Conquest Drilling Fluids, Inc. v. Tri-Flo International, Inc.

137 S.W.3d 299, 2004 Tex. App. LEXIS 4189, 2004 WL 1047150
CourtCourt of Appeals of Texas
DecidedMay 6, 2004
Docket09-02-194 CV
StatusPublished
Cited by22 cases

This text of 137 S.W.3d 299 (Conquest Drilling Fluids, Inc. v. Tri-Flo International, 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
Conquest Drilling Fluids, Inc. v. Tri-Flo International, Inc., 137 S.W.3d 299, 2004 Tex. App. LEXIS 4189, 2004 WL 1047150 (Tex. Ct. App. 2004).

Opinion

OPINION

DAVID B. GAULTNEY, Justice.

On motion for rehearing, our prior opinion was withdrawn. The following opinion is substituted in its place.

This dispute is over equipment manufactured by Tri-Flo International, Inc. that *302 Conquest Drilling Fluids, Inc., says never worked. Tri-Flo executed a contract to build an oilfield-related “encapsulation unit.” One of the buyers was Coastal Mud, Inc., acting as a funding entity for Grant Peterson, president of Conquest, the eventual owner. Coastal sold the equipment to Conquest and then assigned the litigation rights concerning the unit to Conquest.

Alleging defects in the equipment, Conquest sued Tri-Flo. The trial court granted summary judgment against Conquest on its DTPA, negligence, and negligent misrepresentation causes of action. A jury returned a verdict for Conquest on breach of contract and breach of warranty claims, and awarded Conquest $553,172.48 in damages on each claim and also attorney’s fees through trial and on appeal. The trial court granted Tri-Flo’s JNOY motion in part, and signed a judgment in favor of Conquest for $188,851 in actual damages on the breach of express warranty claim, and awarded attorney’s fees, in an amount less than the jury found reasonable and necessary. Both parties appealed.

TRI-Flo’s Issues

Statute of Limitations

Tri-Flo contends Conquest’s breach of contract and breach of warranty claims are barred by the two-year limitations provision contained in the contract. “By the original agreement the parties may reduce the period of limitation to not less than one year.... ” See Tex. Bus. & Com.Code Ann. § 2.725(a) (Vernon 1994). The trial court denied Tri-Flo’s motion for a directed verdict on limitations.

A directed verdict for a defendant is proper if the evidence conclusively establishes a defense to the plaintiffs cause of action. Prudential Ins. Co. of Am. v. Financial Review Servs., Inc., 29 S.W.3d

74, 77 (Tex.2000). For a directed verdict to be proper on limitations, Tri-Flo must conclusively establish the date on which the causes of action accrued and the date on which suit was filed. See Upjohn Co. v. Freeman, 885 S.W.2d 538, 541 (Tex.App.Dallas 1994, writ denied). Suit was filed June 22, 1998. The issue in dispute is the accrual date.

Because the trial court entered judgment on the breach of warranty claim and not the breach of contract claim, we focus our analysis on the statute of limitations governing the breach of warranty claim, though the testimony and arguments concerning actual delivery and tender of delivery overlap. In a sale of goods, a “breach of warranty occurs when tender of delivery is made,” unless the warranty explicitly extends to future performance. See Tex. Bus. & Com.Code Ann. § 2.725(b) (Vernon 1994). Under the Business and Commerce Code, “[t]ender of delivery” requires the seller to “put and hold conforming goods at the buyer’s disposition” and give the buyer any notification reasonably necessary to enable him to take delivery; “[t]ender of delivery is a condition to the buyer’s duty to accept the goods.... ” Tex. Bus. & Com.Code Ann. §§ 2.503(a), 2.507(a)(Vernon 1994). For the purpose of determining when the statute of limitations starts to run on a breach of warranty claim, we construe the term - “tender” to refer to an offer of goods “under" a contract as if in fulfillment of its conditions even though there is a defect when measured against the contract obligation.” See TEX. BUS. & COM.CODE ANN. § 2.503 cmt. 1 (Vernon 1994); Navistar Int’l Corp. v. Hagie Mfg. Co., 662 F.Supp. 1207, 1210 (N.D.Ill.1987).

Tri-Flo says there is evidence it put and held conforming goods for the buyer’s disposition on February 15, 1996, and gave reasonable notification necessary for- deliv *303 ery to be taken. As a result, Tri-Flo argues, Conquest’s filing of suit on June 22, 1998, was outside the two-year statute of limitations provided by the contract. Conquest says there is no evidence delivery occurred on February 15,1996.

To support the February 1996 date, TriFlo points to testimony in the record showing that the requirements of section 2.503, the tender statute, were met on that date. It is undisputed that Rebecca Stokes, president of Coastal Mud, made final payment on February 15, 1996, and that she and Peterson were present at the Tri-Flo yard on that day. David Allen, a Tri-Flo employee, testified as follows:

Q. (The Court): ... [A]re you talking about 2-15-96?
A. (Tri-Flo’s Attorney): Yes, sir, Your Honor.
Q. (The Court): All right. Does that change your answer?
A. (Allen): No, sir, that’s the date I had in mind.
[[Image here]]
Q. (Tri-Flo’s Attorney): [WJhat did Tri-Flo do on the day that that payment was made?
A. Well, it’s my job to actually release the equipment for delivery for the customer, and I authorized payments received. It’s clear, no liens, no holdings, no conditions left, the equipment is considered delivered.
[[Image here]]
A. I released the equipment for delivery to the customer.
Q. [W]as Coastal Mud’s representative there, Mrs. Becky Stokes, on at [sic] that day?
A. Yes, she was.
Q. And was Mr. Grant Peterson there as a representative of Coastal Mud on at that day?
A. Grant Peterson was there, yes.
[[Image here]]
Q. Between February the 14th, '96 and July the 10th of '96, was there anything done to the unit by Tri-Flo?
A. Not to my knowledge. It was moved to the back 40 acres we have back there, out of our assembly work out, moved up the hill.
[[Image here]]
Q. When this unit was constructed and finished and it was paid for on February the 15th, 1996, was it ready to be used in an oil site location?
A. It was field ready, yes.

On cross-examination, Allen testified he did not know what Peterson’s designated shipment location was, and he agreed with the statement that the removal of the unit to Integrity’s yard 1 on July 11, 1996, “could be a shipment.” Conquest also interprets Allen’s testimony to reflect a possible June 1998 shipment and delivery date. Conquest argues the evidence establishes July 11, 1996, as the earliest possible delivery or shipment date.

Tri-Flo employee, James Andrews, Jr., testified concerning the unit’s status on February 15,1996:

Q.(Tri-Flo’s attorney): Okay.

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Bluebook (online)
137 S.W.3d 299, 2004 Tex. App. LEXIS 4189, 2004 WL 1047150, Counsel Stack Legal Research, https://law.counselstack.com/opinion/conquest-drilling-fluids-inc-v-tri-flo-international-inc-texapp-2004.