Zbranek Custom Homes, Ltd. v. Joe Allbaugh, Diane Allbaugh, and Rutilio Albarran Construction, Inc. D/B/A El Paso Framing
03-14-00131-CV
Tex. App.Nov 17, 2015Background
- This is an appellant Zbranek Custom Homes, Ltd.'s motion for rehearing after the Third Court of Appeals (Austin) issued an opinion affirming judgment for appellees Joe and Diane Allbaugh following a residential fire.
- The Allbaughs sued Zbranek for damages from a house fire; the jury awarded damages and those awards were paid by the Allbaughs’ insurer.
- Zbranek challenges the sufficiency of the Allbaughs’ expert causation testimony (fire origin/temperature) and contends experts’ opinions were conclusory and unreliable.
- Zbranek also challenges the sufficiency and admissibility of the Allbaughs’ damages evidence, arguing replacement-cost testimony was offered by an unqualified witness and that replacement cost alone is an inadequate measure of actual value.
- Zbranek argues contractual defenses: (1) a waiver of rights in its construction contract with Bella Cima (owner) bars recovery by the Allbaughs (lessees) for insured losses; and (2) an "as is" clause in the lease between Bella Cima and the Allbaughs should preclude the Allbaughs’ claims against Zbranek.
- The Court of Appeals rejected Zbranek’s causation sufficiency challenge (treating causation as fact issue), accepted replacement cost evidence as sufficient for damages, and declined to apply the lease waivers/as‑is clause to bar the Allbaughs’ claims against Zbranek.
Issues
| Issue | Plaintiff's Argument (Allbaugh) | Defendant's Argument (Zbranek) | Held |
|---|---|---|---|
| Sufficiency of causation expert evidence | Experts provided competent proof that faulty fireplace construction caused the fire | Expert opinions were conclusory, lacked testing/calculation, had analytical gaps, and failed to rule out electrical causes | Court held causation was a fact question and rejected Zbranek’s sufficiency challenge (opinion treated expert evidence as adequate for jury inference) |
| Sufficiency of damages evidence (replacement cost) | Replacement cost evidence is permissible and factfinder may use it to determine actual value | Replacement cost alone can produce a windfall; Allbaughs’ replacement-cost witness was unqualified and testimony was insufficient to show actual value | Court held replacement-cost evidence was sufficient for jury to award damages; rejected Zbranek’s attack on adequacy of the evidence |
| Contractual waiver (privity / waiver of rights in owner–builder contract) | N/A (plaintiff relies on negligence/causation evidence) | Waiver in Bella Cima–Zbranek contract bars recovery for insured losses; lessees (Allbaughs) cannot assert greater rights than lessor and are bound by waiver/successors-and-assigns language | Court declined to apply the owner’s contractual waiver to bar the Allbaughs’ claims against Zbranek; did not adopt Zbranek’s privity/waiver argument |
| Enforceability of "as is" clause by non-party builder | N/A | The Allbaughs accepted the property "as is" in their lease with Bella Cima, which should negate causation and bar claims against the builder | Court held Zbranek could not rely on the lease "as is" clause as a non-party and declined to bar the Allbaughs’ claims on that basis |
Key Cases Cited
- Daubert v. Merrell Dow Pharms., 509 U.S. 579 (reliability standard for expert testimony)
- E.I. du Pont de Nemours & Co. v. Robinson, 923 S.W.2d 549 (Tex. 1995) (Texas standards on expert reliability)
- City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) (standards for evaluating sufficiency of evidence and expert testimony)
- Gharda USA, Inc. v. Control Solutions, Inc., 464 S.W.3d 338 (Tex. 2015) (fire-loss case evaluating interdependent expert reliability; unreliable expert testimony can be legally insufficient)
- Crisp v. Security Nat'l Ins. Co., 369 S.W.2d 326 (Tex. 1963) (factors for determining actual value of damaged personal property)
- Gulf States Utilities Co. v. Low, 79 S.W.3d 561 (Tex. 2002) (replacement cost may be an inappropriate measure for certain personal property)
- Prudential Ins. Co. of Am. v. Jefferson Assocs., Ltd., 896 S.W.2d 156 (Tex. 1995) (effect and enforcement of "as is" clauses)
- MAN Engines & Components, Inc. v. Shows, 434 S.W.3d 132 (Tex. 2014) (downstream purchasers cannot obtain greater warranty rights than original buyer; privity/disclaimer principles)