CCC Group, Inc. v. South Central Cement, Ltd.

450 S.W.3d 191, 2014 WL 5461960
CourtCourt of Appeals of Texas
DecidedNovember 7, 2014
Docket01-13-00567-CV
StatusPublished
Cited by58 cases

This text of 450 S.W.3d 191 (CCC Group, Inc. v. South Central Cement, Ltd.) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
CCC Group, Inc. v. South Central Cement, Ltd., 450 S.W.3d 191, 2014 WL 5461960 (Tex. Ct. App. 2014).

Opinion

OPINION

MICHAEL MASSENGALE, Justice.

South Central Cement, Ltd. prevailed at trial on its claims that CCC Group, Inc. breached a contract and was negligent in connection with the construction of a cement-storage warehouse that collapsed. On appeal from the judgment, CCC argues that the evidence is legally and factually insufficient to establish that it breached any contract, the cause of the structure’s failure, or any resulting damages. We conclude that no evidence supports the jury’s award of future repair damages. Consequently, we reverse and remand for a new trial.

Background

South Central Cement, a subsidiary of a holding company known as Grupo Argos, imports cement and sells it in Texas. In 2006, South Central retained River Consulting, LLC to design a pair of warehouses at the Port of Houston. South Central intended to store dry cement in the warehouses, with each warehouse holding 22,-000 tons, or one shipload, of cement.

South Central asked River to propose possible designs for the warehouses, accounting for cost and construction time. River proposed three designs: a silo, a dome, or a retaining wall built with stacked concrete blocks. South Central selected the retaining-wall design because it was the cheapest and fastest of the options and because South Central already had other facilities in the United States with similar walls. Those other facilities, however, were smaller, holding no more than 15,000 tons of cement each.

To accommodate larger volumes of cement at the Houston facility, River proposed a unique system consisting of three concentric walls, each made of stacked concrete blocks joined by epoxy. The outermost wall would be only 8 feet high, while the middle wall would be 16 feet high and the innermost wall would be 24 feet high. The blocks themselves would be 2 feet deep, 2 feet high, and 2 to 6 feet in length. In all, each warehouse required more than 3,000 blocks, to be cast in a series of metal forms, or molds.

River faced a design challenge with respect to the project. The concrete blocks in the three walls could prove unable to withstand the pressure of the cement because each of the three walls would tend to move independently, making the entire structure only as strong as a single layer of blocks. To address this problem, River designed a three-part system to allow the three walls to function monolithically, as though they were a single, extra-thick wall. First, each block had an angled extension on one end and an angled notch on the other, allowing two blocks aligned end-to-end to fit together. Second, each block would have a similar extension on its upper surface and a notch in its bottom surface. Third, and most important to this dispute, each block would have a set of shallow “keyholes” on its top surface. The blocks in each wall were to be laid so that their keyholes would align with the keyholes in blocks in the adjacent wall. This would result in a single keyhole, spanning two blocks. Into this space would be laid a “shear plate,” a metal plate somewhat smaller than the keyhole, which would be in contact with four blocks: the two blocks on each side, both above and below. River’s engineers calculated that the resulting friction between blocks and between blocks and plates would result in the three concentric walls acting as a single wall due to the plates’ ability to transfer shearing force from one block to another.

*195 River recommended CCC Group and one other company as potential contractors to build the walls. South Central chose CCC, and River entered into a written agreement with CCC. South Central did not have a written agreement with CCC.

The first warehouse was known as Warehouse A. Shortly after construction began on Warehouse A, River realized that it had underbid the project and asked South Central to renegotiate its fees. Ultimately, River left the project instead.

CCC and South Central disagreed at trial about who assumed responsibility for project management and engineering after River’s departure. According to CCC regional manager Darryl Mayfield, South Central assumed all such duties, and CCC’s role as a contractor on the construction project remained unchanged. In contrast, Miguel Jaramillo, a port project manager for Grupo Argos, testified that CCC and South Central orally agreed that CCC would assume responsibility for both the construction and project management.

Once CCC began construction, it encountered difficulties placing the shear plates. After about 700 blocks had been placed, the keyholes in adjacent blocks were no longer lining up correctly. According to Mayfield and CCC’s project manager, Michael Tucker, South Central’s Carlos Gonzales and Uriel Duarte were immediately informed of the problem, and both men responded that CCC should omit the shear plates and use only the epoxy to hold the wall together. CCC also informed River’s David Grillot of the issue, and he responded, “They pay the bills. They’re the owners.” Both Gonzalez and Grillot disputed this version of events, testifying that no such conversations ever occurred; Duarte did not testify at trial.

The project continued, and in April 2007, Warehouse A prepared to receive its first shipment of cement. When the shipment arrived, CCC personnel were operating the facility and supervising the unloading process. Around midnight on April 27, 2007, portions of the retaining wall in Warehouse A failed, and the warehouse essentially “exploded,” causing extensive damage to the building.

Because CCC was already present at the site, South Central asked CCC to perform cleanup and rebuilding of the walls. Because South Central feared another collapse, CCC rebuilt the damaged portions of the walls to a height of only 14 feet. The walls in Warehouse B, also originally planned for 22 feet, were likewise built to only 14 feet. For the cleanup and rebuilding, CCC charged and South Central paid $928,008.40.

In 2009, South Central sued CCC and River for breach of contract and negligence. River settled, while CCC proceeded to trial. A jury found for South Central on both the contract and negligence claims. For breach of contract, the jury awarded $556,800 for past repairs, $1,200,000 for future repairs, $552,000 for the cost of past delays in the construction of the warehouses,, and $859,400 as damages for the temporary reduction of the warehouses’ capacity below the capacity for which South Central contracted. The jury also awarded South Central $150,000 in attorney’s fees. On the negligence claim, the jury assigned 60% of the responsibility for the warehouse collapse to CCC and 20% each to River and South Central. As damages for negligence, the jury awarded exactly two-thirds of each of the amounts that it awarded for the contract claim.

The trial court entered judgment on the jury’s verdict, assessing damages of $2,368,200 after accounting for CCC’s settlement offset, plus pre-judgment and *196 post-judgment interest, attorney’s fees, and costs of court. This appeal followed.

Analysis

On appeal, CCC argues that the evidence is legally and factually insufficient to support the jury’s findings with respect to (1) CCC’s breach of an agreement with South Central, (2) the cause of the retaining wall’s collapse, and (3) damages for past and future repairs, delay, and reduced capacity.

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Cite This Page — Counsel Stack

Bluebook (online)
450 S.W.3d 191, 2014 WL 5461960, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ccc-group-inc-v-south-central-cement-ltd-texapp-2014.