County of Galveston v. Triple B Services, LLP

498 S.W.3d 176, 2016 WL 3025261, 2016 Tex. App. LEXIS 5604
CourtCourt of Appeals of Texas
DecidedMay 26, 2016
DocketNO. 01-15-00565-CV
StatusPublished
Cited by17 cases

This text of 498 S.W.3d 176 (County of Galveston v. Triple B Services, LLP) 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
County of Galveston v. Triple B Services, LLP, 498 S.W.3d 176, 2016 WL 3025261, 2016 Tex. App. LEXIS 5604 (Tex. Ct. App. 2016).

Opinion

OPINION

Harvey Brown, Justice

Triple B Services, LLP filed a lawsuit against Galveston County in a dispute over a road-expansion contract. In that lawsuit, Triple B asserted claims, in relevant part, for (1) “disruption damages” resulting from the County’s alleged breach-of-contract, (2) interest under the Prompt Payment Act, and (3) attorney’s fees. The County filed a plea to the jurisdiction for those three claims, which was denied by the trial court.

[179]*179The County appeals the order denying its plea. We must determine whether the statutory waiver of a county’s sovereign immunity on breach-of-construction-contract claims applies to Triple B’s three claims. To do so, we must decide whether Section 262.007 of the Local Government Code, which waives a county’s immunity for breach-of-construction-contract damages that are “a direct result of owner-caused delays,” (1) allows a claim for “disruption” damages, which are those damages suffered when the non-breaching party completes the project timely—i.e. without delays—but incurs additional costs because of the other party’s inefficiencies; (2) waives immunity for interest under the Prompt Payment Act; and (3) creates a substantive right to attorney’s fees.

We affirm in part and reverse in part, dismissing Triple B’s claims for attorney’s fees for lack of jurisdiction. .

Factual Background

Galveston County contracted with Triple B to expand a three-mile stretch of road. Under the contract, the County was responsible for moving certain utilities, including “gas, water, [and] fiber-optic cables.” The contract, according to Triple B’s damages expert, established a “baseline schedule ... created by the County’s engineer, [and, starting on a particular date] shows unhindered access” along the area of the road where the utilities were located. The contract provided for “delay damages” if the Contractor’s request for those damages “is determined to be com-pensable.”

Although Triple B’s plans for the construction project anticipated that the County would move the utilities by a particular date, the County did not move the utilities until almost a year later.1 Nevertheless, Triple B completed the expansion by the contractual deadline. Triple B contends that it incurred additional costs to timely complete the project as a direct result of the County’s alleged delay in moving the utilities. These costs include additional costs to' hand-form manholes, set and reset barricades, have extended field office overhead, and cover additional labor, equipment, street cleaning, flagging, and traffic control.

After completing the expansion, Triple B sued the County for breach of contract for those alleged additional costs. In its petition, Triple B claims as damages “amounts owed as compensation for the increased cost for Triple B to perform the work on the Project as a direct result of County-caused delays in completing utility adjustments; and amounts owed for additional work Triple B was required to [perform to] carry out the contract.”

The County filed a plea to the jurisdiction. It argued that the trial court lacked subject-matter- jurisdiction because the statute waiving a county’s sovereign immunity for construction contracts only waives immunity for delay damages and thus, by seeking disruption damages, “Triple B seeks only damages excluded from recovery ...” See Tex. Loo. Gov’t Code Ann. § 262.007 (West 2005). The trial court denied the County’s plea to the jurisdiction. The County appeals.

The County relies heavily on the testimony of Triple B’s expert witness who testified on the damages Triple B suffered because of the County’s delay. Because the County did hot timely move the utilities as Triple B had anticipated in its [180]*180original construction plan, those plans, according to that expert, were “disrupted.” Thus, Triple B revised its plans to allow it to complete the expansion by the contractual deadline despite the County’s delay in moving the utilities.

The changes, however, according to Triple B’s petition, caused Triple B to incur an increased cost to. perform the work. Triple B’s expert examined the “daily summaries” of Triple B’s work and “the manner [the project] was intended to be executed ... [and] the manner by which the project was actually executed and some of the specific things that caused that deviation.” Using this information, the expert testified that Triple B had to adjust its approach to accommodate the County’s delay by “segmenting the work into smaller segments of the roadway, waiting on the utilities ... just a various sundry of impacts that caused them to not be as productive from a direct labor standpoint.”

According to the deposition testimony of Triple B’s expert, this “waiting” caused Triple B to waste “man-hours trying to deal with working around utilities and bouncing around back and forth and dealing with not being able to set barricades and ... progress the roadway [in the way] that they thought they would be able to in an unhindered manner.” It also had to add “a number of crews because they were working in so many different areas to try and progress the work....” Additionally, “Triple B had to basically wait and basically get [an existing septic tank that nobody realized existed] drained and out of the way. There [were] some electrical lines and gas lines and that sort of thing .... that hinder[ed] the progression of the work.” Triple B’s clean-up crew also had to. perform additional work because “whenever you slow down that progression and create situations where you’re excavating and you’re staging materials in one location[,] ... you wind up with ... more debris than if you were just moving in a steady progressive manner.”

Although the expert testified to costs that Triple B incurred “as a direct result of County-caused delays in completing utility adjustments,” he explicitly denied that the damages were “delay damages” as understood in construction law. He distinguished between “delay” damages and “disruption” damages: “delay is schedule driven, calendar driven, and ... leads into a certain category of damages that are time-based or calendar-based-type costs like salary personnel, if you will; whereas disruption is really an impact to the number of man-hours—that’s more of a task-based issue as opposed to calendar-based.” But he also testified that disruption damages could be caused by a delay: utilities may be “out of the way in a given segment, hypothetically, ... but there’s still ... disruption to possibly dirt crews that are slowed down by a utility crew, [or] having to double handle or relocate barricades.”

In responding to a cross-examination question of whether his damages calculations included damages under the delay-damages provision of the contract, the expert responded that “there’s a legal argument there that’s outside of my bailiwick because I’m not a lawyer, but ... I did consider it, as well as the rest of the contract that I read, in quantifying my damages.” Upon further questioning, he agreed that “there’s no delay damage listed in ... my summary of damages ... I do see [the contractual] descriptions of various delay-type damages. And the damages that I have quantified do not, in my opinion, fall within those descriptions.” The County relies on the expert’s denial that the damages were “delay” damages [181]*181under the contract.2

Disruption Damages and Delay Damages

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Cite This Page — Counsel Stack

Bluebook (online)
498 S.W.3d 176, 2016 WL 3025261, 2016 Tex. App. LEXIS 5604, Counsel Stack Legal Research, https://law.counselstack.com/opinion/county-of-galveston-v-triple-b-services-llp-texapp-2016.