*1 (Tex.1993) (holding party waived due equal protection challenges by process court). to raise them in trial Jim-
failing argu- not raise my did his constitutional Therefore, in the trial court. he ments preserve issues. failed these
Conclusion agree with the trial court’s construc- We ruling tion of the statute and with its 41.005, Jerry on Section Kidd based judgment a matter of law. entitled as Accordingly, Jimmy’s we overrule sole is- Jimmy’s issue, Having
sue. overruled sole judgment we affirm the the trial court. BARZOUKAS, Appellant, Nicolas DESIGN, LTD. and FOUNDATION Larry Smith, Appellees.
No. 14-10-00505-CV. Texas, Appeals Court of Dist.). (14th Houston March 2012. Rehearing En Banc Overruled
April 2012.
2012, and issue the following substitute opinion.
Nicolas Barzoukas sued Foundation De- *3 sign, Ltd. engineer Larry Smith for damages in connection with alleged defects in the foundation of Barzoukas’s house. The trial granted a no-evidence sum- mary judgment on all claims asserted Foundation and Smith. affirm in part We and reverse and remand in part.
Background
Heights Development, Ltd. contracted with Barzoukas in September 2005 to build a house for him. Heights Barzoukas sued Development, Smith, Design, Foundation and numerous other par- defendants who ticipated in the house, construction of his contending that it is with prob- riddled lems. Smith engineer is the of record for the house’s foundation design. The plans specifications originally called for 15-foot piers support foundation. After began, construction signed Heights letter addressed Development changing plans spec- ifications to allow for piers sup- 12-foot — posedly clay because “hard stone was en- countered” while drilling holes for the piers. says given justifica- Barzoukas tion for shallower piers was false and Smith knew or should have known it was Arnold, Houston, Kurt B. appellant. for Barzoukas, According false. contractor Development used this Petrocchi, Dallas, Anthony A. Erin Eliz- persuade letter to the City of Houston to Jones, Houston, abeth Mclnerny, James P. allow continuation of construction after an appellees. for inspector initially rejected the foundation Panel consists of Chief Justice piers because the were too shallow. Bar- HEDGES and Justices SEYMORE and city ap- zoukas asserts that the has never BOYCE. proved the house’s foundation. Barzou- expert engineer opines kas’s that Smith SUBSTITUTE MAJORITY OPINION the professional violated standard of care BOYCE, WILLIAM J. Justice. approving pier depth change. We overrule the motion for rehearing, Expert reports piers indicate that withdraw our opinion February shallow; dated they are deficient because are too de novo review a under We they properly are not located crooked; they do not favor house; they are must take as true all evidence I- framing every contact with proper make to the nonmovant and draw able the house. support beams used all doubts inference and resolve reasonable foundation cost of repairing estimated Oper in favor of the nonmovant. Valence $25,000. ten new by adding Dorsett, ating Co. Mart, Inc., (Tex.2005); Fiesta Mendoza v. all de- eventually settled (Tex.App.-Houston Design, except
fendants denied). 2008, pet. aWhen Dist.] [14th Smith, who filed for and another defendant *4 for grounds does not specify trial court and Design As to bankruptcy. Foundation af summary we must granting judgment, Smith, neg- claims for Barzoukas asserted summary judg judgment any if firm negligent misrepresentation, ligence, Star- ground ment is meritorious. See inducement, fraud, conspiracy, fraudulent Doe, Inc. v. Telegram, 915 S.W.2d damages in connection exemplary and (Tex.1995). foundation. Design filed a no- Foundation and Smith Analysis summary judgment for evidence motion issue, contends single In a Barzoukas them. The trial all claims asserted sum- by granting that the trial court erred specify- without granted motion De- mary judgment favor of Foundation for its The court later ing ruling. the basis his Smith. sign motion to sever granted Barzoukas’s Design and claims Foundation parties’ appellate briefing focuses Barzoukas and con- appeals Smith. now negli- primarily on whether Barzoukas’s war- summary judgment that is not tends negligent gence misrepresentation ranted. the economic foreclosed under In reliance on loss rule. addition to their Standard of Review a bar to recov- rule as In a no-evidence motion for ery, Design Foundation and Smith judgment, specifically must movant is warranted tend identify the for which there is no elements proffer com- failed to Lumber evidence. Walker v. Thomasson their petent establishing evidence Co., (Tex.App.- 473-74 damages. proximately conduct caused 2006, no pet.). Houston [14th Dist.] Design Smith also con- Foundation grant court must the motion unless trial give that Smith’s not rise tend letter does raising a respondent presents evidence for fraudulent to viable claims fraud and genuine issue of material fact. Tex.R. Civ. inducement. these conten- We address a(i). However, respondent is P. in turn.1 tions required proof; “‘not its marshal its I. Economic Rule Loss only evidence that response point need out challenged a fact issue ele- raises on the ” A. Overview Wilson, ments.’ Hamilton (Tex.2008) in this Applying Tex.R. P. the economic loss rule (quoting Civ. 166a(i) (1997)). two presents challenges. cmt. case Thus, challenge portion ages. judgment we 1. Barzoukas does affirm the not judgment pertaining the trial court's to his pertains extent it to those claims. exemplary conspiracy for dam- because the elements as to which there challenge arises is evidence” The first and the trial legal grant court must motion economic loss rule’s boundaries “unless respondent produces summary entirely not settled. judgment raising evidence a genuine issue because the challenge The second arises of material fact.” Id. summary judgment pleadings in relevant (1) the contract this record include neither Significant hammering and bending gener- Barzoukas and between homeowner required appellate argument to fit the Development; nor Heights al contractor Design Foundation and Smith —which in between purported subcontract vokes the asserting economic loss rule in Development engineer “as a matter law no cause of action or, Heights De- possibly, between Smith — negligent representation or some velopment and appellant respect runs in favor of way entity other related some to Smith. appellees as subcontractors” —within Rule A be the Bar- portion appears of what 166a(i). Determining “the whether mov zoukas-Heights Development ap- contract ing party is entitled to judgment as a *5 pears in the But even elsewhere record.2 matter expressly of law on the issues set if were consider evidence outside of we out in the motion” is an under inquiry Rule judgment pleadings related summary 166a(c)’s summary judgment traditional Smith, to Foundation and little is standard, its with attendant burdens on gained portion this of the contract 166a(c); the movant. Tex.R. P. Civ. purported is The subcontract incomplete. see also Peat v. KPMG Marwick Harrison missing. make entirely gaps is These it Cnty. Corp., Hous. Fin. application
more difficult to evaluate of the (Tex.1999). economic rule. loss summary Proper placement judg- of the difficulty compounded by is an awk- helps ment how gaps burden determine procedural posture. pres- ward This case in regarding evidence the Barzoukas- granting ents as an from an order appeal Development Heights contract and the summary judg- for no-evidence motion purported analysis subcontract affect the ment. Texas Rule of Procedure Civil on appeal. argument regarding But no 166a(i) summary judgment authorizes the operative judgment standard when “there no evidence of one or more is has in the or been raised trial court on Therefore, appeal. despite imperfect essential of a claim or defense on elements have the party arguments appeal which an adverse would fit between on and at trial.” Tex.R. P. proof ap- burden of Civ. mechanism 166a(i). court, in a motion state the invoked the trial eco- pellees Such “must portion Paragraph of 2. A a "New Home Contract” iden- 7.B. this document entitled of tifying Development and states: "Sell- as "Seller” "Construction Documents” "Buyer” complete improvements was attached er shall all and Barzoukas as Response Heights Property diligence due in accordance Defendants’ Plaintiff’s turn, In Summary Judgment as to the with the Construction Documents.” Motion for Damages. Documents" are defined to Measure of This is identified as a "Construction By plans, specifications, change "Promulgated include or- form contract Texas ders; the "Con- Real the name the document recites that Estate Commission” bears signed Realty" have been "Karen Derr & Associates across the struction Documents parties incorporated this top. copy signed by and are into This is not Heights Development, Docu- representative al- tract reference." The "Construction in though appear do not the rec- appears it to have Barzoukas’s initials ments” themselves pages through at the seven. ord. bottom one depth in this case applicability ing pier rule’s the foundation’s nomic loss terms analyzed “no evidence” must be to 12 feet. feet 166a(i). Rule under Determining the economic loss whether uncertainty exist un- Although areas here applies rule to foreclose Barzoukas’s addressing case law der negligent misrepresenta- Texas, thing is clear: at least one rule in Design and tion claims Details matter. analysis a two-step focusing involves matters who contracted It (1) identifying legal governing stan- what the to do what. It matters whom dards, and those standards to applying cover; what and what say; they contracts in this now the record case. We turn to kind of It matters what they do not cover. analysis. this requested. It matters are attrib requested damages whether Legal Governing B. Standards by the contracts. uted to activities covered Rule in Texas Economic Loss par multiple It whether and how matters among Supreme most in a chain of contracts allocated The Texas Court’s recent ties in the participants the risk that themselves loss rule ap- discussion perform deficiently, along with chain would Corp. Sharyland Supply pears Water obligation pay perform deficient Alton, (Tex.2011). City It matters what kinds of claims ance. terms, In broad doctrine ad they are as whom asserted prod efforts to dresses use serted. *6 liability claims for recovery uct as vehicles missing here. largely The details of economic See id. at losses. 414-418. agree parties that a contract existed Sharyland emphasizes that shorthand ref Develop- Heights Barzoukas and between in erences to “the” loss rule economic of Bar- regarding ment construction can be of a singular “something misnomer” They agree zoukas’s house. that a subcon- actually encompasses this term existed to the house’s tract relation multiple concepts addressing efforts re They also agree foundation. particular particu a cover economic losses Development party purported was subcontract, and not. Barzoukas was Id. lar situations. at 414-15. guesswork. Much of the rest is Sharyland goes on to describe cir- which we backdrop against is This under application cumstances which analyze po- rule’s must economic loss economic loss rule is settled under Texas Barzoukas at- applicability tential when law, those it is under which unsettled. engineer tempts professional to sue for Id. at 415-21. misrepresenta- negligent (cid:127) The economic loss rule forecloses prob- tion in connection with foundation liability on a strict claims based defec Heights Development lems in the house product damages only tive itself to build him. Barzoukas contracted for at property. but not other Id. *6 original plans not contend that does Signal & Gas (citing [415-17] Oil Co. 15-foot specifications calling Prods., v. 572 S.W.2d Universal Oil Instead, on a are deficient. his claims rest 320, (Tex.1978); 325-26 Mid Conti signed by Smith after construction letter Curry v. Corp. Cnty. nent underway; characterized letter is Aircraft Inc., Serv., 572 S.W.2d Spraying specifi- plans “an addendum the as (Tex.1978); Nobility which reduc- 312-13 approved cations” Tex., Shivers, ery Homes Inc. completely between contractual (Tex.1977)). 81-2 strangers in a case not involving a (cid:127) product....” defective Id. The economic loss rule also forecloses (cid:127) predicated
a claim on a The supreme rejects a formula- duty created under contract to which tion of the economic loss rule that plaintiff party is a when tort dam “says you can never recover economic ages sought injury for an consist damages for a tort claim.” Id. at *8 ing only of subject economic loss to the [418]. Sharyland, contract. [854 (cid:127) The economic loss rule is not a 2011 WL 5042023at 417-18] law; instead, rule of tort it ais rule in (citing *7 Sw. Bell Tel. v.Co. DeLan negligence and strict product liability (Tex.1991); ney, 809 S.W.2d cases. Id. Homes, Reed, and Jim Walter Inc. v. (cid:127) Merely object because the of the negli- (Tex.1986)). 711 S.W.2d gent performance subject “was the (cid:127) contexts, In these two economic losses a contract does not mean that a con- appropriately are more addressed tractual stranger necessarily barred through statutory warranty actions or from suing contracting party for common law breach of contract suits breach of an independent duty.” Id. instead of tort claims. Sharyland, case, “If that were the party could S.W.3d at [354 2011 WL 417-18] liability avoid tort simply the world 5042023at *7. by entering into a contract with one (cid:127) ... DeLanney “We declined extend party.” Id. claim, to a fraudulent inducement even (cid:127) “The economic loss rule does not swal- only when the claimant suffered eco low all claims between contractual and nomic losses to the of a con commercial strangers.” Id. tract.” Id. (citing Formosa Plastics (cid:127) supreme yet court has not decided Corp. Eng’rs v. Presidio USA & Con purely “whether may losses tractors, Inc., (Tex. *7 ever be in negligence recovered or 1998)). liability strict cases.” Id. “
(cid:127) The economic
‘applies
loss rule
when
precepts,
Based on these
supreme
the
losses from an occurrence arise from
court rejected reliance on the economic
failure
product
of a
and the damage or
”
rule
Sharyland’s
loss
to foreclose
claim
loss is limited to the product itself.’
against a plumbing
alleged
contractor
to
Sharyland,
at
[354 S.W.3d
417-18]
damaged Sharyland’s
system
have
water
circumstances with the nor the parties who privity separate are not in as in- contract with a plumbing those contrac- —such volving a remote Sharyland’s manufacturer and a tor defeated negligence claim product consumer in the defective con- against plumbing the Shary- contractor. Sharyland, text. S.W.3d at 417- [354 against land asserted this claim 2011 WL 18] 5042023at *7. seeking the contractor to recover cost (cid:127) relocating encasing have never “[W]e held eco- its water lines to [the precludes
nomic loss ... prevent improper- rule] recov- contamination from the necessary economic loss rule here is part sewer lines. Id. Based in ly installed damages, preserve agreed-upon existence these risk allocations on the as follows: “We supreme among court concluded who built Barzoukas’s parties loss rule bars disagree that house. in this Id. Sharyland’s recovery case.” by arguments Foun proffered holding, supreme court dis- In so for two Design dation and Smith fail rea address any claimed intent circum- sons. involving in cases stances construction First, Design Foundation and Smith in a contractual chain who have “parties misplace Pugh. That their reliance on case risk, allocate unlike opportunity had the claims for strict lia- negligence, addressed Sharyland.” by situation Id. faced bility, of implied and breach warranties impossible analyze it all the “While brought by against homeowners General in rule which an economic situations Terrazzo, the of an “exterior manufacturer it Id. may apply, govern does not here.” system” finishing insulated used con- parties rule cannot without apply “The their house. structing Pugh, privity, merely even remote contractual alleged 86-7. The homeowners parties because one those had a con- finishing prod- General Terrazzo’s exterior party, a third struction contract with uct was defective because it allowed mois- contracting party when the causes a loss penetration damaged ture the house’s to its Id. unrelated contract.” frame and interior. Id. partial guidance provided With Pugh only addressed claims asserted
Sharyland, this must determine against product manufacturer. The to accept Design’s whether Foundation homeowners dismissed their and Smith’s invitation and hold that applied who masonry subcontractor economic loss rule forecloses Barzoukas’s finish manufactured Gener- exterior misrepresenta- negligent They al Id. at 87 n. 2. Terrazzo. obtained predicated signed tion claims on the letter judgment general default by Smith. contractor. Id. Neither the tractor nor the masonry subcontractor was Applying the Rule C. Economic Loss party appeal. Id. and Smith assert clear, alleged As makes procedural history that “economic losses home- falling Pugh existing owners within the matter of economic loss rule applied pre- their contract with the homebuilder principles governing negligence strict *8 claims, including negligence clude tort and by liability against claims consumers misrepresentation, against negligent sub- prod- remote manufacturer of a defective contractors under loss doc- 90-95; Sharyland uct. Id. at see also They Pugh rely heavily trine.” v. Gen. Supply Corp., Water 354 at 415-18. S.W.3d Inc., Supplies, Terrazzo 243 84 Pugh analyze viability of did not 2007, (Tex.App.-Houston pet. [1st Dist.] contractor or a against asserted denied), support proposition. at 87 Pugh, subcontractor. n. 2 & that the Pugh 90-95. concluded eco- Design Foundation and Smith also nomic loss rule foreclosed the homeowners’ negligence neg- tend that Barzoukas’s and liability negligence and strict misrepresentation claims involve ligent against product manufacturer General already in a who parties contractual chain privity in the of Terrazzo —even absence per- have allocated the risk of deficient They “there was no applying formance. assert between them —because
837
The
injury
damage
proper-
or
to other
most
evidence
personal
concerning
detailed
ty
permitted
Pughs
that would have
to Smith’s role
from the
comes
Affidavit of
P.E.,
would be excepted Kirby Meyer,
assert a tort claim that
“Larry
who states:
F.
Smith,
doctrine.” Id.
economic loss
Engineer,
Professional
State of
(citing Am.
Ins. Co. v.
Eagle
94
United Texas License #
is the engineer
(5th
Corp., 48
Techs.
F.3d
Cir.
record for
design
the foundation of
1995),
Corp., 23
Hininger v. Case
F.3d
this structure.”
affidavit
also states:
(5th Cir.1994),
Murray
and
v. Ford
my understanding
“It’s
that Larry Smith
Co.,
(Tex.App.-
Motor
may have
work individually
done such
pet.)).
Dallas
under different entities.” Plaintiffs Sev-
enth
April
Amended Petition filed on
In contrast to
Pugh,
does not
following
lists the
as defendants:
negligent misrepre-
aim his
and
Foundation
LTD
Design,
Larry
d/b/a
remote
sentation claims at the
manufactur-
Smith
Larry
Engineering;
Smith Engi-
allegedly
product.
er of an
Bar-
defective
Smith, PC,
neering
Larry
a Texas
a/k/a
zoukas’s
Smith’s
claims involve
asserted
professional corporation; Larry Smith,
in connection
professional negligence
PC, a
professional corporation;
Texas
and
approval
that are
foundation
Larry
individually.
Smith
The letter itself
by
than the
called for
depth
shorter
typed
on letterhead reading “Larry
Thus,
original plans
specifications.
we
Smith Engineering”
signed
and is
by Lar-
question
must address a different
that was
ry F.
signature
Smith above a
block that
by
open
Sharyland
addressing
left
reads,
Smith,
“Larry F.
P.E. Registered
particular
whether —in the
home construc-
Engineer.”
Professional
The letter does
tion
presented
circumstances
here —the
not
Design,
reference “Foundation
Ltd.”
“precludes recovery
economic loss rule
completely
strangers
between contractual
This evidence falls short of establishing
prod-
in a case not
a defective
involving
that Barzoukas’s claims
Founda-
Sharyland
Supply
uct....”
Water
tion
foreclosed “as a
Corp.,
Pugh
In
above,
objection
listed
that ex
piers
stances
not make
contact
proper
drilled
do
conclusory
support
too
to
pert testimony is
the
piers
of the
because some of
all
summary judgment is not waived
or defeat
piers
they
not located where
were
ruling
a
trial
by the failure to obtain
the
designed to be.
v.
court. Gen. Star Indem. Co.
Coast
Gulf
I
what
cost to
have estimated
it would
Inc.,
450,
Assocs.,
457
Marine
fact
problems, if in
repair the foundation
n. 6 (Tex.App.-Houston [14th Dist.]
brought up
the
ever
to
foundation can
be
v.
pet.) (citing
Montgomery,
Wadewitz
repair would
designed capacity.
its
The
(Tex.1997)).
“An ex
951 S.W.2d
require
placement
approximately
the
conclusory if it
pert opinion is considered
and the
frame work
piers
new
added
essentially
any ex
is
a ‘conclusionwithout
piers
existing
to
the new
connect
Pink,
planation.’”
FMF Assocs. reject Design’s We (Tex.2008)). 380, 389 expert that dam- Roy’s Smith’s contention Roy’s report states that “[t]he conclusory age respect evidence is damages in are primarily this case based repairs. Roy’s esti- necessary foundation upon the made the Givens complaints mate links cost to adequately the stated Report April dated 2007 and the con to ad- piers installation of additional struction that have been defects identified dress differential movement attributed in the case Report records.” Givens problems. interrelated foundation that grade pier states “the off concrete III. Fraud and Fraudulent Induce- wood beams foundation is found to have ment experienced differential movement of con significant cern as evident uneven contends that the trial court ness in the It floor elevation.” also states by granting summary judgment erred on concrete piers number of the “[a] his fraud and fraudulent-inducement tilted out of to an excess plumb amount.” presented he evidence rais- The Givens further Report states that “[t] each ing fact issue on element of these piers ilting support foundation can be claims. by a caused number of conditions” includ “inadequate
ing consideration for the de pursuing When claims for fraud sign piers....” inducement, plaintiff and fraudulent must establish that defendant made
Roy goes to state as in his follows Amouri misrepresentation. material See report: Inc., Toyota, v. Sw. foundation suffers several fac- denied). (Tex.App.-Texarkana pet. tors. The the fact that first is several of Barzoukas’s fraud claims are based on the piers drilled are not verti- intal[l]ed that, allegation in a letter addressed piers cal designed. as Also were misrepresen Development, deep drilled feet instead the 15 feet required by design. Finally clay ted stone impeded that hard Court, presented all other matter cannot be construed as an effective tation opinion testimony Court is of proffered Defendant’s Mo- holding expert should, tion MERITORIOUS in all "was either inadmissible insufficient.” things, be GRANTED.” In contrast id. express language Praytor, at issue in this reci- *12 being set at the required city, 15-foot nothing in the letter supports an in- depth and intended for Barzoukas and the ference that Smith represented hard clay City rely of Houston to upon misrep- stone was discovered at twelve feet. Smith resentation. merely acknowledged Heights that Devel- opment made such a representation, and letter, which was addressed approved a shallower pier depth only Heights Development, contains the based on this information. Barzoukas did following statements: not present evidence supporting an infer- your At request, engineer an from our ence that Smith or Foundation Design firm has reviewed the pro- information made a purposeful misrepresentation. Ac- regarding pier vided drilling opera- cordingly, the trial court did not err tions at the above referenced residence. granting summary judgment in favor of A representative your firm notified us Smith and Foundation Design on Barzou- during the drilling operations, clay kas’s fraud and fraudulent inducement was encountered. The foundation de- claims. We (see portion overrule the of Bar- 2005-1038) sign LSE Job Number zoukas’s sole issue pertains as it specifies diameter, his to be 12" in claims for fraud and fraudulent induce- grade extend 15 feet below and to be ment. reinforced with one # 5 bar. We were clay
notified that hard stone was en- countered at approximately 12'-0". Due Conclusion stone, presence to the clay hard the We affirm the trial summary court’s pier depth shallowed to 12'-0" with the judgment fraud, with respect to fraudulent reinforcement remaining at one # 5 bar. inducement, conspiracy, and exemplary This letter is to serve as addendum damages. We reverse the trial court’s plans to the specifications with the respect negli- changes noted above. If any pier holes gence and negligent misrepresentation, cave, due presence to the clay, our and remand for proceedings consistent office should be contacted for further with this opinion. recommendation. information,
We trust this is the which SEYMORE, J. concurring and you require. you If any questions have dissenting. this, regarding please feel free to con- SEYMORE, Justice, CHARLES W. tact us. concurring and dissenting. Smith, argues as the foun- I my withdraw concurring and dissent- engineer dation for the project, pre- ing opinion February dated 2012 and senting the information in the letter as fact issue this substitute concurring and dis-
because he was authorizing a material re-
senting opinion.1
pier
duction in
depth. Barzoukas also con-
tends that the
letter was
used
I concur with
majority’s
holding that
Development
city
to obtain
approval for
the record contains no evidence raising a
pier
reduction.
fact issue regarding Barzoukas’s claims for
Regardless of whether Smith
fraud and
intended
fraudulent inducement. Howev-
er,
this letter would be submitted to the
I respectfully
majori-
dissent from the
grant appellees'
1. I would
majority
motion for rehear-
improperly
has
shifted the burden of
ing because I
proof
believe the economic
parties moving
loss rule
for no-evidence
appellant’s negligence
bars
summary judgment.
claims and the
inducement,
sought
judgment
conspiracy,
summary
ty’s reversal
claims because I
Barzoukas’s
a no-
exemplary damages. Smith filed
fore-
rule
believe
judgment
evidence motion for
*13
negligence claims
Smith
closes his
on
claims.
against Barzoukas
all of his
(2)
present
failed to
evi-
Barzoukas
granted
without
trial court
the motion
a
his
raising
fact issue relative to
dence
reasoning.
basis for
specifying the
its
against Foundation De-
negligence claims
granted
court later
Barzoukas’s motion
sign.
suit,
underlying
from
sever his claims
rendering
thereby
I.Background
judgment.
a final
2005, Barzoukas
September
In
contract-
Development,
with
Ltd.
ed
II. Standard
of Review
(“HDL”)
to build a residential house
issue,
In
single
Barzoukas contends
County,
speci-
Texas. Barzoukas
Harris
summary
court erred
granting
trial
pier-
that the
must be built on a
fied
house
judgment in favor of
on Barzoukas’s
Smith
HDL
and-beam foundation.
retained
negligence,
negligent misrepre-
design
the foundation.2 Smith
fraud,
sentation,
and fraudulent
induce-
designed
piers
to extend fifteen feet
ment.4
grade.
below
In a no-evidence motion for
Barzoukas,
According to
Smith instruct-
judgment,
represents
the movant
piers
the contractor to set the
twelve
ed
there
essen
is no evidence
one or more
grade
informing
without
Bar-
feet below
tial
for which the
elements
City
After
of Houston
zoukas.
refused
proof
nonmovant bears the burden of
approve
pier
because of the
house
166a(i); Timpte
trial.
P.
In
reduction,
Tex.R. Civ.
Smith and HDL
asserted
dus.,
Gish,
Inc. v.
clay
hard
stone was discovered at twelve
feet,
(Tex.2009).
drilling.
preventing further
Barzou-
The burden then shifts to
kas claims the
reduced
rendered
raising a
present
nonmovant to
evidence
caused systemic
foundation unstable and
material
genuine issue of
fact on elements
to his
damages
house.
Trucks,
specified in the motion. Mack
(Tex.
Tamez,
Inc. v.
HDL,
Barzoukas
filed suit
2006). A court sustains a no-evidence
Smith, and
participants.3
various other
(a)
summary judgment when
there is
negligence,
sued
neg-
Barzoukas
Smith for
fraud,
vital
ligent misrepresentation,
complete
fraudulent
absence of
of a
evidence
Gibbs,
(Tex.App.-
Facts”
2.In
"Statement of
section of Bar-
222 S.W.3d
838 n. 6
brief,
appellate
pet.).
Dist.]
he made
Accord-
[14th
zoukas's
the follow-
Houston
(1)
ingly,
ing
accept as true
factual recitations:
Barzoukas con-
I
that Barzoukas
house,
house;
HDL to
with
tracted with
build the
tracted
HDL to build his
Smith,
design
HDL
Smith to
Larry
engineer
subcontracted
"HDL retained
area,
foundation.
from the
entities
Dallas
various
him,
design
associated
the foundation
Appellees
exception of
a defen-
of Barzoukas's house.”
did not
3. With the
Smith and
bankruptcy,
dant who filed
Barzoukas settled
contradict these statements. Under the Rules
defendants,
Procedure,
including
Appellate
"accept
we must
with all other
HDL.
as
[by appellant
true the facts
in the
stated
notes,
his
majority
"Statement
Facts” section of
un-
4.
does not
brief]
As the
judg-
party
challenge
portion
another
Tex.
less
contradicts them.”
of the trial court's
R.App. 38.1(g).
applies
appeal
conspiracy
P.
pertaining
This rule
ment
to his claims for
damages.
summary judgment.
exemplary
Choice
(b)
fact,
the court is barred
rules of law generally argued as follows: “Barzoukas
or of evidence from giving weight to the
has no
any
evidence of
of the essential
fact,
only
prove
evidence offered to
a vital
elements listed above which are necessary
(c) the evidence
prove
offered to
a vital
support
such a claim of negligence, in-
(d)
scintilla,
fact is no more than a mere
or
cluding without limitation no evidence of
conclusively
the evidence
establishes the
any duty
owed,
or standard of care
breach
opposite
City
of the vital fact.
Keller v.
duty,
of that
breach of that standard of
Wilson,
(Tex.2005).
care,
to Barzoukas from
The evidence is insufficient if it is so weak that negligence,
proximate
cause be-
*14
as to do no more than create a mere
tween the purported negligence and dam-
suspicion
surmise or
the challenged ages.” Consequently, it was Barzoukas’s
Akin,
Strauss,
fact
Gump,
exists.
Hauer
burden as the nonmovant to present evi-
Feld,
&
L.L.P. v. Nat’l Dev. & Research
raising
genuine
dence
issue of fact as to
(Tex.2009).
106, 115
Corp., 299 S.W.3d
Tamez,
each of these elements.
206
S.W.3d at 582.5
An appellate court
summary
reviews a
judgment de novo and must take as true
matter,
As an initial
I would conclude
all evidence favorable to the nonmovant
the trial
properly granted
summary
every
and draw
reasonable inference and judgment
relative to
negli-
Barzoukas’s
resolve all
in
doubts
favor of the nonmov- gence
claims
Foundation Design.
Dorsett,
ant.
Operating
Valence
Co. v.
164 Although appellees challenged
negli-
each
656,
(Tex.2005);
S.W.3d
661
Mendoza v. gence element in their no-evidence motion
Mart,
(Tex.
653,
Fiesta
276 S.W.3d
655
summary
for
judgment, Foundation De-
App.-Houston
2008, pet.
[14th Dist.]
de
sign is not
any
referenced in
of the re-
nied). When a trial
specify
court does not
letters,
ports,
or other documents attached
grounds
for granting summary judg
Thus,
response.
Barzoukas’s
Barzoukas
ment,
appellate
court must affirm the
present
did not
raising
evidence
a fact
judgment
any ground
if
is meritorious.
regarding
issue
negligence
his
Doe,
Star-Telegram,
See
Inc. v.
915 against
Tamez,
Design.
See
471,
(Tex.1995).
S.W.2d
473
In sounds their motion for judgment, Homes, Reed, tract. Jim appellees argued that Walter Inc. v. economic loss (Tex.1986). 617, precluded rule raising The eco- fact regarding duty issue nomic loss rule generally precludes and breach recov- negligence elements of his ery claims and also in negligence including a claim for — previously 5. This court applied. has affirmed a trial economic loss rule Con- Coastal granting court’s order a no-evidence motion Ditching, Energy Corp., duit & Inc. v. Noram in which the movant (Tex.App.-Houston 29 S.W.3d [14th argued there was no evidence relative to the pet.). Dist.] nonmovant’s claims because the The school district gence. economic Id. 491-92. negligent misrepresentation —for Plumbing’s alleged negli- that Jarrar’s from failure a defendant resulting losses gence sewage “the invasion raw caused perform its contract. Lamar under gas buildings, and sewer into the school Co., Homes, Mid-Continent Inc. v. Cas. buildings ... causing] portions (Tex.2007); Sterling at be at times.” Id. 495. The unusable Inc., Chem., Texaco, 259 S.W.3d Inc. v. Plumbing neg- jury concluded Jarrar’s was (Tex.App.-Houston [1st Dist.] 797-98 the school ligent and awarded district denied). operation, In the rule pet. repairs and of use. for cost of contracting parties to remedies restricts court denied Id. 492. The trial Jarrar’s eco prescribed in their contract for such judgment Plumbing’s motion for notwith- losses, might nomic even when breach standing argument the verdict based on consequence viewed as a reasonably be that the district’s claim school negligence. contracting party’s Lamar under the loss rule. barred Homes, Additionally, at 12. Id. at 493-94. applied Texas courts have *15 no Acknowledging there was contract preclude negligence loss claims be rule to between district and Jarrar’s the school tween have no re parties who contractual Plumbing, appeals the court of concluded Chem., Sterling lationship. claim was school district’s 797. at loss not rule be- barred Analysis B. cause it on a breach of was “based Jarrar’s It undisputed Barzoukas contracted Plumbing’s duty persons to all use rea- house, with to build a HDL HDL injure persons prop- sonable care not to or to design subcontracted with Smith erty in of the contract.” performance Nevertheless, foundation.6 Barzoukas ar at Id. 494. The court further reasoned: gues the economic loss not rule does alleged acts school [the district] apply bar his claims Smith be may breached Jarrar’s Plumb- also have cause was no contractual privity there be However, ing’s contract with Lewis. them, meaning damages tween caused injury alleged, the district] school [the by Smith were not economic loss stem sewage gas invasion and sewer into ming of contract. from breach Barzoukas inju- buildings, the school constitutes an heavily relies on the Texarkana Court of not ry property that was Appeals’s opinion Goose Creek Consoli contract, portion matter dated Independent School District of had contract school [the district] Counties, and Harris v. Chambers Texas with which Lewis Lewis for contracted Inc., 74 Plumbing, Jarrar’s Plumbing, namely with Jarrar’s denied). 2002, pet. (Tex.App.-Texarkana Therefore, injury alleged plumbing. not Independent pure Dis- did constitute economic loss for Goose Creek School trict which school could recover [the district] contracted with Lewis to construct only in contract. three schools. Id. at 491. Lewis then subcontracted with Jarrar’s Plumbing 495; v. Espey Id. see Thomson Huston plumbing. install Id. After the schools Inc., 417, 421-22 & Assocs. ( writ) were occupied, plumbing were dis- defects (holding Tex.App.-Austin Id. The school Lew- covered. district sued economic claim not barred loss rule (1) Plumbing is and later sued Jarrar’s for when contracted with HWC to owner (2) apartment complex, of actions build sub- including negli- various causes HWC 1, supra. 6. See footnote design drainage tion for Espey summary judgment,
contracted
General Ter-
(B)
owner
system
quality,
argued
and test soil
razzo
Pughs’ negligence
claims
alleging negligence in
Espey,
later sued
were barred under the economic loss rule.
designing
system
testing
soil
drainage
Pughs
Id. The
responded that the doctrine
parts
caused
to other
quality
damages
was inapplicable
they
sought dam-
alleged
complex; damages
beyond
were
ages beyond
scope
of General Terraz-
scope of contract between HWC and Es-
zo’s duties.
trial
granted
Id. The
pey); see also Munters
GmbH General Terrazzo’s motion.
Euroform
Id. at 88-89.
Power, Inc.,
Am.
No.
Nat.
03-05-00493-
appeals
court of
acknowledged that
CV,
at *5-6 (Tex.App.-
WL
applied
courts have
the economic loss rule
dism’d) (mem.
31, 2009,
Dec.
pet.
Austin
(1)
preclude
in two
“to
contexts:
tort
(reaffirming
holding by
Thomson
op.)
brought
to recover economic losses
cluding that when
sues subcontrac-
owner
when those
the subject
losses are
matter
tor,
application
economic
rule is
contract”;
of a
preclude
“to
tort
matter
by subject
determined
of subcon-
brought
to recover economic losses
tract,
not contract with
contrac-
the manufacturer or seller of a
tor).
product
defective
where the defect dam-
Creek,
Relying
ar
on Goose
ages only
product
and does not cause
inappli
that the
loss rule is
gues
‘personal injury’
damage
to ‘other prop-
cable because the
caused to his
(citations omitted).
erty.’”
Id. at 90-91
scope of
beyond
house were
HDL’s
The court determined that both contexts
foundation-design subcontract
Smith.
*16
applied
Pughs’
claims. Id. at 93-94.
Contrarily,
argues
the econom
context,
regard
In
to the first
the court
loss
the
applies
damages
ic
rule
because
to
noted that
the economic loss rule “has
within the scope
Barzoukas’s house are
applied
preclude
been
to
tort claims be-
HDL.
Barzoukas’s contract with
Smith re
tween
in
parties
privity.”
who are not
Id.
Appeals’s opinion
lies on the First Court of
at 91. The court determined that the rule
Pugh v.
Supplies,
in
General Terrazzo
claims,
applied
Pughs’
to bar
in part
the
Inc.,
(Tex.App.-Houston
had the burden to raise a fact issue as the der Rule v. Founda- Ltd., (ma- nonmovant of a Design, no-evidence motion: "the tion No. 14-10-00505-CV applicability jority economic loss rule’s op.). in this case building, Id. at 56. The model a the architect hired swimming pool.
with a
perform
subcontractors
to
architectural
an
contractor subcontracted with
general
services, including
and engineering
remod-
and pool
to
the home
design
architect
of the
eling
garage
the basement-level
pool.
The
the
Id.
a builder
construct
(Ind.2010).
722,
N.E.2d
building. 929
subcontractors, alleg-
sued both
plaintiffs
library
The
later filed
negligently designed
the
ing
pool
was
subcontractors, alleging
the
constructed, causing foundation dam-
defectively
garage
the
remodeled
caused
Answering
certi-
to the house.
Id.
a
age
building.
Id.
damages to
entire
at
the federal court of
question
fied
Supreme
The
of Indiana
725-26.
Court
Virginia
of
Supreme
Court
appeals,
the economic loss rule
determined
concluded:
claim
library’s negligence
be-
barred
more
plaintiffs
allege nothing
The
here
remodeling
garage
cause
was
inte-
economic
disappointed
expecta-
than
gral
project.
whole
Id. at 732.
part of
They
with
tions.
contracted
a builder
Although
privity
there was
contractual
purchase
package.
for the
of a
library
between the
and the subcontrac-
land,
services,
design
package included
tors,
recognized
library
that the
the court
a
dwelling.
and construction of
was “connected
[to
subcontractors]
also
a foundation for
package
included
a network or chain of contracts.”
through
dwelling,
pool
and a
pool,
a
enclo-
also,
739;
e.g.,
Id.
see
Davencourt at
package
alleged
sure. The
to have
Pilgrims Landing Homeowners Ass’n v.
or more of
com-
been defective—one
its
LC,
Pilgrims Landing,
Davencourt at
sufficiently
parts
ponent
substand-
¶¶
(deter-
20-26,
65,
ance, Inc., FREEWAY, 223 Ariz. 8100 NORTH P.3d LTD., Appellant, (concluding 671-72 economic loss apply rule does not when plaintiff and defendant are not in privity); contractual HOUSTON, The CITY OF Appellee. Excavating A.C. v. Yacht Club II Home- Ass’n, Inc., owners 114 P.3d No. 14-11-00301-CV. (Colo.2005) (“[T]he economic loss rule has Appeals Texas, Court of no application negligent residential con- (14th Dist.). Houston struction claims subcontractors be- cause subcontractors owe homeowners an March 2012. independent duty of care to act without homes”).
negligence in the construction of Generally, who undertakes to per “[o]ne form a duty contract assumes a to all
persons to take care reasonable not to
injure them or their property per contract,
formance of that and one who is privy not to the contract may assert a claim for negligence for a breach of that I, duty.” Hollow L.P. v. El Paso Wolf L.P., (Tex. Marketing, App.-Houston 2010, pet. grant [14th Dist.]
ed) Creek, (quoting Goose S.W.3d at
494). However, I would recognize an ex
ception to the rule when a subcontractor’s negligence causes damages
matter of the prime contract between the plaintiff contractor. Accord
ingly, I would hold that the economic loss
rule bars Barzoukas’s
against Smith and affirm the summary judgment against Barzoukas on these
claims. cases). in residential construction defect