In an important decision, the Houston [14th] Court of Appeals has reversed and remanded a substantial plaintiffs’ judgment because plaintiffs’ counsel appealed to racial and gender prejudice in both trial and closing argument.
Patriot Contracting, LLC, Stephen J. Friedman, and Travelers Casualty and Surety Company v. HERC Solutions USA (No. 14-24-00395-CV; August 18, 2026) arose from a dispute between parties to a construction project in Houston. The named plaintiff in the case, HERC Solutions, did the plumbing. Scaffold obviously built the scaffolding. Mid-Main was the owner and developer of the project. Patriot served as general contractor. Friedman owned Patriot. Travelers was the surety that issued the performance and payment bonds. The case involved contract and tort claims arising out of contracts between Mid-Main and Patriot, Patriot and HERC, and Patriot and Scaffold. They are as follows:
Patriot v. Mid-Main: In 2016 Patriot and Mid-Main entered into a more or less standard cost-plus construction contract based on the AIA forms. Each months Patriot requested payment for completed portions of the work plus its 5% fee. Mid-Main agreed to release the retainage upon completion. Patriot submitted 31 payment requests through February 17. At that time Mid-Main held about $1.6 million in total retainage. That same month, the City of Houston issued temporary certificates of occupation for Tower 1, the parking garage, and the first-floor retail space. In April Patriot submitted PA 32, seeking $953,279.63, which Patriot claimed represented part of the retainage. Mid-Main declined to pay it on the basis that the retainage wasn’t due until the entire project was substantially complete. Mid-Main immediately terminated the contract with the project about 93% complete. Patriot sued Mid-Main to get the unpaid balance for the work completed prior to the termination, alleging that Mid-Main breached the contract for convenience because “it ran out of money.” Patriot also sought reimbursement for underpayments on other Pas. Mid-Main counterclaimed for breach of contract, seeking $8.1 million in direct damages for the “reasonable and necessary cost to complete the project,” as well as consequential damages.
The jury found that Patriot breached the contract and that Mid-Main terminated for cause. It awarded more than $6.2 million in direct damages and nearly $1.6 million in consequential damages, plus attorney’s fees. The court reduced the direct damages award to $1.942 million and eliminated the jury’s consequential damages for lost rent and additional interest, but allowed $537,855 award for bond payments.
Scaffold v. Patriot: Scaffold sued Patriot for breach of contract for nonpayment of invoices. Patriot argued that the contract was for a lump sum, with additional compensation for extra materials or work ordered by Patriot in writing or by written change orders approved by Patriot. Patriot paid Scaffold $597,110.48, which it alleged covered the lump sum plus change orders. Scaffold disputed that the contract was for a lump sum, but rather it required monthly rental fees for equipment. The jury sided with Scaffold and awarded $544,000 in damages to cover Scaffold’s invoices for equipment, materials, and services. The court entered judgment on the verdict.
HERC v. Patriot: Patriot terminated HERC’s plumbing contract in January 2017, alleging defective work. It sued HERC for breach of contract. HERC counterclaimed for breach of contract on the basis of Patriot’s alleged failure to pay some invoices, including PA 28 through PA 31. The jury again sided with HERC, awarding $600,792.16 for the unpaid invoices, plus another $600,000 for misapplication of funds to which HERC was a beneficiary. The trial court entered judgment on the verdict.
Mid-Main v. Friedman: Mid-Main amended its petition to add third-party claims against Friedman individually. It alleged that Friedman tortiously interfered with its attempt to refinance its construction loan, violated § 53.085, Property Code, when he signed monthly pay applications for Patriot that allegedly contained material misstatements. The trial court granted partial summary judgment to Mid-Main on the Property Code issue and instructed the jury that “Friedman swore to inaccurate information on pay applications.” The jury went for Mid-Main, awarding a total of about $800,000 for the tortious interference claims. The jury further assessed $17.5 million in punitive damages and $537,855 on the Property Code claim. After post-verdict motions, the trial court held Friedman jointly and severally liable with Patriot and Travelers for consequential damages of $537,855. It further reduced the punitive damages award to $1.69 million. Patriot, Friedman, and Travelers appealed.
In an opinion by Justice Jewell, the court of appeals reversed and remanded. Patriot argued, among other issues, that there was not legally or factually sufficient evidence to support Mid-Main’s recovery for yearly payments for a bond on Patriot’s lien, the jury’s adverse finding on Patriot’s quantum meruit claim, and damages award on Scaffold’s claim, and damages awarded on HERC’s claim. Patriot also challenged the trial court’s instruction that Friedman swore to inaccurate information as an impermissible comment on the weight of the evidence, as well as alleged trial misconduct, “including charges of racial and gender discrimination, comparisons to Nazis and murderers, and accusations of blackmail and forgery.” Among other things, Friedman challenged the punitive damages award and Plaintiffs’ trial conduct. Travelers argued that new trial was required because Plaintiffs’ counsel “bombard[ed]” the jury with “unfounded and inflammatory accusations,” as well as the legal and factual sufficiency of liability and damages.
The court first examined Defendants’ rendition issues, including Patriot’s assertion that the one-satisfaction rule extinguished Mid-Main’s entitlement to judgment against it, the various legal and factual sufficiency challenges, Friedman’s assertion that the economic loss rule barred Mid-Main’s tort recovery against him, and that the Property Code didn’t create a private cause of action for inaccurate affidavits included in monthly pay applications.
The court ruled for Mid-Main that the one-satisfaction rule didn’t bar it from recovering from Patriot on the basis of a prior settlement and release agreement between Mid-Main and Travelers that expressly stated that it didn’t satisfy judgment against Patriot and Friedman. Next, the court ruled that Patriot was not entitled to rendition of judgment because it didn’t object to a jury question asking for a finding of the “reasonable and necessary cost to complete the project but didn’t ask the jury to find “the amount Mid-Main would have been obligated to pay Patriot to complete the project had the contract not been terminated.” The court further determined that there was some affirmative evidence supporting the jury’s award (which the trial court substantially reduced anyway).
After that, the court ruled that there was some evidence to support the jury’s damages award to Scaffold and to HERC, so rendition was improper. However, the court sided with Friedman on the tortious interference issue because there was no evidence that Friedman knew that Mid-Main was seeking construction financing with the specific bank, Amegy, identified in the jury charge. Having made that determination, the court proceeded to throw out the punitive damages award as well. As to the jury’s finding that Friedman violated the Property Code, the court found that the evidence supported the jury’s determination of liability for swearing to inaccurate information in affidavits submitted with Patriot’s payment applications under the Mid-Main contract. It further ruled that the trial court’s jury instruction regarding its summary judgment against Friedman for the Property Code violation did not amount to an unlawful comment on the weight of the evidence, but the instruction informing the jury that Friedman “is responsible for any damages resulting from the inaccurate information in those affidavits” was. The court, consequently rendered a take-nothing judgment for Friedman on Mid-Main’s tortious interference claim (and the punitive damages).
Finally, the court reached what we believe to be the most important issue in the case, that is, the trial conduct of the Plaintiff’s lawyers, specifically their “charges of invidious discrimination and extreme personal attacks” on Defendants and their counsel. Defendants argued that this constituted incurable error, requiring remand for new trial. Here Defendants raised the issue in their motion for new trial. The court thus reviewed the denial of Defendants’ motion for a clear abuse of discretion. Demonstrating incurable error, however, isn’t easy. The party complaining about it has to prove: “(1) an improper argument was made; (2) that was not invited or provoked; (3) that was not curable by an instruction, a prompt withdrawal of the statement, or a reprimand by the trial court; and (4) that by its nature, degree, and extent constituted reversibly harmful error based on an examination of the entire record to determine the argument’s probable effect on a material finding” (citation omitted). In other word, Defendants had to convince the court to grant this “uncommon” remedy because “based on the record as a whole, the offensive argument was so extreme that a juror of ordinary intelligence could have been persuaded by that argument to agree to a verdict contrary to that which the juror would have otherwise agreed” (citation omitted).
So what did the Plaintiffs’ lawyers say? First, during a two-day pretrial hearing on motions in limine, the parties had a hot dispute over the admissibility of material purportedly showing racial and gender bias by employees, especially Friedman. Mid-Main wanted to introduce several emails allegedly casting aspersions against workers from Mexico, which, it argued, “supported its claims that Patriot refused to pay minority subcontractors.” Defendants objected on the basis that the emails were irrelevant and “intended to inflame or poison the jury.” The trial court let some of them in and excluded others. Based on the admitted emails, Plaintiffs’ counsel questioned several witnesses during trial about Friedman’s views on “the ethnicity, religion, or gender of those involved in the Project.”
Specific questions asked various Patriot employees about Friedman’s attitude toward various ethnic and religious groups, as well as women. Scaffold’s lawyer asked a witness suggesting that Patriot’s lies could be compared to Nazi propaganda, which “led to the slaughter of millions of people.” The same lawyer further compared Patriot “to ancient Roman generals who ‘lined up all their soldiers and had them kill every tenth soldier.” Travelers also objected to Mid-Main’s characterization of the company and its attorneys as “practicing a strategy or philosophy of ‘divert, delay, and deny’ in handling performance bond claims. And in closing argument, Mid-Main’s counsel “told the jury that Friedman was a ‘petty, vindictive, racist, mean little man.” He also called Patriot “thugs” and “likened Travelers to an ‘enabling . . . drug dealer.” HERC’s and Scaffold’s lawyers rubbed it in, characterizing Friedman and Travelers as “wealthy murderers.”
The court rejected Mid-Main’s argument that Defendants waived their objections because “they did not specifically assert in their statement of issues that the trial court erred by admitting them into evidence.” In fact, Defendants raised them in their motion for new trial. The court then found that Plaintiffs “used the emails throughout the trial as an invitation for the jury to consider racial and gender prejudices of a party in making its decision. Yet the claims at issue are grounded on alleged breaches of contract and tortious interference. The challenged emails added nothing probative to support or refute those claims.” Specifically, the court went on, the question in a breach of contract cause is the breach, not the reason for the breach, which Mid-Main argued was the basis for the emails’ relevance. And even if they were marginally relevant, their “unfair prejudice substantially outweighed any relevance.” The trial court should have excluded them.
To sum up, the court of appeals categorically stated that our courts should never tolerate appeals to racial prejudice. In this case, the court observed that characterizing Friedman as a racist contributed to the jury’s verdict and punitive damages award. But racial labeling wasn’t all. Plaintiffs’ attorneys also compared Patriot and its lawyers to “Hitler’s lead propagandist, and appellants to ‘thugs,’ ‘drug dealers,’ and ‘murderers.’” Extreme and personal attacks on opposing counsel, the court opined, “can [] compromise the basic premise that a trial provides impartial, equal justice” (citations omitted). Based on the record, consequently, the court held that “the ‘strong medicine’ of a new trial is warranted.”
