Beard Family Partnership v. Commercial Indemnity Insurance Company

Beard Family Partnership v. Commercial Indemnity Insurance Company

Fact

Beard failed to comply with the Construction Contract, which stated that work was to be completed in 150 days and that liquidated damages would be charged at $ 500 per day after 150days. Coleman however, finished the work 202 days beyond the 150 days provided in the contract for completion of the project and that Commercial Indemnity was, therefore, responsible for the delay, and Commercial Indemnity failed to submit an all-bills-paid affidavit. Generally, Commercial Indemnity filed suit against Beard, seeking the unpaid balance of the contract for $155,733.51, plus additional damages in the amount of $60,000 for installation of the telephone and television cable outside the scope of the contract and upon Beard’s request. Commercial Indemnity also sought attorneys’ fees

Issue

Surety’s rights and obligations underpayment and performance bond entered into pursuant to a construction contract. Additionally, the jury specifically found that both parties failed to comply with the underlying construction contract, but that Commercial Indemnity substantially performed the contract and that Commercial Indemnity failed to comply with conditions precedent that precluded its recovery.

Rule

The contract requirement of an affidavit that all bills have been paid or satisfied did not apply to the surety. Also, evidence supported jury’s findings that landowner was responsible for delays in the construction and that, Admitting expert testimony on attorney fees despite the untimely designation of an expert until thirty days before the trial was not an abuse of discretion. Additionally, Surety was not required to segregate attorney fees among contract and quantum meruit claims.

Application

Any person who furnishes labor or materials for the construction of improvements on real property shall if requested and as a condition of payment for such labor or materials, provide. An affidavit stating that the person has paid each of the person’s subcontractors, labourers, or material men in full. Also, the condition of a payment bond is typical that the principal will promptly pay persons who furnish labor and material for the use in the performance of the contract work. On a private project, of course, the oblige wants to be sure that these persons are paid because they can file mechanic’s/ construction liens against the owner’s property.

Conclusion

The court erred in awarding attorneys’ fees because Commercial Indemnity’s expert witness was untimely disclosed in addition to excluding Beard’s evidence regarding its damages and settlement offer of the trial court. As the issue involved more than the construction contract between Beard as owner and Round Rock as Contractor; When Commercial Indemnity stepped in as surety after Round Rock defaulted, the terms of the performance bond and the payment bond came into play as well. It is true that Commercial Indemnity as a surety “stands in the shoes” of its principal, here Round Rock, in the event of default by Round Rock either in performance of the construction contract—the performance bond —or in the failure to pay its subcontractors or suppliers—the payment bond. Thus, two parties are liable for a debt, having found no reversible error; we overrule Beard’s issues on appeal and affirm the judgment of the district court.

References

William W. Rittenhouse, Stewart Whitehead, Karen G. Gantt, Winstead, Sechrest&Minick, (2003). BEARD FAMILY PARTNERSHIP, Appellant, V. COMMERCIAL INDEMNITY INSURANCE COMPANY, Appellee 116 S.W.3d 839, Court of Appeals of Texas, Austin. v. No. 03–01–00443–CV.