PJC Business

PJC 101.47

C ONTRACTS

COMMENT When to use. The above question submits the liability of a defendant for the mis application of construction payments or loan receipts as trust funds. PJC 101.47 is a basic question appropriate in cases brought under the Texas Construction Trust Funds Act. Tex. Prop. Code § 162.031. Texas recognizes that the Act creates civil as well as criminal liability. Dealers Electrical Supply Co. v. Scoggins Construction Co. , 292 S.W.3d 650, 657 (Tex. 2009) (“A party who misapplies trust funds under the [Texas Construction] Trust Fund[s] Act is subject to civil liability to trust-fund beneficiaries whom the Act was designed to protect.”). This question applies to public or private construction contracts for the improvement of specific real property in Texas, regard less of whether a construction contract is covered by a statutory or common-law pay ment bond. Tex. Prop. Code § 162.004(c). This question does not apply to (1) a bank, savings and loan, or other lender; (2) a title company or other closing agent; or (3) a corporate surety who issues a payment bond covering the contract for the construction or repair of the improvement. Tex. Prop. Code § 162.004(a). Use of statutory language. Jury questions on a statutory cause of action or defense “should track the language of the statute as closely as possible.” Railroad Commission of Texas v. Gulf Energy Exploration Corp. , 482 S.W.3d 559, 571 (Tex. 2016) (quoting Borneman v. Steak & Ale of Texas, Inc. , 22 S.W.3d 411, 413 (Tex. 2000)). Source of question. The question is adapted from Tex. Prop. Code §§ 162.001, 162.005, 162.031 and Dealers Electrical Supply Co. , 292 S.W.3d at 657. The defini tions are derived from Tex. Prop. Code §§ 162.001, 162.003. Broad-form submission. PJC 101.47 is a broad-form question designed to be accompanied by one or more appropriate instructions. Tex. R. Civ. P. 277 requires that “the court shall, whenever feasible, submit the cause upon broad-form questions.” Tex. R. Civ. P. 277; see Thota v. Young , 366 S.W.3d 678, 689 (Tex. 2012) (rule 277’s use of “whenever feasible” mandates broad-form submission in any or every instance in which it is capable of being accomplished). For further discussion, see PJC 116.2 regarding broad-form issues and the Casteel doctrine. Trust funds. If there is no fact issue regarding the existence of trust funds, the definition of “trust funds” should be omitted and the court should instruct the jury that the funds in question are trust funds. Certain fees payable to contractor not considered trust funds. The statute pro vides an exception to the definition of trust funds. Fees payable to a contractor are not considered trust funds if— (1) the contractor and property owner have entered into a written construction contract for the improvement of specific real property . . . before the commencement of construction of the improvement and the

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