Miner Dederick Construction, LLP v. Gulf Chemical & Metallurgical Corporation

403 S.W.3d 451, 2013 WL 1488186, 2013 Tex. App. LEXIS 4589
CourtCourt of Appeals of Texas
DecidedApril 11, 2013
Docket01-11-00325-CV
StatusPublished
Cited by24 cases

This text of 403 S.W.3d 451 (Miner Dederick Construction, LLP v. Gulf Chemical & Metallurgical Corporation) 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
Miner Dederick Construction, LLP v. Gulf Chemical & Metallurgical Corporation, 403 S.W.3d 451, 2013 WL 1488186, 2013 Tex. App. LEXIS 4589 (Tex. Ct. App. 2013).

Opinion

OPINION ON REHEARING

LAURA CARTER HIGLEY, Justice.

Appellant Miner Dederick Construction, LLP (“Miner Dederick”) .has filed an *455 amended motion for rehearing. We deny the motion for rehearing. We withdraw our December 6, 2012 opinion and judgment and issue the following opinion and a new judgment in their stead.

This appeal arises from a construction defect suit brought by appellee Gulf Chemical & Metallurgical Corporation (“Gulf’) against Miner Dederick. Following a jury trial, the trial court rendered judgment against Miner Dederick in favor of Gulf, awarding it actual damages and attorney’s fees.

Identifying eleven issues, Miner Deder-ick challenges the trial court’s judgment. Among these issues is Miner Dederiek’s assertion that the trial court erred by failing to find that Gulf had engaged in spoliation of evidence. Miner Dederick also challenges the trial court’s grant of summary judgment on its counter-claim for breach of contract.

We hold that the trial court abused its discretion when it failed to find that Gulf had spoliated evidence vital to Miner De-derick’s defense of Gulfs claims. We further hold that summary judgment on Miner Dederick’s counter-claim was appropriate. Accordingly, we reverse and remand, in part, and affirm, in part.

Background Summary

Gulf engages in the business of recycling spent catalyst generated by oil refineries. Gulf processes the catalyst by extracting metal from it. Gulf then sells the metal on the open market.

Before being processed by Gulf, the catalyst is considered a hazardous material. Gulf stores the catalyst in a hazardous waste building called “Containment Building 2” or “CB2.” The catalyst has a granular texture and often appears to be oily, containing free liquids, such as oil and water. It is not uncommon to see an oily liquid pooling on the floor of CB2, which has drained from the spent catalyst.

In early 2005, Gulf decided to expand CB2 to increase its storage capacity for the catalyst. Gulf contracted with Ashkar Engineering Corporation, a structural engineering design services company, to engineer and to design the expansion of CB2. Ashkar Engineering provided the drawings and specifications for how the CB2 expansion should be constructed.

Ashkar Engineering’s drawings and specifications required that a new concrete foundation be poured for the expansion. The new foundation would be attached to CB2’s original foundation by a 140-foot expansion joint. Because of the hazardous nature of the spent catalyst, the design required a primary and a secondary “wat-erstop,” made of specialized chemical-resistant rubberized materials, to be installed within the expansion joint. Ashkar Engineering’s design drawings for the expansion project and the waterstop manufacturer’s specifications detailed how the waterstops were to be fastened and installed within the expansion joint. In addition to the waterstops, the design required the expansion joint to be covered with a sealant. It further required installation of a secondary containment system to hold any liquids that breached the first waterstop. The waterstops and other features of the expansion joint were designed to prevent hazardous materials from leaking through the joint into the environment.

In May 2005, Gulf chose Miner Deder-ick, a commercial construction company, to be the general contractor for the construction of the CB2 expansion. Gulf entered into a written contract with Miner Deder-ick to build the CB2 expansion. Pursuant to the contract, Miner Dederick agreed to construct the expansion in accordance with *456 Ashkar Engineering’s plans and specifications.

Miner Dederick substantially completed the construction of the expansion in January 2006, and Gulf began storing spent catalyst in the CB2 expansion. In March 2006, Miner Dederick gave Gulf a document entitled “Certificate of Guaranty,” providing a one-year warranty for the materials and work performed by Miner De-derick on the expansion project.

In June 2006, an adjacent property owner reported to Gulf that it had discovered an oily substance in a ditch on its property. Upon investigation, Gulf discovered that an oily substance was leaking from the expansion joint of CB2 where the new foundation met the old foundation.

On June 26, 2006, a Miner Dederick employee, Dan Shead, visited Gulfs facility. After looking at the exterior of CB2 where the expansion joint is located, Shead faxed a handwritten sketch to Miner De-derick, indicating that he saw a “leak” at the expansion joint. He noted that he observed an “oil stain,” “oil dripping,” and an “oil puddle” at the expansion joint. Shead did not observe the joint from inside the building. Catalyst was still being stored on the expansion joint and would continue to be stored on it until early 2007.

James Milner, Ashkar Engineering’s prime design consultant who had worked on the expansion project, also visited the site on June 26 and returned to the site approximately six times during the fall of 2006. From the exterior of the building, Milner saw light coming through the expansion joint. From this observation, Mil-ner deduced that there was a hole in the expansion joint, which had to be repaired.

Gulf asked Ashkar Engineering to design a repair for the expansion joint. Once completed, the repair design required the concrete to be chiseled out on each side of the expansion joint and a new waterstop placed on either side. The design also required a new concrete slab to be poured over the expansion joint. In addition, to keep catalyst from being stored directly on the joint, as it had been, the design included a 15 foot high containment wall to be built along the expansion joint.

Gulf requested that Miner Dederick repair the expansion joint, pursuant to the warranty, using the repair designed by Ashkar Engineering. After reviewing Ashkar Engineering’s proposed design for the repair, Miner Dederick’s CEO, John Miner, responded to Gulf in January 2007. He stated that the work requested by Gulf was not covered by Miner Dederick’s warranty for the construction of the CB2 expansion. Miner explained that Miner De-derick regarded the work requested by Gulf to be an entirely new design for the expansion joint and not a repair of the joint. He also stated that Miner Dederick had complied with the original design plan and specifications for the expansion joint. Miner asserted that the oil leak had occurred because Ashkar Engineering’s construction design was faulty. Miner indicated that it would not do the work unless Gulf signed a new contract with his company and paid an additional sum of money.

Gulf opened up the new project for bids from contractors. On March 2, 2007, John Miner sent Gulf a bid proposal indicating that Miner Dederick would do the additional work pursuant to Ashkar Engineering’s designs for $498,000. Gulf hired another construction company, Cajun Contractors, to do the work for $898,605. Gulf notified Miner Dederick on March 6, 2007 that it had hired another contractor.

On March 8, 2007, John Miner sent Gulf an email message, stating, in relevant part:

[W]e would appreciate the opportunity to review the work as it is ongoing so *457

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Bluebook (online)
403 S.W.3d 451, 2013 WL 1488186, 2013 Tex. App. LEXIS 4589, Counsel Stack Legal Research, https://law.counselstack.com/opinion/miner-dederick-construction-llp-v-gulf-chemical-metallurgical-texapp-2013.