Background
Bria and David Field contracted with Elite Concepts, Inc. — a pool contractor owned by Mike Nantz — to build a custom residential pool for $222,144. The contract included a damages clause stating: “Contractor’s liability and Buyer’s sole and exclusive remedy are limited to repair of the swimming pool.” The contract also provided that any incidental or consequential damages were excluded, but separately allowed the prevailing party in litigation to recover attorney’s fees.
After construction began, the Fields requested upgrades and changes that generated three change orders. They paid the first but not the second ($51,412.48). After demanding payment and receiving assurances but no money, Elite walked off the job and repossessed some pool equipment. When Elite left, the pool was substantially complete — approximately 90% done, according to one expert. The Fields owed $61,114.98 for the second and third change orders, and the final contract payment of $20,014.40 had not yet come due. The Fields hired a different contractor and paid $81,199.57 to complete the pool.
The Fields sued for breach of contract. Elite counterclaimed for breach of contract and quantum meruit and sought attorney’s fees. After a bench trial, the trial court found Elite breached the contract by stopping work for non-payment of change orders that were outside the original contract; awarded the Fields $68,000 in cost-to-complete damages; awarded Elite $61,114.98 in quantum meruit for the unpaid change orders; and offset the two amounts, netting $6,885.02 to the Fields. Both sides stipulated to $75,000 in reasonable attorney’s fees, but the trial court awarded fees only to the Fields, ordering Elite to take nothing. Elite appealed (transferred from the Fifth District by docket-equalization order).
The Court’s Holding
The Fifteenth Court of Appeals affirmed on all three issues.
1. The “repair” clause does not exclude cost-to-complete damages. Elite argued that the contract limited recovery to the cost to “repair” defective work, not the cost to “complete” unfinished work — and that because the pool was not yet finished, there was nothing to “repair” within the meaning of the clause. The court rejected this as a false distinction. Under Texas law, remedial damages for breach of a construction contract is the proper measure when there has been substantial performance, and it encompasses “cost to complete or repair” as two sides of the same coin. See Ashford Partners Ltd. v. ECO Res., Inc., 401 S.W.3d 35, 39 (Tex. 2012); McGinty v. Hennen, 372 S.W.3d 625, 627 (Tex. 2012). “Cost to complete” covers omissions (work not done) and “cost to repair” covers defects (work done incorrectly) — both are forms of remedial damages designed to put the owner in as good a position as if the contract had been performed.
Construing “repair” to exclude “completion” would render the contract illusory: if a contractor could walk off the job at any time owing no damages, its promise to build the pool would not bind it at all. See In re 24R, Inc., 324 S.W.3d 564, 567 (Tex. 2010). Courts must construe contracts to give promises meaning rather than render them void. The clause therefore unambiguously limits the owner to remedial damages generally — including cost to complete — as opposed to difference-in-value damages or lost profits.
2. Sufficient evidence supports the $68,000 damages finding. The Fields’ expert testified that the pool still needed plumbing, drainage, and electrical work, and that the amounts were reasonable and necessary. David Field testified that they paid “about $80,000” to fix the pool. Elite’s expert estimated completion cost at approximately $20,000 (roughly the same as the unpaid final contract payment). The trial court’s finding of $68,000 was within the range of the evidence and legally sufficient. The court also rejected Elite’s offset argument — that the Fields should have to credit the $20,014.40 final payment they never had to make — because that payment never came due precisely because the work was never performed, making it part of the completion damages.
3. Elite was not entitled to attorney’s fees. Chapter 38 of the Texas Civil Practice and Remedies Code allows a party to recover attorney’s fees if it prevails on a quantum meruit claim and recovers damages. The final judgment ordered the Fields to recover $6,885.02 and ordered Elite to “take nothing.” Because the Fields’ $68,000 loss exceeded Elite’s $61,114.98 quantum meruit recovery, the Fields were the prevailing party. Elite recovered no damages in the final judgment, so it was not entitled to fees. See Green Int’l, Inc. v. Solis, 951 S.W.2d 384, 390 (Tex. 1997).
Key Takeaways
- A contractual limitation of remedy to “repair” of a construction project does not exclude “cost to complete” damages; both are species of remedial damages under Texas law, and construing “repair” to mean only correction of defective work — not completion of unfinished work — would render the contractor’s performance promise illusory.
- When a contractor abandons a substantially complete construction project and the owner hires a replacement, the owner’s actual completion cost (supported by expert testimony that it was reasonable and necessary) is legally sufficient evidence of remedial damages, even if the contractor’s expert estimated a much lower figure.
- A contractor that prevails on a quantum meruit counterclaim but is awarded nothing in the final judgment (because the owner’s breach-of-contract damages exceed the contractor’s quantum meruit recovery) has not “recovered damages” within the meaning of Chapter 38 and is not entitled to attorney’s fees.
Why It Matters
Texas residential construction contracts routinely contain broad limitation-of-remedy clauses, and contractors frequently invoke them to argue that owners cannot recover the full cost of having the job finished by a replacement. Elite Concepts v. Field draws a clear line: courts will not interpret such clauses in a way that makes the contractor’s core promise — to build the project — meaningless. Because Texas law treats “cost to complete” and “cost to repair” as two expressions of the same remedial-damages concept rather than alternative and mutually exclusive remedies, a “repair only” cap captures both. Drafters of construction contracts who intend to limit liability to defect-correction while preserving the right to abandon a job without consequential liability will need more precise language than the clause at issue here.
The attorney’s fees holding is equally practical. Under the prevailing-party framework for Chapter 38 claims, a contractor whose quantum meruit recovery is overwhelmed by the owner’s offset damages walks away with nothing — no net recovery and no fee award. The court’s analysis confirms that “prevailing” under Chapter 38 means winning in the bottom-line sense, not merely having a successful theory on one claim in a multi-claim case.