Justia Texas Supreme Court Opinion Summaries

A homeowner, Mohammad Rafiei, sued his builder, Lennar Homes, alleging personal injuries due to a construction defect. The purchase contract between Rafiei and Lennar contained an agreement to submit disputes to arbitration under the Federal Arbitration Act, including issues of formation, validity, or enforceability of the arbitration agreement. Lennar moved to compel arbitration, but Rafiei argued that the arbitration agreement was unconscionable because the cost of arbitration was prohibitively high. The trial court denied Lennar's motion to compel arbitration.The Court of Appeals for the Fourteenth District of Texas affirmed the trial court's decision, holding that Rafiei had sufficiently demonstrated that the cost to arbitrate was excessive, making the arbitral forum inadequate to vindicate his rights. The court of appeals concluded that if Rafiei were required to pay more than $6,000, he would be precluded from pursuing his claims.The Supreme Court of Texas reversed the judgment of the court of appeals. The court held that the record failed to support a finding that the parties' delegation clause was itself unconscionable due to prohibitive costs to adjudicate the threshold issue in arbitration. The court noted that Rafiei had not provided sufficient evidence to show that he could not afford the cost of arbitrating the arbitrability question. The court also noted that Rafiei had not provided evidence of how the fee schedule would be applied to resolve the unconscionability issue. The court remanded the case to the trial court for further proceedings consistent with its opinion. View "Lennar Homes Of Texas Inc. v. Rafiei" on Justia Law

In this interlocutory appeal involving the application of a statutory immunity waiver in a lawsuit alleging breach of a contract to construct university housing the Supreme Court reversed the decision of the court of appeals reversing the trial court's ruling that the university was not immune from suit, holding that the court of appeals erred.In 2014, Texas Southern University (TSU) executed a contract with Pepper Lawson Horizon International Group, LLC (PLH) to work as the contractor on a project to construct student housing. PLH later sued TSU for breach of contract. TSU asserted sovereign immunity to suit as a defense despite PLH's pleadings expressly invoking the immunity waiver in Tex. Civ. Prac. & Rem. Code 114.003, arguing that section 114.003 was inapplicable because PLH failed to plead a claim covered by the waiver provision. The trial court denied TSU's plea to the jurisdiction, but the court of appeals reversed. The Supreme Court reversed, holding that the court of appeals erred in concluding that PLH failed to plea a cognizable Chapter 114 claim. View "Pepper Lawson Horizon Int'l Group, LLC v. Tex. Southern University" on Justia Law

The Supreme Court reversed in part the opinion of the court of appeals in this interlocutory appeal concerning whether a subsequent purchaser (Purchaser) of a home is required to arbitrate her claims against the builder (Builder) for alleged construction defects, holding that the trial court erred in granting Purchaser's motion to vacate and denying Builder's motion to confirm.The trial court granted the motion to compel arbitration filed by Builder, which joined two subcontractors in the arbitration, asserting that they owed defense and indemnity obligations. The arbitrator issued an award in favor of Builder. The trial court vacated the award against Purchaser but made no ruling whether to vacate the award against the subcontractors. The Supreme Court rendered judgment confirming the award against Purchaser and remanded the case, holding (1) Purchaser was bound by the arbitration clause in the purchase-and-sale agreement under the doctrine of direct-benefits estoppel; and (2) because the record contained no ruling on whether to vacate the award against the subcontractors, remand was required. View "Lennar Homes of Tex. Land & Construction, Ltd. v. Whiteley" on Justia Law

In this dispute over an arbitration clause within a contract, the Supreme Court held that the minor children who joined Plaintiffs, their parents, in bringing this action seeking damages for construction defects in their home may be compelled to arbitrate along with their parents on the basis of direct-benefits estoppel.Plaintiffs, Tony and Michelle Ha, signed a purchase agreement with Taylor Woodrow Communities-League City, Ltd. to build a home in Texas. The agreement included an arbitration provision. The Has sued both Taylor Woodrow Communities-League City, Ltd. and Taylor Morrison of Texas, Inc., for negligent construction and other claims, alleging the home developed significant mold problems due to construction defects. Plaintiffs' second amended petition named both Tony and Michelle and their three children. Taylor Morrison moved to compel arbitration, but the trial court denied the motion as it pertained to Michelle and the children. The court of appeals affirmed. The Supreme Court reversed, holding that when a family unit resides in a home and files suit for factually intertwined construction-defect claims concerning the home, a nonsignatory spouse and minor children have accepted direct benefits under the signatory spouse’s purchase agreement such that they may be compelled to arbitrate through direct-benefits estoppel. View "Taylor Morrison of Texas, Inc. v. Ha" on Justia Law

In this dispute over an arbitration clause within a contract, the Supreme Court held that the minor children who joined Plaintiffs, their parents, in bringing this action seeking damages for construction defects in their home may be compelled to arbitrate along with their parents on the basis of direct-benefits estoppel.Plaintiffs, Jack and Erin Skufca, signed a purchase agreement with Taylor Woodrow Communities-League City, Ltd. to build a home in Texas. The agreement included an arbitration provision. Plaintiffs sued both Taylor Woodrow Communities-League City, Ltd. and Taylor Morrison of Texas, Inc., for construction defects and fraud, alleging that less than a year after they moved in, the home developed mold issues that caused their minor children to be ill. The petition listed Jack and Erin as plaintiffs individually, as well as Erin as next friend of the couple's children. Taylor Morrison moved to compel arbitration, but the trial court denied the motion as it pertained to the children. The court of appeals affirmed. The Supreme Court reversed, holding that the minor children sued based on the contract and were subject to its terms, including the arbitration clause. View "Taylor Morrison of Texas, Inc. v. Skufca" on Justia Law

In this case arising out of a construction contract dispute involving competing claims of breach between the owner and the contractor, the Supreme Court reversed in part the court of appeals' judgment affirming the portion of the trial court's judgment awarding damages to the owner but reversing as to the contractor, holding that the judgment awarding certain expenses to the owner could not stand.The jury found that both the owner and the contractor breached the contract and awarded damages as to both parties. At issue was whether the owner's entitlement to recover contract damages associated with a termination of the contractor for default hinged on strict compliance with the written-notice conditions precedent to such recovery, whether sufficient evidence supported the jury's finding of compliance, and whether a contractual provision governing consequential damages was liability waiver or a covenant not to sue. The Supreme Court held (1) when a contract mandates written notice, a writing is a necessary part of complying with contractual notice conditions, substantially or otherwise; (2) because the owner failed to provide the requisite written notices to be entitled to recover expenses associated with a termination for default, the judgment awarding them to the owner could not stand; and (3) the contract did not contain a covenant not to sue for consequential damages. View "James Construction Group, LLC v. Westlake Chemical Corp." on Justia Law

The Supreme Court reversed in part the decision of the court of appeals reversing the trial court's summary judgment in this case involving a school district's breach of warranty claims against a general contractor and an artificial-field-turf manufacturer, holding that the court of appeals erred.The Supreme Court reversed in part and reinstated the trial court's summary judgment in favor of the contractor, holding (1) a trial court’s on-the-record, oral ruling sustaining an objection to summary judgment evidence suffices to strike the evidence from the summary judgment record when the ruling is not reduced to a written order; and (2) the court of appeals erred in reversing the trial court's summary judgment in favor of the contractor and remanding the claims against the turf manufacturer for a new trial without addressing the merits of the issues on appeal that could result in rendition of judgment in favor of the manufacturer. View "FieldTurf USA, Inc. v. Pleasant Grove Independent School District" on Justia Law

The Supreme Court held that the Texas Workers' Compensation Act (TWCA) does not affect the enforceability of an additional-insured provision under the Texas Anti-Indemnity Act (TAIA).A general contractor's employee injured in an accident obtained a negligence judgment in Texas state court against the subcontractor that operated the crane (Berkel) and the company that leased the crane (Maxim). Berkel was an indemnity and Maxim was an indemnity for TAIA purposes because Berkel had provided Maxim with coverage as an additional insured. After the injured worker settled with Maxim, Maxim unsuccessfully sought reimbursement from Berkel's insurer (Zurich). The court of appeals reversed the judgment against Berkel, concluding that Berkel and the injured worker were "statutory co-employees" of the general contractor under the TWCA, and therefore, the TWCA provided the worker's exclusive remedy. In a separate suit in federal court, Maxim and Zurich disputed over whether the additional-insured coverage was enforceable. The Supreme Court answered a certified question by holding that the word "employee" in Tex. Ins. Code 151.103 bears its common meaning, which is not affected by whether the indemnity and injured employee are considered co-employees for purposes of the TWCA. View "Maxim Crane Works, LP v. Zurich American Insurance Co." on Justia Law

The Supreme Court reversed the judgment of the court of appeals holding that a fact issue existed as to whether a general contractor on a construction project owed a duty of care to its independent contractor's employee who was injured on the job, holding that no genuine issue of material fact existed regarding the existence of a duty.The trial court entered judgment in favor of the general contractor, concluding that there was no evidence to support the negligence elements of duty, breach, and causation. The court of appeals reversed as to the negligence claim, concluding that a fact issue existed regarding whether the contractor exercised actual control and thus owed the employee a duty, whether the contractor breached that duty, and whether the contractor's breach proximately caused the employee's injuries. The Supreme Court reversed, holding that the contractor owed the employee no duty as a matter of law. View "JLB Builders, LLC v. Hernandez" on Justia Law

In this construction contract dispute, the Supreme Court held that the San Antonio River Authority possessed the authority to agree to arbitrate claims under Texas Local Government Code Chapter 271 and exercised that authority in the contract and that the judiciary, rather than an arbitrator, retains the duty to decide whether a local government has waived its governmental immunity.The River Authority hired Austin Bridge and Road L.P. for a construction project. The parties agreed to submit any disputes about the contract to arbitration. Austin Bridge invoked the contract's arbitration provisions when disagreements about the scope of work and payment arose. After the arbitrator denied the River Authority's plea of governmental immunity, the River Authority sued Austin Bridge, arguing that it lacked the authority to agree to the contract's arbitration provisions. The trial court concluded that the arbitration provisions in the contract were enforceable. The court of appeals agreed that the River Authority had the authority to agree to arbitrate but concluded that a court, rather than an arbitrator, must decide whether the River Authority was immune from the claims against it. The Supreme Court affirmed, holding that chapter 271 waived the River Authority's immunity from suit for Austin Bridge's breach of contract claim. View "San Antonio River Authority v. Austin Bridge & Road, L.P." on Justia Law