Ramex Construction Co. v. Tamcon Services Inc.
29 S.W.3d 135 | Texas Court of Appeals, 14th District (Houston) | 2000
What This Case Means for Subcontractors
Ramex Construction terminated Tamcon Services as a subcontractor on a Houston sewer project, claiming poor performance. Tamcon argued Ramex withheld payment and refused schedule extensions, causing the delays. The jury ruled in Tamcon's favor, but the Texas Court of Appeals reversed because the jury's decision was based on a legal defense (waiver) that Ramex never formally raised in its pleadings. The court also faulted the trial judge for blocking the owner's testimony about the company's lost value. The case gets a new trial.
Key Takeaways
- •Make sure your contractor's written response to your claims specifically addresses every legal defense they plan to use—vague denials won't cut it in court.
- •Document all payment delays and refusals in writing, with dates and amounts. This evidence directly supports claims that cash flow problems caused your performance issues.
- •If you're suing for lost business value, preserve expert testimony and valuation evidence early. Courts may allow this to prove your actual damages from wrongful termination.
Recovery was impliedly based on a ground that it did not plead.
Frequently Asked Question
Can a contractor terminate me for poor performance if they withheld my payments?
Not without risk. If you can prove the contractor's payment delays or refusals caused your schedule problems, you may have a valid counterclaim for breach. The contractor must also formally plead any legal defenses in writing—they can't spring them on you at trial. Document everything in writing to protect yourself.
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