In Re AJT Industries, LLC D/B/A Prestige Builders v. the State of Texas

CourtCourt of Appeals of Texas
DecidedDecember 18, 2024
Docket03-24-00570-CV
StatusPublished

This text of In Re AJT Industries, LLC D/B/A Prestige Builders v. the State of Texas (In Re AJT Industries, LLC D/B/A Prestige Builders v. the State of Texas) 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
In Re AJT Industries, LLC D/B/A Prestige Builders v. the State of Texas, (Tex. Ct. App. 2024).

Opinion

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

NO. 03-24-00570-CV

In re AJT Industries, LLC d/b/a Prestige Builders

ORIGINAL PROCEEDING FROM TRAVIS COUNTY

M E M O RAN D U M O PI N I O N

Relator AJT Industries, LLC d/b/a Prestige Builders filed a petition for writ of

mandamus challenging the trial court’s “Order Granting Bifurcation of Third-Partys [sic] Gonzalez

Iron Works, Capital Iron Works and DB Construction Austin LLC” (collectively, “Gonzalez Third

Parties”). Prestige contends that the trial court committed a clear abuse of discretion for which

there is no adequate appellate remedy by ordering Prestige’s claims against the Gonzalez Third

Parties to be bifurcated and tried separately from both the claims brought against Prestige by the

real party in interest, Escondera Condominium Owners Association, Inc., and the third-party

claims Prestige has filed against other third-party defendants. For the reasons explained below,

we agree that the trial court abused its discretion by effectively ordering a severance of Prestige’s

claims against the Gonzalez Third Parties, and we conditionally grant mandamus relief from the

challenged order.

BACKGROUND

The underlying lawsuit is a construction-defect lawsuit. Prestige was engaged to

act as the general contractor for a project to repair and modify condominium units belonging to Escondera. In March 2022, Escondera sued Prestige, alleging various construction defects and

liability theories for alleged water intrusion at the condominium complex. The alleged

construction defects include defects related to grading and drainage, the building envelope and

cladding, the roof, the rear balconies and roof junctions, and the retention pond. Escondera alleged

claims against Prestige for negligence, breach of implied warranty, negligent misrepresentation,

and DTPA violations.

Prestige answered and denied liability for all claims. Prestige expressly reserved,

pursuant to Chapters 32 and 33 of the Texas Civil Practice and Remedies Code, “the statutory right

to contribution or credit with respect to any other persons or organizations which are or may be

made parties to this cause or any settling persons or organizations.” See generally Tex. Civ. Prac.

& Rem. Code §§ 32.001-.003 (contribution); id. §§ 33.001-.017 (proportionate responsibility).

Prestige also reserved “the right to submit issues to the jury inquiring of the alleged negligence,

proportionate share of responsibility, or alleged wrongdoing of all current or future parties or

responsible third parties to this cause and/or settling party, including Plaintiff.”

Prestige seeks recovery against several of its subcontractors under contribution,

negligence, and breach-of-warranties theories. In its July 2023 first amended third-party petition,

Prestige brought claims against subcontractors Umbrella Tech, Incorporated; Mission Plastering,

Inc.; and Armored Star, Inc. (“Initial Third-Party Defendants”).1 Each third-party defendant

performed labor in connection with the construction at the Escondera project. Mission Plastering

1 Prestige also filed third-party claims against Albert Arellano d/b/a A.J. EZ Lath & Plaster, but this subcontractor has not made an appearance in the case. Arellano was a stucco subcontractor for two buildings at the Escondera project. 2 was a stucco subcontractor for five buildings at the Escondera project; Umbrella Tech built and

installed roofing components; and Armored Star provided waterproofing.

On March 27, 2024, Prestige filed its second amended third-party petition and

added additional subcontractors, the Gonzalez Third Parties, as third-party defendants.2 Gonzalez

Iron Works and Capitol Iron Works installed the bolt attachments for the railings and spiral stairs

that may have contributed to alleged problems with the decks at the project. DB Construction

installed the concrete topping and T metal at the decks that may also have contributed to the alleged

problems with the decks at the property.

After the Gonzalez Third Parties were served on June 24, they collectively

answered on July 19 and moved for a continuance on July 23, arguing that under the docket-control

order, they would be unable to serve any party requests for discovery because the discovery

deadline was August 9. 3 They also argued that they would “be prejudicially and unjustly denied

the opportunity to designate experts, and cross-examine experts currently designated by other

parties, as the deadline for expert designations expired on May 20, 2024.” The Gonzalez Third

Parties sought a 180-day delay of the September 9 trial date to give them adequate time to prepare

for trial.

Escondera opposed the Gonzalez Third Parties’ request for a continuance and

alternatively requested that Prestige’s claims against the Gonzalez Third Parties be bifurcated.

2 Prestige also sued Builders First Source – Texas Installed Sales, LLC in this petition but subsequently nonsuited that company. 3 Prestige’s counsel explained at the August 13 hearing that when his process servers were unable to serve the Gonzalez Third Parties within a short period of time, he filed a motion to seek substituted service less than a month after the third-party petition was filed, which was granted. He noted that Prestige’s third-party petition was filed before the docket-control order was signed and that no party objected to either the timely joinder or Prestige’s motion for substituted service. 3 With regard to the request for continuance of the trial setting, Escondera argued that it would be

significantly prejudiced by continuing the trial date because it does not have the funds to make the

necessary repairs to its damaged property until the case is resolved, and the property’s condition

continues to deteriorate with the passage of time. It further argued that it was already incurring

trial-preparation costs for the upcoming September trial date and would be prejudiced if it was

forced to reschedule. Escondera also expressed concern about Prestige’s diligence, contending

that Prestige had failed to timely serve the Gonzalez Third Parties. 4

In the alternative, in the event that the trial court concluded that additional time

would be required to complete third-party discovery, Escondera moved to have Prestige’s

third-party claims against the Gonzalez Third Parties “bifurcated,” arguing that Texas Rule of Civil

Procedure 174 allows the court to order separate trials “in furtherance of convenience or to avoid

prejudice.” Escondera argued that both judicial efficiency and avoidance of prejudice favor

bifurcation. It argued that bifurcation would avoid significant prejudice to it by ensuring its claims

are heard in a timely manner and that there would be no prejudice to Prestige by having its claims

bifurcated because indemnity claims do not arise under Texas law until a judgment is owed. It

4 In September 2023, after issues with Prestige’s prior counsel’s management of the case, the trial court allowed Prestige’s prior counsel to withdraw and ordered Prestige to obtain new counsel in two weeks, and within two weeks after that date, to confer with Escondera’s and the Initial Third Parties’ counsel about the case status, scheduling order, depositions, and mediation. On November 15, 2023, the trial court signed a docket-control order setting a March 18, 2024 trial date.

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Bluebook (online)
In Re AJT Industries, LLC D/B/A Prestige Builders v. the State of Texas, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-ajt-industries-llc-dba-prestige-builders-v-the-state-of-texas-texapp-2024.