Custom Transit, L.P., Richway Cartage, Inc., and Custom Operations, LLC v. Flatrolled Steel, Inc.
375 S.W.3d 337
Tex. App.2012Background
- Flatrolled sues for damage/missing coils under a direct discharge contract with Custom Transit; Custom Transit used Richway equipment; ownership/lease lines among Custom Transit, Custom Operations, Richway, R Enterprises; weather-sensitive coils stored in warehouses with contested leasehold and control; trial-trial evidence concentrated on 2,455 coils and 105 damaged coils; trial court awarded contract damages and attorney’s fees; Richway found liable for negligence and exemplary damages; appellate court reverses as to Richway's actual damages and exemplary damages, renders for nothing against Richway; issues focus on contract damages, duties in tort, and punitive damages.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Accord and satisfaction instruction valid? | Flatrolled presented evidence of oral agreement to accept lower payments. | Custom Transit argues no valid accord due to lack of mutual intent/notation on checks. | Yes; evidence supported instruction on accord and satisfaction. |
| Damages for damaged coils supported by the evidence? | Flatrolled proved diminished value via expert/owner testimony and sample-based extrapolation. | Custom Transit challenges reliability/conclusory nature of Bollman and O’Keefe. | Yes; damages for damaged coils sustained. |
| Did Richway owe a duty in tort to Flatrolled? | Flatrolled relied on negligent undertaking/ joint team duty. | Richway contends no duty owed; only negligent activity possible. | No duty found; negligent activity theory rejected for Richway. |
| Exemplary damages proper against Richway? | Punitive damages supported by gross negligence. | No independent tort with actual damages; punitive damages improper. | Exemplary damages improper; reversed as to Richway. |
| Attorney’s fees against Custom Transit proper? | Fees recoverable as contract damages. | Challenge to fee award. | Upheld (contract) as to Custom Transit. |
Key Cases Cited
- City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) (legal-sufficiency standard; review favors verdicts supported by some evidence)
- Mendez v. Barrett, 204 S.W.3d 797 (Tex. 2006) (admissibility/reliability of expert testimony factors (Robinson lineage))
- Robinson v. E.I. du Pont de Nemours, 923 S.W.2d 549 (Tex. 1995) (Daubert-style reliability factors for expert testimony)
- Whirlpool Corp. v. Camacho, 298 S.W.3d 631 (Tex. 2009) (limits of Robinson factors; some subjects lack full scientific testing)
- Torrington Co. v. Stutzman, 46 S.W.3d 829 (Tex. 2000) (negligent undertaking vs. negligent activity distinction; duty elements)
- Olivo v. Moody Gardens, 952 S.W.2d 529 (Tex. 1997) (broad-form negligence questions and premises-like elements; deemed findings not applicable to undertaking theory)
- Entex v. Gonzalez, 94 S.W.3d 1 (Tex. 2002) (distinguishes premises from unique statutory duties in jury questions)