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Solar Applications Engineering, Inc. v. T.A. Operating Corporation

Supreme Court of Texas
327 S.W.3d 104 (2010)


Facts

T.A. Operating Corporation (TA) (defendant) hired Solar Applications Engineering, Inc. (Solar) to build a truck stop. Under the terms of TA’s contract with Solar, TA would pay Solar monthly in accordance with Solar’s progress on the project. Once the project was substantially complete, Solar would notify TA, and TA would inspect the project. TA would then provide Solar with a list of items needing correction or completion, called a “punch list.” Once Solar addressed the punch list, Solar could make a final application for payment. The contract specified that the final application for payment should be accompanied by a lien-release affidavit. When Solar had substantially completed construction of the truck stop, TA provided Solar with a punch list. Solar disputed some of the items that TA insisted must be completed before final payment. TA and other subcontractors filed liens against the property. TA terminated its contract with Solar. Solar then submitted a final application for payment, but did not submit a lien-release affidavit. TA refused to pay Solar, claiming that because Solar had failed to submit a lien-release affidavit, Solar had failed to satisfy a condition precedent for payment. Solar sued TA, and the trial court awarded Solar $392,000 in damages. TA appealed. The appellate court reversed the trial court, holding that the lien-release provision of the parties’ contract was a condition precedent of payment that Solar had failed to satisfy. Solar appealed.

Rule of Law

Issue

Holding and Reasoning (Wainwright, J.)

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Questions & Answers


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