Texas: Alamo Community College Dist. v. Browning Construction Co., 2004 Wl 60975 (Tex. App. - San Antonio 2004, No Pet. H.)
December 16, 2004
In Alamo Community College Dist. v. Browning Constr. Co., an unpublished opinion released in January 2004, the San Antonio Court of Appeals affirmed a jury verdict of over $3 million in favor of a general contractor on a delay damages claim. The owner, Alamo Community College Dist. (ACCD), was held liable to the general contractor, Browning Construction Co. (Browning), for design errors in the contract documents. The Court relied on language in the contract stating that Browning would not be liable for damage resulting from such errors unless Browning discovered the errors and failed to notify the architect. Browning also recovered damages for liability Browning incurred to its subcontractors. While noting that such “pass-through” recovery is not specifically authorized by existing Texas precedent, the Court relied on other state and federal decisions allowing such recovery. Finally, the Court upheld the jury’s finding that ACCD could not rely on the no-damages-for-delay clause in the parties’ contract because ACCD failed to grant reasonable time extensions, failed to provide complete and accurate drawings, refused to make adequate adjustments to the contract for the time impact of change orders, and assessed liquidated damages without justification or cause.
In 2003, the Fifth Circuit Court of Appeals certified a question to the Texas Supreme Court on the issue of whether Texas law permits a contractor to assert a “pass-through” claim on behalf of its subcontractor against the owner when there is no privity of contract between the owner and subcontractor. Interstate Contracting Corp. v. City of Dallas, 320 F.3d 539 (5th Cir. 2003). While the Supreme Court has not yet responded, the San Antonio Court’s decision in ACCD may provide some insight into the possible answer.
For more information, e-mail Jonathan S. Miles at jonathan.miles@hklaw.com or call toll free, 1-888-688-8500.