Justia Texas Supreme Court Opinion SummariesArticles Posted in Contracts
International Business Machines Corp. v. Lufkin Industries, Inc.
In this case involving a contract to purchase a business-management software system, the Supreme Court held that contractual disclaimers barred Buyer from recovering in tort for misrepresentations Seller made both to induce Buyer to enter into the contract and to induce Buyer later to agree to amend the contract but that Seller’s breach of contract caused Buyer to suffer damages. Buyer sued Seller for, inter alia, common law fraud, fraudulent inducement, and breach of contract. The jury found Seller liable on all claims. The jury awarded damages for fraudulent inducement and common law fraud but awarded zero damages for breach of contract. The court of appeals affirmed liability for fraudulent inducement but reversed the fraud award, concluding that the claim was based on the same misrepresentations as the fraudulent-inducement claim. The Supreme Court affirmed in part and reversed in part, holding (1) Buyer could not recover from recover for fraudulent inducement or common law fraud because Buyer expressly disclaimed any reliance on Seller’s misrepresentations; and (2) Buyer was entitled to a new trial on its claim for breach of contract because the evidence conclusively established that Buyer suffered some amount of damages as a result of Seller’s breach. View "International Business Machines Corp. v. Lufkin Industries, Inc." on Justia Law
Hays Street Bridge Restoration Group v. City of San Antonio
In this breach of contract case, the Supreme Court held that the waiver of governmental immunity for certain claims provided by the Local Government Contract Claims Act (Act), Tex. Loc. Gov’t Code 271.151-.160, at the time this case arose applies when the remedy sought is specific performance rather than money damages. The Hays Street Bridge Restoration Group sued the City of Antonio alleging that the City failed to comply with a memorandum of understanding (MOU) between the parties with respect to certain property. For its breach of contract claim, the Restoration Group sought only specific performance. The trial court rendered judgment in favor of the Restoration Group. The court of appeals reversed, ruling that the City was immune from suit and that the Act did not waive the City’s immunity from suit for specific performance of a contract. The Supreme Court reversed, holding (1) the City acted in its government capacity when it entered the MOU and, therefore, enjoyed immunity from suit “in the first instance”; but (2) the Act waived the City’s immunity from suit on the Restoration Group’s claim for specific performance. View "Hays Street Bridge Restoration Group v. City of San Antonio" on Justia Law
City of Denton v. Rushing
In this interlocutory appeal from an order denying a city’s plea to the jurisdiction and alternative motion for summary judgment, the Supreme Court reversed the judgment of the court of appeals and rendered judgment sustaining the city’s jurisdictional plea, holding that Tex. Loc. Gov’t Code 271.152, which waives a city’s immunity from suit on certain contracts, did not apply to the underlying claims. Section 271.152 provides that a governmental entity that is authorized to contract and that enters into a contract waives its immunity to suit for purposes of adjudicating a claim under the contract. In the instant case, Plaintiffs, employees of the City of Denton, sued the City for breach of contract, alleging that the City’s policies and procedures manual (the policy) constituted a unilateral contract that the City breached. The trial court denied the City’s jurisdictional plea. The court of appeals affirmed, ruling that the policy created a unilateral contract that certain employees could enforce under the statutory waiver. The Supreme Court reversed, holding that the policy did not create an enforceable, written contract, a requirement for governmental to be waived under section 271.152. View "City of Denton v. Rushing" on Justia Law
Rosenburg Development Corp. v. Imperial Performing Arts, Inc.
In this contract dispute over whether a municipally created economic development corporation is entitled to immunity from suit as if it were a political subdivision of the state, the Supreme Court affirmed the court of appeals’ judgment denying an economic development corporation’s plea to the jurisdiction, holding that economic development corporations are not governmental entities in their own right and, therefore, are not entitled to governmental immunity. Rosenberg Development Corporation (RDC), an economic development corporation created by the City of Rosenberg under the authority of the Development Corporation Act, executed a contract with Imperial Performing Arts, a nonprofit organization, to renovate a historic theater. When RDC refused to extend the deadline to complete the theater’s renovation, Imperial ceased work on the theater project. This dispute followed. The immunity issue on appeal was limited to Imperial’s breach of contract and declaratory judgment claims. The trial court denied RDC’s plea to the jurisdiction, and the court of appeals affirmed. The Supreme Court affirmed, holding that economic development corporations are not governmental entities immune from suit. View "Rosenburg Development Corp. v. Imperial Performing Arts, Inc." on Justia Law
Hughes v. Green County
In this dispute in probate over title to property bequeathed in a will, the Supreme Court reversed the decision of the court of appeals affirming the order of the trial court ruling that governmental immunity barred an heir’s suit against a county, holding that, contrary to the court of appeals’ decision, Texas A&M University-Kingsville v. Lawson, 87 S.W.3d 518 (Tex. 2002), applied in this case. The decedent’s heirs and the county, one of the beneficiaries under the will, agreed to combine forces against the other beneficiary, a private university, during litigation over the properly bequeathed in the will. The county and heirs agreed to share equally in any recovery either of them obtained in the proceedings. The university subsequently settled, and the settlement was divided between the county and the heirs under their agreement. Later, an heir sued the county alleging a breach of the agreement. The county asserted that governmental immunity barred the heir’s suit. The trial court and court of appeals agreed. The Supreme Court reversed and remanded, holding that Lawson, which provides that a governmental entity cannot create immunity for itself by settling a claim for which it lacks immunity only to assert immunity from suit in a subsequent action to enforce the government’s agreement, applied. View "Hughes v. Green County" on Justia Law
Burlington Resources Oil & Gas Co. v. Texas Crude Energy, LLC
The Supreme Court reversed the judgment of the court of appeals in this case involving the construction of an “opaquely worded oil and gas agreement,” holding that Burlington Resources may deduct post-production costs when calculating royalty payments due to Amber Harvest on its oil and gas leases. Amber Harvest, an affiliate of Texas Crude Energy, owned overriding royalty interests in the oil and gas leases operated by Burlington. Texas Crude sued Burlington, alleging that the parties’ agreements prohibited Burlington from charging post-production costs to the royalty holder. All parties agreed that the contracts at issue were unambiguous. After construing the agreements based on the language the parties chose the Supreme Court held that Burlington’s construction of the parties’ contracts was correct and that Burlington may deduct post-production costs when calculating royalty payments. View "Burlington Resources Oil & Gas Co. v. Texas Crude Energy, LLC" on Justia Law
Mercedes-Benz USA, LLC v. Carduco, Inc.
The Supreme Court reversed the judgment of the court of appeals affirming an award of actual and punitive damages in favor of Carduco, Inc., a Mercedes-Benz franchisee, on its fraud claim against Mercedes-Benz USA, LLC, holding that the court of appeals erred in affirming the trial court’s judgment, as modified. In its complaint Caduco alleged that Mercedes fraudulently induced it to purchase the assets of the previous Mercedes-Benz dealer in Harlingen, Texas. Specifically, Carduco argued that Mercedes had promised Carduco that, if it agreed to take on the franchise in Harlington, Carduco would eventually be able to relocate to the McAllen area as the exclusive Mercedes-Benz dealership there. A jury found for Carduco and awarded both actual and punitive damages. The court of appeals affirmed as modified by a suggestion of remittitur of the punitive damages award. The Supreme Court reversed, holding that the parties’ written agreement directly contradicted Carduco’s purported belief that Mercedes had promised to McAllen area to it, thereby negating Carduco’s justifiable reliance as a matter of law. The Court then rendered judgment that Carduco take nothing. View "Mercedes-Benz USA, LLC v. Carduco, Inc." on Justia Law
Exxon Mobil Corp. v. Insurance Co. of State of Pennsylvania
In this dispute by a third party claiming the benefit of a blanket subrogation waiver by virtue of a written contract with the insured, the Supreme Court reversed the conclusion of the court of appeals that the subrogation waiver was inoperative as to an injured worker’s recovery against the third party, holding that the endorsement waiving the carrier’s recovery rights was effective as to the bodily injury claim. In the contract at issue, the insured agreed to procure a waiver of “all rights of subrogation and/or contribution against [the third party]…to the extent liabilities are assumed by [the insured].” The court of appeals read the “to the extent liabilities are assumed” limitation into the endorsement and ruled that the subrogation waiver did not apply to the injured worker’s recovery against the third party because the insured was not contractually obligated to indemnify the third party for the loss. The Supreme Court reversed, holding that the endorsement referred to another contract only to identify who may claim the waiver and at what operations but did not refer to, and thus did not incorporate, any other contract limitations. View "Exxon Mobil Corp. v. Insurance Co. of State of Pennsylvania" on Justia Law
Nghiem v. Sajib
The Supreme Court reversed the decision of the court of appeals affirming the judgment of the trial court that Plaintiff’s implied warranty claim was actionable only under the Deceptive Trade Practices-Consumer Protection Act (DTPA), Tex. Bus. & Com. Code 17.41-17.63, holding that the claim for breach of implied warranty of good and workmanlike repairs in this case was not brought under the DTPA and thus was not covered by the DTPA’s two-year limitations period. Plaintiff sought damages for injuries to himself and his small plane when the plane’s engine failed and it crash-landed. Defendant moved to strike Plaintiff’s petition, arguing that the DTPA’s two-year statute of limitations applied. The trial court agreed with Defendant and struck the petition. The court of appeals affirmed. The Supreme Court reversed, holding that Plaintiff’s breach of implied warranty claim was not barred by the DTPA limitations period. View "Nghiem v. Sajib" on Justia Law
Bombardier Aerospace Corp. v. SPEP Aircraft Holdings LLC
The Supreme Court affirmed in part and reversed in part the judgment of the court of appeals that the evidence was legally sufficient to support the trial court’s award of both actual and punitive damages as to all Plaintiffs in this lawsuit, holding that Plaintiffs were entitled to actual damages but were not entitled to punitive damages. Plaintiffs brought suit against Bombardier Aerospace Corporation for breach of contract, breach of express warranty, and fraud. The jury found in favor of Plaintiffs, and the trial court awarded both actual and punitive damages. The court of appeals affirmed. The Supreme Court affirmed in part and reversed in part, holding (1) the evidence was legally sufficient to support the award of actual damages to Plaintiffs; but (2) the limitation-of-liability clauses in the parties’ agreements barred the punitive damages award under the circumstances. View "Bombardier Aerospace Corp. v. SPEP Aircraft Holdings LLC" on Justia Law