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Click here for the full text of this decision FACTS:Hassell Construction Co. subcontracted with Stature Commercial Co. (SCCI) to work on the Memorial Villages Police Facility. The local police department was dissatisfied with SCCI’s work and discontinued its relationship with the subcontractor. SCCI’s bonding company took over the project. Hassell sued SCCI for $40,300 for work performed and $22,121 in withheld retainage. At trial, SCCI was allowed to enter evidence that it had not been paid by the police department for work done by Hassell. According to SCCI, the contract required that Hassell would not receive funds until SCCI had been paid by the police department. After a bench trial, the trial court entered findings of fact and conclusions of law in entering a take-nothing judgment for SCCI. HOLDING:Reversed and rendered in part; reversed and remanded in part. The court takes up Hassell’s argument that, under Texas Rule of Civil Procedure 94, parties must plead affirmative defenses such as payment and release. Also, Texas law imposes requirements on parties pleading excuses for nonperformance. Affirmative defense are waived when a defendant files only a general denial. In this case, SCCI’s reliance on nonpayment from the owner as a basis for avoiding liability under the contract is an affirmative defense, but SCCI’s original answer contained only a general denial; no affirmative defense was included. Furthermore, at trial, SCCI did not deny that it owed Hassell money, only that it was not legally required to pay Hassell. The trial court denied Hassell’s objections to entry of the contract language, and SCCI did not request a trial amendment in its original answer. The trial court, therefore, erred in admitting the evidence, and judgment on this basis was improper. Additionally, because the evidence presented by SCCI was wrongly entered into evidence, and there was not additional evidence offered, the rest of the judgment was unsupported. OPINION:Hedges, C.J.; Hedges, Fowler and Seymore, JJ.

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