Sevier Enterprises, Inc. v. the Euclid Chemical Company ( 2014 )

COURT OF APPEALS
SECOND DISTRICT OF TEXAS
FORT WORTH
NO. 02-13-00452-CV
SEVIER ENTERPRISES, INC. APPELLANT
V.
THE EUCLID CHEMICAL APPELLEE
COMPANY
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FROM COUNTY COURT AT LAW NO. 2 OF DENTON COUNTY
TRIAL COURT NO. CV-2012-03217
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MEMORANDUM OPINION1
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I. Introduction
In six issues, Appellant Sevier Enterprises, Inc. appeals the judgment on
behalf of Appellee Euclid Chemical Company. We affirm.
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See Tex. R. App. P. 47.4.
II. Background
Sevier submitted a proposal to perform waterproof coating of MCM
Elegante Hotel’s exterior walls after the hotel suffered hurricane damage in 2008.
In its proposal, Sevier indicated that it would use Thorolastic waterproof coating,
but after Sevier’s original proposal, Thorolastic’s manufacturer changed its
warranty policy and would no longer warrant a “wet-on-wet” application.2 Euclid
told Sevier that it would issue a warranty on its waterproof coating product,
Tammolastic, for wet-on-wet application, and Sevier revised its proposal to delete
Thorolastic and substitute Tammolastic. The hotel accepted Sevier’s proposal.
Allegedly, Sevier did not ascertain whether the hotel’s exterior walls met
Tammolastic’s use instructions before it began applying it.
When Sevier finished the job, Euclid issued to the hotel a five-year express
warranty that covered “failure of repairs subject to normal and usual
exposure . . . . If upon laboratory/petrographic testing, it has been determined
that the product was the cause of the repair failure, The Euclid Chemical
Company will authorize the appropriate repairs to the distressed areas.” When
the hotel’s exterior walls began to show discoloration a few months later, Sevier
reported the problem to Euclid. After testing, Euclid reportedly could not
determine that the Tammolastic was the cause of the problem. Sevier sued
2
A “wet-on-wet” application involves application of two coats of the
waterproofing product in order to attain a requisite thickness, but the second coat
is applied before the first coat has dried.
2
Euclid for breach of warranty, DTPA violations, negligence, negligent
misrepresentation, and breach of contract.
Euclid filed a motion for summary judgment on all counts, and the trial
court granted the motion on Sevier’s negligence and negligent misrepresentation
claims based on the economic loss rule. Following the presentation of Sevier’s
case-in-chief at trial, Euclid moved for a directed verdict on the remaining causes
of action, and the court granted the motion “[b]ecause [Sevier] has failed to enter
into evidence any cause or any evidence that the cause of the damage reported
to the building is attributable to the Defendant and the Defendant’s product.”
This appeal by Sevier followed.
III. Directed Verdict
The trial court granted a directed verdict on Sevier’s causes of action for
breach of warranty, breach of warranty under the DTPA, and breach of contract.
A. Standard of Review
A directed verdict is proper only under limited circumstances: (1) when the
evidence is insufficient to raise a material fact issue, or (2) when the evidence
conclusively establishes the right of the movant to judgment or negates the right
of the opponent. See Prudential Ins. Co. of Am. v. Fin. Review Servs., Inc., 29
S.W.3d 74, 77 (Tex. 2000); Farlow v. Harris Methodist Fort Worth Hosp., 284
S.W.3d 903, 919 (Tex. App.—Fort Worth 2009, pet. denied). In reviewing a
directed verdict, we follow the standards for assessing legal sufficiency of the
evidence. See City of Keller v. Wilson, 168 S.W.3d 802, 823 (Tex. 2005). We
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review the evidence in the light most favorable to the person suffering the
adverse judgment, and we must credit favorable evidence if reasonable jurors
could and disregard contrary evidence unless reasonable jurors could not. Id. at
827; see also Exxon Corp. v. Emerald Oil & Gas Co., 348 S.W.3d 194, 215 (Tex.
2011).
B. Breach of Warranty
In the first part of its first issue, Sevier asserts that the trial court erred in
granting Euclid’s motion for directed verdict as to Sevier’s cause of action for
breach of warranty because Euclid failed to plead and prove the “affirmative
defense of no liability under the terms of the warranty.” Put another way, Euclid’s
motion for directed verdict should not have been granted in favor of Euclid absent
proof that it had no liability under the warranty. Sevier’s position is that once it
presented a prima facie case for breach of warranty, Euclid had the burden to
“plead and establish facts as to why it is not liable on the warranty,” that is, prove
the affirmative defense of “no liability.” Or, as articulated by Sevier, after Sevier
established its prima facie case for breach of warranty, it was incumbent upon
Euclid to affirmatively plead and prove that Sevier had breached one of the pre-
conditions that would have made Euclid liable on the warranty or that some other
condition or event precluded liability. This argument fails.
Sevier fails to favor this court with any authority setting forth the existence
of such an affirmative defense nor have we found any. Further, following this
argument to its logical conclusion, any time a plaintiff presented prima facie proof
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of the elements of any cause of action, Sevier would have us hold that the
burden then shifts to the defendant to disprove an element of plaintiff’s cause of
action or assert and prove an affirmative defense. This burden-shifting argument
simply has not been and is not the law. It is the plaintiff’s burden to prove his
case, not the defendant’s burden to disprove it. See Schaffer ex rel. Schaffer v.
Weast, 546 U.S. 49, 56, 126 S. Ct. 528, 534 (2005); Farmers & Merchs. State
Bank of Krum v. Ferguson, 617 S.W.2d 918, 920 (Tex. 1981).
In its second part of its first issue, Sevier argues that it presented evidence
of each element of breach of warranty, thereby precluding the trial court from
granting a directed verdict. Sevier cites Godfrey for the elements of a breach of
warranty cause of action. See Godfrey v. Sec. Serv. Fed. Credit Union, 356
S.W.3d 720, 726 (Tex. App.—El Paso 2011, no pet.). For whatever reason, the
court in Godfrey omitted the essential element of causation when it listed the
elements. See Morris v. Adolph Coors Co., 735 S.W.2d 578, 587 (Tex. App.—
Fort Worth 1987, writ ref’d n.r.e.) (“In order to recover for the breach of an
express warranty, a plaintiff must prove . . . that such failure was the proximate
cause of plaintiff’s injury.”). Elsewhere in the Godfrey opinion, however, our
sister court makes it clear that causation is in fact one of the elements: “Finally,
with respect to their breach of warranty claims . . . [t]here is no evidence . . . that
the alleged breach cause[d] injury to Appellant. As a result, Appellant’s claim for
breach of warranty fails as well.” See Godfrey, 356 S.W.3d at 727. Therefore, it
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was incumbent on Sevier to introduce evidence of breach-of-warranty causation
to avoid a directed verdict.
During oral argument before this court, Sevier argued that there was
circumstantial evidence of causation: Euclid replacing the Tammoplastic with
Tamocore, Euclid paying for that replacement, and Euclid testing the
Tammoplastic in its own lab rather than using an outside lab. We hold this
“evidence” does not address whether Tammoplastic caused the discoloration in
question and does not meet the legal sufficiency test for causation. This is
important because it is not disputed that Sevier presented no direct testimony as
to causation, that is, that the alleged failure of the warranted product,
Tammolastic, caused the damage in question. Further, the record affirmatively
represents that no such evidence existed. In response to his counsel’s question
during Sevier’s case-in-chief, “[Y]ou don’t have any testimony to offer whatsoever
with respect to what caused the problem, would you agree?” Lonnie Sevier, the
sole witness, testified, “[t]hat’s correct.”
Mr. Sevier had no expert testing performed on the structure because he
did not feel like Sevier was the one that should be doing that. Counsel for Sevier
also told the court at trial that “we don’t know what the problem is as of today.”
When asked by the court what evidence had been adduced by Sevier as to
causation, counsel also responded that he could not identify any such evidence
but rather that “all of the evidence that we have provided is that [Sevier] is not the
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producing cause.” Finally, the following exchange subsequently occurred
between the court and counsel for Sevier.
The Court: And, Mr. Ramirez, you—again, I am going to ask you for
at least three of the remaining causes of action. Is there something
in the record that you can point to that suggests that the Defendant’s
product is the cause of the damage?
Mr. Ramirez: Your Honor, the Defendant’s product—truthfully, I
cannot tell you that we have provided any evidence that would
support the claim that the product is the cause. I would have to be—
I would have to be frank in that regard, Your Honor.
....
The evidence may be there. We have not provided that.
Therefore, because no alleged “no liability” affirmative defense exists and
because Sevier produced no evidence of causation on its breach of warranty
claim, Sevier’s first issue is overruled.
C. Lack of Causation
In Sevier’s second, third, and fourth issues, it argues that the trial court
erred in granting a directed verdict as to its DTPA breach of warranty, DTPA
misrepresentation, and breach of contract claims. However, each of these
causes of action, based on the alleged failure of the Tammoplastic product, also
has causation as an element. Doe v. Boys Clubs of Greater Dallas, Inc., 907
S.W.2d 472, 478 (Tex. 1995) (stating that under a DTPA misrepresentation
claim, “[the alleged] . . . acts constituted a producing cause of the consumer’s
damages”); Pagosa Oil & Gas, LLC v. Marrs & Smith P’ship, 323 S.W.3d 203,
215 (Tex. App.—El Paso 2010, pet. denied) (noting that the last element of a
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breach of contract claim, the plaintiff incurred damages as a result of the
defendant’s breach, includes a causation requirement); Elliot v. Kraft Foods N.
Am., Inc., 118 S.W.3d 50, 56 (Tex. App.—Houston [14th Dist.] 2003, no pet.)
(stating that “to recover under the DTPA on a breach of warranty, a plaintiff must
show . . . the breach was a producing cause of damages”). Because, as
previously discussed, no evidence was adduced as to causation, a directed
verdict on these issues was proper. Thus, Sevier’s second, third, and fourth
issues are overruled.
IV. Denial of Continuance
We next turn to Sevier’s fifth issue, which asserts that the trial court erred
in failing to grant a continuance of the summary judgment hearing and trial to
allow Sevier more time for discovery.
A. Procedural Background
Sevier initiated this lawsuit on February 27, 2012, in Dallas County. The
case was transferred to Denton County on December 10, 2012. Sevier served
Euclid with discovery requests on February 22, February 28, May 21, and July 1,
2013. May 21, 2013, was the date for designation of Sevier’s experts and
production of their reports. On August 22, 2013, Euclid filed a motion for
summary judgment, eight days following Sevier’s receipt of Euclid’s responses to
its discovery request. On September 9, 2013, Sevier filed a motion to compel
and a request for continuance for further discovery from the hearing set for
September 24, 2013, on Euclid’s motion for summary judgment. No order
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appears in the record on the motion for continuance, but after further petitions
and motions were filed, the trial court partially granted Euclid’s motion for
summary judgment, and the remaining claims were tried on October 22, 2013.
As such, we conclude that the trial court impliedly denied the motion for
continuance. See D.R. Horton–Texas, Ltd. v. Savannah Props. Assoc., L.P., 416
S.W.3d 217, 223 & n.4 (Tex. App.—Fort Worth 2013, no pet.).
B. Standard of Review
We review the denial of a motion for continuance for an abuse of
discretion. See BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 800
(Tex. 2002). A trial court abuses its discretion if the court acts without reference
to any guiding rules or principles, that is, if the act is arbitrary or unreasonable.
Low v. Henry, 221 S.W.3d 609, 614 (Tex. 2007); Cire v. Cummings, 134 S.W.3d
835, 838–39 (Tex. 2004). An appellate court cannot conclude that a trial court
abused its discretion merely because the appellate court would have ruled
differently in the same circumstances. E.I. du Pont de Nemours & Co. v.
Robinson, 923 S.W.2d 549, 558 (Tex. 1995); see also Low, 221 S.W.3d at 620.
A trial court also abuses its discretion by ruling without supporting evidence.
Ford Motor Co. v. Garcia, 363 S.W.3d 573, 578 (Tex. 2012). But an abuse of
discretion does not occur when the trial court bases its decision on conflicting
evidence and some evidence of substantive and probative character supports its
decision. Unifund CCR Partners v. Villa, 299 S.W.3d 92, 97 (Tex. 2009); Butnaru
v. Ford Motor Co., 84 S.W.3d 198, 211 (Tex. 2002) (op. on reh’g).
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In our review of the denial of a continuance under the abuse of discretion
standard, we consider the following factors: (1) the length of time the case has
been on file, (2) the materiality and purpose of the discovery sought, and (3)
whether the party seeking the continuance has exercised due diligence to obtain
the discovery sought. See Joe v. Two Thirty Nine Joint Venture, 145 S.W.3d
150, 161 (Tex. 2004); D.R. Horton–Texas, Ltd., 416 S.W.3d at 223.
1. Length of Time
The length of time between the commencement of the case and the filing
of the motion for continuance was about nineteen months. The reason for the
continuance motion was the request by Sevier’s expert for more information to
“fully analyze the problem,” stemming from responses to discovery initiated by
Sevier on July 1, 2013, over sixteen months following the filing of the suit. It is
also worth noting that Sevier’s expert’s designation stated that the expert “had
not yet been officially retained . . . but [was] being designated in the abundance
of caution,” and this expert did not provide a report as required by the court’s
May 21, 2013 order.
Denial of a motion for continuance in cases in which there was a much
shorter length of time between the commencement of the case and the filing of
the motion have been found to not constitute an abuse of discretion. See, e.g.,
Harden v. Merriman, No. 02-12-00385, 2013 WL 5874708, at *5 (Tex. App.—Fort
Worth Oct 31, 2013, no pet.) (concluding “although appellant’s lawsuit had been
on file for only approximately five months . . . we cannot conclude that the trial
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court abused its discretion by denying appellant’s motion for continuance
because the record establishes appellant’s lack of diligence”); Restaurant Teams
Intern., Inc. v. MG Sec. Corp., 95 S.W.3d 336, 342 (Tex. App.—Dallas 2002, no
pet.) (holding that the trial court did not abuse its discretion when it found that
less than nine months was adequate time for discovery and as such sufficient to
deny the motion for continuance). Considering the length of time that had
elapsed between the filing of the suit and the request for continuance, we cannot
say that the trial court abused its discretion based on this factor.
2. The Materiality and Purpose of the Discovery Sought
Sevier argues that its unofficially retained expert needed information
regarding tinting products mixed into the coating products in question. However,
when this expert’s report was produced long after it was due and after Sevier’s
motion to compel was filed, it contained no opinions regarding tints or the need
for information regarding tints. In short, the court had nothing before it from a
fact or expert witness that information regarding tints was needed in order to form
causation opinions. Patten v. Johnson, 429 S.W.3d 767, 776 (Tex. App.—Dallas
2014, no pet. h.) (“There is no abuse of discretion in a case in which the trial
court could reasonably conclude additional discovery was unnecessary and
irrelevant to the legal issues in the case.”). Thus, we cannot say that the trial
court abused its discretion in not issuing a continuance based on this factor.
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3. Due Diligence
As partially previously discussed, Sevier missed its expert report deadline
and did not file a motion to compel, purportedly to obtain information needed for
that report, until well after the report was due. A year and five months elapsed
between the filing of the suit and the date the expert’s report was due, yet no
motion to compel the “needed” information was filed in the interim. It is readily
apparent that if the expert’s report was due in May 2013, there was a lack of
diligence when the discovery seeking the information purportedly necessary for
the report was not served until July 1, 2013, and concerning which, Sevier
indicated that its expert could not “fully analyze the problem” without that
requested information. Therefore, we cannot say that the trial court abused its
discretion in denying the continuance based on this final factor.
Sevier’s fifth issue is overruled.
V. Summary Judgment and Directed Verdict
In its sixth issue, Sevier asserts error on the part of the trial court in
granting a directed verdict on certain causes of action after having denied a no-
evidence motion for summary judgment as to those causes of action. Other than
pointing to a case which equates similarities between a no-evidence summary
judgment motion and a directed verdict, Merrell Dow Pharmaceuticals, Inc. v.
Havner, 953 S.W.2d 706, 711 (Tex. 1997), Sevier points to no authority that it is
error for the trial court to grant a directed verdict in these circumstances. Nor
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have we found such cases, and nor do we choose to create such law limiting the
discretion of trial judges. Sevier’s final issue is overruled.
VI. Conclusion
Having overruled Sevier’s issues, the judgment of the trial court is affirmed.
/s/ Bob McCoy
BOB MCCOY
JUSTICE
PANEL: MCCOY, MEIER, and GABRIEL, JJ.
DELIVERED: November 6, 2014
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