Patel v. Creation Construction, Inc.
Dallas Court of Appeals, No. 05-11-00759-CV (February 27, 2013)
Justices Lang-Miers (opinion), O’Neill, and FitzGerald
Dallas Court of Appeals, No. 05-11-00759-CV (February 27, 2013)
Justices Lang-Miers (opinion), O’Neill, and FitzGerald
On appeal of a judgment for breach of a construction contract against Patel, who contended he signed the contract only as an agent, the court of appeals affirmed, and also reversed the trial court’s denial of pre-judgment interest to the plaintiff. The court found no evidence in the record that Patel had disclosed that he was signing the contract as an agent or that he had identified his principal, as required to prevail on an agency defense to a contract. The court rejected Patel’s argument that the trial court’s imposition of joint and several liability on him and his alleged principal necessarily meant he was acting as an agent. The court noted that the alleged principal had not appealed, and therefore the propriety of the judgment against it was not before the court.
The court of appeals then addressed the plaintiff’s cross-appeal of the trial court’s denial of prejudgment interest. The plaintiff sought prejudgment interest under the Prompt Payment Act. Patel contended prejudgment interest was not available under the Act because there had been a bona fide dispute over the amount owed. But the court observed that the Act only permits a party to withhold disputed amounts, whereas Patel had withheld even undisputed amounts owed under the contract. Moreover, the court agreed with a 2005 decision by the Corpus Christi court of appeals that the Act’s provision for withholding of disputed amounts does not preclude an award of prejudgment interest if the withholding party is ultimately found to have breached the contract. The court of appeals therefore reversed in part and remanded for an award of prejudgment interest.
