403 S.W.3d 347
Tex. App.2013Background
- Crown sued Howard Industries, Siemens, A & H Electric, and HD Supply for breach of implied warranty of merchantability regarding a transformer installed in Crown's facility; Crown sought only economic damages.
- Jury awarded Crown $69,400 in damages for replacement costs and the trial court awarded substantial attorney’s fees to Crown, including $150,000 for trial and $50,000 appellate.
- Directed verdicts: express warranty and contract claims were resolved in defendants' favor; the case proceeded on implied warranty claims.
- The parties had agreed during trial on Crown’s reasonable and necessary attorney’s fees, though they did not concede entitlement under the applicable statute.
- Appellants appealed the attorney’s fees award, asserting Texas law does not permit fees for a breach of implied warranty claim.
- The appellate court ultimately held that Crown could recover attorney’s fees under Civil Practice and Remedies Code section 38.001(8) because the implied warranty claim was contract-based and sought only economic damages.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Crown may recover attorney's fees under §38.001(8) for breach of implied warranty of merchantability. | Crown's implied warranty claim is contract-based and seeks economic damages, thus falls under §38.001(8). | Implied warranty is not a contract-based claim and §38.001(8) does not authorize fees here. | Yes; §38.001(8) applies because the claim is contract-based and Crown sought only economic damages. |
Key Cases Cited
- Medical City Dallas, Ltd. v. Carlisle Corp., 251 S.W.3d 55 (Tex. 2008) (contract-based warranty claims may recover under §38.001(8))
- 1/2 Price Checks Cashed v. United Automobile Insurance Co., 344 S.W.3d 378 (Tex. 2011) (suits on contracts, including UCC-related, may recover under §38.001(8))
- Hyundai Motor Co. v. Rodriguez, 995 S.W.2d 661 (Tex. 1999) (damages context; implied warranty discussion not determinative of fees)
- 7979 Airport Garage L.L.C. v. Dollar Rent A Car Sys., 245 S.W.3d 488 (Tex.App.-Houston [14th Dist.] 2007) (fees for implied warranty not clearly supported when fees sought on contract theory)
- Basic Energy Service, Inc. v. D-S-B Properties, Inc., 867 S.W.3d 254 (Tex.App.-Tyler 2011) (cites, without full analysis, limitations on implied warranty fees)
- JCW Electronics, Inc. v. Garza, 257 S.W.3d 701 (Tex. 2008) (damages determine contract vs. tort basis for implied warranties)
- Am. Tobacco Co. v. Grinnell, 951 S.W.2d 420 (Tex. 1997) (implied warranties as contractual in nature)
- Printing Ctr. of Tex., Inc. v. Supermind Publ’g Co., 669 S.W.2d 779 (Tex. App.-Houston [14th Dist.] 1984) (implied warranty contractual nature cited)
- Parkway Co. v. Woodruff, 901 S.W.2d 434 (Tex. 1995) (warranty terms integrated into contract)
- Darr Equip. Co. v. Owens, 408 S.W.2d 566 (Tex. Civ. App.-Texarkana 1966) (early view of contractual nature of warranty)