CCE, Inc. v. PBS & J Construction Services, Inc.

461 S.W.3d 542, 2011 WL 345900, 2011 Tex. App. LEXIS 809
CourtCourt of Appeals of Texas
DecidedJanuary 28, 2011
DocketNo. 01-09-00040-CV
StatusPublished
Cited by5 cases

This text of 461 S.W.3d 542 (CCE, Inc. v. PBS & J Construction Services, Inc.) 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
CCE, Inc. v. PBS & J Construction Services, Inc., 461 S.W.3d 542, 2011 WL 345900, 2011 Tex. App. LEXIS 809 (Tex. Ct. App. 2011).

Opinion

MEMORANDUM OPINION

TERRY JENNINGS, Justice.

Appellant, CCE, Inc., challenges the trial court’s rendition of summary judgment in favor of appellees, PBS & J Construction Services, Inc.; Post, Buckley, Schuh & Jernigan, Inc.; and Yu-Chen Su, P.E. (collectively “PBS & J”), on CCE’s claims against PBS & J for negligent misrepresentation and breach of warranty. In two of its three issues, CCE contends that the trial court erred in rendering summary judgment against CCE (1) on its negligent-misrepresentation claim on the grounds that PBS & J made no affirmative misrepresentation of material fact and the economic-loss rule bars recovery of CCE’s “benefit-of-the-bargain damages” and (2) on its breach-of-warranty claim on the grounds that PBS & J was “not in privity [of contract] with CCE” and PBS & J made no express representation to CCE about the quality or character of its services. Alternatively, in its third issue, CCE contends that it should now be allowed to raise a claim against PBS & J for equitable subrogation. In a styled “cross-appeal,” 1 PBS & J contends that the trial court erred in denying it summary judgment on CCE’s. negligent-misrepresentation claim on the ground that PBS & J did [545]*545not proximately cause CCE’s alleged damages.

We affirm the trial court’s judgment in part, reverse the trial court’s judgment in part, and remand for further proceedings.

Background

The critical facts are largely undisputed. The Texas Department of Transportation (“TxDOT”) hired PBS & J to draft engineering plans and specifications for a new road, FM 2435, in Nacogdoches County (the “road project”). PBS & J devised the plans, including a “Storm Water Pollution Prevention Plan” (the “SW3P”), which was required by -a general surface-water discharge permit (the “permit”), issued by the Texas Commission on Environmental Quality (“TCEQ”), for the road project to prevent pollution from wastewater discharges entering into nearby waterways in violation of the Clean Water Act.2

TxDOT awarded the construction contract for the road project to CCE, a general contractor. TxDOT’s “Standard Specifications for Construction of Highways, Streets and Bridges” generally requires that all work performed by a contractor on a TxDOT project must be in conformity with TxDOT plans, unless a deviation is approved by the TxDOT engineer responsible for the project. CCE alleged that it was contractually bound to configure erosion control measures for the road project in compliance with the SW3P designed by PBS & J and that it, in fact, complied with the SW3P.

TxDOT, on December 22, 2004, notified CCE that silt had discharged from the road project and accumulated on nearby private property, and TxDOT instructed CCE to suspend work on the road project until “all erosion control measures [were] in place.” On January 7, 2005, TxDOT expressed to CCE that it believed that the erosion and “siltation” problems arose from CCE’s “failure to provide the control measures required by the plans.” And TxDOT notified CCE that it had ten days to correct the alleged contract violations, or CCE would be considered in default under the construction contract. On January 18, 2005, TxDOT declared CCE in default, ordered CCE to cease work, and notified CCE’s surety that it was obligated to arrange for completion of the road project.

CCE then hired Longview Road and Bridge, Ltd. (“LR & B”) to complete the road project. In its summary-judgment evidence, CCE included the affidavit of its Financial Control Officer, Phil Mahar, who testified that hiring LR & B to complete the road project caused CCE to spend $2,423,752.20 more than it would have had it been able to complete the project on its own.

In its Fifth Amended Original Petition, CCE, in regard to its negligent misrepresentation claim, alleged that PBS & J “recklessly” or “without reasonable care” submitted the SW3P to TxDOT knowing that construction contractors like CCE would bid on and attempt to build the road project in reliance on the SW3P. CCE further alleged that the SW3P “contained numerous false statements of material existing fact including, but not limited to, the representation^] that it was an instrument of service resulting from an engineering process when it was not, that it complied with the [p]ermit and [TxDOT] [guidelines, and that if CCE followed it, the [engineering] [p]lans and SW3P would work.” In regard to its breach-of-warran[546]*546ty claim, CCE alleged that PBS & J “provided express and written warranties and represented that its [p]lans and SW3P conformed to the [p]ermit and [guidelines, when they did not.” CCE further alleged that PBS & J represented that the engineering plans and the SW3P“were instruments of services resulting from an engineering process, when they were not”; PBS & J “admitted that it expressly warranted and represented that if CCE followed the [p]lans and SW3P, they would work; and the plans and SW3P did not “conform with the [p]ermit and [g]uide-lines and the SW3P did not work.” CCE did not assert a claim for equitable subro-gation against PBS & J.

In its first summary-judgment motion, PBS & J argued that it- was entitled to judgment as' a matter of law on CCE’s negligent-misrepresentation claim because “PBS & J’s alleged misconduct was not the cause in fact of CCE’s alleged injuries,” “CCE’s alleged injuries [were] not a for-seeable result of PBS & J’s alleged misconduct,” and PBS & J did not cause the termination of CCE’s construction contract and its alleged damages. The trial court denied PBS & J’s motion.

' In a second summary-judgment motion and a supplemental summary-judgment motion, PBS & J contended that it was entitled to summary judgment as a matter of law and on no-evidence grounds. In regard to CCE’s negligent-misrepresentation claim, PBS & J asserted that there is no evidence that it made an affirmative misrepresentation of material fact to CCE and, as a matter of law, the economic-loss rule bars recovery of CCE’s damages and CCE may not recover “benefit-of-the-bar-" gain damages” on its negligence claim. In regard to CCE’s breaeh-of-warranty claim, PBS & J argued that because PBS & J did not sell services to CCE, it was “not in privity with CCE.” PBS & J also asserted that it had made no express representation to CCE about the quaiity or character of any of its services.

The trial court rendered summary judgment for PBS & J on all grounds asserted in its second and supplemental summary-judgment motions. PBS & J then moved to dismiss its remaining counterclaim, and the trial court signed a final judgment from which CCE appeals.

Standard of Review

To prevail on a summary-judgment motion, a movant has the burden of proving that it is entitled to judgment as a matter of law and there is no genuine issue of material fact. Tex.R. Civ. P. 166a(c); Cathey v. Booth, 900 S.W.2d 339, 341 (Tex.1995). When a defendant moves for summary judgment, it must either (1) disprove at least one essential element of the plaintiffs cause of action or (2) plead and conclusively establish each essential element of its affirmative defense, thereby defeating the plaintiffs cause of action. Cathey, 900 S.W.2d at 341; Yazdchi v. Bank One, Tex., N.A.,

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Bluebook (online)
461 S.W.3d 542, 2011 WL 345900, 2011 Tex. App. LEXIS 809, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cce-inc-v-pbs-j-construction-services-inc-texapp-2011.