MEMC Pasadena, Inc. v. Riddle Power, LLC
2015 Tex. App. LEXIS 8143
| Tex. App. | 2015Background
- MEMC Pasadena operated a polysilicon plant and contracted CDI as construction manager for the P-23 expansion; CDI ran the bid process and issued the RFP and multiple addenda.
- Triad bid on a T&M electrical contract; CDI sent Addendum 9 (a mutual waiver of consequential damages) to all bidders; Triad received Addendum 9 pre-deadline and did not object in its bid.
- A scheduling decision led to energized ("hot") work on transformer T-45; Triad subcontracted the hot work to Riddle, a high-voltage specialist.
- During cable pulling, a metal fish tape contacted an energized bus (a missing protective lower deflector plate would have blocked contact), causing an explosion and plant shutdown; no injuries occurred.
- MEMC sued Triad (breach of contract and negligence) and Riddle (negligence). Jury found Triad, Riddle, and MEMC negligent (30%/30%/40%) and found Triad breached contract but that Addendum 9 applied (waiving consequential damages); judgment awarded MEMC $90,000 against Riddle and nothing against Triad.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Addendum 9 (mutual consequential-damages waiver) became part of MEMC–Triad contract | MEMC: CDI lacked authority to bind MEMC to Addendum 9; no express agreement or sufficient implied assent | Triad: CDI acted with actual/apparent authority in the bid process; Triad received Addendum 9 and did not except to it | Sufficient evidence supported that CDI (with MEMC approval) sent Addendum 9, Triad accepted it by bidding without exception, and MEMC is estopped from denying it; jury finding affirmed |
| Whether MEMC’s online T&Cs governed as a matter of law | MEMC: PO language incorporated MEMC’s online T&Cs; directed verdict should have been granted | Triad: surrounding evidence created fact issue about which T&Cs governed (CDI T&Cs v. MEMC online T&Cs) | Jury question proper; evidence supported jury’s negative answer that online T&Cs applied |
| Whether CDI had actual or apparent authority to issue Addendum 9 | MEMC: no documentary proof MEMC approved Addendum 9; witnesses lacked recall; Triad’s reliance was based on interested witness | Triad: CDI repeatedly acted as MEMC’s agent for bids; witnesses testified MEMC approved addenda; Triad reasonably relied | Evidence supported actual/apparent authority; jury finding affirmed |
| Whether Triad is liable in tort for economic losses (negligence claim) despite contract | MEMC: Triad was actively negligent (distracting Riddle), causing physical/property damage and economic loss | Triad: economic loss rule bars tort recovery where injury is purely contractual/economic | Economic loss rule applies—MEMC’s claims against Triad sound in contract; negligence recovery barred; take-nothing judgment for Triad affirmed |
| Whether MEMC (via CDI) was negligent and its comparative responsibility (40%) | MEMC: insufficient evidence that MEMC/CDI proximately caused the accident; CDI was agent only for bidding/management, not construction design/installation | Triad/Riddle: CDI/MEMC failed to install/monitor protective barrier, delegated but had construction/safety authority, and MEMC personnel interrupted Riddle’s work | Evidence legally and factually sufficient that CDI/MEMC breached duties (missing deflector plate installation/monitoring and interruption of work) and contributed to the accident; 40% allocation supported |
| Damages: adequacy and measure of lost-profits award ($300,000 jury finding; $90,000 recovery) | MEMC: expert showed ~77.2 metric tons lost production worth ~$23.7M; jury award inadequate and court failed to instruct market-value minus cost measure | Defendants: challenged the volume, market price, internal-transfer practices, and net-profit calculation; evidence supported a wide range of amounts | Jury’s $300,000 lost-profits finding (and resulting $90,000 against Riddle) falls within the conflicting evidence range; no charge error shown on measure of lost profits |
Key Cases Cited
- City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) (standards for legal and factual sufficiency review)
- Sw. Bell Tel. Co. v. DeLanney, 809 S.W.2d 493 (Tex. 1991) (economic loss rule bars tort recovery where only economic loss is the subject of contract)
- Jim Walter Homes, Inc. v. Reed, 711 S.W.2d 617 (Tex. 1986) (negligence claims grounded in contractual duties sound in contract)
- Crown Life Ins. Co. v. Casteel, 22 S.W.3d 378 (Tex. 2000) (improper commingling of liability theories in broad-form questions can be harmful error)
- Lear Siegler, Inc. v. Perez, 819 S.W.2d 470 (Tex. 1991) (more than one proximate cause may exist and jury allocates responsibility)
- Exxon Corp. v. Emerald Oil & Gas Co., 348 S.W.3d 194 (Tex. 2011) (standard for reviewing directed verdict)
- Golden Eagle Archery, Inc. v. Jackson, 116 S.W.3d 757 (Tex. 2003) (factfinder has broad discretion in awarding damages)