Justia Texas Supreme Court Opinion Summaries

Articles Posted in Construction Law
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Two subcontractors employed by Petitioner, a homebuilder, asserted claims on behalf of a class of subcontractors whose pay Petitioner had docked when the subcontractors did not furnish proof of adequate general liability insurance coverage. The parties settled. Under the terms of the settlement agreement, Petitioner would issue refunds checks, sending them to existing subcontractors as it would their paychecks or by mailing checks to the last known addresses of former subcontractors. The class representatives agreed, on behalf of the settlement class members, that refund checks not negotiated within ninety days of issuance would be void and that those and other unclaimed funds would be given to The Nature Conservancy as a cy pres award. The trial court approved the settlement and rendered final judgment accordingly. The court of appeals reversed, concluding that the Texas Unclaimed Property Act prohibited the imposition of a ninety-day deadline for negotiating settlement checks and the cy pres award. The Supreme Court reversed, holding that the Act did not apply in this case and that the judgment approving the settlement agreement was binding on all settlement class members. View "Highland Homes Ltd. v. State" on Justia Law

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A Homeowner contracted with a Builder to build a home on property owned by the Homeowner. The Builder contracted with a Plumber to put in the plumbing at the house. After the home was completed, the Builder and the Homeowner sued the Plumber for damages allegedly caused by plumbing leaks, alleging breach of contract, breach of express warranty, and negligence. The trial court granted summary judgment for the Plumber, reasoning (1) the Homeowner could not recover contract damages because it was not a party to the plumbing subcontract, nor could the Builder recover contract damages because it had not suffered any compensable damage; and (2) the plaintiffs did not have a negligence claim because they did not allege violation of any tort duty independent of the contract. The Supreme Court reversed, holding that the court of appeals erred in concluding that the pleadings and summary judgment evidence negated the existence of a negligence claim. View "Chapman Custom Homes, Inc. v. Dallas Plumbing Co." on Justia Law

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Ewing Construction Company entered into a contract with a school district to serve as general contractor on a project. The school district later filed suit against Ewing for faulty construction. Ewing tendered defense of the underlying suit to Amerisure Insurance Company, Ewing's insurer under a commercial package policy that included commercial general liability coverage. Amerisure denied coverage, and Ewing filed suit in federal district court seeking a declaration that Amerisure breached its duty to defend and indemnify Ewing for damages awarded in the underlying suit. The district court granted summary judgment for Amerisure, concluding that the policy’s contractual liability exclusion applied to exclude coverage because Ewing assumed liability for its own construction work pursuant to the contract such that it would be liable for damages arising out of its defective work. On appeal, the court of appeals certified questions to the Texas Supreme Court, which answered that “a general contractor that enters into a contract in which it agrees to perform its construction work in a good and workmanlike manner, without more specific provisions enlarging this obligation, does not ‘assume liability’ for damages arising out of the contractor’s defective work so as to trigger the contractual liability exclusion.” View "Ewing Constr. Co., Inc. v. Amerisure Ins. Co." on Justia Law

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Homes built with an exterior insulation and finish system (EIFS) suffer serious water damage that worsens over time. Homebuilder began a remediation program in which it offered to homeowners to remove exterior EIFS from the homes it had built and to replace it with conventional stucco. Almost all the homeowners accepted Homebuilder's offer of remediation. Homebuilder sought indemnification for the costs from its insurers (Insurers). Insurers denied coverage, preferring instead to wait until the homeowners sued. This litigation ensued. Now, only one insurer remained. The court of appeals reversed the trial court's judgment in favor of Homebuilder, finding (1) Homebuilder failed to establish its legal liability to the homeowners to trigger Insurer's coverage; and (2) Homebuilder failed to offer evidence of damages covered by the policy. The Supreme Court reversed, holding (1) Homebuilder's settlements with the homeowners established both Insurer's legal liability for the property damages and the basis for determining the amount of loss; and (2) Insurer's policy covered Homebuilder's entire remediation costs for damaged homes. View "Lennar Corp. v. Markel Am. Ins. Co." on Justia Law

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A pipeline owner (Owner) purchased sixty-eight mile-long pipeline constructed in the 1940s and made plans to remove the old pipeline and construct a new one that would carry butane. Owner awarded Contractor the contract to replace a certain section of the pipeline. After Contractor commenced work, Contractor filed suit against Owner for breach of contract and fraud based on Owner's failure to locate several hundred "foreign crossings" in the pipeline's path and its subsequent refusal to compensate Contractor for its additional expenses resulting from the obstacles. The trial court found in favor of Owner, finding that the parties' contract allocated the risk of any additional cost incurred because of foreign crossings to Contractor. The court of appeals reversed, finding that Owner failed to exercise due diligence in locating the foreign crossings. The Supreme Court reversed the court of appeals' judgment and reinstated the trial court's judgment, holding (1) the contract allocated all risk to Contractor for unknown obstacles discovered during the construction process; and (2) the jury's answers to questions about Contractor's recovery for breach of contract based on due diligence were immaterial. View "El Paso Field Servs., L.P. v. MasTec N.A., Inc." on Justia Law