CCC Group, Inc. v. South Central Cement, Ltd.

Opinion issued October 28, 2014.
In The
Court of Appeals
For The
First District of Texas
————————————
NO. 01-13-00567-CV
———————————
CCC GROUP, INC., Appellant
V.
SOUTH CENTRAL CEMENT, LTD., Appellee
On Appeal from the 61st District Court
Harris County, Texas
Trial Court Case No. 2009-50242
OPINION
South Central Cement, Ltd. prevailed at trial on its claims that CCC Group,
Inc. breached a contract and was negligent in connection with the construction of a
cement-storage warehouse that collapsed. On appeal from the judgment, CCC
argues that the evidence is legally and factually insufficient to establish that it
breached any contract, the cause of the structure’s failure, or any resulting
damages. We conclude that no evidence supports the jury’s award of future repair
damages. Consequently, we reverse and remand for a new trial.
Background
South Central Cement, a subsidiary of a holding company known as Grupo
Argos, imports cement and sells it in Texas. In 2006, South Central retained River
Consulting, LLC to design a pair of warehouses at the Port of Houston. South
Central intended to store dry cement in the warehouses, with each warehouse
holding 22,000 tons, or one shipload, of cement.
South Central asked River to propose possible designs for the warehouses,
accounting for cost and construction time. River proposed three designs: a silo, a
dome, or a retaining wall built with stacked concrete blocks. South Central selected
the retaining-wall design because it was the cheapest and fastest of the options and
because South Central already had other facilities in the United States with similar
walls. Those other facilities, however, were smaller, holding no more than 15,000
tons of cement each.
To accommodate larger volumes of cement at the Houston facility, River
proposed a unique system consisting of three concentric walls, each made of
stacked concrete blocks joined by epoxy. The outermost wall would be only 8 feet
high, while the middle wall would be 16 feet high and the innermost wall would be
2
24 feet high. The blocks themselves would be 2 feet deep, 2 feet high, and 2 to 6
feet in length. In all, each warehouse required more than 3,000 blocks, to be cast in
a series of metal forms, or molds.
River faced a design challenge with respect to the project. The concrete
blocks in the three walls could prove unable to withstand the pressure of the
cement because each of the three walls would tend to move independently, making
the entire structure only as strong as a single layer of blocks. To address this
problem, River designed a three-part system to allow the three walls to function
monolithically, as though they were a single, extra-thick wall. First, each block had
an angled extension on one end and an angled notch on the other, allowing two
blocks aligned end-to-end to fit together. Second, each block would have a similar
extension on its upper surface and a notch in its bottom surface. Third, and most
important to this dispute, each block would have a set of shallow “keyholes” on its
top surface. The blocks in each wall were to be laid so that their keyholes would
align with the keyholes in blocks in the adjacent wall. This would result in a single
keyhole, spanning two blocks. Into this space would be laid a “shear plate,” a metal
plate somewhat smaller than the keyhole, which would be in contact with four
blocks: the two blocks on each side, both above and below. River’s engineers
calculated that the resulting friction between blocks and between blocks and plates
3
would result in the three concentric walls acting as a single wall due to the plates’
ability to transfer shearing force from one block to another.
River recommended CCC Group and one other company as potential
contractors to build the walls. South Central chose CCC, and River entered into a
written agreement with CCC. South Central did not have a written agreement with
CCC.
The first warehouse was known as Warehouse A. Shortly after construction
began on Warehouse A, River realized that it had underbid the project and asked
South Central to renegotiate its fees. Ultimately, River left the project instead.
CCC and South Central disagreed at trial about who assumed responsibility
for project management and engineering after River’s departure. According to
CCC regional manager Darryl Mayfield, South Central assumed all such duties,
and CCC’s role as a contractor on the construction project remained unchanged. In
contrast, Miguel Jaramillo, a port project manager for Grupo Argos, testified that
CCC and South Central orally agreed that CCC would assume responsibility for
both the construction and project management.
Once CCC began construction, it encountered difficulties placing the shear
plates. After about 700 blocks had been placed, the keyholes in adjacent blocks
were no longer lining up correctly. According to Mayfield and CCC’s project
manager, Michael Tucker, South Central’s Carlos Gonzales and Uriel Duarte were
4
immediately informed of the problem, and both men responded that CCC should
omit the shear plates and use only the epoxy to hold the wall together. CCC also
informed River’s David Grillot of the issue, and he responded, “They pay the bills.
They’re the owners.” Both Gonzalez and Grillot disputed this version of events,
testifying that no such conversations ever occurred; Duarte did not testify at trial.
The project continued, and in April 2007, Warehouse A prepared to receive
its first shipment of cement. When the shipment arrived, CCC personnel were
operating the facility and supervising the unloading process. Around midnight on
April 27, 2007, portions of the retaining wall in Warehouse A failed, and the
warehouse essentially “exploded,” causing extensive damage to the building.
Because CCC was already present at the site, South Central asked CCC to
perform cleanup and rebuilding of the walls. Because South Central feared another
collapse, CCC rebuilt the damaged portions of the walls to a height of only 14 feet.
The walls in Warehouse B, also originally planned for 22 feet, were likewise built
to only 14 feet. For the cleanup and rebuilding, CCC charged and South Central
paid $928,008.40.
In 2009, South Central sued CCC and River for breach of contract and
negligence. River settled, while CCC proceeded to trial. A jury found for South
Central on both the contract and negligence claims. For breach of contract, the jury
awarded $556,800 for past repairs, $1,200,000 for future repairs, $552,000 for the
5
cost of past delays in the construction of the warehouses, and $359,400 as damages
for the temporary reduction of the warehouses’ capacity below the capacity for
which South Central contracted. The jury also awarded South Central $150,000 in
attorney’s fees. On the negligence claim, the jury assigned 60% of the
responsibility for the warehouse collapse to CCC and 20% each to River and South
Central. As damages for negligence, the jury awarded exactly two-thirds of each of
the amounts that it awarded for the contract claim.
The trial court entered judgment on the jury’s verdict, assessing damages of
$2,368,200 after accounting for CCC’s settlement offset, plus pre-judgment and
post-judgment interest, attorney’s fees, and costs of court. This appeal followed.
Analysis
On appeal, CCC argues that the evidence is legally and factually insufficient
to support the jury’s findings with respect to (1) CCC’s breach of an agreement
with South Central, (2) the cause of the retaining wall’s collapse, and (3) damages
for past and future repairs, delay, and reduced capacity. CCC also argues that
because the jury’s verdict with respect to the breach of contract was not supported
by sufficient evidence, the award of attorney’s fees must also be reversed.
When a party challenges the legal sufficiency of the evidence supporting a
judgment, this court must look at all of the evidence admitted and determine
whether, after disregarding all evidence that a reasonable trier-of-fact could
6
disregard, more than a scintilla of evidence supports the judgment. City of Keller v.
Wilson, 168 S.W.3d 802, 827–28 (Tex. 2005). Evidence is legally insufficient if
the record reveals the “complete absence of evidence of a vital fact”; if the only
evidence supporting a judgment is incompetent, such that a court cannot consider
it; if “the evidence does not rise above a scintilla [such that] . . . jurors would have
to guess whether a vital fact exists”; or if the evidence “conclusively establishes
the opposite of a vital fact.” Id. at 811–14. In conducting a legal-sufficiency
analysis, we review all of the evidence in the light most favorable to the verdict. Id.
at 822.
To determine the factual sufficiency of the evidence, we are required to
examine all of the evidence, and we will set aside the judgment only if it is so
contrary to the overwhelming weight of the evidence as to be clearly wrong and
unjust. Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986). Unlike a legal-sufficiency
review, a factual-sufficiency review requires that we review the evidence in a
neutral light. Id.; Nelson v. Najm, 127 S.W.3d 170, 174 (Tex. App.—Houston [1st
Dist.] 2003, pet. denied). The trier of fact may choose to “believe one witness and
disbelieve others” and “may resolve inconsistencies in the testimony of any
witness.” McGalliard v. Kuhlmann, 722 S.W.2d 694, 697 (Tex. 1986); see also
City of Keller, 168 S.W.3d at 820–21.
7
“Generally, when a party presents multiple grounds for reversal of a
judgment on appeal, the appellate court should first address those points that would
afford the party the greatest relief.” Bradleys’ Elec., Inc. v. Cigna Lloyds Inc. Co.,
995 S.W.2d 675, 677 (Tex. 1999). Accordingly, we begin by addressing CCC’s
liability arguments because reversal on those grounds would result in rendition of
judgment for CCC. See id.; see also TEX. R. APP. P. 43.3 (“When reversing a trial
court’s judgment, the court must render the judgment that the trial court should
have rendered, except when (a) remand is necessary for further proceedings; or
(b) the interests of justice require a remand for another trial.”).
“The essential elements of a breach of contract claim are (1) the existence of
a valid contract; (2) performance or tendered performance by the plaintiff;
(3) breach of the contract by the defendant; and (4) damages sustained as a result
of the breach.” B&W Supply, Inc. v. Beckman, 305 S.W.3d 10, 16 (Tex. App.—
Houston [1st Dist.] 2009, pet. denied). CCC challenges the first, third, and fourth
of these elements on appeal.
I. Existence and breach of contract
CCC argues that the evidence at trial was legally and factually insufficient to
establish that it breached a contract with South Central. Specifically, CCC argues
that the evidence does not support a finding that it was contractually obligated to
install shear plates into the retaining wall. CCC focuses on testimony that South
8
Central agreed to the omission of the shear plates and contends that no evidence
was presented to establish that the final wall design required the installation of the
plates. We disagree.
Jaramillo testified that CCC and South Central entered into an oral
agreement under which CCC bore the responsibility for both construction and
project management after River’s departure. Although CCC disputes this
testimony, the jury could have believed it and disbelieved the testimony of CCC’s
witnesses that no such agreement existed. McGalliard, 722 S.W.2d at 697; see also
City of Keller, 168 S.W.3d at 820–21.
CCC contends that Gonzalez, a South Central employee, consented to the
omission of the shear plates during the course of construction. Gonzalez, however,
testified that he did not do so. The evidence was not conclusive, but conflicted.
Thus, the jury was free to believe Gonzalez and disbelieve testimony that South
Central agreed to omission of the plates. McGalliard, 722 S.W.2d at 697; see also
City of Keller, 168 S.W.3d at 820–21.
Moreover, CCC’s own employees testified that the design that South Central
hired CCC to build included shear plates. Tucker was asked, “What secures these
blocks in place?” He responded, “The design was epoxy and the shear plates.” He
further testified that CCC installed shear plates where it could, although it did not
install them everywhere. When asked whether CCC used River’s design to perform
9
its construction work, he responded, “With the exception of the plates, yes.” The
next question asked, “Did the design of the block walls call for or require the
addition of these—what I’ll call shear plates?” Tucker answered simply, “Yes.”
Tucker also testified that he felt it necessary to inform River’s Grillot when the
plates were omitted.
Likewise, Mayfield testified repeatedly that “the original block design as
provided by River” included the shear plates. He also documented this
understanding in a May 2007 email to Gonzalez, Jaramillo, Tucker, and another
CCC employee.
By contrast, CCC points to no evidence that the shear plates were only part
of an early design and not part of the final design that it began to build. Rather,
CCC merely suggests the possibility that either no “final” design ever existed or
that the final design was the result of various oral changes by South Central and
River that were never documented. Further, CCC does not attempt to reconcile its
theory that the shear plates were not part of a “final” design with the fact that CCC
did install some shear plates in the wall in Warehouse A.
We hold that the evidence was legally and factually sufficient to permit a
reasonable juror to conclude that CCC was contractually obligated to install shear
plates in the retaining wall in Warehouse A, that South Central did not agree to a
10
change in the design, and that CCC failed to install the plates, in breach of an
agreement with South Central.
II. Causation
CCC argues that even if it had a contractual obligation to install shear plates,
the evidence is legally or factually insufficient to support the jury’s finding that the
breach of this obligation caused South Central’s damages. To recover, South
Central must show that the damages that it suffered were “the natural, probable,
and foreseeable consequence” of CCC’s breach. Mead v. Johnson Grp., Inc., 615
S.W.2d 685, 687 (Tex. 1981). CCC argues that South Central failed to do so.
CCC contends that the evidence regarding causation falls short in three
ways. First, Jaramillo and South Central’s own expert, structural engineer Peter
James Arles, both testified that the wall failed because of flaws in River’s design
rather than the lack of shear plates. Second, the only witness who testified that the
absence of the shear plates caused the wall’s collapse, River engineer Karl
Holloway, did not support his opinion with facts sufficient to support his
conclusion. Third, although South Central introduced testimony of River’s retained
expert witnesses, that testimony did not provide any evidence regarding the cause
of the wall’s failure.
11
A. Jaramillo /Arles testimony
CCC is correct that Jaramillo and Arles testified that the wall failed due to a
defective design. But the jury could have disbelieved these witnesses if other
competent evidence tended to show that the design was not defective, but that the
wall failed for other reasons. McGalliard, 722 S.W.2d at 697; see also City of
Keller, 168 S.W.3d at 820–21.
B. Holloway testimony
Holloway, a licensed engineer with bachelor’s and master’s degrees in civil
engineering, testified about the calculations that he performed in designing the
wall. He explained that River determined that the wall would fail if the three
component walls acted independently and would have preferred to build a single
“cast-in-place” wall, but recommended shear plates because of timing and ease-of-
constructability constraints. He also explained that he performed calculations
showing that the installation of shear plates would make the wall 2.5- to 3.5-times
more resistant to overturning than allowing the component walls to move
independently. CCC did not object to any of Holloway’s testimony, which was not
elicited live but instead by deposition.
In a single paragraph, on appeal CCC characterizes Holloway’s testimony as
“conclusory” and attacks its sufficiency to support the element of causation on
three grounds: (1) he did not link his conclusions to the facts; (2) he did not
12
“describe any investigation of the warehouse or consider any other possible factors
that may have contributed” in the wall’s collapse; and (3) he stated that it was
impossible to determine after the collapse whether the blocks were properly
stacked before the collapse. CCC also attacks Holloway’s qualifications because he
had never designed or worked on a retaining wall such as the one at issue and had
no experience with retaining walls designed to contain bulk cement. CCC does not
further elaborate on any of these bases as a reason that Holloway’s testimony was
incompetent to support the verdict.
We first reject CCC’s contention that Holloway’s testimony was somehow
disconnected from the facts of the case. He designed the retaining wall, and the
design included the shear plates. He visited the construction site after the wall
failed, and he also reviewed pictures showing the damage. He was asked on direct
examination:
Q. . . . Do you have a belief of why you think these walls
collapsed?
A. Because the shear plates weren’t put in.
Q. Is that the only reason?
A. That’s the only reason I can think of.
On cross-examination, Holloway elaborated on the basis for his belief:
Q. . . . Did you do anything to try to make a determination of what
you believe the cause of the wall collapse was?
13
A. It was hard to determine how high the cement had actually been
filled in the building because once the walls collapsed, the
cement went out with it. But from what I could see the pipes by
design were cut off 20 feet above the floor. It was obvious from
the photographs and from visual observation while I was there
that the cement had been filled higher than the bottom of those
pipes because there was a crater, like a volcanic crater. Some
had been pumped down there and so there was a hole where the
pipe was but the cement came up several feet higher than the
bottom of the pipe and tapered off towards the walls and that
was true at the two ends of the building.
Q. Did you actually see cement above the bottom downspout of
the pipe when you were there?
A. Yes. At the two pipe discharges at the ends of the building
where it collapsed, it was higher than the bottom of the pipe.
Q. Was that not what this wall was designed to allow for?
A. The wall was designed to have—now, be aware that when the
cement comes out and flows, it is going to have a little bit of
slope to it.
Q. Right.
A. But if you brought more and more in and if you get above the
bottom of that pipe, it will still slope away. So, I can’t say how
high it was at the wall, but it was higher than the 20 feet at the
two end pipes.
As the designer of the retaining wall and having observed the aftermath of the
collapse, Holloway demonstrated that he had a basis for his “belief” that leaving
out the shear plates resulted in the wall’s failure. And in light of this testimony,
CCC’s second criticism that Holloway failed to “describe any investigation of the
warehouse or consider any other possible factors that may have contributed,” is
simply an incorrect characterization of the record.
14
CCC’s third complaint about Holloway’s testimony, raised for the first time
on appeal, was that he stated there was “no way of knowing” whether the concrete
blocks were stacked in the appropriate sequence. We conclude this complaint
about the testimony is waived for failure to raise it at trial because it would require
evaluation of Holloway’s reasons for believing the lack of shear plates caused the
collapse—an explanation that may have been provided at trial in the face of an
objection, but which is absent from the record due to the lack of an objection. See
Coastal Transp. Co. v. Crown Cent. Petroleum Corp., 136 S.W.3d 227, 233 (Tex.
2004) (“[W]hen a reliability challenge requires the court to evaluate the underlying
methodology, technique, or foundational data used by the expert, an objection must
be timely made so that the trial court has the opportunity to conduct this
analysis.”); Mar. Overseas Corp. v. Ellis, 971 S.W.2d 402, 412 (Tex. 1998); see
also TEX. R. APP. P. 33.1(a)(1) (“As a prerequisite to presenting a complaint for
appellate review, the record must show that the complaint was made to the trial
court by a timely request, objection, or motion . . . .”). And finally, by failing to
object to Holloway’s qualifications, CCC also waived that objection to his
testimony. See Nissan Motor Co. Ltd. v. Armstrong, 145 S.W.3d 131, 143–44 (Tex.
2004) (where pretrial motion to exclude expert’s testimony attacked reliability of
opinions but not expert’s qualifications, objecting party did not preserve
complaints regarding qualifications for appeal).
15
C. Testimony of River’s retained experts
Finally, CCC argues that the testimony of River’s retained experts did not
provide any evidence regarding the cause of the wall’s failure. CCC’s argument is
contradicted by the record, at least with respect to Joseph Dreher, a civil and
structural engineer. Dreher reviewed the calculations that River performed in
designing the wall, concluding that the calculations were correct, including the
calculations regarding the shear plates. Although Dreher did not explicitly attribute
the wall’s failure to the omission of the shear plates, he concluded that omitting
them would result in “a problem with the walls.” He further testified that the shear
plates would have worked as specified, had they been included in the wall. Again,
CCC did not object to any of Dreher’s testimony.
* * *
We conclude that Holloway and Dreher gave testimony sufficient to support
the jury’s finding that CCC’s failure to install shear plates in the retaining wall in
Warehouse A caused the wall to collapse. We therefore overrule CCC’s challenges
with respect to the sufficiency of the evidence of causation.
III. Damages
CCC argues that insufficient evidence supports the jury’s damages awards.
A jury has broad discretion to award damages within the range of evidence
presented at trial. See, e.g., Powell Elec. Sys., Inc. v. Hewlett Packard Co., 356
16
S.W.3d 113, 126–27 (Tex. App.—Houston [1st Dist.] 2011, no pet.). “Evidence
corresponding to the exact amount found by the trier of fact is not essential.” Id. at
126. But the verdict must fall within the range of the evidence presented, and a jury
may not “pull figures out of a hat” in assessing damages. See First State Bank v.
Keilman, 851 S.W.2d 914, 931 (Tex. App.—Austin 1993, writ denied).
Among other things, CCC argues that the evidence is legally and factually
insufficient to support the jury’s assessment of damages for future repair costs. “A
party seeking to recover remedial damages must prove that the damages sought are
reasonable and necessary.” McGinty v. Hennen, 372 S.W.3d 625, 627 (Tex. 2012)
(citing Mustang Pipeline Co. v. Driver Pipeline Co., 134 S.W.3d 195, 200 (Tex.
2004) (per curiam)). “[T]he plaintiff must show more than simply ‘the nature of
the injuries, the character of and need for the services rendered, and the amounts
charged therefor.’” Id. (quoting Dall. Ry. & Terminal Co. v. Gossett, 294 S.W.2d
377, 383 (Tex. 1956)). The plaintiff need not use magic words such as
“reasonable” or “necessary,” but is only required to present sufficient evidence to
support a finding that that the costs were reasonable and the repairs were
necessary. Ron Craft Chevrolet, Inc. v. Davis, 836 S.W.2d 672, 677 (Tex. App.—
El Paso 1992, writ denied); Carrow v. Bayliner Marine Corp., 781 S.W.2d 691,
694 (Tex. App.—Austin 1990, no writ); Liptak v. Pensabene, 736 S.W.2d 953, 958
(Tex. App.—Tyler 1987, no writ). The plaintiff may not merely offer evidence of
17
how repair costs or estimates were derived, but must also adduce evidence that the
costs were actually reasonable. McGinty, 372 S.W.3d at 627–28.
South Central relied upon the testimony of Peter James Arles to establish its
future damages. CCC objected to Arles as unqualified to give his testimony, and it
further argues that no other evidence supports the jury’s assessment of future repair
damages. * We review the admission of expert testimony under an abuse of
discretion standard. Whirlpool Corp. v. Camacho, 298 S.W.3d 631, 638 (Tex.
2009). “If scientific, technical, or other specialized knowledge” would assist the
jury, a witness who is qualified as an expert by “knowledge, skill, experience,
training, or education” may testify as an expert. TEX. R. EVID. 702. Such an
individual “may testify . . . in the form of an opinion or otherwise.” Id. The
*
CCC also argues that, although Arles testified as an expert witness, South
Central improperly failed to designate him as an expert on damages. The
record on this point is unclear. The arguments of counsel before Arles took
the stand indicate that South Central designated Arles as an expert in
engineering, but not on damages, and CCC objected to his testimony on the
latter. During cross-examination, however, counsel for South Central
objected, “Mr. Arles hasn’t been designated as an expert in this case.” If
Arles was not properly designated, then the trial court could have excluded
his testimony, and we would review its decision with respect to admissibility
for an abuse of discretion. See Ersek v. Davis & Davis, P.C., 69 S.W.3d 268,
274 (Tex. App.—Austin 2002, pet. denied); Cruz v. Furniture Technicians
of Hous., Inc., 949 S.W.2d 34, 35 (Tex. App.—San Antonio 1997, writ
denied); TEX. R. CIV. P. 195.2; see also TEX. R. EVID. 705. Because our
analysis leads to the same result as if we held that trial court should have
excluded Arles’s testimony as untimely designated, we assume without
deciding that Arles was properly designated as an expert witness.
18
proponent of the witness’s testimony bears the burden to show that the expert’s
testimony is relevant and rests on a “reliable foundation.” E.I. du Pont de Nemours
& Co., Inc. v. Robinson, 923 S.W.2d 549, 555 (Tex. 1995) (citing Daubert v.
Merrell Dow Pharms., 509 U.S. 579, 597, 113 S. Ct. 2786, 2799 (1993)).
Arles, a structural engineer, works for BEI Engineers, an engineering
consulting firm. He testified that BEI, on behalf of South Central, proposed various
scenarios for repairing the retaining wall in Warehouse A, beyond the repairs
initially made by CCC after the wall’s collapse. Before and repeatedly during
Arles’s testimony, CCC objected that South Central had not established that Arles
had personal knowledge of how BEI made its estimates of future repair costs. The
trial court overruled CCC’s objections and admitted both the testimony and
documents reflecting BEI’s estimates.
Arles testified on only one topic: South Central’s options for future repairs
to the warehouses, with a particular focus on two estimates prepared by BEI. One
estimate for proposed repairs ran to $5.4 million, while the other was for
$4 million. Arles testified that the proposed solutions were “workable,” but
clarified, “[h]ow feasible and cost-effective, you know, we never got that far.” He
stated that he assumed that the repairs were still possible at the time of trial, but
qualified that statement, saying, “I’m not even exactly sure what we came up with
at the time. But I would assume that, yeah, there’s always a way.”
19
More importantly, Arles had no direct involvement in cost estimates with
respect to the repair options, other than providing “maybe the preliminary
sketches” to BEI’s estimator, along with a list of materials required for the work.
When asked whether he was “at all familiar with any cost estimates that were
done” for one of the proposed modifications, he responded that he was “pretty
sure” that a cost estimate was done and that he was “sure” he had seen it, but that
he was not familiar with it. With respect to the other proposed modification, he
explained, “I really didn’t pay attention to the detail, the price.” He testified that he
believed that BEI tried to base its estimates on prevailing costs in Harris County at
the time and that his firm was familiar with those costs, but he did not testify about
what those costs were, the sources from which they were derived, or how BEI
determined that they were reasonable. He elaborated:
A. Are you asking if we’re familiar with the costs in Harris County
or these costs that are reflected?
Q. The costs coming up with—
A. Yeah. I mean, I can’t recall—you know, it looks like these were
done—these weren’t done in our estimating software at the
time. That’s why I thought I was just giving the data over to our
estimator. But it looks like I used the spreadsheet to do these.
He did not explain what “spreadsheet” he used or how he used it, nor did he
identify the nature or source of any underlying pricing information. He also did not
20
explain whether using the spreadsheet would result in different estimates from
BEI’s estimating software.
Both estimates had a margin of error of 30% in either direction, meaning
that BEI’s estimates of the total costs could have spanned a range from as little as
$2.8 million to more than $7 million. Arles explained this by stressing repeatedly
that the estimates were “real preliminary” and “conceptual,” and BEI had not done
any “detailed engineering or checking” or any feasibility studies, nor had it
prepared detailed design drawings that would be necessary before actually
performing any repairs.
Expert testimony is conclusory if there is no factual basis for it or if the basis
offered does not, on its face, support the opinion. City of San Antonio v. Pollock,
284 S.W.3d 809, 817 (Tex. 2009). A court may also conclude that an expert’s
testimony is unreliable if there is too great an analytical gap between the data upon
which the expert relies and the opinion offered. Gammill v. Jack Williams
Chevrolet, Inc., 972 S.W.2d 713, 727 (Tex. 1998) (citing Gen. Elect. Co. v. Joiner,
522 U.S. 136, 146, 118 S. Ct. 512, 519 (1997)). A party challenging expert
testimony as premised on an unreliable methodology must make a timely objection
to preserve error on appeal, but may bring a challenge that the expert’s testimony is
“conclusory or speculative and therefore non-probative on its face . . . even in the
21
absence of any objection to its admissibility.” Coastal Transp, 136 S.W.3d at 233;
see also Mar. Overseas, 971 S.W.2d at 410, 412.
Arles’s testimony does not demonstrate that the estimated costs of BEI’s
proposed repairs were reasonable and necessary. See McGinty, 372 S.W.3d at 627.
Arles demonstrated no familiarity with how the costs were derived. On the
contrary, his testimony repeatedly reinforced that he lacked knowledge of the costs
involved and he did not participate directly in estimating costs. Moreover, BEI did
no assessment of whether the proposed repairs were feasible or cost-effective, and
it had not performed enough of the engineering legwork to determine whether the
repairs would be realistic.
In light of these facts, we hold that Arles’s testimony with respect to future
repair costs was conclusory. Pollock, 284 S.W.3d at 817. It is also unreliable, as
too great an analytical gap exists between the data upon which Arles relied—
technical calculations about the materials to be used in the proposed repairs—and
the opinions he offered regarding repair costs. Gammill, 972 S.W.2d at 727; see
also Robinson, 923 S.W.2d at 555. Because Arles’s testimony on repair costs was
conclusory and unreliable, it constitutes no evidence in support of the jury’s award
of future repair damages.
We further agree with CCC that the record contains no other competent
evidence of the cost of reasonable and necessary future repairs. Indeed, South
22
Central relies entirely on Arles’s testimony and the BEI estimates to support the
jury’s award on appeal. Because the evidence does not support the future repairs
award, we sustain CCC’s argument on this point.
Ordinarily, appellate courts render judgment when sustaining a no-evidence
issue. Guevara v. Ferrer, 247 S.W.3d 662, 670 (Tex. 2007). However, if there is
evidence to support some award of damages, rendition is inappropriate. Id. In that
scenario, we must remand for a new trial, unless we can suggest a remittitur. Id.
In this case, the evidence at trial conclusively demonstrated that Warehouse
A was damaged by the collapse of its retaining wall and that the retaining wall in
each warehouse falls short of the capacity that South Central paid CCC to build.
The evidence is also conclusive that repairing or rebuilding the walls will result in
actual costs to South Central, even though there is no evidence of the reasonable
and necessary amount of those costs. Thus, we cannot render a judgment for CCC,
nor are we able to suggest a remittitur. We therefore must remand for a new trial.
Id.
Because CCC disputes liability, and the costs of future repairs constitute
unliquidated damages, we may not order a separate trial solely on those damages.
TEX. R. APP. P. 44.1(b). Instead, we must remand for a new trial on both liability
and damages. Id.; Minn. Min. & Mfg. Co. v. Nishika Ltd., 953 S.W.2d 733, 740
(Tex. 1997). Further, CCC’s remaining points on appeal all relate to other
23
measures of damages, and it is undisputed that South Central did or will incur each
such type of damages. CCC argues only that the jury’s damages awards are
supported by legally and factually insufficient evidence. Because each of these
issues, if sustained, would require us to remand for a new trial, we do not reach
them.
Conclusion
Because no evidence supports the jury’s award of future repair damages, we
reverse and remand for a new trial.
Michael Massengale
Justice
Panel consists of Justices Jennings, Bland, and Massengale.
24