Barzoukas v. FOUNDATION DESIGN, LTD.
363 S.W.3d 829
Tex. App.2012Background
- HDL contracted to build Barzoukas's house; Smith was engineer of record for the foundation.
- Plans called for 15-foot piers; Smith signed a letter reducing piers to 12 feet after claims of hard clay stone.
- Barzoukas alleges the justification for shallower piers was false and Smith knew it; owner contends city approval relied on the letter.
- Piers are allegedly deficient (shallow, mislocated, crooked, poor contact with framing); repair cost estimated at $25,000 for ten new piers.
- Barzoukas settled with all defendants except Foundation Design and Smith (and one bankruptcy defendant) and asserted multiple claims against them.
- Trial court granted a no-evidence summary judgment; Barzoukas appeals claiming there was no basis for summary judgment against them.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Economic loss rule applicability to bar negligence claims | Barzoukas argues the rule does not foreclose negligence/negligent misrepresentation against Smith/Foundation Design. | Foundation Design/Smith contend economic loss rule forecloses such tort claims. | Economic loss rule cannot foreclose here; reversal on this ground is warranted. |
| Sufficiency of causation and damages evidence | Barzoukas asserts competent damages proof linking foundation defects to costs (including $25,000 repair estimate). | Defendants argue Barzoukas failed to prove causation/damages and that expert evidence is inadequate or conclusory. | Roy's testimony is competent; damages link supported; objections to authentication etc. not dispositive. |
| Fraud and fraudulent inducement viability | Barzoukas claims Smith misrepresented facts via the letter regarding pier depths. | Smith/Foundation Design claim the letter reflects information from Heights Development and is not a misrepresentation by Smith. | Fraud/fraudulent inducement claims fail; no viable misrepresentation by Smith/Foundation Design shown. |
Key Cases Cited
- Sharyland Water Supply Corp. v. City of Alton, 354 S.W.3d 407 (Tex. 2011) (defines multiple facets of economic loss rule and its limits)
- Pugh v. Gen. Terrazzo Supplies, Inc., 243 S.W.3d 84 (Tex.App.-Houston [1st Dist.] 2007) (product-defect context; distinguishes from construction-subcontractor context)
- Goose Creek Consol. Indep. Sch. Dist. v. Jarrar's Plumbing, Inc., 74 S.W.3d 486 (Tex.App.-Texarkana 2002) (economic loss rule not applied where damages extend beyond contract performance)
- Thomson v. Espey Huston & Assocs., Inc., 899 S.W.2d 415 (Tex.App.-Austin 1995) (negligence not barred when damages extend beyond contract scope)
- Hou-Tex, Inc. v. Landmark Graphics, 26 S.W.3d 103 (Tex.App.-Houston [14th Dist.] 2000) (constructive discussion of risk allocations in construction contracts)