527 S.W.3d 563
Tex. App.2017Background
- Union Gas purchased GB Tubulars CDE couplings (P-110, ~5–5½") after relying on GB Tubulars’ product datasheet and used them in the Dubose #2H horizontal, hydraulically-fractured shale well in 2010.
- During fracking, casing joints separated and a coupling cracked; Union Gas plugged and abandoned the well and sued GB Tubulars on multiple theories (products liability, express and implied warranties, negligence, DTPA, etc.).
- The jury found no design or manufacturing defect but found a marketing defect, breaches of several express warranties (five identified), negligence, and awarded $3 million in damages; it also found Union Gas 45% negligent and awarded $0 in attorney’s fees.
- Trial court granted a new trial limited to attorney’s fees; Union Gas elected recovery on breach of express warranty; the court later awarded $3 million and $950,000 in attorney’s fees (plus prospective fees on appeal).
- GB Tubulars appealed alleging (1) erroneous admission of other-failure evidence, (2) insufficiency on express-warranty breach/causation, (3) improper submission of multiple overlapping theories, (4) failure to reduce damages for Union Gas’s negligence, and (5) error in granting new trial on fees.
Issues
| Issue | Plaintiff's Argument (Union Gas) | Defendant's Argument (GB Tubulars) | Held |
|---|---|---|---|
| Admissibility of evidence of other well failures | Other incidents were sufficiently similar (same product type/size, failure mode, conditions) and relevant to defect and notice | Other incidents were not shown to involve the same defect or sufficiently similar circumstances; prejudicial | Court: Admissible — Union Gas showed similarity in part type, size/grade, fracture location/mode, timing, and load conditions; no abuse of discretion in admission (Nissan/Kia framework) |
| Sufficiency of evidence for breach of express warranty and causation | Datasheet representations (joint strength, tension, internal yield, fatigue, pipe-body parity) were false; experts showed couplings failed within published parameters and could mislead purchaser | No evidence tying misrepresentations to the actual cause; corrosion or other factors could explain failure | Court: Legally and factually sufficient — experts and reports established misrepresentations, purchase reliance, and that coupling failed at loads within represented specs; causation supported |
| Submission of multiple theories based on same facts | Multiple discrete legal theories were legitimately submitted | Submission would confuse jurors and produce irreconcilable findings (not preserved at trial) | Court: Waived/unchallenged below; overruled on appeal for lack of preservation |
| Reduction of contractual damages for plaintiff’s comparative negligence | Damages should not be reduced; express warranty is contract-based and proportionate-responsibility statute doesn’t apply | Comparative fault (pre-chapter 33 cases) should reduce recovery because Union Gas was 45% negligent | Court: Overruled — proportionate-responsibility statutory scheme applies only to torts; express-warranty recovery is contract-based, so damages not reduced for plaintiff’s negligence |
| Grant of new trial on attorney’s fees | New trial on fees was proper; jury finding of zero fees was subject to post-judgment challenge | Union Gas waived challenge by accepting verdict and failing to request jury return for further deliberations | Court: New trial and bench retrial of fees were permissible; no waiver; trial court’s award of fees affirmed |
Key Cases Cited
- Nissan Motor Co., Ltd. v. Armstrong, 145 S.W.3d 131 (Tex. 2004) (limits on admissibility of other-incident evidence: similarity, prejudice, and purpose)
- Kia Motors Corp. v. Ruiz, 432 S.W.3d 865 (Tex. 2014) (other-incident evidence must be tied to similar defect, not merely similar outcome)
- City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) (legal-sufficiency review standards and deference to reasonable inferences)
- Ford Motor Co. v. Ledesma, 242 S.W.3d 32 (Tex. 2007) (definition/analysis of producing cause in products cases)
- Signal Oil & Gas Co. v. Universal Oil Products, 572 S.W.2d 320 (Tex. 1978) (historical comparative-fault approach to warranty damages; later superseded by chapter 33)
- JCW Electronics, Inc. v. Garza, 257 S.W.3d 701 (Tex. 2008) (discussing legislative replacement of common-law comparative-fault schemes by chapter 33 and limits on coexistence)