In Re: Wells

Because Gary Roberts failed to comply with the notice provisions of the Residential Construction Liability Act, the trial court abused its discretion by denying Wells & Sons Roofing Co.'s motion to dismiss.

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Click here for the full text of this decision FACTS:In March 2005, Calvin D. Wells, doing business as Wells & Sons Roofing Co., replaced the roof on Gary Roberts’ home in Houston. In May 2005, Roberts, through his attorney, notified Wells Roofing that the roof had rippled almost immediately upon installation and that “other aspects of your work were improper and insufficient.” Roberts also complained specifically that Wells Roofing did not remove the old felt from the existing roof before the new roof was applied, as Wells Roofing had purportedly represented it would do. Contending that Wells Roofing’s actions and omissions constituted a violation of the Texas Deceptive Trade Practices Act (DTPA) as well as fraud, breach of warranty and breach of contract, Roberts demanded reimbursement for the price paid for the roof, the cost of an engineer’s inspection and report, and his attorneys’ fees. In June 2005, in Roberts’ presence, Calvin Wells and a construction consultant inspected the roofing shingles and installation at Roberts’ home. Based in part on the consultant’s report, Wells Roofing made a settlement offer to Roberts in a letter dated June 28, 2005. In the letter, Wells Roofing: 1. addressed each allegedly deficient condition covered in the engineer’s report that Roberts had commissioned after the roof’s installation; and 2. offered to pay Roberts a monetary sum to cover his attorneys’ fees and an itemized list of repairs, modifications and alterations to the roof. Roberts’ attorney received Wells Roofing’s settlement offer on June 30, 2005, but Roberts did not respond to the offer. In February 2007, Roberts filed suit for damages against Wells Roofing, asserting breach of contract, fraud and DTPA causes of action. In his petition, Roberts alleged that he sent Wells Roofing a timely notice of his claims as required by the DTPA but that Wells Roofing “has not offered to rectify [its] breaches.” Wells Roofing moved to dismiss the lawsuit on the ground that Roberts failed to comply with certain provisions of the Texas Residential Construction Liability Act (RCLA). After a hearing and briefing from both sides, the trial court denied the motion to dismiss on July 12, 2007. Wells Roofing then filed a motion, with briefing, asking the court to reconsider its ruling. On July 27, the court issued a second order denying both the motion to dismiss and the motion for reconsideration. This second order was based on the court’s finding that Wells Roofing was not a “contractor” under the RCLA and, therefore, not subject to its provisions. Wells Roofing sought relief by writ of mandamus from the trial court’s orders of July 12, 2007, and July 27, 2007. HOLDING:The court conditionally granted the writ of mandamus. Under Texas Property Code �27.002(a)(1), the court stated, RCLA applies to “any action to recover damages or other relief arising from a construction defect, except a claim for personal injury, survival, or wrongful death or for damage to goods.” RCLA contains certain notice and settlement offer requirements that must precede such actions. The substance of the requirements varies depending on whether the particular residential construction dispute is also subject to the state-sponsored inspection and dispute resolution process under the Residential Construction Commission Act (RCCA). In this case, however, the court found that RCCA did not apply, because Wells Roofing did not meet the RCCA’s definition of a “builder,” as its contract with Roberts involved only the replacement or repair of the roof of Roberts’ existing home. With respect to a dispute not subject to the RCCA inspection and dispute resolution process, RCLA requires a claimant to give notice to a contractor more than 60 days before filing suit. Such notice must specify in reasonable detail the construction defects of which the claimant complains. Under �27.004(b), the court stated, the contractor may make a written settlement offer to the claimant within 45 days of receiving such notice. The contractor may offer repair of any construction defect in the notice. The offer may provide that the contractor itself or an independent contractor will make the repair, at the contractor’s expense or at a reduced rate to the claimant. The offer must describe in reasonable detail the repairs that will be made. The repairs, the court stated, must be made within 45 days from the contractor’s receipt of the claimant’s written acceptance of the settlement offer. If the claimant believes the settlement offer is unreasonable, the claimant has 25 days from receipt of the offer to advise the contractor, in writing and in reasonable detail, why it considers the offer unreasonable. Within 10 days of receipt of such notice from the claimant, the contractor may make another written settlement offer. RCLA, the court stated, calls for mandatory dismissal of an action not subject to the inspection and dispute resolution process of the RCCA if, after a hearing, the court finds that the claimant failed to follow the procedures in �27.004(b). Roberts disputed that the RCLA applied to his underlying action. Specifically, he contended his action against Wells Roofing did not concern “construction defects” and, alternatively, that Wells Roofing was not a “contractor” as defined by RCLA. First, the court rejected Roberts’ argument that the notice, offer of settlement and dismissal portions of the RCLA did not apply to the suit, because Wells Roofing was not a “contractor” under RCLA. The court found that Wells Roofing was a contractor. The definition of “builder” in Texas Property Code �401.003, the court noted, excludes an entity that replaces or repairs the roof of an existing home. But the court found that while Wells Roofing may not be a “builder,” it was, as a matter of law, a “contractor” covered by RCLA. Wells Roofing, the court stated, was indisputably a person contracting with an owner, Roberts, for the construction of an alteration to an existing residence or for repair of an existing residence. Second, the court concluded that Roberts’ action concerned the construction of an alteration to, or the repair of, an existing residence. Accordingly, Roberts’ action arose from a “construction defect” as defined by RCLA. Third, the court found that Wells Roofing lacked an adequate remedy by appeal. If forced to wait for appeal to present whether Roberts’ failure to comply with the RCLA’s notice requirements mandates dismissal of the action, Wells Roofing would endure the very expense of litigation such notice requirements were meant to avoid. Accordingly, the court found that Roberts’ action was subject to RCLA, including the notice provisions of �27.004(b). Because Roberts failed to comply with the notice provisions, the court found that the trial court abused its discretion by denying Wells Roofing’s motion to dismiss. Moreover, the court found that, because Roberts failed to file a controverting affidavit within 11 days of Wells Roofing’s filing of its motion to dismiss, Roberts’ action was automatically dismissed on June 25, 2007. OPINION:Yates, J.; Yates and Guzman, JJ. DISSENT:Seymore, J. “I would hold that the trial court did not abuse its discretion by denying relator’s motion to dismiss the underlying lawsuit. Accordingly, I respectfully dissent. . . . “In defining the term builder, the legislature specifically excluded entities that replace or repair the roof of an existing home. . . . The legislature infused this specific exclusionary language into the RCLA by reference to the word”builder as defined by [Texas Property Code �]401.003.’”

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