Equistar Chemicals, LP v. Clydeunion DB, Limited
579 S.W.3d 505
| Tex. App. | 2019Background
- Equistar bought two custom pumps from ClydeUnion; both exhibited subsynchronous vibrations and eventually sustained cracked shafts, making them unsafe to operate.
- Equistar ran the pumps intermittently in late 2012–2013, engaged Bently Nevada for vibration data (showing excessive subsynchronous vibration), and later sent the pumps for evaluation and repair; Equistar then modified older pumps to meet capacity needs.
- Equistar sued ClydeUnion for breach of warranty and related claims; ClydeUnion counterclaimed for breach of contract for nonpayment.
- A jury found ClydeUnion breached an express warranty and awarded Equistar ~$391,694, but also found Equistar breached the contract and awarded ClydeUnion ~$150,781; the jury found Equistar gave notice but did not give a "reasonable opportunity to cure."
- The trial court entered judgment for ClydeUnion (recovering its counterclaim) after applying the offer-of-settlement statute and awarding litigation-cost offsets; Equistar appealed.
Issues
| Issue | Plaintiff's Argument (Equistar) | Defendant's Argument (ClydeUnion) | Held |
|---|---|---|---|
| Admissibility of ClydeUnion experts' testimony (damages/time-to-repair) | Townsend’s damages opinion was unreliable and conclusory because it rested on flawed assumptions (pumps should've been taken out in Mar 2013; repairs would take 10 weeks). | Expert relied on Bently Nevada data and HydroTex bid and other experts; methodology was reliable and matched Equistar’s own damages methodology for the relevant months. | Court overruled this issue; admitted testimony was within trial court’s discretion and not conclusory as to the decisive points. |
| Exclusion of ClydeUnion counsel’s October 2013 letter | The letter was admissible and central to proving opportunity to cure and the time required for repairs; exclusion prejudiced Equistar. | Letter was a settlement communication and inadmissible under Rules 403/408; much of its substance was cumulative. | Court assumed error but found any exclusion harmless because the letter’s substance was cumulative of admitted testimony/evidence. |
| Jury finding that Equistar did not give a reasonable opportunity to cure | That finding was immaterial and should have been disregarded because UCC and contract do not require a cure opportunity after acceptance; thus it cannot bar Equistar’s warranty recovery. | The UCC and contract (Article 26) support an opportunity-to-cure requirement; jury finding is material to deny Equistar recovery. | Court sustained Equistar’s challenge: no statutory or contractual right to cure after acceptance; the jury’s answer was immaterial and should have been disregarded. |
| Calculation/order of offsets under offer-of-settlement statute (litigation-cost offsets vs. counterclaim award) | Litigation-cost offset must be applied after offsetting defendant’s counterclaim damages against plaintiff’s award, producing a mutual take-nothing judgment. | Litigation costs are offset first against plaintiff’s damages; any remaining defendant counterclaim award stands as judgment for defendant. | Court sustained Equistar’s challenge: statute requires computing the claimant’s recovery after netting counterclaim damages first, then offsetting litigation costs (resulting in judgment that both parties take nothing). |
Key Cases Cited
- Ford Motor Co. v. Ledesma, 242 S.W.3d 32 (Tex. 2007) (expert testimony admissibility requires reliable foundation)
- Gharda USA, Inc. v. Control Sols., Inc., 464 S.W.3d 338 (Tex. 2015) (analytical gap doctrine for expert reliability)
- Diamond Offshore Servs., Ltd. v. Williams, 542 S.W.3d 539 (Tex. 2018) (exclusion of noncumulative, qualitatively different evidence may be harmful)
- City of San Antonio v. Pollock, 284 S.W.3d 809 (Tex. 2009) (conclusory expert testimony is legally insufficient)
- Gappelberg v. Landrum, 666 S.W.2d 88 (Tex. 1984) (seller’s right to cure exists primarily where buyer rejects goods; no cure right after acceptance)
- Bobo v. Varughese, 507 S.W.3d 817 (Tex. App.—Texarkana 2016) (interpretation of terms in settlement-offer context; discussed prejudgment interest and "award")