judgment interest ftOil'l
Plahlti!l' in the. ai1JOtJnt or S.'27J}52.20 through June 29. 20 ~ 7, plus $.69.4:951 from ~~dch day from
Jwm 2i1, 2017 untiHhe Judgmt."n! is signed,
rr iS FURTI·IEl{ ORPHRF£D that l)efendant shall recover all of his crnwt costs fh)m
Plahttiffln lh:eamounrM'$9.72134.
IT IS FURFHER ORDERED that De1endant shall have and recover post-judgment it1terc~\
on uH :)UfnS a•warded herein, except !br com!itil1nill allCmlcy"s fees~ aw;trds, ofHvepercem{$.0%)
compounded annually from tbo date ofthis Judg1r1ent, set lbrtl1 he:low until paid.
JT IS FUR1TIER ORDEREI) that Defendant shall havi! and rcc~wer post-judgment im~rcst
<~n• conditlol'lal mrorney's fees detailed ab~we.offive percent (5.0%} C{lfnpoundcd iirmwrlly th)m
U1c fiJikwciitg d~ttes until paid. for the correspon4ing subs<:ctions ofsec(ion Jabove:
a. The date the tria! <;:ourr denies any post-jlldgincnt n1btion. or the dme lhe
motion is denied hy opcrari~;1n oflaw. whkhcvcr is carlkr:
h. The date tlfthe cotn't of apfJeali\' Judgmem fot an nppetll w the <:oHn of
appeals:.
c. The date of the denial of a motion fOr rehearing fbr tees related ~o
responding lo-u motion for rehe