BEAUMONT – Chief Justice Steve McKeithen has affirmed a lower court's summary judgment awarding $163,062 in damages in a dispute between a building company and its clients.

The events that led Tracy Paul Smith and Jennifer Blackman Smith v. Lancelot Homes LLC to the 9th District Court of Texas at Beaumont began when the plaintiffs entered into a construction/purchase agreement with Fresh Start Homes in 2013. The agreement stated that the plaintiffs would build a home for $180,000 on the condition that the plaintiffs would secure financing for the home. If they did not secure a loan within 30 days after signing the contract, Fresh Start had the option declare the contract null and void or grant the Smiths additional days to secure a loan, the opinion states.

In addition, the builders reserved the right to fix a lien on the property if the owners failed to make timely payments. Furthermore, the agreement stated that all controversies, claims or matters in question arising out of or relating to the contract or any breach or termination of the contract would be subject to binding arbitration.

In August 2015, Fresh Start executed an assignment of the construction purchase agreement between Fresh Start and the Smiths, which sells, assigns and conveys all of the rights, duties and obligations set forth in that one certain Construction Purchase Agreement to the defendants, Lancelot Homes. That same month, Lancelot Homes executed an affidavit claiming a mechanic’s and materialman’s lien. The lien was set for the amount of $163,062 for labor and materials furnished on the construction of improvements to the property.

Similarly, representatives from Fresh Start also issued an affidavit, alleging that the plaintiffs had started requesting changes to the construction, while refusing to acknowledge the additional costs and stifling attempts at further communication. The affidavit alleged that the requests where designed to slow down construction and to get out of the binding contract because they were unable to raise the funding necessary to pay for the house. According to the affidavit, this problem continued to escalate until the plaintiffs became abusive in their communications, using derogatory and profane languages in their phone calls and texts.

By November 2015, the defendants had filed suit against the plaintiffs to foreclose on its lien against the real property and improvements arguing that the lien note was due, owing, and payable; and that all conditions precedent under Texas Property Code chapter 53 had been accomplished.

The plaintiffs countered by alleging that "that Lancelot and its attorney had knowingly filed fraudulent documents and forged her signature in an attempt to foreclose on her property," according to a statement written by the 9th District Court of Texas at Beaumont. 

The defendants countered by filing an amended petition arguing that the plaintiffs had not asserted that they had made any payments for the construction nor had they secured financing. The plaintiffs again responded by contesting the validity of their signatures on the initial agreement and followed-up by filing a traditional motion for summary judgment on the grounds that it had a valid mechanic’s and materialman’s lien on the property and was entitled to judgment as a matter of law. 

The trial court granted the request for the summary judgment and found in favor of Lancelot Homes and ordered judgment in favor of Lancelot in the amount of $163,062 plus court costs and interest. The plaintiffs filed for an appeal which was heard by the the 9th District Court of Texas at Beaumont. However, the court was unmoved by the Smith's request to overturn the summary judgment and affirmed the lower court ruling.

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Court of Appeals - 9th District of Texas at Beaumont
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Beaumont, TX - 77701

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