City of Alton, Carter & Burgess, Inc., Turner, Collie & Braden, Inc., and Cris Equipment Company, Inc. v. Sharyland Water Supply Corporation
402 S.W.3d 867
Tex. App.2013Background
- 1980s–1990s: Alton built water system, later sewer system; Sharyland acquired water system from Alton.
- Construction involved L.L. Rodriguez & Associates (design), Turner, Collie & Braden (TCB) (engineer/inspect), Carter & Burgess (C&B) (construction management), Cris (contractor), and Grab Pipeline for subcontracting.
- Sewer lines crossed water mains; Sharyland claimed service-line crossings violated regulatory/industry standards and damaged Sharyland’s water system.
- Texas Supreme Court held section 317.13 applied to all sewer lines, including service connections, and that Sharyland’s water system was damaged, negating complete economic-loss bar.
- On remand, court addresses duty, breach, causation, and damages for negligence claims against C&B, TCB, and Cris; law of the case from Supreme Court guides analysis.
- Trial jury found contractual non-beneficiary status, negligence, and allocation of fault; Court of Appeals previously reversed in part and remanded; Supreme Court remanded to address negligence issues.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did C&B owe a common-law duty to Sharyland? | Sharyland relies on independent duty under contract to assure compliance. | C&B’s duty limited by contract with Alton; no tort duty owed to Sharyland. | Yes; C&B owed an independent tort duty to Sharyland to perform with reasonable care. |
| Did Cris owe a duty to Sharyland? | Cris had contractual obligation to comply with state regulations; duty implied. | Regulation applicability to service connections disputed; limited contract obligations. | Yes; Cris owed an independent duty to Sharyland not to negligently damage its sewer system. |
| Was there sufficient evidence of breach by C&B (and by extension duties)? | Experts testified to breach under contract duties interpreted for project management. | Challenge to expert reliance on contract; insufficient breach proof. | Yes; reasonable, legally sufficient evidence supported breach; experts’ testimony admissible. |
| Was there proximate cause linking breach to damages and are damages reasonable? | Damages tied to costs to repair/encase water lines; future damages justified. | Past repair costs not shown reasonable; future costs contested. | Proximate causation affirmed; future damages upheld as reasonable; past damages reversed for lack of proof. |
Key Cases Cited
- City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) (no-evidence standard; objective sufficiency of evidence review)
- McGinty v. Hennen, 372 S.W.3d 625 (Tex. 2012) (damages proof must be reasonable and necessary; not mere costs shown)
- Mustang Pipeline Co. v. Driver Pipeline Co., 134 S.W.3d 195 (Tex. 2004) (recovers damages only if evidence shows reasonableness of repairs)
- Thomson v. Espey Huston & Assoc., 899 S.W.2d 415 (Tex. App.—Austin 1995) (independent tort duty may exist despite contract; not automatic third-party beneficiary)
- Goose Creek Consol. Indep. Sch. Dist. v. Jarrar's Plumbing, 74 S.W.3d 486 (Tex. App.—Texarkana 2002) (contractor may owe independent tort duty to avoid injuring property)
- TXI Trans p. Co. v. Hughes, 306 S.W.3d 230 (Tex. 2010) (reliable foundation for expert testimony; abuse-of-discretion standard for admissibility)
- U.S. Renal Care, Inc. v. Jaafar, 345 S.W.3d 600 (Tex. App.—San Antonio 2011) (no-evidence review encompasses opposing evidence on reliability)
- Sharyland Water Supply Corp. v. City of Alton, 354 S.W.3d 407 (Tex. 2011) (Supreme Court held economic loss rule does not bar negligence where water system damaged; applied law of the case on remand)