CourtListener 10748904•Trident Homes, Inc. and Ryan Strickland v. Ramesh Kainthla and Neetu Kainthla
Trident Homes, Inc. and Ryan Strickland v. Ramesh Kainthla and Neetu Kainthla
CourtListener 10748904Txctapp155 déc. 2025
Texte intégral
ACCEPTED
15-25-00078-CV
FIFTEENTH COURT OF APPEALS
AUSTIN, TEXAS
12/5/2025 1:45 PM
NO. 15-25-00078-CV CHRISTOPHER A. PRINE
CLERK
FILED IN
15th COURT OF APPEALS
IN THE FIFTEENTH COURT OF APPEALS AUSTIN, TEXAS
AUSTIN, TEXAS 12/5/2025 1:45:01 PM
CHRISTOPHER A. PRINE
Clerk
TRIDENT HOMES, INC. AND RYAN STRICKLAND,
Appellants,
v.
RAMESH KAINTHLA AND NEETU KAINTHLA.
Appellees.
On Appeal from the 272nd District Court, Brazos County, Texas
No. 21-000379-CV-272
APPELLEES’ BRIEF
WATSON LAW FIRM EWELL, BROWN, BLANKE & KNIGHT LLP
J. Davis Watson Joseph R. Knight
State Bar No. 24004979 State Bar No. 11601275
dwatson@watsonlawyers.com jknight@ebbklaw.com
Sean Hester 111 Congress Ave., Suite 2800
State Bar No. 00784266 Austin, Texas 78701
shester@watsonlawyers.com (512) 770-4010
1450 Copperfield Pkwy, Suite 300
College Station, Texas 77845
(979) 703-4044
Attorneys for AppelleeS
Ramesh and Neetu Kainthla
IDENTITY OF PARTIES AND COUNSEL
In addition to the counsel identified in Appellant’s Brief, the following is
serving as lead appellate counsel for the Kainthlas:
Ewell, BROWN, BLANKE & KNIGHT LLP
Joseph R. Knight
State Bar No. 11601275
111 Congress Avenue, 28th Floor
Austin, Texas 78701
(512) 770-4010
jknight@ebbklaw.com
i
TABLE OF CONTENTS
Identity of Parties and Counsel .................................................................................. i
Table of Contents ...................................................................................................... ii
Table of Authorities ................................................................................................. iv
Statement on Oral Argument ................................................................................... vi
Statement of Facts ......................................................................................................1
Summary of the Argument.........................................................................................9
Argument..................................................................................................................10
I. Legally and factually sufficient evidence supports the jury’s
explicit finding that Ryan Strickland was a party to the oral
contract. ...............................................................................................11
II. Legally and factually sufficient evidence supports the jury’s
damages findings. ................................................................................16
A. Legally and factually sufficient evidence supports the
jury’s award of $13,538.05. ......................................................16
B. Legally and factually sufficient evidence supports the
jury’s award of $3,802.23. ........................................................20
C. Legally and factually sufficient evidence supports the
jury’s award of $1,300. .............................................................22
III. The record supports the jury’s rejection of Trident’s claims. .............24
A. Appellants’ argument is undermined by their
mischaracterization of the October 22, 2020 billing packet.
...................................................................................................24
B. Legally and factually sufficient evidence supports a
finding that Strickland and Trident committed a prior
material breach. .........................................................................25
ii
C. Appellants did not conclusively prove their claim, and the
jury’s failure to find in their favor is not against the great
weight and preponderance of the evidence. ..............................29
IV. The trial court did not abuse its discretion in awarding attorney’s
fees.......................................................................................................33
A. Appellants did not conclusively establish the affirmative
defense of excessive demand. ...................................................34
B. The amount of attorney’s fees awarded is not excessive
merely because the jury awarded lower damages than the
Kainthlas sought........................................................................38
C. Proof of the Kainthlas’ attorney’s fees was adequately
segregated..................................................................................43
Prayer .......................................................................................................................47
Certificate of Compliance ........................................................................................49
Certificate of Service ...............................................................................................49
iii
TABLE OF AUTHORITIES
Cases
Barker v. Eckman,
213 S.W.3d 306 (Tex. 2006) ................................................................................41
Burch v. Hancock,
56 S.W.3d 257 (Tex. App.—Tyler 2001, no pet.)................................................15
City of Fort Worth v. Zimlich,
29 S.W.3d 62 (Tex. 2000) ....................................................................................44
City of Hous. v. Williams,
353 S.W.3d 128 (Tex. 2011) ................................................................................19
City of Keller v. Wilson,
168 S.W.3d 802 (Tex. 2005) ................................................................... 10, 11, 13
Drummond v. WWW.URBAN.INC.,
508 S.W.3d 657 (Tex. App.—Houston [1st Dist.] 2016, no pet.)................. 39, 40
Findlay v. Cave,
611 S.W.2d 57 (Tex. 1981) ........................................................................... 35, 38
Gordon v. Leasman,
365 S.W.3d 109 (Tex. App.—Houston [1st Dist.] 2011, no pet.)........................15
Green Int’l v. Solis,
951 S.W.2d 384 (Tex. 1997) ................................................................................33
Hernandez v. Gulf Grp. Lloyds,
875 S.W.2d 691 (Tex. 1994) ................................................................................26
Hernandez v. Lautensack,
201 S.W.3d 771 (Tex. App.—Fort Worth 2006, pet. denied)..............................35
Intercontinental Grp. P’ship v. KB Home Lone Star L.P.,
295 S.W.3d 650 (Tex. 2009) ................................................................................39
McMillin v. State Farm Lloyds,
180 S.W.3d 183 (Tex. App.—Austin 2005, pet. denied) .............................. 36, 37
Metroplex Mailing Servs. v. RR Donnelley & Sons Co.,
410 S.W.3d 889 (Tex. App.—Dallas 2013, no pet.) ............................................42
iv
Mustang Pipeline Co. v. Driver Pipeline Co.,
134 S.W.3d 195 (Tex. 2004) ................................................................................26
Panizo v. Young Men’s Christian Ass’n of Greater Hous. Area,
938 S.W.2d 163 (Tex. App.—Houston [1st Dist.] 1996, no pet.)........................37
Posey v. Broughton Farm Co.,
997 S.W.2d 829 (Tex. App.—Eastland 1999, pet. denied) ..................................15
Rohrmoos Venture v. UTSW DVA Healthcare LLP,
578 S.W.3d 469 (Tex. 2019) ............................................................. 34, 40, 41, 43
Safeshred, Inc. v. Martinez,
365 S.W.3d 655 (Tex. 2012) ................................................................................44
Staff Indus., Inc. v. Hallmark Contracting, Inc.,
846 S.W.2d 542 (Tex. App.—Corpus Christi 1993, no writ) ..............................38
State Farm Life Ins. Co. v. Beaston,
907 S.W.2d 430 (Tex. 1995) ................................................................................33
Tony Gullo Motors I, L.P. v. Chapa,
212 S.W.3d 299 (Tex. 2006) ................................................................... 44, 45, 46
Tuthill v. Sw. Pub. Serv. Co.,
614 S.W.2d 205 (Tex. App.—Amarillo 1981, writ ref’d n.r.e.) ..........................36
United Servs. Auto. Ass’n v. Hayes,
507 S.W.3d 263 (Tex. App.—Houston [1st Dist.] 2016, pet. dism’d) ................35
Von Hoffman v. City of Quincy,
71 U.S. 535 (1867) ...............................................................................................19
Statutes
Tex. Civ. Prac. & Rem. Code § 38.001(b)(8) ..........................................................34
Tex. Civ. Prac. & Rem. Code § 38.003 ...................................................................34
Tex. Prop Code § 162.001 .......................................................................................16
Tex. Prop. Code § 162.003(a) ..................................................................................18
Tex. Prop. Code § 162.031 ......................................................................................19
v
STATEMENT ON ORAL ARGUMENT
Appellants correctly suggest that oral argument is unnecessary. Their appeal
merely second-guesses the jury’s resolution of disputed fact issues and the trial
court’s discretionary award of attorney’s fees to the prevailing parties. This Court
likely does not need oral argument to assist in identifying the record evidence
supporting the judgment under familiar and well-established standards. But of
course, the Kainthlas will appear and argue if the Court prefers.
vi
STATEMENT OF FACTS
Ramesh and Neetu Kainthla are dissatisfied with Appellants’ statement of
facts, which is unhelpful to the Court because it exclusively presents Appellants’
version of disputed facts that the jury resolved against them. Along the way,
Appellants portray the Kainthlas as undeserving litigants merely because they saved
enough money over thirty years to build a nice house, which Appellants pejoratively
characterize as “sprawling” and “a mansion.”
Plaintiff Neetu Kainthla and Defendant Ryan Strickland worked together for
a long period of time, with Neetu often bringing him clients for whom he built
custom homes. Appellants’ Br. at 4; 8RR204. As a realtor, Neetu Kainthla has
access to form contracts generated by the Texas Real Estate Commission, and she
typically prepared written contracts for her clients, which Ryan Strickland would
sign on behalf of his companies. 8RR205; 9RR54. But this relationship was
different. The parties did not prepare a written contract.
The jury heard conflicting evidence regarding the terms of the oral contract
and whether Strickland was a party to it. Yet Appellants unqualifiedly assert, “both
parties agreed that the agreement was with Trident Homes.” Appellants’ Br. at 5.
In fact, both Ramesh and Neetu Kainthla swore that they contracted personally with
Ryan Strickland, not Trident. Ramesh testified: “my contract was with Ryan
Strickland.” 5RR131. He said the parties had no conversations whatsoever about
1
Trident Homes building the home. 5RR50. When Neetu was first asked whether
she is “claiming that Ryan Strickland breached the contract,” she likewise answered
“[y]es, because we hired Ryan Strickland.” 9RR53. She then gave the testimony
that Appellants quote as if it were clear and uncontradicted. And then she clarified
what she meant:
Q: So just want to be clear on this. You understand that
the construction contract that we’re here about was
a contract between you and Trident Homes, right?
A. It was our house contract you’re talking about,
right?
Q. Yes, ma’am.
A. Our house contract when we hired him was with
him. Whatever he told us, we did that. There was
no written contract. It was a verbal agreement with
him.
9RR55 (emphasis added). The jury credited the Kainthlas’ testimony and rejected
Strickland’s contention that he acted solely as an agent for his company. CR1226.
Appellants tell the Court that the construction project suffered “significant
delays driven by Plaintiffs’ failure to make timely selections,” as if this, too, were
undisputed. Appellants’ Br. at 5. Neetu Kainthla testified extensively on this
subject. She explained that when working with her clients in the past, Strickland
would tell them when it was time to make selections, and he would accompany them
to the relevant vendors. 8RR205-211. She expected to follow the same procedure
here. Id. There was no agreement on any particular timetable for selections, yet she
2
never delayed when Strickland said it was time to make one. 8RR210-11. Likewise,
Ramesh Kainthla testified that Strickland never discussed the timing of exterior
selections, that the Kainthlas did not cause any delays, and that “we made the
selections when we were told to make the selections.” 5RR53, 147. Although
Strickland said otherwise, he admitted that there is no documentary proof that he
ever notified the Kainthlas that their selections had to be made by a particular date.
8RR163-64. The jury resolved the conflicting testimony in the Kainthlas’ favor and
expressly rejected Appellants’ contention that the parties had agreed for selections
to be made by particular times during the project’s progression. CR1228 (Question
2(8)).
Appellants tell the Court that Trident funded the project “using the
construction account it maintained.” Appellants’ Br. at 5. In fact, the “construction
account” was a trust account established exclusively with the Kainthlas’ money.
7RR225, 227. The Kainthlas initially deposited $30,100 into this account. 5RR54;
7RR227. Despite holding this sum in trust, Appellants sent monthly billing packets
to the Kainthlas with every vendor invoice incurred that month. P.Ex.88 at
14RR130; 5RR58-67. Until the end of the parties’ relationship, the Kainthlas timely
paid every billing packet in full, adding 10% as the builders’ fee. Id. Accordingly,
the full amount of $30,100 should have remained in the construction account when
Strickland terminated the contract in December 2020. But there was only
3
$13,538.05, and Appellants never accounted for the difference. 7RR181. Worse,
they appropriated the remaining $13,538.05 for their own use and benefit before the
litigation commenced. 7RR181-82; 8RR150-51. The jury found that this money
belonged to the Kainthlas and that Appellants breached the parties’ contract and
knowingly violated the DTPA by taking it. CR1229-30; 1239-40; 1243-55; 1249-
51.
Appellants state that in October 2020, they submitted a billing packet totaling
$95,021.38 but “instead of paying the full amount, the Kainthlas remitted only
$58,558.46.” Appellants’ Br. at 6. These assertions omit a critical, undisputed fact.
Ramesh Kainthla complained that the original October 22, 2020 billing packet
lacked the supporting documentation that the parties had agreed would be submitted
with each request for payment. 6RR8-13. In response, Appellants withdrew the
original October 22, 2020 billing packet and replaced it with a revised packet totaling
$58,655.46. Id.; see also 7RR73-74 (Trident’s bookkeeper testifying that he made
a “correction” to the October 22 invoice that reduced the amount). Ramesh Kainthla
paid the revised amount in full, along with an additional $5,865.55 builder fee.
6RR12. Appellants’ own project spreadsheet reflects a charge of only $58,655.46
on October 22 and confirms that the charge was timely paid in full. P.Ex.88 at
14RR137.
4
The corrected and paid October 22, 2020 invoice included charges from a
vendor called BMC in the amounts of $2,863.63, 768.58, and 83.83. P.Ex.88 at
14RR137. However, by letter dated November 12, 2020, BMC notified the
Kainthlas that its invoices for $2,863.63, 768.58, and 83.83 had not been paid.
P.Ex.100 at 14RR177. BMC threatened to place a lien on the Kainthlas’ property.
Id.
Ramesh Kainthla is a man who pays his bills. 5RR68-69. He told the jury
that receiving a certified letter asserting an overdue debt and threatening a lien was
hard on him. Id. Kainthla testified he confronted Strickland and demanded that
Appellants satisfy BMC’s claim with the money Kainthla had already paid them for
these invoices. 5RR69. But Strickland flatly refused. Id.
Kainthla testified that it turned out BMC was not alone. There were other
subcontractors that Appellants failed to pay even though they had collected money
from Kainthla for the subcontractors’ outstanding invoices. 5RR70-72. Kainthla
said that he asked Strickland to sit down with him in person and reconcile the
accounting between them so both parties could understand where all the money
Kainthla had paid Strickland had gone. 5RR72. But Strickland refused to meet.
5RR73.
By this point, the Kainthlas had paid Appellants more than $1.8 million to
cover vendor invoices and more than $180,000 in builder fees. P.Ex.88 at 14RR137.
5
Kainthla was reluctant to make further payments to Appellants until he and
Strickland reconciled their accounting of funds because Kainthla was worried that if
he paid Strickland, the funds would not be used to pay vendors on his project.
5RR73. Strickland responded that he was “tired of dealing” with the Kainthlas and
would take them to court. 5RR74. Strickland announced that he would cut a check
to himself from the funds that the Kainthlas had initially deposited with him and
would sue the Kainthlas and anyone else who came to him looking for money.
5RR74; P.Ex.44 at 14RR30. Strickland threatened: “You have no idea how much
this is about to cost you.” Id.
Ramesh Kainthla then reviewed the various subcontractors’ invoices and paid
every vendor that Strickland had failed to pay. 5RR75-76. This included paying
BMC the amounts Kainthla had previously paid Strickland for BMC’s invoices—in
other words, Kainthla paid these invoices twice. 5RR76.
Once the Kainthlas brought all of Appellants’ subcontractors current on their
billings, they started looking for ways to finish the work in Appellants’ absence.
5RR76-78. One consequence of Appellants’ mismanagement of the project was that
several subcontractors quit mid job and refused to work for him. Id. For example,
Appellants went through four electrical contractors without managing to complete
the electrical work. Id. Ramesh Kainthla testified that persuading one of the original
electrical vendors to come back and complete the work directly for the Kainthlas
6
resulted in significant additional costs. 5RR78. The Kainthlas sought to recover
these extra expenses on their breach-of-contract claim, but the jury did not award
damages on this element of the claim. CR1231. The Kainthlas spent approximately
9 more months managing various trades to complete their home and moved into it
some four and a half years after Appellants started the project. 5RR78-79.
Meanwhile, in February 2021, the Kainthlas filed this lawsuit. CR7. Among
other things, discovery revealed that Appellants repeatedly withdrew funds from the
Kainthlas’ construction trust account and used them for unrelated projects
(sometimes later reimbursing the Kainthlas’ account and claiming the transaction
was an error). In April 2019, Appellants withdrew $23,048.35 from the Kainthlas’
construction trust account without their knowledge or permission and used it to
purchase an unrelated piece of property for a different Trident construction project.
5RR118-19; P.Ex.89 at 14RR142. Although this deduction was later repaid (also
without the Kainthlas’ knowledge), Ramesh Kainthla identified several deductions
from his trust account for items that were not billed to him, did not relate to his
project, and did not get repaid. 5RR121-24.
After hearing more than a week’s worth of evidence, the jury returned a
verdict finding, among other things, that:
• Both Trident Homes and Ryan Strickland were parties to the oral
contract (CR1226);
7
• The contract included Appellants’ promise to use funds in the
Kainthlas’ construction trust account only for their project (CR1227);
• The contract included Appellants’ promise to timely pay all
subcontractors and vendors (CR1228);
• Appellants failed to comply with the contract, causing over $28,000 in
damages (CR1230-31);
• The Kainthlas did not fail to comply with the contract – “by excusal”
(CR1232);
• Strickland intentionally, knowingly, or with intent to defraud,
misapplied the Kainthlas’ trust funds (CR1235-36);
• Appellants are holding money that belongs to the Kainthlas (CR1239-
40);
• Appellants engaged in an unconscionable action or course of action that
caused damages to the Kainthlas CR13243-44; 1249-50);
• They engaged in such conduct knowingly or intentionally (CR1245;
1251); and
• The Kainthlas were not unjustly enriched by Appellants and did not
commit fraud against them (CR1256; 1258).
The Kainthlas elected to recover on their contract claim. By agreement, the
parties tried the issue of attorney’s fees to the court. After an evidentiary hearing on
attorney’s fees (12RR), the trial court rendered judgment that the Kainthlas recover
$28,640.28 in damages, plus interest, and $233,769.83 in reasonable and necessary
attorney’s fees. CR1217-21. The judgment also awards appellate attorney’s fees,
contingent on success in this Court, which Appellants do not challenge. CR1220.
8
SUMMARY OF THE ARGUMENT
This lawsuit arises out of an oral contract. At trial, the parties disputed the
terms of this contract, including the identities of the contracting parties. Each side
presented evidence in support of its positions on these disputed terms. The trial court
submitted the disputed facts to the jury in a 44-page charge. And the jury sided with
the Kainthlas on the terms that form the basis of the judgment.
To attack the verdict, Strickland and Trident do exactly what this Court cannot
do. They cherry-pick the evidence on their side and mischaracterize or ignore
evidence supporting the verdict. When the Court considers the evidence supporting
the verdict, as it must in resolving Strickland’s and Trident’s no-evidence and great-
weight points, it becomes clear that the jury simply found the Kainthlas’ version of
the facts more credible.
The trial court did not abuse its discretion by awarding attorney’s fees
calculated at a modest rate of $350 per hour and discounted significantly in
Appellants’ favor. Neither the facts nor Texas law supports Appellants’ contention
that the award is excessive merely because the Kainthlas demanded and sought to
recover higher damages on their contract claim than the jury ultimately awarded.
The Kainthlas adequately segregated the fees they incurred. Because
Appellants do not claim charge error, this Court reviews the evidence supporting the
attorney’s-fee award according to the charge as given. The jury found that the
9
misconduct on which the Kainthlas’ tort claims were based also breached specific
terms of the parties’ oral contract. Accordingly, legal fees spent trying to prove this
misconduct—which may have been unrecoverable in another case—were
recoverable here because those fees were for legal work that also established the
Kainthlas’ claim for breach of contract.
The breach-of-contract question also instructed the jury to consider whether
Appellants’ behavior “comports with standards of good faith and fair dealing.”
Legal fees spent establishing Appellants’ bad faith—which also may have been
unrecoverable in other cases—were recoverable on the breach-of-contract claim
here. The trial court therefore had adequate discretion to find, in light of the evidence
and specific charge in this case, that the discounts given by the Kainthlas adequately
segregated any small amount of fees that may have been incurred solely in
connection with causes of action for which fees were not recoverable.
ARGUMENT
While Appellants give a passing nod to the applicable standards of review
(Appellants’ Br. at 14), they fail to acknowledge just how steep a hill they must
climb in this particular case. “If the parties to an oral contract testify to conflicting
terms, a reviewing court must presume the terms were those asserted by the winner.”
City of Keller v. Wilson, 168 S.W.3d 802, 819 (Tex. 2005). The Court should reject
Appellants’ no-evidence and insufficient-evidence points.
10
I. Legally and factually sufficient evidence supports the jury’s explicit
finding that Ryan Strickland was a party to the oral contract.
Appellants lead with a little exaggeration. They tell the Court three times—
in their statement regarding oral argument, summary of the argument, and
argument—that Neetu Kainthla conclusively admitted Strickland was not a party to
the oral construction contract. Appellants’ Br. at 2, 12, 16. There are at least three
problems with this assertion.
First, a snippet of Neetu Kainthla’s testimony would not be conclusive even
if Appellants accurately represented it. Plaintiff Ramesh Kainthla testified
unequivocally that he believed and understood from the parties’ discussions that
Ryan Strickland was going to build the house for him. 5RR50; see also 5RR131
(“my contract was with Ryan Strickland”). He testified that the parties had no
conversations whatsoever about Trident Homes or S&I Residential building the
home. 5RR50. The jury was free to credit this testimony, even if other evidence
contradicted it. See City of Keller, 168 S.W.3d at 819 (“Jurors are the sole judges of
the credibility of the witnesses and the weight to give their testimony. They may
choose to believe one witness and disbelieve another. Reviewing courts cannot
impose their own opinions to the contrary.”).
Second, Neetu Kainthla did not make the clear concession that Appellants
claim. Shortly before the testimony quoted in their brief, Neetu testified that she had
a contract with Ryan Strickland:
11
Q. Are you also claiming that Ryan Strickland
breached the contract?
A. Yes, because we hired Ryan Strickland.
9RR53. Neetu Kainthla then explained that when she dealt with Strickland’s
companies as a real estate agent, there was always a written contract between the
company and the buyer. 9RR54. In the course of this examination, Appellants’
counsel asked Neetu if she was “seriously” claiming that she had a “construction
contract” with Ryan to build this house. Id. In context, her “no” answer indicated
that, unlike the clients she represented in transactions with Strickland’s businesses,
she did not have a written contract with him to build her own home. In fact, when
Appellants’ counsel attempted to clear up the distinction, Mrs. Kainthla explained
that she (a non-lawyer) was distinguishing between a contract and a verbal
agreement:
Q: So just want to be clear on this. You understand that
the construction contract that we’re here about was
a contract between you and Trident Homes, right?
A. It was our house contract you’re talking about,
right?
Q. Yes, ma’am.
A. Our house contract when we hired him was with
him. Whatever he told us, we did that. There was
no written contract. It was a verbal agreement with
him.
12
Q. But he was acting on behalf of Trident Homes, and
you did not have a contract with him individually to
build the house, correct?
A. We didn’t have contract with -- we had a verbal
agreement, however you want to put it, but we had
a contract with him and whatever his companies
were.
9RR55 (emphasis added). At best, Neetu Kainthla’s “concession” is ambiguous,
not dispositive as Appellants contend. Appellants err by insisting the Court must
credit the excerpt they quote from page 54 of Neetu Kainthla’s testimony while
disregarding what she said on pages 53 and 55. See City of Keller, 168 S.W.3d at
820 (“whenever reasonable jurors could decide what testimony to discard, a
reviewing court must assume they did so in favor of their verdict, and disregard it in
the course of legal sufficiency review”).
Appellants’ citation to volume 7 of the Reporter’s Record is even worse. After
telling the Court that Neetu Kainthla never considered using another builder,
Appellants say: “As she put it, ‘There was no doubt that Trident Homes would build
this house.’” Appellants’ Br. at 19 (citing 7RR201, emphasis added). Contrary to
Appellants’ representation, that is by no means “as she put it.” The quoted testimony
came from Ryan Strickland, not from Neetu Kainthla. 7RR201. The jury was free
to disregard Strickland’s self-serving assertion. It was well within the jury’s
discretion to accept the testimony of both Kainthlas that they negotiated and agreed
to an oral contract with Strickland in an individual capacity.
13
Third, there is ample additional evidence corroborating the Kainthlas’
testimony that they had an oral deal with Strickland personally. Strickland entered
into this transaction with a level of informality that his companies would never
implement, presenting a seven-figure construction bid sheet that did not even
mention his companies’ names. P.Ex.48 at 14RR31. Strickland never presented the
Kainthlas with one of the standard written contracts that his businesses use, which
would have called for a builder’s fee of 20-22%. 8RR161. Strickland’s willingness
to build the Kainthlas’ home for half his regular fee based on nothing more than a
handshake shows Strickland’s intent to undertake this project in an individual
capacity based exclusively on his long-term personal friendship with Neetu
Kainthla.
Appellants argue that Neetu Kainthla’s familiarity with the contractual
practices of Strickland’s businesses in other transactions establishes that he was not
individually a party to the contract here. But the evidence supports the opposite
inference. In more than 40 prior transactions when one of Strickland’s business
entities was the contracting party, a written, fixed price contract was used. 8RR204-
05. Had this transaction been the same, the parties could have executed a standard
Trident Homes written contract. The fact that no such written contract exists in this
unique situation supports the inference that this was not a typical contract with
14
Trident Homes. Rather it was, as the Kainthlas testified, an oral contract with
Strickland himself based on personal trust.
Strickland’s reliance on post-contract-formation activities cannot help him.
Appellants’ Br. at 19-20. Instructing the Kainthlas to write checks to Trident Homes
and purchasing an insurance policy in the name of Trident Homes (which was not
specific to this project) are irrelevant to the parties’ intent at the time of contract
formation. In Gordon v. Leasman, 365 S.W.3d 109, 115 (Tex. App.—Houston [1st
Dist.] 2011, no pet.), for example, the court upheld a finding of personal liability
despite proof that invoices were issued and checks were paid to the individual’s
business entity because the invoices and checks “do not relate to the time [the
individuals] entered into the contract.” See also Burch v. Hancock, 56 S.W.3d 257,
262 (Tex. App.—Tyler 2001, no pet.) (evidence was legally and factually sufficient
to support finding that agent was individually liable even though plaintiff received
check from the company); Posey v. Broughton Farm Co., 997 S.W.2d 829, 832 (Tex.
App.—Eastland 1999, pet. denied) (agent was personally liable on contract even
though plaintiff subsequently received drafts with principal’s name on them).
These cases are factually different from this one in the sense that the
individual defendants did not disclose the existence of their principals during
contract formation, whereas the Kainthlas already knew that Trident Homes existed.
But there is no analytical difference because Strickland never disclosed that he was
15
entering into an oral contract solely on behalf of his business entity, and there is
ample evidence that the Kainthlas never agreed to such an arrangement. The Court
should overrule Appellants’ first issue.
II. Legally and factually sufficient evidence supports the jury’s damages
findings.
Appellants’ analysis of the jury’s findings regarding the Kainthlas’ damages
suffers a similar analytical flaw. Appellants urge the Court to credit their version of
the facts over the Kainthlas’ version without demonstrating why a rational jury could
not have believed the Kainthlas.
A. Legally and factually sufficient evidence supports the jury’s award
of $13,538.05.
Strickland testified that he maintained two bank accounts that are relevant to
this case. First, there was a corporate operating account for Trident Homes, which
held the company’s own funds, from which Appellants could “spend our money on
whatever we needed.” 7RR225. The other account was created specifically for this
project and called “the Kanati Cove account.” Id. The money in this account did
not belong to Strickland or his companies; rather, it “pays the bills for the house.”
Id. The Kainthlas initially deposited $30,100 into the Kanati Cove account.
7RR225, 227. By statute, Appellants held these funds in trust, and by Strickland’s
own admission, this money was to be used not on “whatever we needed,” but solely
to “pay the bills for the house.” Id; Tex. Prop Code § 162.001.
16
Ramesh Kainthla identified the checks he wrote to fund the initial deposit into
the Kanati Cove account and testified that that the account was “to be used for paying
the bills incurred for 3545 Kanati Cove.” 5RR55. Because the Kainthlas also paid
for every construction expense incurred each month, the $30,100 deposit was
intended to serve as a cushion in case expenses for the home needed to be paid before
Strickland presented invoices and a draw request to the Kainthlas. 5RR166; see also
7RR227 (Strickland characterizing the funds as a “buffer”). Neetu Kainthla
corroborated this testimony, confirming that the money in the trust fund was there
only to allow Strickland to pay contractors if the Kainthlas were not available to
provide funds for them on time. 8RR198-200. This testimony supports—and
Appellants do not challenge—the jury’s finding that Strickland and Trident agreed
that they “would open a construction trust account and funds from that account
would only be used to pay for the Kainthlas’ construction project.” CR1227
(emphasis added).
When Strickland terminated the parties’ oral contract in December 2020, there
was a balance of $13,538.05 in the Kanati Cove account. Rather than use this
balance to pay contractors, as the parties agreed and the law requires, Appellants
used it to pay themselves. 7RR181-82; 8RR150-51. Appellants cannot muster an
argument that the trust funds in this account somehow belonged to them. The best
they can argue is that the funds were not earmarked for “any specific unpaid vendor”
17
and that the Kainthlas failed to “offer testimony” that the use of these funds violated
an “express term” of the parties’ oral contract. Appellants’ Br. at 21-22.
These carefully chosen words come nowhere close to requiring reversal. It
was not the Kainthlas’ burden to introduce “evidence that the funds were earmarked
for any specific unpaid vendor, invoice, or project expense.” Appellants’ Br. at 22
(emphasis added). There were copious outstanding vendor invoices pending at the
time Strickland terminated the contract. P.Ex.88 at 14RR137; 5RR75-76. These
vendors were statutory beneficiaries of the trust funds in the Kanati Cove account.
Tex. Prop. Code § 162.003(a). So were the Kainthlas. Tex. Prop. Code §
162.003(b). The Kainthlas’ expert testified without objection or contradiction that
it was improper for Appellants to appropriate these trust funds:
Q. Did you see on this exhibit where Ryan Strickland
took the money left in this trust account and put it
into Trident operating account?
A. I do.
Q. What are your thoughts on that?
A. That was not a proper thing to do.
Q. Okay. Why not?
A. The funds he did not earn, and all these funds in this
account are supposed to go towards paying invoices
for material and labor performed on this house. And
this was probably part of that 30,000 cushion that
was put in there. It’s just not a proper thing to do, to
take it out.
18
6RR170. And it was not necessary for the Texas Construction Trust Fund Act to be
an “express term” of the parties’ contract. “[I]t is ‘settled that the laws which subsist
at the time and place of the making of a contract . . . form a part of it, as if they were
expressly referred to or incorporated in its terms.’” City of Hous. v. Williams, 353
S.W.3d 128, 141 (Tex. 2011) (quoting Von Hoffman v. City of Quincy, 71 U.S. 535,
550 (1867)).
When Appellants appropriated money from this account (7RR182; 8RR150-
51), they broke the law and breached the contract. Tex. Prop. Code § 162.031;
CR1227, 1228. In fact, Appellants do not even challenge the jury’s findings that (1)
Appellants held money that belongs to the Kainthlas; and (2) Appellants engaged in
an “unconscionable action or course of action” by misusing the balance of the Kanati
Cove account. CR1239-40; 1243-44.
Appellants’ attempt to justify their illegal conduct in this Court fall short.
They claim “Strickland testified that these funds were applied to actual overhead
costs incurred in connection with the project.” Appellants’ Br. at 22 (citing 7RR230-
32). But the cited testimony does not even mention the Kanati Cove account, much
less trace funds from it to expenses incurred in connection with the project.
Likewise, Appellants tell the Court that certain fixed overhead expenses were
“funded in part from the construction account.” Appellants’ Br. at 22 (citing
7RR100-03). But, again, the cited testimony does not even mention the Kanati Cove
19
account, much less conclusively establish a legitimate use of those funds in
connection with the alleged overhead. See, e.g., 7RR101 (discussing “insurance that
wasn’t specifically related to the Kainthlas’ home”).
More importantly, ample testimony and the jury’s unchallenged finding
(CR1227) establish that the parties agreed the Kanati Cove account was to be used
only to pay for work on the home. Yet Appellants appropriated the balance of the
Kanati Cove account for their own purposes. Because no one disputes that the
balance of the account was $13,538.05 when the parties parted ways, the evidence
is thus legally and factually sufficient to support the jury’s award of this amount as
damages for Strickland’s and Trident’s breach of contract.
B. Legally and factually sufficient evidence supports the jury’s award
of $3,802.23.
The Kainthlas paid twice for $3,802.23 in charges submitted by two
contractors (BMC and Madole Equipment Rental). Appellants argue that because
Strickland never paid BMC or Madole in the first place, the vendors never “received
duplicate reimbursement.” Appellants’ Br. at 23. But the concern is not whether
the vendors received two payments. The concern is that the Kainthlas had to pay
these vendor invoices twice, because Appellants misappropriated the first payments.
According to Appellants’ own records, they submitted an invoice to the
Kainthlas on October 22, 2020, in the total amount of $58,655.46. P.Ex.88 at
14RR137. Among the vendor charges comprising this amount were three invoices
20
from BMC totaling $3,721.04. Id. The Kainthlas paid the October 22 invoice in full
on November 2, 2020, and at the same time they paid Appellants a builder fee of
$5,865.55. Id. This payment was deposited into the Kanati Cove trust account on
November 2, 2020. P.Ex.90-45 at 14RR159-60. This evidence indisputably shows
that the Kainthlas paid Appellants for the three BMC charges totaling $3,721.04.
Nevertheless, by letter dated November 12, 2020, BMC threatened to place a
lien on the Kainthlas’ property because BMC had not received payment on its
invoices for $3,721.04. P.Ex.100 at 14RR177. When Ramesh Kainthla asked
Strickland to pay BMC, Strickland refused. P.Ex.1 at 14RR10; 5RR69. To prevent
BMC from placing the lien on his property as threatened, Ramesh Kainthla then paid
BMC directly by electronic funds transfer. 5RR76. Accordingly, he paid the BMC
invoices twice—once to Appellants and once directly to BMC. Id.
The October 22, 2020 invoice that Kainthla paid to Appellants also included
a charge from Madole Equipment Rental for $81.19. P.Ex.88 at 14RR136. As with
the BMC payments, Appellants collected money from Kainthla to pay this invoice
but failed to pay Madole. After paying Appellants for Madole’s charge, Kainthla
wound up paying it a second time to Madole by credit card. 5RR76. Adding the
amount of this Madole charge to the amounts of BMC’s bills, Kainthla paid a total
of $3,802.23 to Appellants for the October 22, 2020 invoice that Kainthla wound up
paying a second time directly to the vendors.
21
Kainthla’s testimony that he paid Appellants for the BMC and Madole charges
and then had to pay these amounts a second time directly to the vendors fully
supports the jury’s award of this sum to the Kainthlas. It also negates Appellants’
contention that this double-payment amount was “introduced” by counsel during
closing argument. Appellant’s Br. at 23. Appellants offer no reason why the jury
could not have credited this evidence, and this Court should reject their evidentiary
challenges to the award.
C. Legally and factually sufficient evidence supports the jury’s award
of $1,300.
Contrary to Appellants’ argument, the jury heard conflicting evidence
regarding minor damage to the Kainthlas’ tile roof. Ramesh Kainthla testified
unequivocally that certain roof tiles were cracked and had grass growing in them
while Appellants were still on the job. 5RR105. He swore that Strickland told him
not to worry about it because Strickland would have the roof inspected before the
Kainthlas moved into the house, and any damage would be repaired at that time. Id.
Kainthla further testified that when Appellants left the job, those tiles had not been
repaired. 5RR105-06. He then had to pay the roofer $1,300 to repair those tiles
because, by that time, the roof was out of warranty. 5RR106.
Appellants tell this Court that “Plaintiff Ramesh Kainthla admitted that Quick
Roofing was contacted to address new cracking in the tiles.” Appellants’ Br. at 24
(emphasis added). This is false. In support of their representation, Appellants cite
22
8RR33-34, which is Strickland’s testimony, not Kainthla’s. Nothing on these two
pages of Strickland’s testimony could be twisted into an admission by Ramesh
Kainthla that he paid $1,300 for repairs to “new cracking in the tiles” after
Appellants left the job. 8RR33-34.
Strickland disputed Kainthla’s version of the facts, testifying that that he saw
only two broken tiles while he was still on the job, and he had the roofer repair those
tiles before he paid the roofer’s final installation bill. 7RR169. Strickland said that
he did not know of any more broken tiles when he left the job. 7RR170; 8RR30.
He speculated that the tiles that were later repaired for $1,300 were probably broken
by someone walking on the roof after he left the job.
However, the Kainthlas’ expert testified that, based on the location of the
damaged tiles, there would not have been any reason for a person to have walked on
them after Appellants left the job. 6RR128. Based on that fact, he assumed that the
tiles were cracked during their initial installation and opined without objection that
the builder would be responsible for the repairs. Id.; see also 6RR200-01 (admitting
he does not know when the tiles were cracked but reiterating that “I could not see
any reason anyone would have been working in an area that those tiles were
broken”).
This record required the jury to make a credibility decision regarding when
the tiles cracked and who was responsible for the cost of repairing them. Yet again,
23
Appellants offer the Court no reason why a rational jury could not have believed
Ramesh Kainthla and his expert and no reason why a jury was compelled to believe
Strickland instead. The Court should reject this third and final evidentiary challenge
to the jury’s damages findings.
III. The record supports the jury’s rejection of Trident’s claims.
There are multiple independent reasons why the Court should reject Trident
Homes’ contention that it conclusively proved its claims for breach of contract
against the Kainthlas.
Appellants do not complain about the jury charge, which combined the
question on Trident’s claim with the instruction: “A failure to comply by the
Kainthlas is excused if the Builder previously failed to comply with a material
obligation of the same agreement.” CR1232. Asked whether the Kainthlas breached
the contract, the jury answered “No – By Excusal.” Id. Accordingly, as they
acknowledge (Br. at 26), to prevail here, Appellants must demonstrate that they
conclusively proved both a material breach by the Kainthlas and that Appellants did
not commit a prior material breach.
A. Appellants’ argument is undermined by their mischaracterization
of the October 22, 2020 billing packet.
Appellants’ entire argument regarding Trident’s counterclaim is premised on
their contention that Ramesh Kainthla underpaid the October 22, 2020 billing
packet. Appellants’ Br. at 6, 13, 27, 28, 30. But the record shows otherwise.
24
Appellants fail to tell the Court that the original October 22, 2020 billing packet in
a total amount of $95,021.38 lacked the supporting documentation that the parties
had agreed would be submitted with each request for payment. 6RR8-12. When
Ramesh Kainthla pointed this out, Appellants withdrew the original October 22,
2020 billing packet and replaced it with a revised packet totaling $58,655.46. Id.;
see also 7RR73-74 (Trident’s bookkeeper testifying that he made a “correction” to
the October 22 invoice that reduced the amount). Kainthla paid the revised amount
in full, along with an additional $5,865.55 builder fee. 6RR12. This is why
Appellants’ own project spreadsheet reflects a charge of only $58,655.46 on October
22 and confirms that the charge was paid in full on November 2. P.Ex.88 at
14RR137.
Appellants can hardly establish as a matter of law that the Kainthlas were
contractually obligated to pay an invoice that Appellants withdrew and replaced.
They can hardly prevail as a matter of law on a claim that the Kainthlas underpaid
the October 22 invoice when their own project records show the invoice was paid in
full within 13 days. This Court should summarily overrule Appellants’ third issue
because it is built entirely on a false premise.
B. Legally and factually sufficient evidence supports a finding that
Strickland and Trident committed a prior material breach.
Appellants submitted the next billing packet on November 20, 2020 with
$85,245.68 in new charges and an aggregate total of $111,709. 7RR79; PX88 at
25
14RR137. By that time, the parties were in dispute, and the Kainthlas did not pay
the November 20 invoice to Strickland or Trident. Id. All of the amounts allegedly
owed to Appellants as discussed in section III of their brief were charged on the
November 20 invoice or later. Even if the jury believed the Kainthlas breached the
contract, the jury could certainly have concluded that the breach occurred sometime
after the Kainthlas received the November 20, 2020 billing packet.
It is a fundamental principle of contract law that “when one party to a contract
commits a material breach of that contract, the other party is discharged or excused
from further performance.” Mustang Pipeline Co. v. Driver Pipeline Co., 134
S.W.3d 195, 196 (Tex. 2004) (citing Hernandez v. Gulf Grp. Lloyds, 875 S.W.2d
691, 692 (Tex. 1994)). The jury found in response to questions 1 and 3 that Trident
was a party to the oral construction contract and that Trident (along with Strickland)
breached the contract. CR1226, 1230. The jury also found that Trident (along with
Strickland) agreed it “would open a construction trust account and funds from that
account would only be used to pay for the Kainthla’s construction project,” and
“would timely pay the sub-contractors and vendors for the work they performed on
the home.” CR1227, 1228. The jury also found that Appellants contracted to
provide a $10,000 credit toward a refrigerator for the Kainthlas’ home. CR1229.
Appellants do not contest these findings. The record contains ample evidence that
26
Trident and Strickland breached these contractual terms before the Kainthlas
allegedly breached the contract.
It is undisputed that in April 2019 Appellants withdrew $23,048.35 from the
Kainthlas’ construction trust account without their permission and used it to
purchase an unrelated piece of property for a different Trident construction project.
5RR118-19; P.Ex.89 at 14RR142. Strickland admitted he withdrew these funds
from the Kainthlas’ trust account, and he characterized the withdrawal as an error.
7RR133. Strickland agreed that he effectively gave Trident an interest-free loan
from the Kainthlas without their knowledge. 7RR136. Although Trident repaid
these funds to the Kainthlas’ account, Appellants did not come clean when they
allegedly discovered their error. The Kainthlas did not learn of this misappropriation
of their funds until they subpoenaed Appellants’ bank records in connection with
this case. 5RR118-19.
Appellants’ records also showed other instances of using the trust funds in the
Kainthlas’ account for purposes unrelated to their project. Ramesh Kainthla
identified the following deductions from his trust account for items that were not
billed to him and did not relate to his project:
$1,051.16 to MidSouth Bank (P.Ex.89 at 14RR142);
$618.70 to Daniel Stagg (Id.);
27
$9,325.60 for a project at 4202 Wallaceshire (the same
address for which the $22,000 “error” had previously been
made) (Id.); and
$2,886 to College Station Utility for a permit on a different
Trident project (P.Ex.88 at 14RR131).
5RR121-24.
It was well within the jury’s province to find that Appellants were misusing
the Kainthlas’ trust fund over the course of many years—withdrawing funds when
they needed them to cover expenses at unrelated projects. The evidence amply
supports a finding that Strickland and Trident breached their contractual duty to use
the funds in the Kainthlas’ construction trust account only “to pay for the Kainthla’s
construction project.” CR1227. All of these abuses occurred long before the
Kainthlas allegedly breached the parties’ contract. Because this evidence supports
the jury’s answer to question 5, the Court should overrule Appellants’ third issue.
The jury also found that Appellants promised to provide the Kainthlas with a
$10,000 credit toward the cost of their refrigerator, and Appellants breached this
term of the contract. CR1229, 1231. Appellants do not challenge these findings.
The jury heard evidence that Strickland denied this obligation and said he could not
perform it back in May 2020. See P.Ex.138 at 14RR198-99; 5RR82-84. Then on
November 11, 2020, when the parties were still trying to work together, Strickland
flatly told the Kainthlas “I’m not paying money for the fridge.” D.Ex.246 at
15RR233. Based on this evidence, the jury could have concluded that Appellants’
28
unchallenged breach of their contractual obligation to pay $10,000 toward the
refrigerator occurred before the Kainthlas’ alleged breach (which, again, logically
could not have occurred before November 20, 2020).
The jury also could have found that, before the Kainthlas’ alleged breach,
Appellants breached their contractual obligation to “timely pay the sub-contractors
and vendors for the work they performed on the home.” In fact, it was Appellants’
failure to pay BMC on time—despite receiving reimbursement from the Kainthlas
for BMC’s invoices—that led to the Kainthlas’ refusal to accept Appellants’
November 2020 invoice without first receiving an accounting of their funds. See
supra at 20-22.
C. Appellants did not conclusively prove their claim, and the jury’s
failure to find in their favor is not against the great weight and
preponderance of the evidence.
The above-discussed proof of Appellants’ prior breaches defeats their third
issue. Alternatively, the Court should overrule the third issue because Appellants
did not conclusively prove their claim in the first place, and the verdict is not against
the great weight and preponderance of the evidence.
Appellants tell this Court that they “proved up builder fees totaling $19,425.22
that were earned but never paid.” Appellants’ Br. at 29. But the chart they provide
often appears to have been created from the record in some other case. The Kainthlas
29
have reproduced Appellants’ chart below with comments regarding their evidentiary
citations:
Builder Proof What the record citations
Fee Owed really say
to Trident
Homes
Earthstone $287.91 DX22; Certain invoices are mentioned,
Colours 7RR73-79 but not in these amounts. And the
right to payment is not
Old Stone $1,705.61 DX22; established, but admittedly in
Marble and 7RR73-79 dispute: “They were still trying to
Granite work some things out with him
and Ryan.” 7RR77.
Art’s Fencing $738.30 DX22;
7RR73-79
Emser Tile $509.37 DX22; The charge is identified on DX22
6RR15-16 and Kainthla admits that he
received but did not pay an
invoice for 7,389.83. No proof is
cited regarding the legitimacy of
the invoice or an amount owed to
Appellants.
Frank Tello $663.50 DX20; PX90; The cited testimony does not
7RR94-95 mention Frank Tello.
Additional $3,733.48 7RR104-05; The cited testimony does not
Invoices DX22 mention any additional invoices
Submitted to submitted to Kainthlas, much less
Kainthlas by establish liability for any
Trident Homes particular amount.
Subcontractors $254.71 7RR104-05; The cited testimony does not
paid by DX22 mention any subcontractors paid
Kainthlas by Kainthlas outside of Trident
outside of Homes, much less establish
Trident Homes liability for any particular
amount.
Items $1,450.01 7RR96-97; DX31 does not appear in the
purchased by DX31 record. The cited testimony does
Kainthlas not quantify any particular
30
outside of amount or value of items
Trident Homes purchased outside of Trident
Homes.
Gutters $925 7RR95-96 The cited testimony does not
mention gutters.
Climate $2,379.40 7RR96-97; DX31 does not appear in the
Doctors DX 31 record. The cited testimony does
not mention Climate Doctors.
Cabinets – Juan $62.50 DX22; 7RR95 The cited testimony does not
Tzunun mention cabinets or Juan Tzunun.
Audio Video $1,949.91 5RR96-97 The cited testimony does not
mention audio or video.
Art’s Fencing $1,455.00 DX22; 6RR8- The cited testimony establishes
(additional 16 that Art’s Fencing initially
work and requested a 50% payment, and
invoice) Ramesh Kainthla paid the
requested amount. He did not
pay two later invoices 6RR13-14,
16. There is no proof that a
builder’s fee of over $1,400 was
earned or owed.
Factory $3,094.33 DX22; 6RR8- The cited testimony does not
Builders 16 mention Factory Builders.
Appellants simply have not shown that they proved their case, much less that the
jury lacked discretion to disbelieve it.
Moreover, Strickland admitted that more than half of the builder’s fee
Appellants claim is owed to them was calculated based on items that Appellants did
not acquire for the home and never installed on the Kainthla home. 8RR150.
Ramesh Kainthla testified that he bought certain items when Appellants could not
or would not, and he told Strickland that he would provide purchase receipts and pay
Appellants their 10% builder fee on these items as soon as Appellants installed them
31
on the house. 5RR79-82. It was well within the jury’s discretion to find that
Appellants had not earned a builders fee on items that the Kainthlas purchased and
Appellants never installed.
There is no evidence that the Kainthlas ever failed to timely pay any invoice
or associated builder fee from the beginning of the project in 2017 through and
including the revised October 20, 2020 invoice that they paid on November 2, 2020.
At that time, the Kainthlas had paid more than $1.8 million in contractor invoices
and more than $180,000 in builder fees. PX88 at 14RR137. Afterwards, Appellants
submitted only one more invoice in the aggregate amount of $111,709. Id. This
November 20, 2020 invoice included all of the amounts that Appellants voluntarily
removed from the original October 22 invoice, plus new charges. Even if—as
Appellants allege—the Kainthlas breached the contract by not paying this November
20 invoice, the ten percent builder’s fee associated with it would have been only
approximately $11,171. The money that Appellants appropriated from the
Kainthlas’ construction trust account—net of the amounts the judgment returns to
the Kainthlas—more than covered this alleged liability.
Appellants never accounted for the full amount of Kainthlas’ $30,100 deposit
into their construction trust account. The record showed that, prior to November 20,
2020, the Kainthlas had promptly paid in full every single invoice that Appellants
submitted to them and, in each instance, added the 10% builder’s fee. 7RR76. For
32
this reason, the balance in the Kainthlas’ construction trust account in November
2020 should have been $30,100.
Yet the record shows that the balance in this account was only $13,538.05 in
November 2020. 7RR181. The jury was free to conclude that Appellants had
drained $16,561.95 from the Kainthlas’ trust account by late November 2020, more
than covering the Kainthlas’ alleged liability for unpaid builder’s fees and negating
Appellants’ claim for breach of contract.
Of course, we do not know the exact reason or reasons why the jury rejected
Appellants’ claim for breach of contract. The evidence permitted the jury to
conclude that the Kainthlas did not breach the agreement or that any breach post-
dated material breaches by Appellants. Either way, this Court should hold that
Appellants did not conclusively prove their claim and that the verdict is not against
the great weight and preponderance of the evidence.
IV. The trial court did not abuse its discretion in awarding attorney’s
fees.
“To recover attorney’s fees under Section 38.001, a party must (1) prevail on
a cause of action for which attorney’s fees are recoverable, and (2) recover
damages.” Green Int’l v. Solis, 951 S.W.2d 384, 390 (Tex. 1997) (citing State Farm
Life Ins. Co. v. Beaston, 907 S.W.2d 430, 437 (Tex. 1995)). “[T]he the idea behind
awarding attorney’s fees in fee-shifting situations is to compensate the prevailing
party generally for its reasonable losses resulting from the litigation process.”
33
Rohrmoos Venture v. UTSW DVA Healthcare LLP, 578 S.W.3d 469, 487 (Tex.
2019).
The Kainthlas are entitled to an award of attorney’s fees because they
prevailed on their claim for breach of contract and recovered damages on that claim.
Tex. Civ. Prac. & Rem. Code § 38.001(b)(8). The amount awarded in the judgment
is the amount the Kainthlas actually incurred to litigate their case and is therefore
the amount required to compensate them for their reasonable losses resulting from
the litigation process.
This amount—$233,769.83—was based on the hours reasonably worked by
capable, experienced lawyers multiplied by a modest rate of only $350 per hour and
discounted by a total of more than $60,000. 14RR222-24. Appellants do not claim
that the rate is unreasonable or that the amount of time spent on any task was
unreasonable (except in the context of segregation). The trial court was entitled to
take judicial notice of the usual and customary attorney’s fees and the contents of
the case file. Tex. Civ. Prac. & Rem. Code § 38.003; see 14RR222-25 (discussing,
without contradiction the complexity and duration of the case). This Court should
reject Appellants’ three challenges to the attorney’s-fee award.
A. Appellants did not conclusively establish the affirmative defense of
excessive demand.
Appellants initially challenge the presentment requirement on the Kainthlas’
claim for attorney’s fees, arguing that they should take nothing “as a matter of law”
34
because their pretrial demand was excessive. Appellants’ Br. at 48. The Court
should reject this argument for multiple reasons.
First, Appellants did not preserve this challenge for judicial review. “To
preserve an excessive-demand challenge, a debtor is required to (1) plead excessive
demand as an affirmative defense to the claim for attorney’s fees and (2) request and
obtain findings of fact regarding the essential elements of excessive demand.”
United Servs. Auto. Ass’n v. Hayes, 507 S.W.3d 263, 279 (Tex. App.—Houston [1st
Dist.] 2016, pet. dism’d). Despite pleading 27 affirmative defenses, Appellants did
not plead excessive demand. CR60-63. This defense has been waived.
Second, Appellants did not conclusively prove this defense. Even if the
Kainthlas’ pretrial demand of approximately $96,000 was unreasonably high—it
was not, as shown below—that is insufficient to establish the defense.
“[A]pplication of the excessive-demand doctrine is limited to situations in which a
creditor has refused a tender of the amount ‘actually due’ or has clearly indicated to
the debtor that such a tender would be refused.” United Servs. Auto. Ass’n, 507
S.W.3d at 270; Hernandez v. Lautensack, 201 S.W.3d 771, 777-78 (Tex. App.—
Fort Worth 2006, pet. denied); see also Findlay v. Cave, 611 S.W.2d 57, 58 (Tex.
1981) (rejecting an excessive-demand defense because the defendant refused to offer
the amount owed and “there has been no claim that [plaintiff] would have refused
tender of the $ 5,624.23 the jury found owing to him”); Tuthill v. Sw. Pub. Serv. Co.,
35
614 S.W.2d 205, 212 (Tex. App.—Amarillo 1981, writ ref’d n.r.e.) (“a demand is
not ‘excessive’ unless . . . the creditor either refuses, or clearly indicates that he will
refuse, tender of the amount actually due”).
Here, Appellants never offered to pay the amounts awarded by the jury, and
they introduced no evidence that the Kainthlas would have refused a tender of those
amounts. To the contrary, Appellants initially threatened to sue the Kainthlas, and
their consistent position was that the Kainthlas owed them money, not the other way
around. 5RR74; P.Ex.44 at 14RR30. The complete absence of proof that Appellants
would have paid a demand for the amount found owing defeats their unpleaded
excessive-demand defense as a matter of law.
Finally, the evidence relevant to this unpleaded affirmative defense was
contested, not conclusive. Appellants argue that the demand was unreasonable
because it was “nearly four times the amount the jury ultimately awarded.”
Appellants’ Br. at 47. The court rejected an identical argument on stronger facts in
McMillin v. State Farm Lloyds, 180 S.W.3d 183, 209 (Tex. App.—Austin 2005, pet.
denied). There, the plaintiffs made a pretrial demand of $950,000, yet recovered
only $1,000 at trial. Like Appellants here, State Farm argued that the plaintiffs could
not recover attorney’s fees due to their demand being excessive and “point[ed] to
the judgment as showing that the demand was unreasonable.” Id. Rejecting this
argument, the court explained that “the size of the verdict does not prove that the
36
[plaintiffs] would not have taken a lesser amount to settle the dispute, nor does it
prove as a matter of law that the [plaintiffs’] demand was unreasonable.” Id. The
same is true here. See also Panizo v. Young Men’s Christian Ass’n of Greater Hous.
Area, 938 S.W.2d 163, 169 (Tex. App.—Houston [1st Dist.] 1996, no
pet.) (unliquidated demand of $125,000 not excessive even though jury awarded
only $1,000).
Appellants also contend that Ramesh Kainthla “conceded under oath that the
$95,955.46 demand was ‘not reasonable.’” Appellants’ Br. at 47. As shown in the
testimony set forth in their brief, however, this concession was expressly tied to the
amount of money Trident Homes allegedly had in its checking account at the time
of the demand. Id. at 47-48 (quoting 6RR80-81). The trial court was not bound to
accept this testimony as a concession that the demand was an unreasonable estimate
of the Kainthlas’ damages. The court could reasonably have interpreted Ramesh
Kainthla’s testimony as merely agreeing it was not reasonable to expect Trident to
pay more than $95,000 “at that time” (6RR80-81) because Trident did not have the
funds available in the referenced checking account “at that time.”
Regardless, Kainthla’s testimony is not the only relevant evidence the trial
court heard on this topic. As aptly summarized in Appellants’ brief, the Kainthlas
sought recovery for itemized losses that totaled considerably more than the pre-suit
demand. See Appellants’ Br. at 50-53. They introduced a damages model totaling
37
over $319,000. D.Ex.390 at 15RR310-13. This is evidence that the Kainthlas had
a good-faith basis for claiming the amount they demanded. See, e.g., Staff Indus.,
Inc. v. Hallmark Contracting, Inc., 846 S.W.2d 542, 548 (Tex. App.—Corpus
Christi 1993, no writ) (“absent some evidence of unreasonableness or bad faith, a
demand is not excessive merely because it is greater than that which is later
determined at trial to be due”) (citing Findlay, 611 S.W.2d at 58).
Having admitted evidence of claimed damages in excess of three times the
Kainthlas’ demand, the trial court had an ample basis for rejecting any claim of
excessive demand. Even though the jury exercised its prerogative not to award the
full amount of these claimed damages, the Kainthlas’ proof is evidence the trial court
could have considered in determining that their pre-suit demand was not excessive.
B. The amount of attorney’s fees awarded is not excessive merely
because the jury awarded lower damages than the Kainthlas
sought.
Relatedly, Appellants assert that the attorney’s-fee award is not supported by
legally or factually sufficient evidence. Appellant’s Br. at 49. But they do not back
this contention with any analysis of the record evidence or any reference to the
standards governing such contentions. Rather, they superficially argue that the
award is excessive because it is disproportionate to the amount of damages the
Kainthlas recovered. Id. at 49-53. Appellants cite a total of three cases, none of
which supports this contention.
38
The issue in Intercontinental Group was whether the plaintiff constituted a
“prevailing party” under a contract. KB Home obtained a verdict on its claim for
breach of contract, but the jury awarded no damages. The Supreme Court held that
because KB Home recovered no damages on its claim for breach of contract, it could
not be considered to have “prevailed” on that claim. “Whether a party prevails turns
on whether the party prevails upon the court to award it something, either monetary
or equitable.” Intercontinental Grp. P’ship v. KB Home Lone Star L.P., 295 S.W.3d
650, 655 (Tex. 2009). “The jury answered ‘0’ on damages, and KB Home sought
no other type of relief, so the trial court should have rendered a take-nothing
judgment against KB Home on its contract claim.” Id. “A zero on damages
necessarily zeroes out ‘prevailing party’ status for KB Home.” Id. at 655-66.
Because the Kainthlas were awarded money on their breach-of-contract claim,
Intercontinental Group is irrelevant here.
The issue in Drummond was whether the defendant was a prevailing party
under a contract. Urban sued Drummond for breach of the parties’ agreement.
Although the jury found that both parties breached, it found that Urban breached
first, which meant that Drummond’s breach was excused as a matter of law.
Drummond v. WWW.URBAN.INC., 508 S.W.3d 657, 671 (Tex. App.—Houston [1st
Dist.] 2016, no pet.). Based on the verdict, the trial court rendered judgment that
Urban take nothing on its claim for breach of contract. Having defeated Urban’s
39
claim, the court of appeals held that Drummond was the “prevailing party” under the
contract and was therefore entitled to recover attorney’s fees: “Drummond prevailed
at trial by successfully defending against the main issue in this case, i.e., Urban’s
breach of contract claim.” Id. at 669. Because the Kainthlas do not seek attorney’s
fees as prevailing defendants, Drummond has nothing to do with this case.
The only other case cited by Appellants in this section of their brief is the
Supreme Court’s leading opinion on attorney’s fees, Rohrmoos Venture v. UTSW
DVA Healthcare, LLP, 578 S.W.3d 469 (Tex. 2019). Appellants concede that
Rohrmoos requires a trial court to calculate a lode star when considering an award
of attorney’s fees—the number of hours reasonably expended multiplied by a
reasonable rate for the work. Appellants’ Br. at 49. In fact, Rohrmoos establishes
that this product yields a “presumptively reasonable” fee. Id. at 496.
Appellants then state that “the court may adjust the lodestar—up or down—
based on specific factors, with the most important factor being the result obtained.”
Appellants’ Br. at 49 (citing Rohrmoos). Even if this were a correct reading of
Rohrmoos, it would not help Appellants because they are arguing that the court must
adjust the lodestar, not that it “may” do so. More importantly, Appellants misread
Rohrmoos. Nothing in Rohrmoos suggests that “results obtained” is the most
important factor to be considered in adjusting a lodestar. To the contrary, the Court
explained that “results obtained” is usually subsumed in the lodestar itself:
40
In Texas courts, the base lodestar calculation of reasonable
hours times a reasonable rate should account for any
results obtained up to trial. But to the extent that the
results obtained are not reflected in the base lodestar, then
the fact finder may determine whether the results obtained
consideration necessitates an adjustment to achieve a
reasonable fee under the second step of the lodestar
method. Cf. Barker v. Eckman, 213 S.W.3d 306, 313–14
(Tex. 2006).
Rohrmoos, 578 S.W.3d at 500 n.12. Barker illustrates a unique circumstance when
“results obtained” would not already be baked into the lodestar determination.
There, a jury awarded damages of approximately $111,000, and the jury was
instructed to consider this result in fashioning an award of attorney’s fees. The court
of appeals reduced the damages award down to $16,000 and then ordered a new trial
on attorney’s fees based on this post-trial adjustment of the damages award. Barker,
213 S.W.3d at 313–14. The Court could not determine whether the attorney’s-fee
award should stand or not because it did not know how much weight the jury gave
the “results obtained” factor. Id. at 314. Neither Barker nor Rohrmoos in any way
suggests that an appellate court should use “results obtained” to reduce a trial court’s
award of attorney’s fees when the actual damages are not adjusted.
In fact, Appellants cite a grand total of zero cases in which any appellate court
has reversed an award of attorney’s fees based on its assessment that the award is
disproportionate to the results obtained. Texas courts require an award of attorney’s
41
fees to be reasonably proportionate to the amount in controversy, not to the final
amount awarded.
The applicable rules are discussed in Metroplex Mailing Servs. v. RR
Donnelley & Sons Co., 410 S.W.3d 889, 894 (Tex. App.—Dallas 2013, no pet.),
which rejected an argument identical to Appellants’ argument. Donnelley recovered
a judgment against Metroplex for $40,391.28 in actual damages and $538,358.32 in
attorney’s fees. This ratio of more than 13:1 significantly exceeds the 8:1 ratio we
have here. The court’s analysis is squarely on point:
Metroplex and Marion do not challenge the evidence
supporting the award per se in their request for remittitur,
but argue only that the award of attorney’s fees is
disproportionate to the award of damages. While
attorney’s fees should bear some reasonable relationship
to the amount in controversy, there is no rule that fees
cannot be more than the actual damages awarded. Indeed,
the amount awarded for attorney’s fees can greatly exceed
the amount of damages recovered. In this case, the legal
issues involved claims and counterclaims with damages
sought totaling more than $3 million. Donnelley submitted
detailed invoices itemizing the majority of the work
performed and there is no evidence that the rate charged
by Donnelley’s attorneys was unreasonable. Based on the
record before us, we conclude the evidence is factually
sufficient to support the award and we decline to suggest
a remittitur.
Metroplex Mailing Servs, 410 S.W.3d at 900-01 (multiple citations omitted).
Likewise, this case was complex, with claims and counterclaims necessitating
a 44-page jury charge. The Kainthlas submitted detailed invoices itemizing the work
42
performed by their lawyers. 14RR221-292. Appellants do not contend that the
hours expended or the rates charged were unreasonable. The mere fact that the jury
awarded less damages than the Kainthlas sought does not undermine their right to
recover the reasonable and necessary fees they incurred to prosecute the case. See
Rohrmoos, 578 S.W.3d at 487 (“the idea behind awarding attorney’s fees in fee-
shifting situations is to compensate the prevailing party generally for its reasonable
losses resulting from the litigation process”). This Court should reject Appellants’
excessiveness argument.
C. Proof of the Kainthlas’ attorney’s fees was adequately segregated.
Finally, the Court should reject Appellants’ challenge that the Kainthlas
“failed to segregate.” Appellants’ Br. at 53. This argument is primarily a repackaged
version of their complaint that the attorney’s fees are excessive in light of the actual
damages recovered. Appellants argue that the Kainthlas should have segregated the
time spent on the damages elements for which they recovered and should not be
allowed to recover for time spent pursuing damages elements that the jury did not
award. See Appellants’ Br. at 55-56. No case requires this sort of segregation.
The Kainthlas admittedly pled and submitted to the jury causes of action for
which attorney’s fees were recoverable and causes of action for which they were not
recoverable. In this case more than most, however, not only were the facts
underlying each claim intertwined, but so were the legal elements and hence the time
43
spent trying to prove them. The vast majority of the legal services performed in this
case “advance[d] both a recoverable and unrecoverable claim,” rendering them “so
intertwined that they need not be segregated.” Tony Gullo Motors I, L.P. v. Chapa,
212 S.W.3d 299, 313-14 (Tex. 2006).
Because Appellants do not claim charge error, the Court evaluates the
evidence “in light of the charge as given.” Safeshred, Inc. v. Martinez, 365 S.W.3d
655, 661 n.3 (Tex. 2012); City of Fort Worth v. Zimlich, 29 S.W.3d 62, 71 (Tex.
2000). Several aspects of the jury charge in this case establish a broader than usual
overlap between the tort claims and the contract claims.
For example, the jury found that the parties’ contract included a term that
Appellants “would open a construction trust account and funds from that account
would only be used to pay for the Kainthlas’ construction project.” CR1227. Work
performed by the Kainthlas’ lawyers to prove that Appellants breached this
contractual provision simultaneously advanced their claims for violation of the
Texas Construction Trust Act, violation of the DTPA, fraud, money had and
received, and breach of fiduciary duty, all of which were based on the same conduct.
Recovery of fees for the hours spent proving that Appellants misused the trust funds
is “not disallowed simply because they do double service.” Tony Gullo, 212 S.W.3d
at 313.
44
Likewise, Appellants had a contractual obligation to “timely pay the sub-
contractors and vendors for the work they performed on the house.” CR1228.
Evidence admitted at trial established that Appellants breached this duty by
sometimes keeping for themselves money that the Kainthlas had already paid them
for the purpose of paying subcontractors. The legal work spent proving a violation
of this contractual term simultaneously supported the Kainthlas’ claims for fraud,
violation of the DTPA, money had and received, and breach of fiduciary duty.
Further still, in connection the claim for breach of contract, the jury was
instructed to consider “the extent to which the behavior of the party failing to
perform or to offer to perform comports with standards of good faith and fair
dealing.” CR1230. Fees incurred for legal work aimed at proving that Appellants
acted fraudulently, unconscionably, in violation of their fiduciary duties, and in
violation of the Texas Construction Fund Act were recoverable in this case because
they helped establish Appellants’ lack of good faith and fair dealing and therefore
helped establish the claim for breach of contract.
The trial court could reasonably have concluded, based on the unique facts of
this case and the specific charge to the jury, that little or none of the fees charged by
the Kainthlas’ lawyers “relate solely to a claim for which such fees are
unrecoverable.” Tony Gullo, 212 S.W.3d at 313. The court also heard undisputed
evidence that the Kainthlas’ lawyers wrote off $50,000 worth of their time and thus
45
discounted their claim against Appellants by that amount. 14RR223; 12RR100. On
top of that, the Kainthlas deducted an additional 5% to account for the small amount
of fees that were possibly incurred on tasks that related solely to claims for which
attorney’s fees were unrecoverable. 14RR224; 12RR100-01.
Appellants criticize this 5% estimate as “conclusory.” But the Supreme Court
anticipated and rejected this attack. The Court recognized that “many if not most
legal fees in such cases cannot and need not be precisely allocated to one claim or
the other.” Id. Accordingly, the Court advised lawyers to segregate their fees
exactly the way the Kainthlas lawyers did here. They “did not have to keep separate
time records when they drafted the fraud, contract, or DTPA paragraphs of [the
Kainthlas’] petition; an opinion would have sufficed stating that, for example, 95
percent of their drafting time would have been necessary even if there had been no
fraud claim.” Id. at 314. The evidence produced in this case—time records
accompanied by testimony from the Kainthlas’ lawyer—is legally and factually
sufficient under Tony Gullo to support the trial court’s fee award.
The contrary testimony of Appellants’ counsel does not require reversal of the
award. They argue that “the overwhelming majority of the case was devoted to
claims on which Plaintiffs did not prevail,” citing as an example the Kainthlas’ claim
for extra costs associated with the electrical work. Appellants’ Br. at 55. But the
Kainthlas unquestionably pursued recovery of these costs as an element of their
46
damages for breach of contract. CR1231. The fact that the jury awarded $0 on this
element of the Kainthlas’ claimed contract damages does not raise a segregation
issue. Appellants cite no authority for the proposition that a prevailing plaintiff must
segregate out fees spent trying to prove elements of contract damages that a jury
declines to award.
Finally, Appellants posit that “Plaintiffs’ own fee invoices, attached to their
affidavit (Exhibit T), show a heavy focus on discovery, depositions, and motions
practice relating to claims for which fees are not recoverable.” Appellants’ Br. at
56. But Appellants do not discuss this evidence in any meaningful way. They do
not challenge a single time entry. They do not identify a single witness whose
deposition would not have been taken, a single discovery request that would not have
been served, or a single motion that would not have been filed, if the Kainthlas had
asserted only their claim for breach of contract (which, again, required them to
negate Appellants’ good faith). Appellants thus utterly fail to carry their appellate
burden of establishing that the totality of evidence considered by the trial court was
factually insufficient to support an award of attorney’s fees constituting the amount
the Kainthlas incurred, less $50,000, less 5%.
PRAYER
The Kainthlas pray that the Court affirm the judgment of the trial court and
award them such further relief to which they may be entitled.
47
Respectfully submitted,
EWELL, BROWN, BLANKE & KNIGHT LLP
By: /s/ Joseph R. Knight
Joseph R. Knight
State Bar No. 11601275
jknight@ebbklaw.com
111 Congress Avenue, Suite 2800
Austin, Texas 78701
(512) 770-4010
WATSON LAW FIRM
J. Davis Watson
State Bar No. 24004979
dwatson@watsonlawyers.com
Sean Hester
State Bar No. 00784266
shester@watsonlawyers.com
1450 Copperfield Pkwy, Suite 300
College Station, Texas 77845
(979) 703-4044
Attorneys for Appellees
48
CERTIFICATE OF COMPLIANCE
As required by Texas Rule of Appellate Produce 9.4(i)(3), I certify that
this Appellees’ Brief contains 11,094 words, excluding the parts of the brief
exempted by Rule 9.4(i).
/s/ Joseph R. Knight
Joseph R. Knight
CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of this Brief has been served upon
the following via electronic mail on the 5th day of December 2025.
Chad Flores
cf@chadflores.law
Flores Law PLLC
917 Franklin Street, Suite 600
Houston, Texas 77002
Matthew D. Sharpe
matt.sharpe@lonestarlawoffice.com
Sharpe Law, PC
416 Tarrow St
College Station, Texas 77840
Mark Hellinger
mhellinger@hellingerlawfirm.com
The Hellinger Law Firm
12 Greenway Plaza, Suite 1100
Houston, TX 77046-1201
/ s / Joseph R. Knight
Joseph R. Knight
49
Automated Certificate of eService
This automated certificate of service was created by the efiling system.
The filer served this document via email generated by the efiling system
on the date and to the persons listed below. The rules governing
certificates of service have not changed. Filers must still provide a
certificate of service that complies with all applicable rules.
Envelope ID: 108777694
Filing Code Description: Brief Not Requesting Oral Argument
Filing Description: Appellees' Brief
Status as of 12/5/2025 1:55 PM CST
Case Contacts
Name BarNumber Email TimestampSubmitted Status
Mark Hellinger mhellinger@hellingerlawfirm.com 12/5/2025 1:45:01 PM SENT
Matthew D.Sharpe matt.sharpe@lonestarlawoffice.com 12/5/2025 1:45:01 PM SENT
Charles Flores cf@chadflores.law 12/5/2025 1:45:01 PM SENT
Charles Flores cf@chadflores.law 12/5/2025 1:45:01 PM SENT
J. Davis Watson dwatson@watsonlawyers.com 12/5/2025 1:45:01 PM SENT
Sean Hester shester@watsonlawyers.com 12/5/2025 1:45:01 PM SENT
Poursuivez vos recherches dans ChatGPT ou Claude
Connectez Omnilex pour rechercher dans le corpus juridique depuis votre assistant IA.