*1 SOLUTIONS, PETROLEUM
INC., Appellant, Enterprises Bill
Bill HEAD d/b/a Corporation,
and Titeflex
Appellees.
No. 13-09-00204-CV. Texas, Appeals
Court of Christi-Edinburg.
Corpus 29, 2011.
April *10 McGurk, Coveler, Houston, Michael A.
E. Gonzales, Thomas, Kittleman, & Ramirez Vicinaiz, Oliveira & Fish- Roerig, A. Victor TX, McAllen, er, Appel- for Lopez, Zuleida lant. Grissom, Thompson, W.
Donald William Austin, III, George Thompson, & Grissom Smith, McAllen, Powell, Rober- Craig S. P. Dohse, Ferguson Darling, Cor- ta Hoblit Nichols, Christi, Thomas Benjamin C. pus Cowen, Fergu- Gonzales Hoblit Anthony Antonio, TX, LLP, Appellee. San son and Before Justice VALDEZ Chief and VELA. Justices RODRIGUEZ OPINION MEMORANDUM Justice Opinion Chief Memorandum VALDEZ. to a appeal pertains
This substantial underground fuel from an leak of diesel Spur at the Silver storage system located Pharr, By thirteen Stop in Texas. Truck Solutions, issues, Inc. appellant, Petroleum (“PSI”), challenges jury’s verdict Bill Bill appellees, favor of Head d/b/a (“Head”) Titeflex, Enterprises Inc., by the trial and sanctions issued court, assessment of which included the PSI, striking of PSI’s against costs defenses, jury and a instruction affirmative lost, pro- failed to destroyed, that PSI evidence, flex con- namely material duce was the cause of nector that PSI asserted argues underlying leak. PSI further (1) on judgment it entitled to that: fraud, fiduciary duty, Head’s breach contract, warranty, breach of breach of (2) claims; it is entitled to negligence claims; indemnity judgment on Titeflex’s (3) failing prop- the trial court erred in dam- erly jury overlapping on instruct (4) attorney’s entitled to ages; Head is not (5) interest; pre-judgment Ho- fees or Hogan, Bruch Richard P. Jennifer LLP, disregarded Jr., judgment improperly Hogan, & Matthew gan, Hogan finding; responsibility installing, repairing, business of jury’s proportionate maintain- ing, removing judgment underground-storage- on its it is entitled *11 systems compliance clean- tank and issues payment to relat- against claims Head affirm, systems, Barron, ed Mark to those and as part,- We in and up of the leak. the remand, president PSI and in Environmental part. reverse and (“ERM”), testified, Management
Risk industry. is a leader this I. BACKGROUND career as a truck driver began Head his proposal PSI’s to Head included the re- began acquiring and to eventually trucks moval of the three steel tanks and the trucking At the establish a business. twenty-thousand-gallon, installation of two time,- worked for a part-time same he fiberglass double-walled to be tanks used Edinburg, truck Head broker in Texas. to Though regula- store diesel fuel. State own open trucking desired to his broker- require tions did not the tanks be pur- age stop. and truck In Head double-walled, agreed Head to PSI’s pro- Ta- chased what once known as The was posal Acting work began. on Head’s Pharr, padera, which is located Texas.1 behalf, application PSI filed a construction Spur facility Head renamed the the Silver with the Texas Natural Resource Conser- Stop. facility (the Truck The included nineteen “TNRCC”), vation Commission now office, restaurant, land, acres of an the known as Texas Commission on Envi- underground three fuel steel tanks and Quality. receiving ronmental After ap- motel dispensers. In Head added a TNRCC, provals from the PSI removed operat- to The stop. facility the truck was the old steel tanks and installed the new stop brokerage ed as a truck as a tanks in fiberglass a different area from shipping products center for trucks be- steel previously where the tanks were in- the tween Mexico and United States. stalled. Barron testified that: off, we First installed the new under- A. PSPs Installation of a New Under- 20,000- ground storage two tanks those Storage System ground Tank storage then gallon probably tanks. We Shortly property, system after took their out of purchasing service because Head discovered that one of the steel un- we had to build new to the trenches derground required tight- existing dispensers piping, failed a to run new tanks did, test, being dug ness which resulted in it re- which and after we we tanks, Later, dug moved the Texas installed the service. tanks or from trenches, legislature a new passed requiring piping, law installed the modified existing that steel be electrical run to the new underground storage tanks against existing pumps hook replaced protect system, up or modified to law, system leaks. In to the new we from their old response moved tanks, backfilled, up, Head with PSI to install new hooked all that contracted concrete, underground storage powered everything a new checked fiberglass out, system. tank selected PSI do the on testing did the tanks required, open work he had it’s because PSI was local and lines as started business, good system. heard about the then we moved the old things company. fact, basically. exclusively engaged project, PSI is in the That’s the whole upon Tapadera companies up was to clean Head testi- 1. The land which The the leak. property, previously purchased when he situated had been contaminated fied that leak, prior a fuel State had with had been remediated. but the contracted contamination repair sys- that PSI maintain construction on the new completed and/or tem numerous times.3 Head testified that system in 1997. systems problems caused him more of a New Release Installation B. PSI’s system than his old and that PSI serviced System Detection systems “[p]retty regular on a [basis].” Morris, inspector to Bill an According Head recalled that the ATG employee of the previous and a for PSI usually problems. the reason for TNRCC, 1998, the State on December Carpenter, Head authorized Robert im- regulations requiring new enacted Spur Stop, Truck manager of the Silver Among *12 release detection methods. proved problem contact PSI a arose whenever usage by the approved the methods systems. Carpenter with the recalled gauging sys- tank State was an automatic entity the exclusive that main- PSI was (“ATG”),which reconciles fuel lost and tem repaired systems. the tained and if storage tanks to determine added 2001, Carpenter In late October went on time, At a release has occurred.2 early vacation. he returned in No- When method, gauging the stick using Head was 2001, Carpenter vember discovered addi- underground storage tanks us- fuel problems underground tional with the measuring sticks. ing long, calibrated Obregon, tanks. Gilbert a clerk at storage regulation, to the new PSI rec- response that, Truck Spur Stop, Silver testified that Head install a new ATG ommended month, sys- when reconciled each the ATG system. PSI told Head that the ATG always overage tem revealed an or short- all system supposed “was do the work the amount age respect with of diesel alert us we and should—should whenever purchased fuel and the amount of fuel in Further, a leak.” based on the advice had storage Oddly, tanks. at the end of PSI, to the installation of agreed Head October, Obregon noticed that the ATG in- system. completed the ATG PSI system percent. reconciled 100 Neverthe- system ATG stallation of the October less, vacation, Carpenter while on was system, 1999. Because of the ATG Head inventory numbers became more volatile. using the stick method to discontinued Carpenter volatility described the as such: inventory monitor levels. inventory The numbers of the didn’t C. Problems With the Release Detec- up, match but it was taken off the ATG. System tion They bouncing were back and forth Shortly gone. day after PSI installed the under- within the time I was One we fuel, systems, a and the next ground storage tank and ATG would have minus fuel, out, began experience many problems. day plus Head a which would balance on, requested progressed Between 1997 and but as time these num- regulation system designed 2. The al- the ATG was to be more December also operators soil-vapor lowed to utilize a moni- later accurate than the stick method. Morris reconciliation; statistical-inventory tor or a sys- testified that PSI sold installed ATG however, Carpenter, manager Robert tems, yet soil-vapor monitoring it did not do Spur Stop, the Silver Truck that PSI testified statistical-inventory reconciliation. only system. Carpen- the ATG recommended explained ter that PSI told him that the ATG 3. The record reflects that between 1997 and system supposed leaps "was to be and bounds fifty Head at least PSI invoiced times they expected [using over what us to do systems for service calls on the that PSI in- computerized stick It was kind of a method]. Spur Stop. stalled at the Silver Truck piece Carpenter equipment.” noted that bers—it became evident that there was ron traveled to the scene. Barron admit- potential problem on ted that when he leak, hand.[4] was told about the anticipated he that PSI would be sued observations, As a result of his Carpenter because PSI had installed the under- notified PSI. Head allowed PSI to investi- ground storage tank systems. and ATG gate systems to determine the extent and source perceived problem. E. PSI’s Determination of the Source Leaking D. The of Diesel Fuel of the Leak In the Several investigation, employees course of investigated its underground major storage discovered that a tank release of diesel to deter- mine the cause of the fuel had occurred. leak.6 PSI Experts estimated that examined 20,000 tanks, double-walled fiberglass more than gallons sys- of diesel fuel tem’s piping, and the dispensers. underground. recovered from Barron Barron ac- testified that the tanks were subjected knowledged that the fuel “quite had leaked pressurized tests, two leak aways both of which from the Silver Spur [sic]” Truck they passed. PSI then tried to test the Stop, including drainage ditch that bor- system’s piping, but PSI could not “estab- *13 dered the property and that he had “no pressure lish on piping.” Based on the idea how much they [diesel fuel] lost.”5 inability of system’s piping to establish Carpenter denied seeing any diesel fuel on pressure, PSI concluded that the leak the asphalt surrounding the stop; truck must be located somewhere within the pip- however, witnesses, one of Head’s expert ing system. Airey, Daniel an environmental consultant Ranger
for Environmental Services Later, Barron approached Carpenter that, (“Ranger”), stated based on a moni- and informed him that the source of the Ranger tor well implemented on the north- leak a faulty was flex connector located ern side of stop, the truck diesel fuel under “Dispenser Number 4.” Barron leaked from 5.78 feet to 19.95 feet under- showed Carpenter the alleged faulty flex ground. Airey further noted that diesel connector allegedly and Carpenter told table, fuel had leaked into the water which vendor, following: “I’m the I would like to is located at 18.82 feet underground where part take this over to our location to our the monitor well placed. Upon was discov- keep office and it safekeeping ering major occurred, that a leak had maybe Bar- testing at a later Carpenter time.” alleged 4. PSI at trial volatility 6.Among that the could stop those who arrived at the truck explained be inventory-control as bad ac- once the leak was discovered was Morris. counting part on the of Head. Sullivan Cur- Morris testified that he stop went to the truck ran, witnesses, expert one of Head's noted on his own volition and subsequently that he asserting that even if PSI was correct in Obregon creating inventory assisted rec- bad, inventory Head’s control records were Obregon ords to submit to the TNRCC. testi- the ATG very failures made it difficult fied that Morris instructed him to round off for Head to discover the leak. inventory figures reporting before the infor- mation to the TNRCC. Other witnesses stat- mandatory In a "Release Obregon Determination Re- ed that inventory Morris told to alter port prepared by Form” PSI on preceding December entries for the months the leak to 2001, PSI gross informed the TNRCC figures figures. that: "Diesel reflect rather than net noted in drainage experts observation wells and in opined figures Head’s that these were proximity ditch located in facility.” respect altered to minimize PSI’s fault with irrigation also noted that the soil and an the leak and to show that Head was not drainage impacted. ditch diligent were discovering the leak. 32,000 gallons and that faulty cavity” “tank allegedly to take Barron allowed extracted had been really he “didn’t because flex connector “water/diesel/mix” signed Barron drainage from ditches. it.” That was the store place have supervising that PSI was report certifying Head ever saw Carpenter time last investigation repair trial, testified all site activities At Barron flex connector. industry stan- accepted with notes about accordance handwritten that he created dards. connector when it faulty flex allegedly the. recalled that specifically He
was removed. report, the TNRCC Mor- In addition to manufactured was the flex connector chronology of the leak for the ris created a however, Titeflex; asked whether he when chronology, Barron.8 In his benefit of day, from that Barron his notes still had that, things, on among other Morris noted stating the notes it have stated: “I don’t 19, 2001, of the source “[t]he November Titeflex, actually flex connector] [the to be has now been determined release no, alleged faulty Photographs of sir.” #4. dispenser flex connector at from the trial, were admitted flex connector tightness were tested Both diesel tanks photo- that none Barron admitted chronology was sub- passed.” Morris’s the flex connector graphs indicated attachment to the “Release mitted as an by Titeflex. The manufactured was indeed Report Form.” Determination PSI; produced never flex connector was Response F. The TNRCC’s instead, that PSI’s attor- Barron asserted then sub- connector and neys took the flex the under- examining PSI was While expert, to PSI’s flex connector mitted the system to determine ground storage tank suit, Head filed Once David Hendrix. leak, Head contracted the cause of the the flex con- *14 to find Hendrix was unable ERM, company, with Barron’s other nector. cleanup Representatives effort. begin the of the re- event, filed of ERM informed the TNRCC PSI and ERM docu-
In lease, sent Boots & Head’s behalf.7 and the TNRCC TNRCC on ments with the Coots, specializing in the clean- company 2001 “Re- mandatory December In the spills, Carpenter of fuel to assist.9 up Form” that Report lease Determination during present at trial that he was the flex con- stated was PSI identified prepared, lead appeared that ERM cleanup; of the leak. PSI nector as the sole source efforts; & cleanup and that Boots replaced. was noted that the connector to ERM. Short- employees reported Further, report gener- was Coots at the time thereafter, 14,843 ly the fire marshal and other ated, gallons of PSI revealed that ar- specializing in remediation companies from the had been recovered diesel fuel trial, per- & Coots acknowledged he 9.The record reflects that Boots 7. At Barron Moreover, president stop PSI and ERM. from Novem- of both formed work at the truck рublically- 9, 2001, that ERM is a removing Barron testified 2001 to November ber owns company and that PSI 75% traded drainage spilled into two diesel fuel that had cross-examination, Barron ERM's On stock. irrigation canals that were in close canals and ostensibly controls busi- admitted that PSI stop implementing proximity to the truck ness of ERM. migration stop the to absorb and "boons” charged hydrocarbons. & Coots Boots that much of the 8. Barron admitted at trial $16,178.03 expert, Head's for their services. chronology contained in Morris's information Airey, testified it was a reasonable Daniel Barron had told based on information charge provided. for the services subsequent and the Morris about the leak cleanup. less, trial, rived at the scene to also assist in the at the time of Head still operat- Coots, In ed under a cleanup. addition to Boots & TNRCC enforcement order.12 representative, TNRCC sent a Paul Cor- G. Remediation of the Leak
dova, investigate part the leak.10 As investigation, his required Cordova was efforts, Through remediation approxi- determine the cause of the leak. Cordova 22,000 mately gallons of diesel fuel were testified that the flex connector was the recovered from underground, drainage cause of the though leak he admitted to ditches, and places. addition, other connector; having never seen the flex in- 39,000 gallons more than groundwater stead, Cordova relied solely on Barron’s was extracted because the water contained regarding statements the cause of the However, traces of diesel fuel. the remed- leak. requested Cordova also in- iation of the monthly ongoing site was an endeavor. In December ventory records for the more than stop, though years truck four leak, after the initial Head hired Ranger only Head was able to quickly produce Environmental (“Ranger”) Services to con- couple records for a months. Cordova tes- duct a compliance audit and to ensure that provided tified that PSI most of the infor- paperwork Head’s regarding fuel invento- mation stop about the truck to the ry being levels was done correctly. At this appeared TNRCC and that it as if PSI was time, Ranger was not performing any representative. Head’s Instead, remediation work for Head. Based on his investigation of the truck Ranger checked various monitors to en- stop’s inventory records and the state- sure that the remediation efforts were PSI, ments made by Cordova issued nu- compliance with TNRCC Air- regulations., Head, merous citations to with some of the ey audit, was in charge of the and when he monitors, violations not checked the pertaining discharge he noticed that there was lot of “[a] of diesel fuel.11 diesel fuel in the The citations amounted to ground.” Airey $300,000 found that there was over still in fines against assessed about 10.5 feet of diesel fuel on the Head; however, negotiating after -withthe groundwater Airey table. testified that TNRCC and demonstrating compliance ERM and responsible PSI were for clean- with regulatory provisions, numerous *15 ing up the released diesel fuel at this time. Head was able to reduce the ap- fines to $80,000, proximately with half of the fines Upon Airey’s discovery, Head hired paid to a in charity Valley the Rio Grande Ranger to complete clean-up the of the - that providing “dealt with water and sewer matter, leak. At the time of trial on this services poor communities.” Neverthe- in October the site has not been It was penses. established at trial that Morris 10. hourly used Grissom noted that his fee of to work for the TNRCC and had trained Cor- $250 was reasonable for this service in Travis investigator. dova to be a TNRCC Hidalgo and counties. Grissom referenced county Travis because several administrative Among 11. the citations issued to Head was Austin, Texas, hearings place took in which is failing for correctly label each under- county county. the seat of Travis See Tex. tank, ground storage which several witnesses Assoc., Austin, (Travis County), State Hist. TX responsibility. testified was PSI's http://www.tshaonline.org/ available (last Grissom, attorneys, 12. One of visited Head's Donald handbook/online/articles/hda03 fact, 2011). Mar. testified that he Grissom acknowl handled the TNRCC’s en edged forcement action and that Head incurred that about of the work done 90% on the $42,925 fees, $2,800 attorney's1 plus in place in ex enforcement action took in Austin. per square remediated, [pounds inch]” below ten PSI though the completely to detect system in ef- for the ATG order remains to allow remediation TNRCC system. cost to in the that the total there was a leak estimated whether Airey fect. to the satisfac- remediation the complete during chief Roy Rodriguez, PSI’s crew $509,509. would be of the TNRCC tion leak, clean-up of the testi- the initial 2001 tested dug up system the fied that PSI About the Theories Alternative H. hoses, not re- flex which did system’s the Titeflex’s Leak and Cause taking Rodriguez leaks. denied veal Involvement system out of any portion of witness, Bruce W. expert Titeflex’s Rodri- testing. Specifically, ground for Ph.D., the leak Pinkston, estimated anyone removing a flex did not recall guez 2001, and contin- in March first occurred in ground November connector from in No- consistently until discovered ued being recall Barron and he did not opined Dr. Pinkston vember stop in November present at the truck constituted probably the leak was slow connector, putting flex testing the per hour. One gallons about five truck. in the back of his the flex connector Curran, witnesses, Sullivan expert Head’s director of the consultant and executive continual- allegations, these Despite Institute, Pump testi- Fiberglass Tank and that the flex connector was ly asserted the leak was PSI’s that the cause of fied that he of the leak. Barron testified cause a union at a shear installation of improper during the present stop at the truck valve, Relying on flex connector. not the investigation stages initial testimony of Octavio Prune- the deposition 2001. Barron re- clean-up in November PSI, asserted da, for Curran a technician alleged faulty flex con- removing called improperly cross-threaded that PSI it in the back of his placing nector and caused a small which question, union The flex truck that it could be tested. so fact, Pruneda system.13 In leak in the however, again; was never seen connector union at one of-the galvanized replaced notes, pic- took Barron made handwritten confirming presence dispensers after connector, repeatedly the flex tures of also testified that PSI of a leak. Curran the flex connector was manu- testified that using designed system improperly had Titeflex, though origi- even factured for too small diameter pipes that were Titeflex system did not call for a plans nal system properly. the ATG to work Cur- implemented to be flex connector pipes PSI used two-inch ran noted that Furthermore, system. repeatedly Barron it have used system when should the cause of certified to the TNRCC that high- has a pipes. three-inch The a Titeflex flex connector. the leak was pump that powered, five-horsepower fuel from the tanks push used to *16 I. The Lawsuits were pipes Because the dispensers. 13, 2006, February On Head filed suit industry what standards re-
smaller than warranty fit- against PSI for breach of with a five-horse- quire integrated when ness, warranty good implied breach of pressure sys- fuel in the power pump, services, negligence, and “dropped never and workmanlike always high tem was pressure effect of too much that the had fied that 13. Pruneda also noticed with holes and that there were go two boots bad. You be "the flex hose can would system, which allowed for kinked hoses leak.” would have a pressure Pruneda testi- the fuel to increase. fraudulent concealment. Because the law- flex found, connector could not be the trial than years suit was filed more four after court continued the hearing.15 leak was discovered November designation its expert witnesses pleaded discovery Head rule. On Oc- 20, 2007, August filed on PSI identified one 5, 2006, tober a third-party filed action expert, Cornelissen, Bastiaan Ph.D., E. Titeflex, against claiming contribution and P.E., opine that all the damages sus- indemnity. PSI claimed that Titeflex had tained aas result of the leak were attribut- faulty manufactured the flex connector able alleged to the faulty flex connector. that caused the leak and subsequently However, after several notices were pro- missing. went PSI’s contribution claim vided, Dr. Cornelissen never up showed premised was on a liability strict cause of for deposition. Nevertheless, his PSI con- action, and PSI claimed that all damages tinued to blame the leak on the flex con- may that Head have sustained were attrib- nector that purportedly manufactured alleged utable to the faulty flex connector. by Titeflex. allegations Based on the by made PSI in action, third-party its Head amended his 4, 2008, On January Titeflex filed a mo- original petition to include Titeflex as a sanctions, tion for alleging that PSI had defendant. Head specifically noted that spoliated by evidence failing produce “Titeflex strictly damages liable for the alleged faulty flex connector. In its by caused the defective flex connector.” motion, Titeflex deposition referenced tes- thereafter, Shortly Titeflex answered both timony provided Barron, by whereby he third-party PSI and Head’s actions and admitted that PSI tested several flex con- asserted various affirmative defenses. incorporated nectors system, into the re- moved the alleged faulty connector, flex meantime,
In the PSI filed a counter- and subsequently lost allegedly faulty against claim Head on March connector, flex thus making impossible it asserting that Head had breached numer- to determine if the flex connector was agreements ous by failing to pay PSI defective and whether Titeflex $57,527.49 had indeed for work and provided materials manufactured the part. Titeflex Later, sought stop.14 truck Titeflex filed a exclude all evidence tending motion to show that summary judgment, for urging that any product manufactured or by there was no sold Tite- evidence that the flex connec- defective, flex was requested tor that and it PSI asserted was the an cause of the instruction to jury spoliation. leak had been on manufactured Titeflex. also filed a Essentially, motion for argued against Titeflex that sanctions there was PSI, arguing no evidence whatsoever that PSI had intentionally to show that it was evidence, destroyed i.e., at fault for the leak. The trial court crucial alleged set a date hearing faulty for the on flex requested Titeflex’s motion connector. Head however, summary judgment; that the trial because court consider the full range sanctions, both argued they Head and PSI up need- to and including the strik- ed more time to conduct discovery, espe- ing of PSI’s pleadings and rendering cially considering alleged faulty default judgment. acknowledged
14. Head Ultimately, that PSI had submit- summary Titeflex’s motion for ted requested invoices for the amount in its judgment was denied the trial court. counterclaim; however, pay Head refused to *17 the invoices because he believed that PSI was causing at fault for the leak. defenses, includ- Titeflex and serted.various affirmative to both responded PSI of limitations. blaming ing statute for sanctions motions Head’s suit and PSI’s delay bringing in Head’s a counter- response, In Titeflex filed firm and lab for the consulting engineering PSI, owed against contending that it claim argued of the flex connector.16 loss indemnify. Titeflex fur- duty PSI no efforts to re- it had made numerous that an assembler ther contended that PSI was connector, though more the flex even cover and that Titeflex was product of a finished the flex years elapsed had since than six chapter 82 of the an innocent seller under from allegedly was removed connector id.; code, practice civil and remedies see system. tank underground storage Head’s thus, indemnify Tite- obligated PSI was argued that it did deliber- PSI further .not court, past for “all and future costs of flex evidence; destroy that it had not ately expenses, reasonable and reasonable and negligent conduct culpable engaged ex- necessary attorney’s fees which were connector; respect to the flex with of this action and in pended defense flex duty keep it did not have a that indemnity.” prosecution of this demand for period once the limitations ex- connector argued also there was no Titeflex result, a PSI did not believe pired. As that a Titeflex flex con- indicating evidence instruction spoliation that sanctions or underground nector was used in Head’s was warranted. system. Titeflex also re- storage tank urged request against its for sanctions summary Titeflex’s motion While PSI. and the motions for sanctions judgment Head, meanwhile, petition amended his Head non-suited all his pending, were 7, 2008, peti- several times. In his sixth amended against claims Titeflex on March tion, live pleading, the lack of evidence demonstrat- his asserted based on against implied the flex PSI for breach of ing that Titeflex had manufactured claims warranty good and workmanlike ser- connector that PSI contended was the vices, fraud, PSI, however, fiducia- negligence, of the leak. contin- breach of cause concealment, ry duty, fraudulent indemnity ued to maintain its claims alleged breach of contract. Head also against Titeflex. PSI later filed its first answer, defenses, strictly and cross- PSI was liable for the defective amended system, denied “did not work at the filing, generally claim. this ATG which claims; required Head re- argued system’s capacity.” all of Head’s that Head (2) (1) remediation;. damages for: contributorily negligent causing quested (3) leak; Titeflex, others, among penalties; TNRCC fines and lost reve- designated chapter being as third under nues as a result of the lines shut responsible parties (4) failures; code, 82 of the civil and remedies down due to the cost practice replacing system; see TEX. & REM.CODE of the failed CIV. PRAC. (West 20,000 2011); replacing gallons §§ of lost ANN. 82.001-.008 and as- cost support examination of the flex connec- 16. In of its contentions in its re- non-evasive tor[,] sponse sanctions, subject September to Titeflex and Head’s motions for of this suit.” In PSI included the affidavit of Eliza- Neally received an invoice from Hen- Neally, attorney previously beth an who regarding the examination of the flex drix case, worked on this who averred that she connector; however, apparently nev- Hendrix possession took of the flex connector from Neally, er returned the flex connector to nor February then Barron on or about 2002. She respond requests for the re- did he to PSI’s Hendrix, sent the flex connector to David one turn of the flex connector. consulting perform experts, of PSI’s "to *18 addition, gallon. fuel per petitions, diesel at amended a and motion $1.50 to dismiss attorney’s or sever asked for fees and un- Titeflex’s counterclaims. Head against capped punitive damages PSI for In October this matter proceeded allegedly “us[ing] workers who were not trial, ultimately to which lasted for seven for that was qualified per- work [the] At evidence, weeks. of conclusion formed, regularly work falsifying] descrip- jury found in of favor Head and Tite- intentionally covering] up tion sheets and particular, flex. In jury ruled in favor real causes leak and resulting of the negligence, contract, of Head’s breach of damages.” alleged Head further that PSI fraud, warranty, breach of and breach of violated section 32.46 the Texas of Penal fiduciary duty claims.17 With respect to Titeflex, securing for the execution of jury Code docu- concluded that PSI was a manufacturer; ments TEX. that deception. See PENAL Titeflex was an inno- (West cent seller within § the context of Supp.2010). chapter ANN. CODE 32.46 practice code; of the civil and remedies 32.46 respect penal to section of the With and that Titeflex was entitled to (1) indemnity code, PSI: argued Head induced PSI, allowing from thus for the recovery Carpenter sign to documents that were costs, expenses, attorney’s of and fees as- TNRCC, falsely to the sent which stated sociated with the trial this matter. that the flex was the connector sole cause Head elected to recover on the theories of (2) leak; of the and withheld documents contract, implied breach breach of war- and evidence and from the TNRCC fraud, ranty, of fiduciary and breach duty. cover up to the true causes leak. In (1) $818,142.38 Head was awarded: in ac- response defense, to PSI’s limitations $283,178.88 damages tual in pre-judg- Head asserted causes of that his action ment interest for sum total of discovery were tolled rule. $1,131,321.26; (2) $91,500in attorney’s 12, 2008, On August non-suited its $382,334 fees. Titeflex was awarded: However, against $68,519.62 claims Titeflex. Titeflex attorney’s fees and in ex- $450,853.62; continued seek costs associated with the for a sum penses total (2) $12,393.55 pursuant matter Rule jury to Texas of Civil court costs. The also concluded that Head agree- breached Procedure 162. See TEX.R. P. 162. CIV. ments with PSI for commenced, materials and services Shortly before trial the trial clean-up for the provided the truck stop; hearing court conducted a on the pending however, according jury, Head was hearing argu- motions for sanctions. After excused from complying agree- with the parties, ments from all the trial court ments.18 defenses, struck PSI’s affirmative includ- defense, its
ing limitations ruled that a The trial court the final signed judgment be spoliation given instruction would jury’s findings on the on January based jury. parties’ request attorney’s The 2009. post-judgment Various motions fees was carried to the end of the filed, trial. including were motions for judgment trial The court also denied various veredicto, motions disregard non-obstante filed, including that PSI had trial, motion to jury’s findings, for a new to modify third, fourth, fifth, judgment, strike Head’s and sixth the and for remittitur. Each of claim, Regarding negligence Despite concluding Head’s 18. Head was excused 75%, complying agreements from PSI, his apportioned with with jury PSI’s fault with the jury determined that PSI was entitled remaining apportioned to Head. 25% $57,527.49 compensation from Head. *19 the flex con- preserve trial that PSI’s failure to denied the these motions he was prejudiced nector Head “bеcause timely appeal filed its notice of PSI court. 9, certainty TEX.R.APP. P. to determine with liabili- See unable April on causation[,] 26.1(a). 28, 2009, ty, PSI filed a and fault.” April On registry in the bond supersedeas Applicable and A. of Review Standard $1,037,737, or amount of trial court in the Law net worth as ex- fifty of PSI’s percent R. Barron.19 See id. at pressed by imposi We review a trial court’s 24.2(a)(1)(A); also TEX. CIV. PRAC. see under an abuse of discre tion of sanctions 52.006(b)(1)(West § ANN. & REM.CODE Cummings, tion standard. Cire v. 134 2008). appeal (Tex.2004). This followed. 835, A trial court 838 ruling its when its is
abuses discretion arbitrary II. THE TRIAL COURT’S and unreasonable and without any guiding princi SANCTIONS reference to rules and ples. conducting at 838-39. our Id. issue, challenges PSI the By its first review, to a review of we are not limited PSI imposition of sanctions. trial court’s “sufficiency support the of the evidence” to trial court’s sanctions as characterizes the rather, findings; the trial court’s we make specifically ar- penalty death sanctions inquiry an of the entire rec independent forth in they violate the test set gues that ord to if the trial court abused determine Corporation Natural Gas TransAmerican sanction, by imposing its discretion (Tex.1991). Powell, S.W.2d 913 811 230, Kelley Corp., Daniel v. Oil 981 S.W.2d relationship be- that there is no contends (Tex.App.-Houston [1st Dist.] offender, conduct, the and the tween the denied) Thus, pet. (op. reh’g). we are on the sanctions were ex- sanction and that considering only specific not limited to trial responds that cessive. Head committed; may violation we consider oth do not violate the Trans- court’s sanctions during er matters that have occurred there a standard because re- American litigation. Opera v. Aquamarine Downer PSI’s conduct and the lationship between tors, Inc., (Tex.1985); 701 S.W.2d the sanc- imposed sanction and because Abascal, see Acc. & Indem. v.Co. tions were not excessive. Hartford (Tex.App.-San 831 S.W.2d Antonio spoliation as to the trial court’s Specific 1992, orig. proceeding). instruction, duty that it had no argues procedure than the Rule of civil longer to retain the flex connector 215.2 allows “just” that the a trial court to enter sanctions for a applicable period; limitations loss any party’s comply discovery not failure to with a of the flex connector did cause 215.2; request. that instruction order or TEX.R. P. prejudice;' CIV. Cire, 839; “nudged jury against Response PSI.” Head coun- see 134 S.W.3d at Time, (N. Am.), duty Sterling Inc. v. by arguing ters PSI had Commerce Inc., preserve (Tex.App.-Dallas connector because PSI flex likely Among prescribed pet.). knew that a lawsuit would arise from (1) the flex connector sanctions contained in rule 215.2 are: incident and expenses an key piece charging discovery was a of evidence. He asserts order thus, $2,075,472.44. supporting filing net 19. In an affidavit worth is Half PSI, supersedeas bond on behalf of Barron equals approximately of PSI's net worth $13,200,367.27 averred that PSI has in assets $1,037,737. $11,124,894.83 capital; in liabilities and costs; and court striking 882; Blackmon, 104 S.W.3d at pleadings and defenses. TEX.R. P. CIV. reason, at 849. For this the supreme (b)(4)-(5). 215.2(b)(2), Any sanction that court requires courts to consider less strin- adjudicates a precludes pres claim or gent sanctions and whether such lesser entation of the merits of the case consti fully sanctions would promote compliance. penalty” tutes a “death sanction. See TransAmerican, 917; 811 S.W.2d at see *20 Blackmon, Chrysler Corp. v. 841 S.W.2d Cire, 839; 134 S.W.3d at Spohn Hosp., 104 844, (Tex.1992); 845 see also De Los San S.W.3d at 882. Johnson, 18-07-00502-CV,
tos v.
No.
2008
Discovery sanctions cannot be
3971455,
*3,
WL
at
2008 Tex.App. LEXIS
used to adjudicate the merits of a
6841,
party’s
at *8 (Tex.App.-Corpus
Aug.
Christi
defenses,
claims or
28,
denied)
party’s
unless a
hin
2008,
(mem.
pet.
op.); In re
drance of
discovery process
the
justifies
Co.,
Fina
Oil & Chem.
No. 13-98-00640-
CV,
presumption that the
33589153,
party’s claims
*12-13,
1999
or de
WL
at
1999
fenses lack
TransAmerican,
merit.
(Tex.
1751,
811
Tex.App. LEXIS
at **36-37
However,
S.W.2d at 918.
if a
App.-Corpus
11, 1999,
party re
Christi Mar.
orig.
(not
produce
evidence,
fuses to
material
despite
proceeding)
designated
publica
for
tion)
imposition
the
sanctions,
of lesser
(noting that
the
striking
party’s
of a
trial
may
court
presume that
affirmative defense as a
the asserted
precludes
sanction
claim
or
defense lacks merit
dispose
defendant from
of
going to trial on the
it.
and,
Id.
thus,
merits of that
Sanctions which
defense
are so severe
should be
as to
preclude
according
presentation
tested
to the
-applied
standards
the merits of the
case
striking
other
should not be
pleading).
par
assessed absent a
ty’s flagrant bad faith or a party’s callous
Supreme
The
Court
Texas in
disregard for
responsibilities
of discov
TransAmerican developed two-part
test
ery under
(citing
rules.
Id.
Nat’l
for
apply
courts to
when determining
Hockey League
Club,
v.
Hockey
Metro.
whether a
“just.”
sanction is
811 S.W.2d
Inc.,
639, 642-43,
2778,
427 U.S.
96 S.Ct.
First,
at 917.
there must be a direct
curiam)).
Second, “just” sanctions must not testimony.” witnesses’ “In determin TransAmerican, be excessive. 811 ing S.W.2d whether a trial court has abused its is, at 917. imposed That a sanction discretion appeal], a sanctions [in we are discovery abuse should be no more severe required to view the light evidence in the than necessary satisfy legitimate its most favorable to the trial court’s action purposes, which includes securing compli indulge every and to legal presumption in rules, discovery ance with deterring other favor of judgment.” Vaughn v. Tex. litigants misconduct, Comm’n, from similar pun 139, Employment Id.; ishing violators. Spohn Hosp., 1990, see (Tex.App.-Houston 143 no [1st Dist.] 540 the evi
writ) sumed to have done so because Corp., Home 652 Parks v. U.S. (citing 479, (Tex.App.-Houston Id. at [1st was unfavorable to its case. S.W.2d dence dism’d)). Further, 1983, rea- writ Dist.] Energy Co. v. Sub (citing 721-22 Williford from may be drawn “inferences sonable Servs., Inc., 895 S.W.2d mergible Cable by the trier of the proved” actual facts (Tex.App.-Amarillo 389-90 McEver, Beazley v. S.W. facts. 159). writ); Brewer, Under writ). 1922, no (Tex.Civ.App.-Dallas circumstance, presumption the second party controlling arises because Spoliation In- Trial B. The Court’s its failure missing explain evidence cannot struction (citing it. Id. at 722 Watson produce instruction is an spoliation “A Inc., Coop., Power Brazos Elec. jury outlining per given instruction writ (Tex.App.-Waco they may against make missible inferences denied)). not presumption ap “The does *21 lost, altered, destroyed or has party a who merely are lost.” ply when documents Dillard, 171 Coop. Elec. v. evidence.” Tex. v. Free Nursing Residence Cresthaven 2005, 201, (Tex.App.-Tyler no S.W.3d 208 man, 214, 227 (Tex.App.-Amar 134 S.W.3d Dowling, v. 862 pet.) (citing Brewer 2003, Energy pet.) (citing illo Williford 156, (Tex.App.-Fort 159 Worth S.W.2d Brewer, Co., 389-90); 862 895 S.W.2d at denied)). 1993, spolia The use of a writ may guid A court be S.W.2d at 160. trial generally is limited to two tion instruction in deter following ed three factors (1) the deliberate circumstances: destruc is mining spoliation presumption whether a (2) evidence; the fail relevant and tion of (1) duty to justified: whether there was a produce to relevant evidence party ure of a (2) evidence; alleged whether the preserve non-production. its Wal- explain or to intentionally spoliator negligently either Stores, Johnson, Inc. v. 106 S.W.3d Mart evidence; and spoliated whether (Tex.2003) 718, (citing Anderson v. 721 prejudiced nonspoliator’s spoliation (Tex. Co., Publ’g 13 S.W.3d 61 Taylor ability present to its case or defense. Tre denied)).20 2000, pet. App.-Dallas Under circumstance, Ortega, vino v. 954-55 party the first a who has (Tex.1998) (Baker, J., destroyed pre- concurring)21; evidence is deliberately Stores, Johnson, Ortega, Inc. v. 21. In Trevino v. Justice Baker noted In Wal-Mart that: supreme that: court stated duty reasonably parties a Because have to may discovery Evidence be unavailable for evidence, logical preserve only it that variety of reasons. Evidence and trial for they should be held accountable for either lost, may destroyed willfully be altered or negligent spoliation. or intentional While may faith or it be lost for rea- bad allowing party a court hold a accounta- Sometimes, completely innocent. lost sons negligent spoli- ble for as well as intentional may easily replicated, may evidence be or it may appear pu- ation inconsistent with the marginal that it has little or no effect be so remedying purpose spoliation, it is nitive on the of the case. On other occa- outcome clearly evidentiary consistent with the ratio- sions, or destruction of evidence the loss supporting it the remedies nale because seriously impair party's ability may resulting prejudicial effects ameliorate judge present A trial should have its case. unavailability from the of evidence. es- appropriate remedy an sence, discretion to fashion places prejudi- it the burden of parties rough approxima- to restore the to a upon culpable spoliating cial effects positions of their if all evidence were nonspoliat- tion party rather than the innocent generally remedies must ing available. These party. J., (Tex.1998) (Baker, case-by-case be fashioned on a basis. S.W.2d 957 969 (internal omitted). (Tex.2003). concurring) citation 721
541
Camacho,
however,
251
Whirlpool Corp.
gument,
S.W.3d
is belied by Barron’s
2008),
(Tex.App.-Corpus
102
testimony
Christi
Neally’s
affidavit.
In his
grounds,
rev'd an other
S.W.3d
testimony, Barron stated that the flex con-
(Tex.2009).
nector was the cause of the leak and that
it was removed from the underground
Before
failure
produce
storage
tank
by PSI employees
may
material evidence
be viewed as dis
placed
in the back of
pickup
Barron’s
abuse,
covery
opposing party
must es
Moreover,
truck in November 2001.
Bar-
tablish that
non-producing party
had a
ron admitted that he anticipated that he
duty
preserve
the evidence in question.
would be sued for the leak when he ar-
Dillard,
Johnson,
(citing
at 209
S.W.3d
rived at the scene of the November 2001
722).
at
S.W.3d
There must be a
incident. Carpenter consented to Barron
sufficient
showing
foundational
removing the flex connector
from the
party
destroyed
who
the evidence had no
premises
safekeeping
for
possible
test-
potential
tice both of the
claim and of the
ing. Neally averred that
gave
Barron
potential
evidence’s
relevance thereto.
Id.
flex connector to her in February 2002.
Johnson,
722).
(citing
An
She then sent the flex connector to Hen-
objective
anticipation
test for
of litigation
drix, PSI’s expert,
testing.
Hendrix
person
is whether a reasonable
would con
examined the flex connector and sent PSI
severity
clude from the
of the accident and
a bill for the examination in September
other circumstances
it
surrounding
*22
2002. The flex connector was never re-
there was a substantial
litiga
chance for
turned,
Johnson,
alleges
tion.
and PSI
(citing
Id.
that it was
S.W.3d at
unable
722).
to
“A
contact Hendrix to
party should not be able to sub
instruct him to re-
vert
the discovery process and the
turn the flex connector.
fair
justice
administration of
simply by de
Based on Barron
Neally’s
state-
stroying evidence
actually
before a claim is
alone,
ments
it is clear that
February
since
Trevino,
filed.” See
the cause of prejudiced parties both litigation, produce part of the majority tor. For the flex connector was significantly. represented PSI’s failure by Titeflex. manufactured con foregoing, we Based on significantly connector flex preserve person would have clude that a reasonable and Titeflex. Head Head both prejudiced 20,000- severity of the deduced from certainty with to determine was unable other circum diesel fuel leak and gallon causation, enor- and fault for the liability, leak that there surrounding the forced stances fuel. Head was of diesel mous leak litigation, chance for es the was a substantial determination of solely on PSI’s rely leak, Barron admitted as pecially considering licensed contractor cause of the Johnson, underground 106 S.W.3d at installed much at trial. See originally who Dillard, whose systems 722; ATG tank and 171 S.W.3d at storage see also sued once the anticipated being president Further, the flex connector was because precluded Head was discovered. leak was in determining of evidence piece central about the obtaining opinion a second from who was at cause of the leak and the actual from another licensed of the leak cause fault, conclude that it was reasonable to to file suit and was induced contractor rele potential was on notice of its allega- of PSI’s against Titeflex because Johnson, 722; vance. Sеe that it would have testified tions. Cordova Dillard, at 209. We also see regulations if violation of state been a that Head and Titeflex further conclude in- conducted an independently had Head they signifi were both demonstrated underground storage vestigation pro failure to cantly prejudiced by PSPs assistance of a without the tank event, duce the flex connector. Thus, like PSI. contractor licensed attorneys, com PSI blames its insurance mercy. was at PSI’s inability pro Hendrix for its pany, and by PSPs prejudiced was also flex connector. Titeflex duce the *23 the flex connector be- preserve to failure against an as- spoliator A can defend the basis of Tite- part the itself was cause de- negligent sertion of or intentional Barron testified that he liability. flex’s by providing explana- other struction stating *24 February lost since a date which was 811 S.W.2d at Therefore, clearly period within the limitations that we with intima- disagree PSI’s applies. argues PSI PSI withheld the tion the its in hav- pro lawyers that actions of duction ing of evidence that was crucial to this the flex connector tested PSI shielded engaged actions, case and in numerous as from all sanctions. The reflects record later, we detail to its that designed minimize that Barron was aware of the fact addition, fault in matter. Neally gave this In PSI the flex connector to Hendrix summary testing judgment upon moved for based for and that Hendrix was unable to limitations, even though liability produce February in the flex this connector since Therefore, credibly case on explanation centered for the 2002. PSI cannot as- alleged non-pro- faulty cause of the leak—the flex sert that it was unaware of the the produce simply connector—and PSI to duction of the flex connector failed part. lawyers. feet place blame at the of its
544
stating
supreme
in
the
Next,
more
we PSI is correct
that
importantly,
and perhaps
trial
consider
considering
requires
court
that a
court
propriety
note that in
the
sanctions,
on
stringent
settling
we are not limited
measures before
trial court’s
less
considering
specific
Mayer,
the
violation
104 S.W.3d
only
to
severe sanctions. See
TransAmerican,
mat-
committed;
may consider other
(citing
we
811 S.W.2d
at 883
917).
litigation.
However,
during
ters that
the
occurred
at
determinative
“[c]ase
241;
Downer,
also
S.W.2d at
see
See
701
in the first in-
may
imposed
sanctions
be
Abascal,
en-
at
PSI has
they
831 S.W.2d
only
exceptional
in
when
stance
cases
attempts
in
to minimize
gaged
repeated
its
justified
clearly
fully apparent
are
and it is
(1)
matter,
by:
in
as
fault
this
evidenced
promote
no
that
lesser sanctions would
Obregon
to
sending
Morris
instruct
to
GTE
compliance with
rules.”
mislead-
inventory
using
re-create
records
Tanner,
Corp. v.
856
Sys.
Comm’cns
was
ing
(Tex.1993)
calculations to show that Head
not
(orig. proceed-
729
S.W.2d
(2)
leak;
Barron
diligent
detecting
in
TransAmerican,
919;
ing);
811 S.W.2d at
alleged
testifying that he removed
Inc.,
re
9
Zenergy,
see In
premises,
faulty flex connector from the
1997, orig. pro-
(Tex.App.-Corpus Christi
crew-chief, denying
Rodriguez,
Inc.,
while
Ryder Sys.,
ceeding); Marshall
(3)
thing;
do
that he saw Barron
such a
(Tex.App.-Houston
Titeflex,
blaming
of the
on
denied).
the cause
leak
fact,
In
writ
[14th Dist.]
flex con-
alleged
manufacturer of the
they
are so
that
which
severe
“[sanctions
nector,
existed
though
even
evidence
to
presentation on the merits should
preclude
Titeflex;
fail-
implicate
Cornelissen
party’s
not be assessed absent a
bad faith
he
ing
deposition
to
his
when
attend
disregard
the re-
flagrant
or counsel’s
designated
opine
sole
that
expert
discovery
sponsibilities of
under the rules.”
flex connec-
the cause
the leak was the
Inc.,
9;
In re
at
see
Zenergy,
S.W.2d
engaged
tor.
that PSI
these Blackmon,
We believe
Ultimately,
841 S.W.2dat 849.
anticipated
actions
Barron
being
because
court,
as described
TransAmerican
sued once he was informed about
leak.
punishment should fit the crime.”
“[t]he
Finally, compliance. Considering PSI that mote all of the asserts the case, sanctions were in this we conclude imposed excessive when circumstances justified in con- spoliation that a instruction that the trial court was considering to bad cluding was also and that the trial court that PSI’s actions amounted given imposition should of more have considered lesser sanctions. faith and warranted
545 Blackmon, thereof, 841 to pleadings parts severe sanctions. See strike or dis- 849; Inc., Zenergy, at In re 968 S.W.2d miss actions with or prejudice, without 9; Downer, at see also 701 a judgment S.W.2d S.W.2d render default discovery for Abascal, 241; abuses). at 881 at 561. Fur- S.W.2d Therefore, based on forego- thermore, considering all the evidence ing, we overrule first issue. light
in the most favorablé to the trial say judgment, court’s we cannot III. LIMITATIONS impos- trial court abused its discretion in issue, In its second PSI argues that issuing ing spoliation sanctions and by Head’s claims were barred limitations. 838; Cire, See S.W.3d at instruction. 134 Specifically, argues PSI that Head’s claims Trevino, (stating S.W.2d 953 969 at occurred, when accrued the leak first and have trial courts broad discretion to sanc- discovery that the rule fraudulent con- tion for spoliation, including evidence cealment not apply doctrine do or do not sanctions); imposition of death penalty serve toll period the limitations such Daniel, 234; 981 S.W.2d at see also that Head’s timely. lawsuit was Head 143; Parks, 652 Vaughn, 792 S.W.2d at counters that PSI’s limitations defense was essence, S.W.2d 485. we conclude at properly struck as sanction and a because imposed spolia- that the sanctions and the limitations must be pleaded proved, given tion trial “fit instruction court PSI is not on judgment entitled to its crime” were not excessive. See limitations affirmative defense. TransAmerican, 811 at 917. S.W.2d The statute of limitations is an The dissent states that trial court’s 94; affirmative defense.22 Tex.R. P. de- striking sanction of PSI’s affirmative Civ. Servs., & Fontenot Petro-Chem. Mar. Inc. fenses was so severe as to violate the LaBono, 455, v. 993 (Tex.App. S.W.2d 458 See How- TransAmerican standard. id. denied) 1999, ever, -Corpus pet. Christi (citing we note that the trial court’s sanc- Mercer, Inc., v. Woods William M. 769 preclude challeng- tions did not from 515, (Tex.1988)). ing on S.W.2d 517 It is the liability presenting Head’s claims plead defendant’s burden support prove witnesses and evidence in thereof. its sanctions, defense, Despite re- statute of still limitations affirmative LaBono, quired prove his causes of aсtions at it is See otherwise waived. 993 Thus, 458; Tuttlebee, trial. this was not an instance at v. S.W.2d Tuttlebee 702 (Tex.App.-Corpus where the trial court all of the S.W.2d Christi struck 1985, writ); pleadings spoliator, including see also Devlin-Weinheim answer, Weinheimer, 13-08-00546-CV, spoliator’s and conducted a trial er v. No. such, *5, solely damages. Tex.App. on As we believe 2009 at WL imposed that the sanctions were of a lesser LEXIS at **13-14 (Tex.App.-Corpus (mem. denied) 2009, pet. nature than those that could have been Christi Dec. 918; pleaded imposed. op.). See id. at see also TEX.R. its limitations affirma 215.2(b)(5) defense; however, (allowing P. CIV. trial court tive the trial court contract, (Tex.1968). Ordinarily, period negli- the limitations for Breach of 22. fraud, gence fiduciary duty, of action and causes of breach of causes action and breach implied warranty arising implied warranty arising of an out breach an out of a written years four-year of an oral contract is two from the contract claims have limitations period. accrual date. See See Prac. & Prac. Tex. Civ. Rem.Code Tex. Civ. & Rem.Code Ann. 16.003(a) (West 2002), 16.004(a)(4)-(5) (West Supp.2010); § § § see also 16.051 Ann. Bell, Bell, (West 2008); Corp. Prods. Certain-Teed see also S.W.2d *26 546 Brooks, 694, defense, others, (Tex.App. in its 180 S.W.3d 705 among this
struck
2005,
pet.).
court Houston
no
The
[14th Dist.]
Because the trial
order.
sanctions
if it
legally
evidence is
sufficient
would
limitations defense and be
struck
people
the trial
enable reasonable and fair-minded
concluded that
cause we have
under review. See
issuing
discretion in
to reach the decision
abuse its
court did not
Keller,
827-28;
order,
at
plead
City
PSI did not
168 S.W.3d
Ver
its sanctions
of
Brooks,
24;
at
180
nagallo,
limitations.
181 S.W.3d
defense of
prove its affirmative
458; Tuttlebee,
must credit favorable
LaBono;
at
S.W.3d at 705. We
993 S.W.2d
See
Weinheimer,
256;
evidence if a reasonable trier of fact could
at
see also
702 S.W.2d
have,
4432713,
*5,
contrary
un
Tex.App.
disregard
at
2009
evidence
2009 WL
Moreover,
9258,
this
less a reasonable trier of fact could not
at **13-14.
LEXIS
Deere,
886,
Ingram
have.
v.
288 S.W.3d
general
“that a mere
denial
has held
Court
(Tex.2009);
Med.
issue the affirmative de
893
Columbia
Ctr. Las
place
will not
of
Colinas,
238,
must,
Hogue,
Inc. v.
271 S.W.3d
pursuant
limitations which
fense of
Keller,
(Tex.2008);
Rules of
248
168 S.W.3d
City
the Texas
Civil
[of
to Rule 94
of
Procedure],
judge
at 827. The trier of fact is the sole
specially pleaded.” Wynn
be
(Tex.Civ.
790,
credibility
weight
792
of the witnesses’
and the
Wynn,
v.
587 S.W.2d
writ).
1979,
given
testimony. City
no
Ac
to be
their
Kel
Christi
App.-Corpus
of
ler,
819; Vernagallo,
PSI’s second issue.
S.W.3d at
547
1986)
curiam).
Applicable
(per
support
The evidence
Law
ing
weighed along
the verdict is to be
with
charge
The
jury
asked the
wheth
case,
in
including
the other evidence
the
it
agent
er
believed that PSI was an
contrary
that which is
to the verdict.
Agency
Head.
was defined as:
Jackson,
performance is that of an agent only if agency the present. elements of are trial, In context jury of a the Proof agency requires a showing sufficiency of the evidence is reviewed alleged that the principal right has light charge submitted if no assign to alleged agent’s task and objection charge. is made to the Romero right to control the means and de- Consolidation, Inc., v. KPH tails of the to to process be used accom- (Tex.2005); Stores, Wal-Mart plish this task. (Tex. Inc. v. Sturges, S.W.3d right The to veto another’s decisions 2001). Here, although expressed PSI right does not itself create to give many with jury charge, concerns it affirmative directives be that action tak- appears from the record that the concerns en, which integral right to the charge were resolved in PSI’s favor in the agency control within an relationship. court, given jury, trial power The principal’s to control the therefore, objections, ruled ever on its if agent distinguishes principals agency Thus, any. review we the evidence under relationships from those who contract to charge. the law as set out in the jury See provided by persons receive services Romero, 221; 166 S.W.3d at see also who are agents. not Sturges, 52 at 715. relationship A agency is not one of agent unless the consents act on be- to half of the principal, principal and the Fiduciary Duty B. Breach of right throughout has the the duration of issue, PSI that argues its third there relationship agent’s control the agreed is no evidence that PSI to be sub- acts. control; there ject Head’s is no charge The Head further stated that must evidence that Head controlled details comply failed to with prove work; general of PSI’s that it did not owe fiduciary duty by showing: owed to Head Head; fiduciary that Head duties (1) the transactions were not fair and prove damages failed to as the sustained (2) Head; inequitable were PSI did not alleged result of of fiduciary breach make reasonable use of the confidence duty. Essentially, PSI attacks all three (3) it; placed PSI failed to act in of Head’s fiduciary elements breach of good the utmost faith and exercised duty Head; scrupulоus honesty cause of action. most toward “ to, from the prior apart own above ‘must exist placed its interests ” *28 suit.’ Head, agreement a made the basis of the caused detriment
those of
which
Head;
fully
(quoting
failed to
and Meyer,
A relationships that “confidential (providing arise as a matter of law in certain formal may parties have dealt with arise when relationships. v. 167 Meyer Cathey, See long each in such a manner for a other (Tex.2005) 327, curiam); (per S.W.3d 330 period party justified time that one is Rawson, 588, Priddy v. 600 282 S.W.3d to act inter expecting the other in its best 2009, (Tex.App.-Houston pet. [14th Dist.] est”); also v. Brewer & see Johnson denied); Lundy, see 260 also S.W.3d (Tex. Pritchard, P.C., 193, 200 501; Bancshares, Cotten v. 2002) (“The Weatherford on behalf of agreement act Inc., 687, 187 698 (Tex.App.-Fort S.W.3d be a principal agent causes denied). 2006, However, be pet. Worth is, person duty, a a fiduciary, having every relationship involving cause not a by primari his to act undertaking, created high degree rises of trust confidence matters ly for the benefit of another in fiduciary a formal rela stature of More undertaking.”). connected with his tionship, recognizes the law also the exis over, subjective mere trust is insufficient tence of an or confidential fiducia informal relationship that to establish a confidential ry Meyer, 167 at 330. relationship. S.W.3d gives fiduciary duty. Meyer, 167 rise to An fiduciary relationship may informal 331. S.W.3d at social, moral, domestic, arise from or between relationship The purely personal relationship of trust agent fiduciary is a relation principal Id.; confidence. & Trac see Crim Truck (SECOND) ship. RESTATEMENT OF Transp. tor v. Corp., Co. Navistar Int’l 823 (1958). § 591, (Tex.1992); agency 1 An relation AGENCY Priddy, S.W.2d 594 282 ship depend express 600; Cotten, upon does not S.W.3d at 187 S.W.3d at moral, domestic, social, appointment principal; or assent The or personal rather, conduct relationship may implied it be from the upon which informal Sander, 824 relationship parties. confidential Orozco v. predicated
549 (Tex.1992); agent, in 556 see Ross v. installing underground S.W.2d stor (Tex. age system. P’ship, One 210 See First Nat’l Acceptance Tex. S.W.2d (Tex. curium, 1990), Bishop, Co. per writ denied App.-Dallas (“The (Tex.1991); App.-Corpus pet.) Christi S.W.2d 222 Mercedes- party claiming agency must Am., Dickenson, prove the N. Inc. v. Benz of principal right- has both the to assign the (Tex.App.-Fort Worth agent’s right task and control the writ). 1986, no An is one agent who is means and details which the agent will by another to transact business authorized *29 accomplish the task. The principal’s ex manage some affair for him. Welch v. tent- of control over the details of accom Enters., Inc., Coca-Cola plishing task assigned primarily distin withdrawn). (Tex.App.-Tyler pet. guishes agent status of from that of relationship existence of an agency The contractor.”) (citations independent omit may be established circumstantial evi ted). We disagree. upon proof based of all the facts and dence relationship that circumstances shows The evidence establishes that PSI and parties light upon and throws the Head had a long-standing relationship dat- Id. ing character such relations. at 540. back to Head first when contract- with ed PSI to remove the three steel Discussion 2. and implement tanks the new underground case, jury In this concluded that PSI storage system. tank Head continued to agent was Head’s and that PSI failed to use PSI to exclusively perform work on fiduciary comply duty with the owed to underground storage system. tank In Head, the principal.23 particular, In fact, the record demonstrates that PSI jury found that PSI failed show that: repairs underground made to the storage (1) the the parties transactions between system fifty tank at least times from 1997 (2) Head; equitable fair and it were to 2001. In based on October made reasonable use of the confidence that recommendation, Head authorized PSI to (3) it; placed it Head with acted in the system, install new ATG which was de- good faith utmost and exercised most signed to allow to discontinue using Head (4) Head; honesty it scrupulous towards stick inventory method to monitor lev- Head’s; place not above did its interests addition, accepted responsibil- els. (5) fully fairly it and and disclosed all ity for ensuring system that Head’s was Head important concerning information to compliant regulations. with State rules and the transactions in this case. involved regarding system’s PSI advised Head tests, registration, leak monthly monthly Duty a. Existence of control, inventory annual line and leak duty In challenging the element of detector tests. testified Carpenter that annual, fiduciary duty Head’s breach of cause of tightness PSI conducted tank action, Carpenter’s PSI directs us to testi tightness line tests direction of mony that PSI was a “vendor” and simply stop Head so that the could obtain a truck Head on” simply that “relied PSI and ar fuel-delivery State-mandated certificate. that the gues testimony record contains Beginning September PSI sent indicating that controlled stop speak PSPs Morris to the truck with it argues employees compliance work. that acted as an Head and his about issues, contractor, including inventory not as Head’s control. independent proper Implicit finding agent jury’s principal. in the that PSI Head’s was the was that Head necessary repairs “get reflects that PSI re- The record also up pumping Head’s behalf with the online and back as [in] acted on peatedly application initial possible.” PSI filed the short time TNRCC. as for the construction with the TNRCC Carpenter’s testimony, PSI directs us to system on storage tank underground where he testified that “we relied [Head] paperwork PSI also filed behalf of Head. in the on—on them to direct us [PSI] to the cause pertaining with the TNRCC direction, correct as far as what was need- behalf, leak on Head’s scope of the time.” ed at that immediate PSI also additional calculations and which included not exercise control notes that Head did inventory records revisions done to the completing assigned over the means of Furthermore, Bar- by Obregon. created tasks; “entirely in fact PSI was left free to “I for Bill ron testified at trial that worked pursue assigned task as PSI chose.” Head,” thereby intimating that PSI was testimony appears This to conflict with Head’s control. Barron himself subject to testimony indicating that PSI acted on Determination Re- executed the “Release during Head’s behalf the: construction filed with the port Form” *30 underground storage system; of the tank supervisor. as the on-site Even TNRCC (2) TNRCC; of with the filing paperwork Cordova, investigator, the field TNRCC (3) (4) testing system; investigation of the determine, I that what can “[f]rom noted (5) leak; of the and remediation of the they representing, providing were [PSI] testimony leak. The record contains that representing Bill Head.” Car- information input Head had or exerted control over the in penter input testified that he had some completing assigned means of most of the TNRCC, sent to the and he paperwork the tasks, especially regard filing with to the required sign paperwork was the before of the paperwork and interactions with sent, indicating it that he reviewed the was TNRCC, and that PSI regularly repaired paperwork representa- and assented to the tests, system, the conducted and ensured by PSI. tions made system compliance that the remained detected, agreed the leak was PSI Once standards; regulations with State and to act on behalf of Head in the assessment therefore, we conclude that PSI owed leak, the in compliance and remediation of general fiduciary duty. Head a See Bish- regulations. Carpenter with State stated 714; op, 187 S.W.3d at see also Field ERM were that PSI and hired to investi- Serv., Ives, Measurement Inc. v. 609 repair the leak. He that: gate and noted (Tex.Civ.App.-Corpus S.W.2d 619 “[w]ell, parties, it was—it was two Envi- n.r.e.) (noting Christi writ refd that Management ronmental Risk and Petro- duty by fiduciary agent owed an to his Solutions, leum and Mark was [Barron] agency inherent in an principal is relation- know, you involved into it because he he— ship). get prob- wanted to to the source .of Carpenter’s To the extent that testimo- lems, I it in their ... put hands ny indicates that Head relied on PSI and backtrack and see where it came from.” pursue assigned allowed PSI to tasks as further that Carpenter employ- noted chose, that PSI we note the reconciliation ability stop ees at the truck lacked the leak; thus, conflicting prov- of evidence was within the investigate repair jury, ince of the and we must Head relied on PSI ERM for these defer jury’s long finding so as the is pipes, Barron resolution tasks. tested the tanks and Keller, City 168 being and after told about the flex connec- reasonable. See of Kuhlmann, tor, 819; Carpenter make all directed PSI to see also McGalliard (Tex.1986) (3) leak; (stating cost of past remediation (4) conflicting evi presented stop; that when with the truck cost of future remedia- (5) dence, one wit tion of truck may stop; the fact-finder believe value of others); leak; ness and disbelieve v. diesel fuel as a result lost of the Ashcraft Lookadoo, (Tex.App. the cost the ATG by installed denied) 1997, pet. alleges that the PSI in 1999. PSI (noting Dallas that “[t]here trier of is the exclusive evidence of these judge damages fact were credibility proximately and the to be caused weight witnesses’ breach of fiducia- ry given testimony). concluding duty In owed PSI.” their The record indi- agent, jury implicitly PSI Head’s cates was otherwise. fiduciary duty
found that PSI owed Head a
trial,
jury
At
nu-
heard evidence of
clearly
the benefit
to act for
of Head and
merous instances where
put
its own
acted
rejected PSI’s assertion that PSI
interest ahead of Head’s interest. The
contractor,
independent
rather
solely as an
example
most obvious
is PSI’s failure to
agent,
completing
than as Head’s
when
produce
alleged faulty
flex connector
Keller,
City
tasks for Head. See
when it
insistеd
documentation to the
S.W.3d at 819. To the extent
TNRCC that the flex
connector under
PSI did
a fidu
argues that
not owe Head
fourth
dispenser
the cause of the
written
ciary duty because there were not
Moreover,
leak.
the record reflects sever-
task,
every
we
assigned
contracts for
note
al
where PSI
provide
instances
failed to
agency
that Texas courts have held that
copy
Head with
being
the records
relationships may
implied
be
from
con
fact,
provided
one
TNRCC.
Orozco,
*31
parties.
the
824
duct of
See
instance,
such
attorneys requested
Head’s
556; Ross,
210;
S.W.2d at
796
at
S.W.2d
records
the
regarding
installation of
Dickenson,
b. of the experts opined Head’s TNRCC.24 Damages Elements were figures these altered to minimize jury damages respect The awarded Head PSI’s fault with the leak and (1) attorney’s for: with the diligent fees associated show that Head was not in discov- action; Pruneda, ering em- defense of enforcement cost leak. another PSI other emergency clean-up ployee, of the November witnesses testified records, Obregon again. testified that he was about and he never saw them unsure Owens, Moreover, expert, of the created own whereabouts records he Mark figures prior Morris’s rec- net should when instructions to recreate testified that be used Obregon reconciling inventory figures. ords. noted that someone took the 552 produced and often improper paired numerous times of the leak was an
the real cause
$300,000 in
faulty readings. Though the
valve,
of a union at a shear
installation
by
against
fines assessed
that Barron
than the flex connector
rather
reduced, Head was still
TNRCC were
paperwork
filed
at
trial and
blamed
$30,000 in
approximately
forced to pay
testimony gives
This
with the TNRCC.
in de-
significant
fines and incurred
costs
negligently
that PSI
rise to an inference
action,
re-
fending the enforcement
which
storage tank
underground
installed the
compliance
Head to demonstrate
quired
and, thus, caused the leak and the
regulations,
with State rules and
some-
discovering,
with
damages
associated
that PSI could have and should have
thing
remediating the leak.
cleaning up, and
agent.
Head’s
done as
Furthermore,
gives
record also
rise to
evidence, we conclude that a
From this
namely
employees,
inference that PSI
an
jury
reasonably infer
that PSI
could
Morris,
in a coordi-
engaged
Barron and
fiduciary duty it owed to
breached the
blame for the leak at
place
nated effort to
re
damages
Head and that the
awarded
Clearly, such actions
the feet of Head.
Kyu
the breach
PSI. See Si
sulted from
fiduciary
would constitute a breach
Harstan, Ltd.,
629,
Kim v.
286 S.W.3d
635
Lundy,
duty
by PSI to Head. See
owed
denied) (cit
2009,
(Tex.App.-El
pet.
Paso
Bradshaw,
501;
at
see also
Blume,
440, 447
ing Jones v.
335676,
*3,
Tex.App.
at
WL
(stat
denied))
2006,
(Tex.App.-Dallas
pet.
LEXIS
at *9.
ing
fiduciary duty requires
that breach of
jury also hеard evidence that Cor-
The
showing
inju
that the breach caused an
representations
made
upon
dova relied
Wilson,
ry); Punts v.
complete
investigative
his TNRCC
(same);
pet.)
(Tex.App.-Texarkana
as the basis for the
report, which served
Bank,
Fargo
see also Wells
N.A. v. Crock
$300,000 in
more than
fines assessed
er,
13-07-00732-CV,
No.
2009 WL
against
admitted that Mor-
Head. Cordova
5135176, *6,
Tex.App.
at
LEXIS
TNRCC;
colleague
ris was a
of his at the
Dec.
(TexApp.-Corpus
at *10
Christi
fact,
acknowledged
that Morris
Cordova
denied)
2009, pet.
(noting
plaintiff
that a
investigator. Never
trained him to be an
proving
has the burden of
each element of
investigation
any point during
Cordova’s
claim).
fiduciary duty
his breach of
As a
*32
intervene on Head’s behalf.
did
result,
hold
there exists more than
we
against Among the fines assessed
support
jury’s
a scintilla of evidence to
the
testing
were
annual
on the
failing
to do
of
findings pertaining to Head’s breach
underground piping and leak detectors.
Keller,
fiduciary duty
City
claim. See
of
done,
testing
This
had been
but PSI failed
that,
ty. Head also received a fine associated Fraud C. records, with monthly inventory control issue, again, challenges once PSI failed to inform Cor- the In its fourth committed fraud jury’s finding dova that the ATG had been re- that PSI
553
(Tex.1995)(“A
against
Specifically,
Head.
PSI asserts
statement is not fraudu
fraud,
that there is no evidence of
nor is
lent unless the maker knew it was false
any possible
there evidence that
material when he made it or made it recklessly
misrepresentation
caused the damages
truth.”).
without knowledge of the
More
by
sustained Head.
over, a statement
regarded
is
as material if
“it
important
party
to whom it is
Applicable
Law
in making
made
a decision regarding the
The elements of a
cause
ac
particular transaction. Material means a
(1)
tion for fraud are:
that a material
person
reasonable
would
impor
attach
(2)
made;
representation was
repre
the
tance to and would be induced to act on
(3)
false;
sentation was
when
repre
the information in determining his choice
made,
speaker
sentation was
knew it
m
actions
question.”
transaction in
was false or made it recklessly
any
without
Plunkett,
Burleson State Bank v.
knowledge
positive
of the truth and as a
S.W.3d
613 (Tex.App.-Waco 2000, pet.
(4)
assertion;
speaker
made
repre
denied) (citing
Personnel Serv.
Beneficial
sentation with the intent
the other
Porras,
v.
927 S.W.2d
186 (Tex.App.
(5)
it;
party should act upon
party
1996),
-El Paso
vacated and
remanded
acted in reliance
representation;
on the
agreement,
(Tex.1997);
measure for leak discharge. fuel Head and the TNRCC that the cause of the source of the diesel from PSI representatives that was the flex connector under the fourth testified system sup- “was him that the ATG dispenser. represented told PSI also this to all the work and should— posed fact, to do In the TNRCC on Head’s behalf. whenever we had a leak” should alert us discharge Barron determination signed the would allow system that the ATG report supervisor conducting as on-site readings. How- Head to discontinue stick repair work after the leak and noted that ever, system the ATG malfunctioned soon the flexible connection under fourth installation; fact, after the date of However, dispenser rep- had failed. after repair system the ATG more than came to resenting the cause of the leak to both certainly to 2001. It fifty times from 1997 TNRCC, Head and the Barron removed Although operate represented. did not as alleged faulty flex connector from the Novem- the leak was not discovered until premises, part and the was never seen 2001, experts opined that the leak ber again, making impossible thus it to deter- Moreover, in March likely began certainty particular mine with whether the though Cordova testified that even allegedly flex connector that was removed installed, system regula- had an ATG State from the premises was indeed the cause of required operators tions that continue to event, the leak. In representa- PSI’s readings in other engage conduct stick tions about the cause of the leak were measuring techniques back-up as a to an by testimony undermined at trial. One of gauging system, though automatic tank Curran, experts, Head’s stated that represented fact never to Head. this was source of the leak was a union underneath Furthermore, Obregon testified that he dispenser. the fourth Curran based his monthly for in- responsible compiling was on, opinions among things, other the testi- ventory the truck stop. records mony Rodriguez. of both Pruneda and so, doing Obregon daily calculated invento- Pruneda, PSI, a technician for testified ry using figures generated by totals net improperly installers for PSI had system, using gross the ATG rather than question, cross-threaded the union in adjusted for figures, evapo- which are not system, which caused a small leak Shortly ration. after the leak was discov- Moreover, replacement. and warranted ered, unexpectedly paid a visit Morris design Curran noted that called fоr stop. represented the truck Morris pipes large enough that were not in diame- Obregon regulations that State rules and pressure piping sys- ter to reduce in the required inventory figures be rounded high-powered tem when combined with the expressed gross off and numbers for pump. opined high pres- that the Curran gallons daily received in order to calculate pump prevented sys- sure in the the ATG inventory Obregon amounts. Because had detecting tem from whether the inventory figures used net to do his calcu- leaking. lations, re- Obregon Morris instructed testimony, Rodriguez In addition to this monthly create several months of invento- failed to corroborate Barron’s statements ry stop using control records the truck numbers, Owens, regarding the removal of the flex connec- gross though Mark Rodriguez testi- premises. tor from the expert, regu- testified that State rules and *34 fied that none of the flex hoses were leak- require figures lations that net be used and that figures ing, during clean-up, the use of net is more and as crew chief the seeing accurate for he test the al- assessing inventory. denied ever Barron connector, repair faulty requests flex much less from 1997 to leged the lost fuel, truck part in the back of his to of place the diesel and the cost and clean-up As premises. be from the is remediation, removed jury which properly the evidence, PSI several clear from this made awarded. throughout to Head representations
false
the foregoing,
Based on
we conclude
relationship.
the
of their business
course
the
that
record
more than
scin
contains
of
false representations
As a result
the
to support
jury’s
tilla
evidence
the
find
Morris,
by
Obregon recreated the
made
ing on
City
Head’s fraud claim. See
stop
records for the truck
to
inventory
Keller,
810;
at
S.W.3d
see also Ernst
By
with
instructions.
coincide
Morris’s
L.L.P.,
577;
Young,
&
at
S.W.3d
Brad
this,
doing
newly
the
recreated records
754-55;
ford, 48
Johnson &
failed to
suggest
seemed to
Head
Tex., Inc.,
526;
Higgins
962 S.W.2d at
in
system.
notice an obvious leak
the
And Spoljaric,
result of PSI’s about its representations is a systems and Whether a contract exists subsequent leak and costs, clean-up, significant jury. Head incurred of fact for the See Ward question Ladner, including fifty (Tex.App. those with the associated *35 556 filed) Inc., 319, (Tex.App.-Dallas 322 201 S.W.3d 2010, (citing Am. pet.
-Tyler Transfer Stores, 2006, 162, pet.) (citing Wal-Mart no Reichley, 543 S.W.2d v. Storage & Co. (Tex. 548, 556 ref'd)); Lopez, Inc. v. 93 S.W.3d 1976, writ (Tex.App.-Amarillo 2002, pet.)). no App.-Houston [14th Dist.] Stores, 93 S.W.3d Lopez, Inc. v. Wal-Mart 548, (Tex.App.-Houston Dist.] [14th 555-56 2. Discussion contracts 2002, (describing implied pet.) no Here, jury was asked whether con from the acts and as those inferred build, install agreed PSI “that would [PSI] the facts and parties when duct of the storage tank underground or service the intent to con show a mutual circumstances system in accordance with environmental Prods., tract); H Adams v. H & Meat of the State of Texas regulations rules and Inc., 762, (Tex.App.-Corpus so, and if wheth Industry and Standards” 2001, (holding jury that a pet.) no Christi comply agree failed to with this er PSI con formation of a properly imply can in jury The answered the affirma ment. by parties both from conduct tract questions. tive to both contract). of a the existence recognizing trial, only testified that At Barron contract, plain recover for breach of To licensed, entity, as State-approved such (1) the existence of a valid prove: tiff must PSI, may underground storage an install (2) contract; per performance or tendered system. regulations tank State rules and (3) breach plaintiff; formance installing Head from his own un- prevent defendant; plain harm to the storage system. tank Barron derground the breach. See Adams tiff as a result of in the business further testified that PSI is Prods., Inc., 41 H & H Meat v. all relat- selling servicing products 2001, 762, no (Tex.App.-Corpus Christi fueling systems, including the instal- ing to Resources, Inc. v. Beckham pet.); see also maintenance, lation, repair of such Resources, L.L.C., No. 13-09- Mantle li- systems. Because Head was not a *7, 00083-CV, at 2010 WL censed, of under- State-approved installer (Tex.App. *22 LEXIS Tex.App. systems, and because ground storage tank denied). 25, 2010, pet. Feb. -Corpus Christi areas, PSI excelled in such pre- with PSI to remove the contracted sufficiently must be A contract existing replace steel tanks and them with in its terms so that a fact-finder definite fiberglass underground the double-walled promisor can understand what the under system. storage tank Huerta, v. took. See Meru Christi (Tex.App.-Corpus Barron noted that PSI is a leader this upon which the pet.). agreement If the State rules and industry; that it follows indefinite as to make it plaintiff relies is so regulations associated with the installation impossible for the fact-finder to determine systems; and that and maintenance of the legal obligations and liabilities complying appli- PSI clients in with assists parties, fact, it is not an enforceable contract. regulations. cable rules Furthermore, binding, the legally Id. to be underground required to install the parties meeting must have a of the minds storage systems compli- tank and ATG and must communicate consent regulations. ance with State rules and аgreement. terms of the Id. The determi underground Once installed the stor- meeting of the minds is based age system, nation of a tank PSI recommended upon objective system. an standard of what the Head install the ATG Based on recommendations, parties or did rather than on their Head contracted said DDA, the ATG install- subjective Searcy with PSI to have state mind. *36 ed. Several witnesses testified that PSI that if correctly, installed primary and promised repair to service and both sys- secondary walls of the underground stor- tems. From 1997 to age fail, serviced tank system should not both and repaired systems and on more than they fact that did was “unacceptable.” fifty regard occasions. to failed, With the under- If one of the walls the secondary ground storage system, tank Head paid wall should have absorbed any leakage. $192,647.37 installation, However, for the ser- the entire underground storage vice, repair system. and of this system And after tank and the ATG system failed. discovered, the leak was Head hired PSI Dr. opined Pinkston that the likelihood of investigate and up, clean and PSI all of systems these failing at once was 1 in agreed repair get the leak and opera- years, words, or in other it should have tions back online. been “an extremely remote possibility.” These failures caused Head to incur the start, From the Head experienced nu- awarded, damages including the cleanup merous problems underground with the leak, remediation, past and future storage tank and ATG systems. Barron fuel, cost of the lost diesel substantial acknowledged at trial that it was PSI’s fines, attorney’s TNRCC and fees associat- responsibility to system’s test the leak de- ed with this case and the enforcement year tectors each they to ensure that were action with the TNRCC. operating properly. Barron later men- tioned that he was unsure whether such Despite the foregoing, PSI asserts that testing actually had every year. occurred there existed no agreement written be- Instead, argued Barron build, it was Head’s tween install, Head and PSI to responsibility to have the leak detectors service system either “in accordance with tested; that Head could have used another environmental rules and regulations of the vendor to testing; do the and that PSI State of Industry Texas and Standards.” only went out to stop the truck when PSI further asserts that the agreements requested to do testimony so. Barron’s parties is between the are unenforceable be- by Carpenter’s undermined assertion that they cause lack disagree. definiteness. We PSI was Head’s exclusive vendor regard- The evidence par- demonstrates that the ing underground storage system. tank agreed ties for PSI to install the under- event, In several witnesses testified ground storage tank systems and ATG that PSI’s failure properly install the exchange addition, In payment. wit- systems caused the in question, leak and nesses testified that PSI regularly re- thus, Head significant damages. incurred paired systems and serviced the and con- Pruneda, particular, acknowledged that ducted testing systems, annual on the as leak was caused a negligently-in- required by the Implicit TNRCC. stalled union under the fourth dispenser. agreements these was that PSI would in-
Owens, stall, maintain, PSI’s own expert, testified that systems service these system had the ATG prop- been installed “in accordance with environmental rules erly or properly, worked regulations more than of the State of Texas and 20,000 gallon-leak would have been detect- Industry Standards.” We do not find ed earlier. system Owens stated that argument persuasive, especially con- go failed to into “slow flow mode” sidering once the Barron’s testimony that PSI was Soto, leаk occurred. Al thirty-year em- required comply with State rules and ployee of PSI and regulations certified installer of in installing, repairing, and underground storage systems, tank servicing Moreover, noted the systems. Barron po- would not comply- on failure of the ATG prides itself that PSI
testified
regulations
rules and
in a leak and that foresee-
governing
tentially result
ing with
servicing
its
installing, repairing,
include the costs of
damages
when
able
would
that PSI offers its
systems
fuel,
clean-up
clients’
of the
the lost
cost
compliance
about
issues.
remediation,
clients advice
leak,
*37
and oth-
past and future
fact,
Obregon
to consult
PSI sent Morris
jury
the
awarded. As we
damages
er
that
inventory control
Carpenter regarding
and
concluded, implicit in PSI’s
already
have
purposes. This ev-
compliance
records for
install, repair,
and service
agreement
to more than a scintilla
idence amounts
storage tank and ATG
underground
the
install, service, and
agreed
PSI
that
duty
to act in accordance
systems was
stop
at the
“in
systems
the
truck
repair
indus-
regulations
with State rules and
and
rules and
accordance with environmental
The record reflects that
try standards.
of Texas and In-
regulations of the State
systems
comply
the failed
did not
with
Keller,
City
See
168
dustry Standards.”
of
rules,
and standards and
regulations,
such
We, therefore, reject PSI’s
at 810.
S.W.3d
signifi-
cost Head
resulted
a leak that
agreements between
assertion that
the
cantly
up
to clean
and remediate. We
unenforceable for lack
PSI and Head were
damages
that
could have been
believe
such
of definiteness.
parties
foreseen at the time the
contracted
damages naturally
the
flowed from
and
Next,
argues that there is
PSI
breaching
agreements
PSI’s
of the
it had
that
not sufficient evidence
demonstrate
687;
Mead, 615
at
with Head. See
S.W.2d
agreements
the
with Head
PSI breached
Hallmark,
481;
885
see also
S.W.2d
subsequently
damages.
caused Head
and
Strain,
fact,
In
ten notice
League, 801 S.W.2d
gressive Voters
Couch,
(Tex.1990);
99
Dail v.
see
Attorney’s Fees
A.
Christi
(Tex.App.-Corpus
S.W.3d
38.001(8)
of dis-
The test for abuse
pet.).
civil
Section
whether the trial
cretion is to determine
code authorizes
and remedies
practice
any guid-
reference to
attorney’s fees
court acted without
reasonable
recovery of
38.001(8)
whether,
§
under
ing
principles,
Id.
rules or
contract claims.
based on
case,
(West 2008).
the trial
prevails on a
the circumstances of
party
A
who
arbitrary
claim and
awarded
were
or unreason-
of contract
court’s actions
breach
Downer,
attor
its reasonable
at 241-42.
damages may recover
able.
38.001(8)
under section
ney’s fees
case,
jury concluded that PSI
In this
code. Green
practice and remedies
civil
Head,
we
agreements with
breached
Solis,
Int’l,
Inc. v.
Because
jury’s
affirmed the
decision.
have
(Tex.1997);
Group
Intercontinental
see
of contract
prevailed
on his breach
Star, L.P.,
Lone
v. KB Home
P’ship
damages, he was
claim and was awarded
(“Under
(Tex.2009)
fees. See
attorney’s
entitled to reasonable
Rule,
attorney’s fees
litigants’
American
ANN.
TEX. CIV. PRAC. & REM.CODE
by stat
only if authorized
are recoverable
Solis,
38.001(8);
§
*39
951 S.W.2d at
see also
parties.”);
between the
byor
a contract
ute
challenge
appeal,
390. On
PSI does not
Operating
Corp.
MBM Fin.
v. Woodlands
attorney’s
of the
fees
the reasonableness
(Tex.2009);
Co.,
660,
Tony
669
292 S.W.3d
awarded,
that Head
argue
but
it does
I,
Chapa,
v.
212 S.W.3d
Motors L.P.
Gullo
timely present
his breach of con-
failed
(Tex.2006).
299,
An award of at
310-11
segregate
he
tract claim and that
failed
mandatory under section
torney’s fees is
were recov-
attorney’s fees so that the fees
proof of
reasonableness.
upon
38.001
under his breach of contract
solely
ered
Inc., 977
Lifestyles,
v. Leisure
Help
World
claim.
662,
(Tex.App.-Fort
683
Worth
1. Presentment
denied)
1998,
Atlantic
(citing
pet.
Richfield
439,
timely
failed to
Trusts,
PSI asserts that Head
Long
860 S.W.2d
Co. v.
1993,
denied);
present his contract claim and
writ
(Tex.App.-Texarkana
(Tex.
521,
satisfy
require-
cannot
filing
of suit
Gay,
Budd v.
writ)).
1993,
ments of section 38.002. See TEX. CIV.
no
App.-Houston
Dist.]
[14th
38.00225;
§
Nevertheless,
&
ANN.
attorney’s
amount of the
PRAC.
REM.CODE
Davila,
the discretion of the Llanes
fees award lies within
pet.).26
only
(Tex.App.-Corpus
be
for an
Christi
trial court and will
reversed
pre-
day
practice and
tion of the 30th
after the claim is
of the civil
25. Section 38.002
sented.
provides
code
that:
remedies
(West
§
Tex Civ. Prac. & Rem.Code Ann.
38.002
chap-
attorney’s fees under this
To recover
2008).
ter:
Davila,
(1)
Court noted that:
represented by
26.
In Llanes v.
this
be
an
the claimant must
attorney;
fees,
attorney’s
the claimant
To recover
(2)
present the claim to the
opposing par-
the claimant must
present
must
the claim
duly
party
to a
authorized
opposing
ty.
purpose
presentment
re-
The
of the
agent
opposing party;
person against
quirement
allow the
is to
opportunity to
payment
just amount owed must
claim is asserted an
for the
whom a
thirty days
receiving
expira-
pay within
notice
not have been tendered before
correspon-
Segregation
counters that based on a
Attorney’s
Fees
30, 2002,
May
dence sent on
PSI knew of
regard
With
to the segregation of attor-
thirty
his contract claim more than
days
fees,
ney’s
PSI contends that it is entitled
before trial. Head also argues that PSI
to a new trial because Head did not segre-
gate attorney’s
waived
by failing
object
this contention
fees with respect
to each
cause of action. Specifically, PSI alleges
in the trial court to the amount of attor-
that Head
fees,
is entitled to attorney’s
if
fees,
ney’s
the reasonableness of the attor-
any, solely on his breach of contract action.
fees,
ney’s
necessity
of the work
Head asserts that his request
for attor-
performed.
ney’s fees could not be segregated because
the claims are inextricably “intertwined.”
There is no indication that PSI
Head notes that “the mere fact that Head
objected in the
appar
trial court to Head’s
prosecuted
also
tort claims for which attor-
ent
present
failure to
his contract claim. ney's
recoverable,
fees are not
does not
Moreover, PSI did not file a verified denial
render
the breach of
attorney[’]s
contract
that Head failed to present his contract
fees incurred unrecoverable as well.”
Thus,
claim.
this contention has not been
In support of its segregation argument,
preserved
See TEX.R.APP.
appeal.27
for
PSI directs us to the supreme court’s deci-
33.1; Llanes,
641;
P.
see
133 S.W.3d at
sion in Tony Gullo Motors. See also
Trucking,
Reveille
Inc. v. Loera Cus
Motors,
S.W.3d at 314. In Tony Gullo
Inc.,
toms Brokerage,
No. 13-08-00127-
supreme court stated that
general
rule
CV,
*6-7,
2010 WL
at
2010 Tex.
segregation
for
of attorney’s fees is that “if
App. LEXIS’
(Tex.App.
**17-20
any attorney’s fees
solely
relate
to a claim
denied)
-Corpus
2010, pet.
Christi June
unrecoverable,
which such fees are
(mem. op.).
segregate
claimant must
recoverable from
claim,
incurring
obligation
without
equipment
an
by your
installed
client
*40
attorney’s
party
for
fees.
plead
The
must
spill
resulted in a
[PSI]
fuel
at the Truck
prove
presented
that he or she
a con-
Stop
damages ensuing
therefrom.
opposing party,
tract claim to the
and the
upon my
Based
review of the situation and
opposing party
perform-
failed to tender
your
in
pursue
the event
client elects to
this
particular
ance.
presentment
No
form of
further, you
my
matter
will leave
client with
required.
of a claim is
option
allege
no
other than to
causes of
against your
action
client for breach
con-
of
case,
In
appellees argue
the instant
tract, negligence along with other violations
presentment
through
plead-
was made
their
However,
of Texas law.
I am sure that an
ings
participation
in mediation. How-
amicable resolution to this matter can be
ever,
suit,
filing
neither the
aof
nor the
reached.
allegation
pleadings
of a demand in the
can
added).
(Emphasis
Because section 38.002 is
presentment
alone constitute
of a claim or a
liberally
promote
to “be
construed to
its un-
demand
paid.
that the claim be
derlying purpose,”
Kelley,
see Jones v.
614
635,
133
(Tex.App.-Corpus
S.W.3d
641
Christi
95,
(Tex.1981),
S.W.2d
100
partic-
because no
2003,
(internal
pet.)
omitted).
no
citations
presentment
ular form of
of a claim is re-
30,
quired,
May
and because Head's
2002
event,
any
we note that record contains
possible
letter informed PSI about a
breach of
30, 2002,
May.
a letter dated
in which Head’s
action,
presentment
contract
PSI's
contention
stated,
regards
counsel
requests
to PSI’s
preserved.
would fail even if it had been
See
payment
for
performed
for work
at the truck
Llanes,
(citing
unrecoverable that: explained fees, court further preme segregate attorney[’s] failure to ei fraud, certainly Chapa’s attorney[’]s true that It is ther at the time evidence contract, were all DTPA claims “de- the time of the presented fees is or at upon the same set of facts or pendent v. charge, the error is waived.” Holmes circumstances,” mean but that does not Homes, Ltd., 310, 115 S.W.3d Concord research, they required all the same dis- 2003, no (Tex.App.-Texarkana pet.); see covery, proof, legal expertise. Nor Solis, 274; P. 951 S.W.2d at Tex.R. Civ. unrecoverable fees rendered recov- are 389; Hruska v. First State Bank Deau nominal; they are merely erable because ville, 783, (Tex.1988); Ar 747 S.W.2d con- exception there is no such Dieterich, Gallagher v. thur J. & Co. tract, statute, or “the American Rule.” 2008, (Tex.App.-Dallas 705-06 Sterling suggested To the extent .that pet.); Rappeport, no Lesikar v. 33 S.W.3d underlying set of facts neces- common 2000, pet. (Tex.App.-Texarkana arising all therefrom sarily made claims denied); see also Norrell v. Aransas legal all recovera- “inseparable” and fees County Navigation Dist. No. ble, it went too far. (Tex.App.-Corpus 303-04 Christi Sterling certainly But correct pet.). if many legal not most fees such precisely not be cases cannot and need Pre-Judgment Interest B.
allocated to one claim or the other. Many prepar- involved in services respect argument With to its ing a or a DTPA claim contract interest, pre-judgment about PSI asserts trial must still be incurred tort claims if improperly pre that Head was awarded it; adding the latter appended are judgment interest based on future dam claims does not render the ser- former ages pre-judgment and that interest Requests vices unrecoverable. for stan- comport not with the time calculation does disclosures, proof background dard frame outlined in section 304.104 of the facts, actors, depositions primary of the finance code. TEX. See FIN.CODE discovery hearing, motions and voir dire (West 2006). § ANN. 304.104 review We jury, and a host of other services pre-judgment a trial award of in court’s may necessary be whether a claim is filed alone or with others. To the extent terest under an abuse of discretion stan Morales, such services have been would incurred dard. See Morales *41 alone, they on a recoverable claim are 2003, 343, (Tex.App.-Corpus Christi not simply they disallowed because do denied); v. pet. see also Sw. Grain Co. double service. C.V., Pilgrim’s Pride S.A. de No. 13-07-
00557-CV, 2638483, *6, 2010 2010 WL at Intertwined facts do not make tort fees 5014, (Tex.App. at *16 Tex.App. LEXIS recoverable; only it is when discrete denied) 28, 2010, -Corpus pet. June Christi legal services advance both a recovera- (mem. earlier, op.). As noted a trial court they ble and unrecoverable claim that arbitrarily, if it acted abuses its discretion they are so intertwined that need not be unreasonably, any or without reference to segregated. Downer, guiding principles. rules or See added). Id. at (emphasis 813-14 241-42; 701 S.W.2d at see also Sw. Grain Co., 2638483, *6, 2010 Tex. case, 2010 WL
In
object
this
PSI did not
5014,
alleged
Head’s
LEXIS
at *16.
segregate
App.
failure to
attor-
$560,450,
Section 301.102 of the finance code au-
or approximately 66% of the
pre-judgment
award,
thorizes an award of
damages
interest
constitutes future dam-
death,
“in a wrongful
personal injury, or
ages.
If we were to subtract
the future
property damage case.” TEX. FIN.
damages from the
award,
actual damages
(West 2006).
§
CODE ANN.
304.102
Pre- we
$287,692.38
would be left with
past
in
judgment
interest
is measured from the
damages.
It is this amount upon which
day
“earlier of the 180th
after the date the
pre-judgment
interest should be based.
defendant
receives written notice of a See TEX.
304.1045;
§
FIN.CODE ANN.
claim or the date the suit is filed
Honaker,
and see also
The final recites that ment interest calculations came. Based on Head was awarded damages record, actual in the our review of the it appears that $848,142.38. amount of Pre-judgment in Head first notified PSI of potential his 9, accruing May terest from through 30, Moreover, claims on May 2002. 13, 2009, January at a rate per of 5% did not file suit until February annum, addition, was awarded to Head for a total the final judgment specifies, $283,178.88 amount of in pre-judgment in pre-judgment interest accrued from terest. The final judgment seg does not May 2002 to the date the judgment was regate pre-judgment 13, 2009, interest associated signed, January a date that sec past with damages and future awarded. tion 304.104of the finance code excludes PSI does not challenge sufficiency pre-judgment calculations of interest. supporting evidence the amount of § See TEX. FIN.CODE ANN. 304.104. awarded, damages nor challenge does it Because there is a discrepancy between the failure to segregate pre-judgment in the dates pre-judgment interest calcu terest past between damages. and future lations should begin and end and because Nevertheless, Head concedes that to the the trial court did not clearly specify extent pre-judgment interest is attrib pre-judgment amount of interest attribut uted to future damages, modify we should able to future damages, we believe that a judgment only reflect pre-judgment remand necessary for proper findings past interest on damages. interest, See Main pre-judgment recalculation of Homes, Honaker, Place Custom Inc. v. 192 if it is necessary. found be See Royal S.W.3d 628-29 (Tex.App.-Fort James, Worth Maccabees Ins. Co. Life denied) 2006, pet. (modifying judgment 354 (Tex.App.-Dallas $69,283 denied) to exclude pre-judgment pet. inter (remanding an pre award of est that the trial court found to be attrib judgment interest the trial court for *42 However, utable to repair). recalculation); future costs of see also v. Guerrero Sali Honaker, nas, unlike 13-05-323-CV, the record in this 2294578, case No. 2006 WL does not contain any findings *15, indicating 8562, at Tex.App. 2006 LEXIS at how much of the pre-judgment 10, interest is **48-49 (Tex.App.-Corpus Aug. Christi (mem. (same). attributable to future damages. Of the pet.) op.) Accord $848,142.38 awarded, in actual damages ingly, we sustain ninth issue.
564 claim is sufficient. breach of contract PROPORTIONATE
VI. Therefore, damages award because RESPONSIBILITY breach of premised on Head’s could be issue, alleges that the PSI In its tenth claim, in which the doc contract a claim disregarded improperly court trial does responsibility of proportionate trine find- responsibility proportionate jury’s that the trial court apply, not we conclude for responsible was 75% ings —that jury’s propor properly disregarded responsible. Head was 25% the leak and as immateri responsibility findings tionate jury’s proportion- that the responds Head 172; Tichacek, al. See 997 S.W.2d immaterial be- finding is responsibility ate 157; also Don Spencer, 876 S.W.2d at see responsibil- chapter proportionate 33 cause Hernaiz, 161 S.W.3d 604 caster v. only tort causes of action ity applies (2005). overrule PSI’s Accordingly, we on, among recover other Head elected to tenth issue. of contract cause of things, his breach action. DAMAGES VII. OVERLAPPING question is immateri [jury] “A issue, By eleventh PSI con its submitted, not have been al when it should to a new trial tends that it is entitled finding beyond province of it calls for a erroneously refused because the trial court law, question as a of or jury, such dam jury overlapping to instruct on has properly it submitted but when was that the trial court ages. PSI asserts immaterial other find been rendered “you that jury should have instructed the Tichacek, 997 Line Co. v. ings.” Pipe Se. money any on shall not award sum of (Tex.1999) (citing Spencer 172 S.W.2d otherwise, you if have under some element Am., Star Ins. Co. Eagle element, money a other awarded sum (Tex.1994)). jury After the re PSI, Acсording to for the same loss.” verdict, to recover its Head elected turned “probably give failure to this instruction contract, of im on his breach of breach judg improper caused the rendition of an fraud, fidu warranty, and breach of plied jury to award a by allowing ment Boyce action. See ciary duty causes of prevented recovery probably double Works, Co., Iron Inc. v. Sw. Bell Tel. presenting its case to properly PSI from (Tex.1988) (“When party a by preventing PSI from demon this Court of re tries a on alternative theories case of a double recov strating the existence jury returns favorable find covery and a ery.” argues that PSI’s sole author theories, ings party on two or more supreme court’s ity argument, for this judgment theory on the right has a Eagle Archery, Inc. v. decision in Golden greatest him to the or most favor entitling (Tex.2003), Jackson, is in relief.”). However, jury able neither the argues that PSI’s applicable. Head also the dam specified nor the trial court how argument potential there was a ages corresponded assessed to the causes enough to war overlapping damages is not to re upon of action which Head elected Moreover, Head coun rant a new trial. Garza, argues cover. that the Citing to establish a double ters that PSI failed “jury’s to Head responsibility allocation harmed the trial recovery or that it was supported by considerable evidence that court’s submission. properly inspect Head failed to and moni Archery, personal- Eagle tor storage system.” his diesel Golden case, tasked injury supreme court was S.W.3d at 704-05. concluded earlier We appeals should Head’s to resolve how courts supporting the evidence *43 a sufficiency conduct factual review when all the elements that could have been “(1) jury permitted is damages award considered the jury in making its (2) for elements that overlap, somewhat total, single-amount award. “If there is jury the is instructed not to duplicate an just one element that is supported by loss, any particular award for evidence, the damages award will be jury damages damages awards no that if supported affirmed it is by the evi- are allegedly inadequate for an element dence.” that could overlap with another.” Id. at In us, the case before the jury had six 758. The presented evidence at trial in blanks to fill and was instructed not to Eagle Archery pertained Golden to more damages award for the same element than one category damages physical — more than once. Unless the record pain anguish, mental “physical impair- otherwise, demonstrates an appellate vision,” ment of loss of and “physical im- presume court must that jury fol- pairment other than the loss of vision.” lowed these instructions. In conducting Id. at 760. The jury was instructed to sufficiency review, its factual the court “[cjonsider the of damages elements listed appeal presume should jury that the below and none other. Consider each ele- did not damages award to Jackson for separately. ment Do not include damages any once, element more than unless the for one element in other element.” Id. record demonstrates otherwise. jury at 762. The declined to find that the (internal Id. at 770-71 citations & foot- product involved in the incident was defec- omitted). *44 of reasonable care. Consid- Head Bill Head the exercise of Bill any,
if d/b/a not include interest in Do Enterprises. following damages, of if er the elements damages you find. of any amount any, and none other. your any answer Do not include damage ques- jury The then answered Bill Bill you find Head
amount that d/b/a by awarding following tion amounts: by could have avoided Enterprises Head system Underground Storage Tank in 1996-97. Cost of the installation $0 $0_ liner in 1997. of the tank hole Cost $47,749.88 Action. Attorney’s for the defense of the Enforcement fees $94,127.50 clean-up of the discoveredin November2001. emergency release Cost $108,315.00 Spur past remediation of the Silver site. Cost of $560,450.00 Spur the Silver future remediation of site. Cost of $30,000.00 in November 2001. diesel as a result of the release discovered Value lost $7,500.00 gauge/leak detection installed in 1999. of automatic tank Cost $0_ Amount the TNRCC fine. Clearly, jury upon this case was entitlement to a new trial based over- damage each ele damages. instructed to consider we over- lapping Accordingly, jury in the separately, ment as Golden rule eleventh issue. was instructed to do.
Eagle Archery ease
Moreover, we
PSI’S CONTRACT CLAIMS
id. at 770-71.
are to
VIII.
See
jury in this case followed the
presume the
HEAD
AGAINST
and did
provided
instructions
not award
issue,
argues
In its thirteenth
PSI
damages
any
for
element more than
Head
judg
that it is entitled to the rendition of
once,
the record indicates other
unless
against
ment on its contract claims
Head
wise;
771;
id.
it does not here. See
see
support
there
no evidence to
because
is
Healthcare,
Rio
also Columbia
Grande
estoppel
by
Specifi
defense raised
Head.
(Tex.
851, 862
Hawley,
L.P. v.
cally,
challenges
jury’s
that the
find
2009) (“The jury
presumed
to have fol
ing
pay
that Head’s failure to
its
instructions.”);
the court’s
Sanchez
lowed
was excused.
services
Maint.,
Bldg.
Excelo
jury
The
that Head
to com-
found
failed
writ)
(Tex.App.-San
Antonio
ply
agreement
pay
with his
PSI for
(same). PSI has not shown how it was
provided
materials and services
and con-
submission,
trial
harmed
court’s
$57,527.49
cluded that
would be fair com-
speculating hypothetically.
other than
pensation for PSI as a result of the breach.
record,
review of the
we
Based on our
However,
jury
also concluded that
do not
suggest
find
evidence to
comply
failure to
was excused.
Head’s
jury
overlapping
awarded Head
dam-
charge
The
stated that Head’s failure to
or,
words,
ages
provided
other
excused if:
comply was
such,
with a
recovery.
double
As
we can-
Solutions,
not
1. Petroleum
Inc.
say that PSI has demonstrated an
a.
words or conduct made a false
rely on the representation false concealment in action or deciding IX. TITEFLEX’S CAUSES act; not to and OF ACTION 2. Bill Bill Head Enterpris- d/b/a issue, its twelfth PSI argues es Titeflex was not entitled to indemnification a. did not know and had no means of (1) as a matter of law because: PSI is knowing the real not facts and 82.002(a) manufacturer under section b. relied to his detriment on the practice code, civil and remedies see representation false or concealment TEX. CIV. PRAC. & REM.CODE ANN. of material facts. 82.002(a); (2) § Titeflex was not sued as In arguing that he was excused (3) an innocent seller product; of PSI’s paying from PSI for the presented invoices (4) fail; Head’s claims Titeflex’s indemnity for repairs systems from 1997 to claims do not constitute a “product liability 2001, Head relied on the estop- doctrine of action” and Titeflex did not segregatе its notes, pel. As PSI the “burden of proving fees; (5) attorney’s if and the underground estoppel and the essential elements thereof storage tank system is “prod- considered a party is on the asserting it and the failure uct,” then PSI is entitled to a new trial. to prove any one or more of the elements (1) Titeflex counters that: the fact that the Barfield, is fatal.” v. Howard M. Smith underground storage tank can be Amarillo, (Tex. Co. “improvement” considered an to real 1968). prop- The supreme court further noted erty preclude does not a products liability party that “the asserting an estoppel must action, nor the applicability chapter establish that he relied on the misleading code; of the civil practices and remedies conduct to his detriment.” Petroleum An (2) PSI is a duty manufacturer and its chor Equip., Tyra, Inc. v. (Tex.1967). indemnify Titeflex was However, triggered by we concluded allegations contained in pleadings, earlier that the Head’s record contains more than (3) case; not the outcome of the jury scintilla of evidence support jury’s properly finding fraud concluded that Titeflex that Head relied on was an the nu (4) seller; innocent representations PSI, merous false the trial court properly made including the concluded that functionality of the Titeflex was systems, entitled to in- inventory demnity fees, recordkeeping, from PSI for attorney’s and cause of ex- leak, and penses, suffered a detriment reasonable costs assessed amount of approximately jury; million in PSI is not entitled to a $1 fines, costs, fees, attorney’s expenses. new trial any based on contention that it Keller, See City 810; 168 S.W.3d at was not permitted see to allocate blame to Barfield, 838; also 426 S.W.2d at Tyra, Titeflex. com- nent thereof in the stream of part Law Applicable
A.
82.001(4).
§
merce.” Id.
practice
civil
Section 82.002
following,
provides
remedies code
B. Discussion
part:
relevant
above,
jury
concluded
As noted
(a)
indemnify and
A manufacturer shall
was a manufacturer and that Titeflex
harmless,
against
loss
a seller
hold
chapter
the context of
was a seller within
liability ac-
products
of a
arising out
and remedies code.
practice
82 of the civil
tion,
by the
except
loss caused
*46
82.001(8)-(4). Though they
§
were
See id.
intentional miscon-
negligence,
seller’s
determine wheth-
specifically
not
asked to
omission,
duct,
as
other act or
such
or
Titeflex,
indemnify
duty
er. PSI had a
altering
or
modifying
negligently
$382,384 in
jury, by awarding
Titeflex
which the seller is inde-
product, for
$68,519.62
attorney’s
reasonable
fees
pendently liable.
expenses,
implicitly
concluded
a
lia-
products
Head’s claims arose out of
from
is entitled to recover
(g) A seller
required
was
bility action and that PSI
court costs and oth-
the manufacturer
Titeflex for
indemnify and hold harmless
reasonable at-
expenses,
er reasonable
id.
arising
losses
from Head’s claims. See
fees,
any
reasonable
torney’s
82.002(a),
court,
(g).
§
trial
in its
The
by the seller to en-
damages incurred
judgment, noted that Titeflex was an
final
right
seller’s
to indemnifica-
force the
Further,
the trial court
innocent seller.
tion under this section.
$12,393.25in court costs.
awarded Titeflex
82.002(a),
§
Section 82.001 defines
(g).
Id.
action” as:
“[products liability
a
Questions
Mixed
of Law and Fact
1.
a manufacturer or
any
against
action
matter,
argues
As a threshold
recovery
damages arising
seller for
man
jury’s
regarding
that the
conclusions
death,
injury,
proper-
or
personal
out of
chap
under
ufacturer and seller statuses
damage allegedly caused
a defec-
ty
practice
ter 82 of the civil
and remedies
action is
product
tive
whether the
based
are immaterial bеcause such determi
code
liability,
products
strict
lia-
in strict tort
n
questions
support
nations are
of law. To
bility, negligence, misrepresentation,
contention,
supreme
to the
this
PSI cites
implied warranty,
express
breach of
or
Fitzgerald
court’s decision in
v. Advanced
any
theory or combination of
or
other
Inc.,
Spine
Systems,
Fixation
theories.
(Tex.1999).
do not find the
We
82.001(2) (West 2011).
§
the other
Id.
On
Fitzgerald
supportive
case
of PSI’s conten-
“[sjeller”
hand,
“a person
is defined as
tion.
of distribut-
engaged
who
the business
any
Fitzgerald,
supreme
In
court ana-
ing
placing,
or otherwise
for
commer-
lyzed
argument
in the
of commerce
an
made
a manufactur-
purpose,
cial
stream
deny
intended to
consumption
product
any
Legislature
or
or
er “that the
use
82.001(3).
§
who are not in
thereof.” Id.
indemnification to sellers
component part
from the manu-
a manufacturer as
the chain of distribution
Section 82.001 defines
formulator,
Id. at
person
designer,
injured plaintiff.”
is a
facturer to the
“a
who
constructor, rebuilder, fabricator,
con-
produc-
Specifically,
the manufacturer
er,
legislative
law and
processor,
“that-prior
or assembler of
tended
case
compounder,
Legislature’s
that the
any product
any
part
history
or
thereof
demonstrate
component
82.002(a)
enacting section
place
product
any'compo-
purpose
and who
[in
Care, Inc.,
the civil practice and remedies
code]
Child
309;
29 S.W.3d at
see
codify
aspects
Miller,
some
of our
supreme
[the
also
*3,
2009 WL
others,
decisions and overrule
court’s]
re-
Tex.App. LEXIS
Moreover,
at *10.
sulting
indemnity only
for those seller
court,
the trial
in its final judgment adopt
in the chain of marketing or distribution of
ing
jury’s
findings, ostensibly conclud
product
the defective
from the manufac-
ed as a matter of law that PSI was a
injured
turer
plaintiff.” Id. The manufacturer and that Titeflex was an in
supreme
analyzed
court
the construction
nocent seller under section 82.001 of the
82.002(a)
of section
and concluded that the
practice
civil
We,
and remedies code.
argument
manufacturer’s
conflicted with therefore, reject PSI’s contention that the
the intent of the Legislature.
Id. at 867.
jury’s answers- regarding the statuses of
The court held that the unambiguous lan- PSI and Titeflex are immaterial.
guage of the statute did not require that a
event, we defer to the fact-finder’s factual
proved
seller be
spe-
have been in the
they
determinations if
are supported by
distribution;
cific chain of
based on this
the evidence and
legal
review its
determi
statute,
interpretation of the
im-
court
*47
State,
nations de novo. Brainard v.
12
plicitly
seller,
concluded that the
Fitzger-
6,
(Tex.1999),
S.W.3d 30
overruled on other
ald, was entitled to indemnification from grounds by
Amerman,
Martin v.
133
867,
the manufacturer.
Id. at
869.
(Tex.2004).
S.W.3d 262
case,
In this
do
parties
not contend
Underground
2. Whether the
Storage
82.002(a)
that section
is ambiguous;
they
System
Tank
Improvement
Was an
to
do not advance a novel interpretation of
Property
Real
That Was Not Placed in
82.002(a);
section
analysis
and the
of this
the Stream of Commerce
issue does not require resorting to the
Instead,
rules of statutory construction.
Next,
argues
that it is not a
analysis
our
arguments
in this
manufacturer because the underground
issue involves
questions
mixed
of law and
storage tank system was an improvement
or,
words,
fact
in other
an application of
property
to real
placed
that was not
in the
Care,
law to the facts. See Mega Child
stream of commerce. Essentially, PSI
Inc. v.
Dep’t
Tex.
Regula
Protective &
challenges the characterization of the un
Servs.,
tory
308,
29 S.W.3d
(Tex.App.
309
derground storage tank system
prod
as a
2000) (“An
-Houston [14th Dist.2000]
issue
placed
uct
into the stream of commerce in
involves a
question
mixed
of law and fact
accordance with chapter 82. PSI relies
when a standard or measure has been
heavily on the holdings in Sonnier v. Chis
fixed
law and
question
is whether
Co.,
(Tex.
holm-Ryder
475,
909 S.W.2d
479
person
or conduct measures up to that
1995);
Rogers,
342,
Barbee v.
standard.”),
(Tex.
425 S.W.2d
aff'd,
underground
added).
16.009.”)(emphasis
Tite-
the stream of commerce.
product
to real
improvement
an
argues that
flex
the Barbee case for the conten-
PSI cites
product
considered a
still be
property can
storage tank
underground
tion that
chapter
the context
within
stop
at Head’s truck
installed
gen-
product
offered to the
“not
finished
Sonnier,
court ad
supreme
of trade.”
public
regular
eral
channels
of the statute
applicability
dressed
to
respect
at 346. With
See 425 S.W.2d
of the civil
in section 16.009
stated
repose
appellate complaints,
the nature
code. 909 S.W.2d
and remedies
practice
noted that:
Barbee court
distinguished
court
at 479. The Sonnier
optome-
and the licensed
Respondents
(1)
property
manufacturers of
between:
employ
trists in their
exercise skill
later
party
that a third
product
craft a
who
examination, prescrip-
in the
judgment
thereby convert
property,
real
to
attaches
tion[,]
whereby it
fitting process[,]
improvement;
into an
product
ing
remedy visual abnormalities
sought to
actually
who
work
manufacturers
prisms.
the use of curved lenses or
directly to the real
personalty
attach
The failure here is not attributable
specifi
court
Id. The Sonnier
property.
itself, i.e.,
lenses,
contact
product
when “an attachment of
cally mentioned
professional
statutorily
but
improve
an
realty
becomes
personalty
“measuring
powers
act of
authorized
Mullis,
Citing Logan
ment.” Id.
eyes
Petitioner’s
and “fit-
of vision” of
(Tex.1985),
the Sonnier
...
ting
remedy
lenses ...
to correct or
that are relevant
three factors
court stated
of vi-
defect or abnormal condition
[his]
*48
has be
determining
personalty
whether
selling
not the act of one
sion.” This is
(1)
realty:
attached to
permanent
come a
un-
“product
a
a defective condition
annexation,
sufficiency of
the mode and
reasonably dangerous to the user” in the
(2)
constructive;
the adapta
real or
either
Restatement.
It is
terms of the Torts
the
the
personalty to
use
tion of the
or
of
deemed in law to have the
the act
one
realty;
the intention
the
purpose of
remedy a
competence
visual defect
personalty
causes the
of the owner who
furnishing particularly prescribed con-
realty.
the
Id. “The own
be attached to
tact lenses.
personalty
is critical because
er’s intent
Id.
it
improvement
an
until
does not constitute
case,
In this
Titeflex was sued on the
realty. To constitute an
is annexed to
theory
liability
allegedly pro-
of strict
joinder
there must be a
of
improvement
viding a
flex connector to the
defective
realty.”
Regardless
Id.
of
personalty with
system that PSI assembled and installed.
underground storage tank
whether
the
Because the Barbee case did not address
system
permanent
a
fixture to
constitutes
“in
products
indemnification or involve
a
explicitly
court did not
realty, the Sonnier
unreasonably danger-
defective condition
improvement
property
state
to real
that an
user,”
the
which served as the basis
ous to
product
chapter
cannot also be a
under
Titeflex,
against
we do
complaints
of the
code;
practice
of the civil
and remedies
persuasive
not find the Barbee case to be
instead,
analyzed
the
the court
whether
in this matter.
repose precluded
statute of
suit.
Id. at
(“Absent
Palmer,
In
this Court addressed com-
any
evidence that Chisholm
more,
a breakwater
in a
plaints pertaining
did
did
we conclude that Chisholm
Appellants
marina.
at 349.
“improvement
not construct an
to real
See
Moreover,
system
after “a series of storms with
the
at
brought suit
issue in this case
northerly
generated
prevailing
certainly
winds
is
movable and was attached to
went
overtopped
waves which
or
under
realty, especially considering
prior
that the
damage
breakwater and caused
system,
system,
which was similar to PSI’s
docks
inside the marina.” Id.
and boats
premises
was removed from the
pieces
of
specifically
design
We
noted that
of PSI’s
were
testing
removed for
by professional
the breakwater was done
a
replacement.
or
architectural,
engineering,
planning
Cecil,
the trial
granted
court
appellants’ complaints
firm and that
cen-
verdict in
of company
directed
favor
that
breakwater,
design
tered “on the
of the
designed an
Spa pool.
Executive Health
not the
of
or
construction
the breakwater
plaintiff
S.W.2d at 50. The
com
provisions
parts
thereof.”
Id.
plained
company’s
that the
design of the
determining
356. In
whether the trial
pool
Essentially,
was defective.
Id.
court
in granting appellees’
erred
motions
pertained
case
to the company’s manufac
verdict,
for directed
we noted that
turing and
of coping
installation
stones as
not movable
it
breakwater was
because
pool.
a border around the
plaintiff
The
permanent improvement
was a
to the real
complained that
the coping-stone tiles
concluded,
ultimately
estate and
for strict
slippery
were too
and improperly installed
liability
that
purposes,
the breakwater was
tiles,
top
pre-existing
on
of
creating an
Id.
put
not
into the stream of commerce.
uneven surface that caused the plaintiff to
at 356.
lose
she
along
her balance as
walked
on
reliance
the Palmer case
pool
Id. at
side.
42. This Court affirmed
First,
unfounded for several reasons.
verdict,
the trial court’s directed
conclud
Palmer
did not
the applica-
Court
address
ing
the plaintiff
had
raised an
not
bility
indemnity
provisions
contained
evidentiary dispute regarding
compa
chapter
practice
82 of the civil
ny’s
knowledge
danger
in the de
code, nor
appel-
remedies
did the Palmer
sign
pool.
ruling
Id. at 51. Our
right
lants
or
assert a
to indemnification
coping
was not based on whether
usage
parts
the construction or
products
cop
stones were
whether the
instead,
problematic;
we addressed appel-
*49
placed
ing stones had been
in the stream
Second,
complaints.
lants’ design
the
of
respect
commerce. With
concur
a
emphasized
Palmer
that
Court
the break-
brought
rent marketing-defect
claim
and, thus,
water was not movable
not
was
plaintiff,
the
the Cecil Court concluded
placed in the stream of commerce.
Id.
cop
that there was no
the
“evidence that
Here,
testified
in
Barron
that
is
the
ing
unreasonably dangerous
stones were
assembling
business of
installing
un-
or that the absence of
in
accompanying
derground storage
systems
tank
and that
double-walled,
warnings
inju
struction
caused
each of
Cecil’s
fiberglass
the
stor-
ry.” Id.
50. Based on our review of
age systems is
the
all
essentially
same for
case,
the
we do
testimony
of PSI’s
not believe that the Cecil
customers. Barron’s
supports
on
case
PSI’s inference
a swim
appeal
undermines
contention
that
underground storage
ming
much
an
system
pool,
underground
that “the
was
less
stor
‘designed
light
system,
in
in
particular
age
product
of
tank
is not a
the
[Head’s]
”
Barbee,
needs.’
of
See
Inc., (Tex.App.-Corpus theories)). only negligеnce held liable under (citing pet.) Wochner v. However, Christi negligence properly claim that is Johnson, (Tex.App.-Waco 475-77 joined products liability with a claim is to be *50 1994, writ) negli (distinguishing no between liability part products ac- considered gence liability against the and strict in a suit duty tion in terms of a manufacturer’s plans seller of materials and for the construc seller, indemnify an innocent and the manu- Crest, home); tion of a Hanselka v. Lummus required indemnify facturer is the seller for Inc., 665, (Tex.App.-Corpus 800 S.W.2d 666 action, any arising except loss out of the when 1990, writ) (concluding that a Christi no finding independently there is a that the seller design cause of action based on the flawed Toyota Equip. Mfg. caused the loss. Indus. v. factory negligence a than lies rather strict 683, Inc., Carruth-Doggett, 325 S.W.3d 690- Indus., Inc., liability); Span Bennett 628 v. 2010, Dist.j pet. (Tex.App.-Houston [1st 91 470, (Tex.App.-Texarkana S.W.2d 472-73 Automotive, filed) (citing Inc. v. Meritor Ruan 1981, n.r.e.) (holding writ ref’d that absent Co., 86, (Tex.2001)). Leasing 44 S.W.3d 87 proof design involving roofing of a defect
573 definition, law); From that product a is Cupples Pipe, Coiled Inc. v. Esco something Co., distributed or otherwise Supply 615, 615-16, S.W.2d placed, any purpose, for commercial into (Tex.Civ.App.-El 1979, Paso writ ref'd the stream of commerce for use or con- n.r.e.); Tenbush, Hovenden v.
sumption. 302, 305-06 (Tex.Civ.App.-San Antonio 1975, writ) hold that the EIFS provided by
We
(treating used bricks in a
“product”
Fresh Coat was a
as
building
as defective products after walls
deteriorated)).
word is used in the text of Chapter made with the bricks
Fol
lowing
analysis
82.[29]
conducted by the Fresh
Court,
reject
Coat
we
Dictionary
PSI’s contention
897;
Id. at
see Black’s Law
the attachment of the
(8th
underground
2004)
ed.
(defining “product”
a
as
storage
tank
to real property pre
“[s]omething that
is distributed commer-
vented it from being
product
considered
cially
consumption
for use or
and that is
placed into the stream of
(1)
commerce within
(2)
usu[ally]
tangible personal property,
the context of chapter
Coat,
82. See Fresh
the result of
processing,
fabrication or
Inc.,
897,
In on the Fresh Coat Court cited 82.001(4) plain language of to other Texas section prod- cases which Texas and the uets-liability applied supreme law court’s subcomponents decision in General Mo or, words, Chevrolet, Inc., tors Corp. Hudiburg homes other products af (Tex.2006), fixed to real property. 318 at 899 S.W.3d 256-57 S.W.3d Titeflex EasTex, n. 8 (citing Temple Inc. v. Old contends that PSI is a manufacturer. Sec Partners, Ltd., 82.001(4) Orchard Creek tion as, defines a manufacturer 731-32 (Tex.App.-Dallas among writ de things, other a “designer ... con nied) (treating structor, product rebuilder, fabricator, fiberboard as a producer purposes claims); of products-liability ... or assembler” product that is Indus., Inc., Span Bennett v. placed in the stream of commerce. TEX. 472 (Tex.App.-Texarkana writ CIV. & PRAC. REM.CODE ANN. n.r.e.) (noting 82.001(4). ref'd § that has there been a Hudiburg, supreme component defect in a installed in a build court noted that “all manufacturers are ing, might sellers,' that defect supported have also but not all sellers are manu legitimate claim products-liability under facturers” and that: *51 K-2, Inc., 893, 29. The (Tex. Fresh Coat Court noted that EIFS "is a Inc. v. 318 S.W.3d 897 synthetic system component stucco made of 2010). Coat, parts manufactured [K-2].” Fresh 574 or foundational methodology, technique, ... the manufacturer the statute
Under
data.”)
v.
(citing
Transp. Co.
by a
Coastal
alleged
component product
of a
Corp.,
Petroleum
duty to Crown Cent.
defective has a
claimant to be
(Tex.2004)). Second,
227,
as we
231-33
indemnify an innocent seller/manufac-
earlier, whether PSI is a manu
concluded
incor-
product which
of a finished
turer
Titeflex is an inno
facturer and whether
arising
component from loss
porates the
questions
are mixed
of law and
cent seller
related
liability action
products
out of a
may state an
expert
fact. An
witness
defect, but the manufac-
alleged
to
questions
on mixed
of law and fact.
opinion
finished
allegedly
of an
defective
turer
Spohn Hosp. Kleberg,
In re
See
Christus
duty
indemnify
has a
product
(Tex.2007);
222
440
S.W.3d
compo-
of a
innocent
Birchfield
seller/manufacturer
747
Hosp.,
Texarkana Mem’l
S.W.2d
v.
for the same loss.
product
nent
(“Fairness
(Tex.1987)
and efficien
365
Here,
at 256-57.
several wit-
cy
expert may
that an
state an
dictate
designs, assem-
testified that PSI
nesses
of law
fact
opinion
question
on a mixed
and
bles,
underground storage
and installs
confined to the
long
opinion
as
as the
tanks
actions
for customers and
such
proper
relevant
issues and is based on
Witnesses
integral
are
to PSI’s business.
Leon,
concepts.”); Louder v. De
legal
design plans
that PSI creates
also testified
(Tex.1988).
Therefore, in
S.W.2d
listing
component parts
of
to be
with
reviewing
light
the evidence in the
most
system. Titeflex’s
incorporated into the
jury’s findings,
favorable to the
we con
that,
Pinkston,
Dr.
testified
based
expert,
juror, based on the
clude that a rational
and his review
experience
on his extensive
82.001(4)
plain language of section
record,
underground storage
in the rec
abundance of relevant evidence
product
tank
in this case is a
ord,
concluded that PSI is a
could have
it de-
that PSI is a manufacturer because
82.001(4).
manufacturer under section
See
assembles,
systems
signs,
and installs
Tex.
&
Ann.
Civ.
Prac.
Rem.Code
argues
appeal,
for customers. On
82.001(4);
§
see also
Med.
Columbia
Ctr.
testimony
that Dr. Pinkston’s
should be
Colinas,
Hogue, 271
Las
Inc. v.
S.W.3d
testimony
his
is eon-
disregarded because
Brainard,
(Tex.2008);
S.W.3d
testify
clusory,
qualified
and he is not
at 30.
purely legal question.
about a
4.
Titeflex is an Innocent
Whether
First, we note that PSI did not
82.001(3)
Under
Seller
Section
qualifica
Dr.
object at trial to
Pinkston’s
82.001(3)
tions,
A
section
methodology,
ability
or his
seller under
his
civil
remedies code is an
testify
practice
about the issues in this case. To the
entity “engaged
Pink-
in the
of distrib
objects
the extent that PSI
to Dr.
business
uting
placing,
or otherwise
com
qualifications
appeal,
ston’s
on
we conclude
purpose,
waived. mercial
in the stream of com
arguments
that such
have been
Flores,
consumption product
See
232 merce for use or
Borg-Warner Corp.
(Tex.2007) (“We
thereof.” TEX.
any component part
769 n. 11
note
CIV.
S.W.3d
82.001(3).
§
ANN.
initially
Borg-Warner
did not chal PRAC. & REM.CODE
“Anyone
qualifies
may
who
as a ‘seller’
lenge, either before trial or at the time the
indemnification,
offered,
subject
seek
limita
reliability
evidence was
82.002(a).”
has, therefore,
Fitzgerald,
waived tions of section
experts
Flores’s
The limitation of section
any reliability challenge
require
that would
82.002(a) is that the seller must be inno-
experts’ underlying
us to evaluate the
*52
any
cent of
“negligence,
seller,
intentional mis Titeflex was a
court,
and the trial
conduct,
omission,
or other act or
such as
its
judgment,
final
specifically noted that
negligently
or
modifying
altering
prod
Titeflex was an innocent seller within the
uct, for which the seller is independently
context
chapter
liable.” TEX. CIV. PRAC. & REM.
Viewing the evidence is the light most
82.002(a);
§
CODE ANN.
see Owens & favorable
jury
and the trial court’s
Minor,
Prods.,
Inc. Ansell Healthcare
findings, we conclude that a rational fact-
Inc.,
(Tex.2008).
481,
finder, based on
plain
language of sec
The record reflects that Titeflex makes
82.001(3)
tion
and the abundance of rele
and sells a type of flex connector that is a vant
record,
evidence in the
could have
component part in a
underground
finished
concluded that Titeflex is an innocent sell
storage
fact,
system.
tank
Barron cer-
82.001(3).
er under section
See TEX. CIV.
tified to the TNRCC and testified at trial PRAC. &
82.001(3);
§
REM.CODE ANN.
alleged
faulty flex
connector
see
Hogue,
also
248;
S.W.3d at
Brai
this case was
by
manufactured and sold
nard,
unreasonably
Solutions, without
Petroleum
on a direct claim between
parties
reach[ed]
based
them.”)
(citations
in its
from
change
condition
substantial
original)
in
(emphasis
The
originally sold.
time it was
omitted).
the
by
alleged
changes
defect
the
cause[d]
reading
Based on our
of
section
Therefore, Titeflex is
[Head].
Plaintiff
82.001(2)
law,
and related case
we conclude
products liability
strictly
under
liаble
brought
the
against
that
claims
Titeflex
to
strictly
is
liable
.... Titeflex
law
actions and
products-liability
constituted
Solutions,
plaintiff
the
Petroleum
seller,
Titeflex was an innocent
it
because
damages,
any,
if
under
injuries,
his
PSI,
from
was entitled to indemnification
liability law.
products
the manufacturer. See TEX. CIV. PRAC.
added.)
PSI, Head also
Like
(Emphasis
82.001(2); Garza,
§
ANN.
& REM.CODE
against
action
alleged
products-liability
a
(Tex.2008);
S.W.3d
705
see also
257
third[-]party
stated
the
Titeflex: “As
Inc.,
Med.,
Danek
2005
WL
action,
the
purchased
Petroleum Solutions
*2-3,
8408, at
Tex.App.
2005
LEXIS
**5-
from Titeflex.
underground flex connector
the flex
Titeflex manufactured
connector.
damages
strictly
is
liable for
Titeflex
Relationship
6. The
Between Tite-
by
defective flex connector.”
caused
flex’s
indemnification
Claims
Automotive,
In
Inc. v. Ruan
Meritor
Against
Head’s Claims
Co.,
held
Leasing
supreme
court
that
Nevertheless,
argues
that Titeflex’s
duty
indemnify the
manufacturer’s
to
“the
claims
fail
indemnification
should
because
by
plaintiffs pleadings
is invoked
seller
First,
against
Head’s claims
PSI fail.
we
as defendant.” 44
joinder
of the seller
already
jury’s
have
affirmed the
conclu-
(Tex.2001);
Hudiburg
see
S.W.3d
against
as
PSI.
sions
to Head’s claims
(“The
Chevrolet, Inc.,
7. The
of Titeflex’s At-
Solis,
was waived. See
389;
951 S.W.2d at
torney’s Fees
Dieterich,
705-06;
Norrell,
S.W.3d at
argues
PSI also
that there is le
At the outset of our analysis, we (3) the fee customarily charged in note the lo that PSI has not directed us to a (4) cality services; for similar legal portion of the record demonstrating that amount obtained; an involved and the objection was results made to Titeflex’s pur (5) the ported imposed failure time limitations segregate by attorney’s its (6) circumstances; client or expense fees and requests. PSI’s counsel questioned length professional both of nature and attorneys, Titeflex’s rela (7) client; tionship Thomas A. with the George experience, Cowen and E. Peters- marck, segregation reputation, ability about the of the lawyer of their at torney’s however, services; fees and expenses; lawyers performing objection Holmes, was made. See contingent 115 whether the fee is fixed or on (citing 274; S.W.3d at 313 TEX.R. P. results uncertainty CIV. obtained or of collec Solis, 389; Hruska, 951 S.W.2d at legal tion before the services have been pre- And at a solely & on cross-examination. Arthur Andersen Co. See
rendered.
Titeflex
uncontro-
hearing,
presented
818 trial
Corp.,
Perry Equip.
(Tex.1997).
each
the An
argument
it
incurred
Evidence
verted
court,
support
$12,393.55
costs;
required
is not
in court
the trial
dersen factors
fees,
attor
attorney’s
and an
discretion,
an award of
ordered PSI to reimburse
its
“may testify that he re
ney’s
expert
fees
Titeflex for all of its court costs.
attorney’s
opin
fíle and offer an
an
viewed
segregation con
Though PSI waived its
that work
charged
the fees
ion that
cross-examination,
tention,
counsel for
on
Diete
necessary.”
were reasonable
about wheth
questioned
Petersmarck
rich,
at 706.
by Tite-
attorney’s
requested
er the
fees
by counsel
represented
Titeflex
segregated
flex were
between the lawsuit
Petersmarck,
local
Michigan,
from
against
Titeflex and the lawsuit
filed
*55
counsel,
testified
Petersmarck
Cowen.
by Head. See
against
filed
Titeflex
Osborne
1,032 hours on
his firm worked
that he and
(Tex.
Inc.,
v.
252 S.W.3d
Jauregui,
case;
charged
per
he
and that
$160
this
denied)
2008, pet.
(noting that
App.-Austin
per
at
while his associates billed
hour
$140
attorney’s
the extent to which
fees can be
hand,
Cowen,
the other
noted
hour.
on
of
segregated
question
is a mixed
law and
701 hours on this
that his firm worked
fact);
at
Birchfield,
see also
747 S.W.2d
case;
attorneys billed at
his firm’s
$150
testify
(stating
expert may
that an
to
hour;
at
paralegals
and his
billed
per
$75
questions
ultimate issues which are mixed
stated that
the
hour. Petersmarck
per
fact).
question
and
To this
Peters-
law
by
attornеy’s
total amount of
fees incurred
responded
marck
that he and Cowen were
$382,334, and the total
both firms was
segregate
attorney’s
unable to
the
fees
expenses
incurred was
amount
coun
because “it’s all intertwined.” PSI’s
$68,519.62. Petersmarck
testified that
questioned
sel then
Petersmarck about Ti-
attorney’s
and
had their
both he
Cowen
teflex’s
of Head’s lawsuit to which
defense
parties,
including
audited
third
fees
responded that Head never
Petersmarck
comptroller,
par-
and the third
Titeflex’s
any discovery
submitted
defense
requests
ap-
the
were
ties concluded that
defending
costs incurred in
the Head law
billing
Detailed
propriate and reasonable.
pertained
filing
suit
to
an answer
to
the work done
Peters-
statements for
petition.
Head’s
marck and Cowen’s firms were admitted
all
Considering
of the evidence
jury
into evidence for the
to review and
light most favorable to the verdict and
evaluate. These statements reflected the
indulging every reasonable inference from
rendered, the date
nature of the services
verdict,
in support
that evidence
we
service,
length
spent
of time
on the
legally
conclude that
sufficient evidence
rates,
case, applicable billing
and the fees
attorney’s
uphold
exists to
the award of
for the
ren-
and costs incurred
services
fees,
costs,
expenses.
City
court
See
and Petersmarck tes-
dered. Both Cowen
Keller,
827;
168 S.W.3d at
see also
they
charge
tified that
did not
Titeflex for
Dieterich,
Further-
706.
necessary
that was
to prepare
all the work
more,
reviewing
the evidence in a neu-
to defend both PSI and Head’s lawsuits
that
light,
tral
we cannot conclude
reason-
hourly
and that their
rates were
fees,
costs,
attorney’s
court
ex-
jury’s
Hidalgo county.
able for
locale—
were
pense
contrary
awards
so
present any expert testimony
not
did
of the evidence as to
attorney’s
expenses
overwhelming weight
refute the
fees and
Cain,
Titeflex; instead,
requested by
clearly wrong
unjust.
PSI relied
be
See
(“To
Dieterich,
176;
escape
duty
270 255
to indemnify,
S.W.2d at
see also
this
at 706.
indemnitor must
prove
indemnitee’s
independent culpability.”); Ruan Leasing
Entitlement
to a New Trial
PSI’s
Co.,
(“[I]t
issen, for his appear deposition. failed to Dissenting Opinion by Memorandum As a result of the of evidence impli- dearth Justice VELA. Titeflex,
cating
both Head and PSI non-
VELA, dissenting.
ROSE
Moreover,
suited Titeflex.
the trial court’s
prevent
sanctions order did not
PSI from
I respectfully dissent because I do not
calling witnesses to refute Titeflex and
penalty
believe
death
sanctions issued
claims,
including
Head’s
negli-
Head’s
by the trial court were warranted.
In
gence,
warranty,
breach of
and breach of
Corp.
TransAmerican Natural Gas
v.
claims,
contract
establish that
and to
Tite- Powell,
(Tex.1991),
Based on its implicating lack of evidence Titeflex, and trial courts consider the we that PSI is must avail- say cannot entitled ability a new trial of less sanctions and dispute stringent to Titeflex’s status as fully pro- an “innocent seller” under section whether such sanctions would 82.002(a). 82.002(a); § A compliance. See id. see also mote Id. sanction order Inc., Chevrolet, Hudiburg striking S.W.3d at an defense is tested affirmative standards, findings, the trial court quested to make same under according there TransAmerican, articulate what connection striking did not as Blackmon, alleged discovery abuse was between the See pleading. other Lanfear striking of the affirmative defense. (Tex.App.-Corpus not articu- majority opinion In And the does proceeding); see also orig. Christi one, Co., No. 13-98- late either. Chem. re Fina Oil (Tex. 640-CV, at *12 1999 WL disregarded PSI’s ar- majority The also Christi, 11, 1999, orig. Mar. App.-Corpus punished it should not be gument (not designated publica proceeding) expert who lost the because it was its tion). pre- circumstances Under the connector. here, there is no evidence that PSI meted out in this case sented The sanctions anything had to do with the failure of the most of PSPs claims and striking included the connector more than expert defenses. The evi- locate all of its affirmative no years support was that Barron took four later. There is also offered at trial dence deliberately proposition for the that PSI back to his office. the flex connector 2002, Neally, misplaced an came the connector. attorney, February Barron testified the last it pick up. only should be penalty Death sanctions when he loaded it in to he it was time saw enough satisfy legitimate severe Neally engaged the ser- vehicle. Nealies such sanctions. purpose granting Hendrix, an engineering vices of David required are to consider the avail- Courts inspect the flex con- review and expert, to Here, ability stringent sanctions. of less receiving admitted a flex nector. Hendrix majority suggest not even opinion does early 2002. He left it hose connector imposed lesser sanctions were first. laboratory to store. More than four with a gave explanation The trial court also later, un- years Head discovered that the respect impose. with to the sanctions it did storage system leaking derground supreme The court has indicated that *57 later, and, years more than four sued PSI. explanation record should contain some the return attorneys PSI’s asked for of the im- appropriateness of the sanctions Both Hendrix flex connector. and PSI’s Mayer, v. posed. Spohn Hosp. See connector, the flex attorneys looked for (Tex.2003). Discovery Titeflex, find it. Even but could not inhi- they sanctions that are so severe that underground of the flex con- manufacturer of the merits of the presentation bit the nector, acknowledged in its brief it “has party case should be reserved for a who misplacement never contended that callously disregarded responsibili- has flex was deliberate or intention- connector discovery under the rules. Id. ties al....” Here, from prohibited properly PSI was TransAmerican, defenses, as raising Under PSI’s failure its affirmative such meritorious, limitations, which, proven if locate the flex connector must have some recovery prevented to the trial action of would have Head’s on relationship court’s not striking all of PSI’s affirmative defenses. issue. While PSI’s answer was Court, Oil, struck, absolutely precluded from opined This in Fina that that PSI was during presenting dispositive direct the merits of defens- discovery “conduct has no majority’s link es. The conclusion that the tri- to the merits of affirma- [defendant’s] sanc- granted greater tive defenses that the relevant limitations al court could have ” Fina, reality not that PSI period expired.... See In re 1999 tions does lessen sum, trial though WL at *13. Even re- went defenseless. majority evidence outlined in the opinion not explain
does conduct that would war-
rant the imposition penalty of death sanc-
tions. least, very
At the this case should be
remanded to the trial court to allow the
jury to upon decide the case based
defenses, in addition to the pleaded claims plaintiff.
SOUTH EAST TEXAS REGIONAL COMMISSION,
PLANNING
Appellant SERVICES, LLC,
BYRDSON d/b/a Construction, LLC,
Excello
Appellee
NO. 09-14-00198-CV Texas,
Court of Appeals
Beaumont. September
Submitted on
Opinion
Delivered January
notes
that the
created handwritten
example,
tions for the destruction. For
by Tite-
was manufactured
flex connector
of the evidence was
if the destruction
flex,
produce
to
those notes.
yet he failed
spoliator’s
the
control or done
beyond
addition,
of the
photographs
In
Barron’s
business,
the
ordinary
the
course of
that
failed to demonstrate
flex connector
not
may
spoliator
find that the
did
court
manu-
connector had indeed been
the flex
Im-
duty
preserve
violate a
to
evidence.
and Tite-
by Titeflex. Had Head
factured
though,
party’s duty
when a
to
portantly
opportunity
the
to examine
given
flex been
de-
preserve evidence arises
the
before
connector, they likely would have
the flex
policy
or when a
is at odds
struction
Ti-
easily
to
determine whether
been able
records,
the
duty
with a
to maintain
part
teflex
the manufacturer
was
obligation
the
to
policy will not excuse
part was defective.
and whether
the
evidence.
preserve
Moreover,
the flex con-
produced
had PSI
(Baker, J.,
Trevino, 969
at 957
nector,
very likely
it
that Titeflex would
is
added).
we have
concurring) (emphasis
As
in this lawsuit from
not have been involved
above,
duty
pre-
to
PSI had a
Essentially,
explained
the flex con-
beginning.
The fact that
serve the flex connector.
key piece
nector
a
of evidence to both
Second,
requested
produce the flex
PSI
that
PSI was not
to
contends
it should not
years
punished
several
later when
be
expert
connector until
because its
the flex
lost
inconsequential
Barnes,
was filed
lawsuit
is
connector. See In re
956 S.W.2d
the.
746,
because the evidence establishes that
1997,
748 (Tex.App.-Corpus Christi
2002,
missing
February
since
part was
orig.
(“Respondent’s
proceeding)
order ex-
within
limi-
governing
which was well
tinguished Relators’ lawsuit
their
because
See id.
period.
tations
did
counsel
not file verified responses to
interrogatories when he
represented
had
Striking
C. The Trial Court’s
of PSI’s
to Respondent
opposing
that
counsel
Affirmative Defenses
forthcoming.
verifications would be
regard
the trial
With
to
court’s
This order had the effect of punishing
defenses,
striking of PSI’s affirmative
for the
Relators
conduct of their coun-
asserts
that
the sanctions violate the
sel -
There was no evidence ...
TransAmerican standard and are exces
Relators
were doing anything
themselves
First,
sive.
PSI states that the trial court
discovery
to
process.”);
thwart
see
failed to articulate a connection between
Condos,
also
v. Skipworth
Richmond
Com-
spoliation
alleged
pro
failure to
—the
Inc.,
mercial Plumbing,
alleged
flex
faulty
duce the
connector—
(Tex.App.-Fort
pet.
Worth
de-
striking of
de
and the
PSI’s affirmative
nied)
that,
(holding
on
based
the facts
statement, PSI,
support of
fenses.
this
case, a
against
sanction
client
it
a
again, suggests
once
did not have
“would be unfair
improper
because it
duty
preserve
the evidence once
punished
would have
for a
[defendant]
limitations
while
period expired
citing
transgression that it did not commit and
State,
our
opinion Thomas v.
it
for which bore no responsibility”).
(Tex.App.-Corpus
Christi
dism’d)
pet.
(stating
primary
regard
contention,
that “the
pur With
to this
we first
pose
ensuring
of a
Skipworth
statute
note that
Commercial
limitations —
court,
TransAmerican,
placed
Plumbing
that a defendant
is
on
citing
notice
time,
a
claims within reasonable
when evi
that “a lawyer
stated
cannot shield his
...”).
sanctions;
party
dence and witnesses are available
client from
bear
must
concluded,
However, we have
its
previously
responsibility
as
some
counsel’s discov-
duty
preserve
ery
when
alleged
had
abuses
it is
should be aware
faulty
argument
flex connector and PSPs
of counsel’s conduct and the
violation
part
discovery
the fact that
(citing
belied
has been
rules.”
Notes
notes Ultimately, the court con- however, tively designed; it did find that cluded that the submission “physi- of both give adequate manufacturer failed to cal impairment of loss of vision” and warnings about product’s danger. Id. “physical impairment other than loss of jury The ultimately awarded damages on vision” separate as damage items was not grounds, several and Jackson complained Moreover, erroneous. Id. at 776. that the damages overlapped, especially court stated that Golden Eagle Archery with respect physical to the impairment had failed to demonstrate how it was causes of action. Id. at 760-61. In ana- harmed such a submission. Id. lyzing complaints Jackson’s about jury As was the case in Eagle Golden Arch- charge, supreme court noted that de- ery, the trial court this case followed the fining damage categories juries in such State Bar of Jury Texas Pattern Charge to way they do not overlap may not be some extent. See id. (citing at 770 Tex. feasible for some damage elements. Id. (2000 ed.)). Jury Charges Pattern PJC 8.2 The court further noted that: Moreover, the instructions contained in the The charge permitted this case charge in substantially this case are simi- jury separate to award amounts of dam- lar to those contained in the charge sub- ages in six categories. different The mitted in Eagle Golden Archery. See id. standard of review to determine factual fact, jury in this case was sufficiency of the evidence that we set “[cjonsider repeatedly instructed to today forth differs from the standard of following of damages, any, elements if review that applied jury is when the respect none other.” With damages asked to award a single amount of dam- questions upon which complains, ages, but may is told that it consider jury specifically instructed as follows: various elements in arriving at circumstance, amount, amount. In the latter we Do not reduce the any, if have held challenge that a your must address answer negligence, because of the