Miner Dederick Construction, LLP v. Gulf Chemical & Metallurgical Corporation , 403 S.W.3d 451 ( 2013 )

Opinion issued April 11, 2013
In The
Court of Appeals
For The
First District of Texas
————————————
NO. 01-11-00325-CV
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MINER DEDERICK CONSTRUCTION, LLP, Appellant
V.
GULF CHEMICAL & METALLURGICAL CORPORATION, Appellee
On Appeal from the 215th District Court
Harris County, Texas
Trial Court Case No. 2008-66374
OPINION ON REHEARING
Appellant Miner Dederick Construction, LLP (“Miner Dederick”) has filed
an 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 Dederick challenges the trial court’s
judgment. Among these issues is Miner Dederick’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 Dederick’s defense of Gulf’s 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
2
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 “waterstop,” 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
3
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 Dederick, a commercial construction
company, to be the general contractor for the construction of the CB2 expansion.
Gulf entered into a written contract with Miner Dederick to build the CB2
expansion. Pursuant to the contract, Miner Dederick agreed to construct the
expansion in accordance with 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 Dederick 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 Gulf’s
facility. After looking at the exterior of CB2 where the expansion joint is located,
Shead faxed a handwritten sketch to Miner Dederick, indicating that he saw a
“leak” at the expansion joint. He noted that he observed an “oil stain,” “oil
4
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, Milner 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
5
Gulf was not covered by Miner Dederick’s warranty for the construction of the
CB2 expansion. Miner explained that Miner Dederick 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
$398,605. 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 that Miner Dederick can view the as is condition and show
that the work done at the joint between the slabs was done per plans
and specs originally. If in the future Gulf Chemical expects us to be
responsible for payment of any of this work, then at the very least our
insurance folks will need to be there to review things first hand.
Please let me know how this can be arranged. Thank you.
6
Miner did not receive a response to the message. On March 14, 2007, John
Miner sent a letter to Gulf. He wrote,
In my previous email dated Thursday, March 8, 2007, we had
requested the opportunity to view any work that is to be done on the
expansion joint at the CB2 facility or at least give our insurance folks
the chance to review the existing work once it is uncovered and see
that it was originally constructed per plans and specs. Once again,
please let us know how this can be arranged; Miner Dederick needs
the opportunity to review any and all findings first hand. Thank you.
The following day, John Miner sent another email to Gulf in which he
stated, “There is no reason to deny Miner Dederick access to document our work.
Our documentation will not slow down the progress. On the other hand, denying
access is prejudicial against Miner Dederick because it deprives us of the
opportunity to document the work conformed to the plans and specifications.”
Gulf responded as follows: “Unfortunately, we are not in a position and cannot
afford to slow down the repairs for any purpose. We plan on and intend to
document whatever we find for future reference.”
In early March 2007, Gulf retained Engineering Systems Inc. (“ESI”), a
forensic engineering firm, to determine why oil was leaking through the expansion
joint. ESI first visited the site on March 7, 2007. To permit ESI’s inspection and
testing of the expansion joint, Cajun Contractors removed six inches of sealant
covering the primary waterstop and power washed the area.
7
After the sealant was removed, ESI did a visual inspection of the expansion
joint and took photographs. James Milner of Ashkar Engineering also did a visual
inspection. He would later testify that he saw “holes” between the waterstop and
the face of the original concrete foundation. Milner stated that the waterstop
should have been tightly fitted against the concrete to prevent liquids from
penetrating the primary waterstop.
On March 16, 2007, ESI, Gulf, and Cajun Contractors performed a
spontaneous “water test,” in which they poured buckets of water down the
expansion joint to see if it disappeared. They observed that the water did
disappear. Milner later stated that, to him, this indicated there was a hole in the
primary waterstop.
On March 21, 2007, ESI conducted another test of the expansion joint to
understand how the joint was constructed. Using a hollow drill bit, made to drill
through concrete, ESI drilled in three places along the expansion joint. When the
drill bit was pulled out, the concrete stayed in the hollow drill bit. These core
samples were eight inches in diameter and showed a cross-section of the expansion
joint. ESI and a Gulf employee photographed the coring process.
Miner Dederick was not notified that ESI would be testing the expansion
joint. Miner Dederick did not learn of the ESI testing until June 2007.
8
Cajun Contractors finished the work designed by Ashkar Engineering in
June 2007. As part of that work, Cajun Contractors covered the expansion joint
with a new sealant system and then poured six to eight inches of concrete over that.
It also installed waterstops on either side of the expansion joint. In addition, Cajun
Contractors built a 15-foot high 97-foot long retaining wall to prevent the storage
of catalyst on the expansion joint.
Gulf filed suit against Miner Dederick on November 7, 2007, for breach of
contract and for breach of warranty. It alleged that Miner Dederick breached the
construction contract (1) by failing to construct the expansion joint in conformance
with the project’s design and its specifications and (2) by failing to repair the joint
to make it conform to the plan design and specifications.
In support of its breach of warranty claims, Gulf asserted that Miner
Dederick had issued a written guarantee that its work conformed to the plans and
specifications for the project and that it would repair any defects to the completed
structure. Gulf asserted that Miner Dederick refused to honor the warranty and
make the necessary repairs after Gulf had notified Miner Dederick of defects in the
structure.
9
Gulf filed an amended petition adding a negligence claim against Miner
Dederick. Gulf also sued Ashkar Engineering and suppliers of component parts for
the waterstop. These later added defendants settled with Gulf.1
Miner Dederick answered Gulf’s suit. It asserted a number of affirmative
defenses, including waiver, excuse, impossibility, and illegality of contract.
Miner Dederick also filed a counter-claim against Gulf for breach of
contract. Miner Dederick alleged that Gulf had breached the construction contract
by providing Miner Dederick with a faulty construction design for the expansion
joint. Miner Dederick alleged that Gulf knew, or should have known, that the
design would result in oil seepage from the expansion joint. In addition, Miner
Dederick asserted claims against Gulf for various torts.
Miner Dederick further alleged that Gulf had spoliated evidence.
Specifically, Miner Dederick alleged that Gulf had refused to allow it to inspect the
expansion joint, had failed to notify Miner Dederick of the testing conducted on it,
1
Ashkar Engineering filed a motion to dismiss Gulf’s claims against it based on
Gulf’s failure to comply with the certificate-of-merit requirements of Civil
Practice and Remedies Code section 150.002. See TEX. CIV. PRAC. & REM. CODE
ANN. § 150.002. The trial court denied the motion. In interlocutory appeal, we
reversed the trial court’s order denying the motion to dismiss Gulf’s claims against
Ashkar Engineering and remanded to the trial court for it to dismiss the claims.
See Ashkar Eng’g Corp. Gulf Chem. & Metallurgical Corp., No. 01-09-00855-
CV, 2010 WL 376076, at *10 (Tex. App.—Houston [1st Dist.] Feb. 4, 2010, no
pet.). While this Court still had plenary power, Ashkar Engineering and Gulf
entered into a settlement agreement. The parties filed a joint motion to dismiss the
appeal, which we granted. See Ashkar Eng’g Corp. Gulf Chem. & Metallurgical
Corp., No. 01-09-00855-CV, 2010 WL 1509287, at *1 (Tex. App.—Houston [1st
Dist.] Apr. 15, 2010, no pet.).
10
and had effectively destroyed the expansion joint by covering it with concrete.
Miner Dederick asserted that Gulf had a duty to inform Miner Dederick of the
testing conducted on the expansion joint and to preserve it for Miner Dederick’s
inspection and testing. Miner Dederick claimed that Gulf’s actions with respect to
the expansion joint had prejudiced Miner Dederick’s ability to defend against
Gulf’s claims. Miner Dederick requested the trial court to either sanction Gulf or
instruct the jury on the spoliation presumption.
Gulf filed a traditional and no-evidence motion for summary judgment on
Miner Dederick’s counter-claims. After Miner Dederick responded, the trial court
signed an order on July 2, 2010 granting summary judgment on Miner Dederick’s
counter-claims.
Gulf also filed a traditional motion for partial summary judgment on its
breach of contract claim against Miner Dederick; that is, Gulf asserted that, as a
matter of law, Miner Dederick was liable to it for breach of the construction
contract. Gulf asserted that Miner Dederick had breached the construction contract
by failing to construct the expansion joint pursuant to the specifications required
by Ashkar Engineering’s design drawings and those contained in the
manufacturer’s installation guide for the waterstop. In its motion, Gulf identified
four design specifications with which it alleged Miner Dederick had failed to
comply in constructing the expansion joint.
11
As summary judgment evidence, Gulf offered the deposition testimony of its
own witnesses and those aligned with Miner Dederick, as well as the report of ESI,
the forensic engineering firm hired by Gulf to determine why the expansion joint
had failed. To support non-compliance with each individual design specification,
Gulf relied heavily on the deposition testimony of James Milner of Ashkar
Engineering. Milner had been permitted to view the expansion joint after the
catalyst and sealant had been removed from the joint. Milner had been present on
the day the water test was performed while ESI was at the site. Milner’s cited
deposition testimony regarding non-compliance was based, to a great extent, on
ESI’s photographs of the expansion joint, including a photograph of a core sample
taken by ESI, and on ESI’s report.
In its response to the motion for summary judgment, Miner Dederick
asserted that Gulf was not entitled to summary judgment because Gulf had
engaged in spoliation by failing to preserve the expansion joint. Miner Dederick
wrote,
Gulf understood the importance of this evidence. It retained forensic
engineers to investigate the construction and integrity of the
expansion joint, conduct destructive testing, render opinions . . . as to
the failure of the expansion joint. It selectively photographed portions
of the expansion joint before it covered it with a half a foot of
concrete and permanently destroyed any opportunity to investigate it,
conduct testing, or even visually inspect it.
12
Miner Dederick offered the affidavit of John Miner, who testified that he had
requested, “in writing, the opportunity to investigate the expansion joint prior to
the work being performed so that Miner Dederick could confirm the joint was
constructed as planned.” Miner testified that Miner Dederick was concerned that it
would be prejudiced if it were not allowed to investigate because Gulf had stated
that it may seek damages from Miner Dederick. Attached to Miner’s affidavit
were the emails sent by Miner to Gulf, in early March 2007, requesting permission
to inspect the expansion joint before it was repaired and Gulf’s response to Miner
denying the request.
Miner stated that Gulf’s investigation and testing of the expansion joint in
March 2007 occurred without any notice to Miner Dederick. He testified that it
was in June 2007 that Miner Dederick first learned that Gulf had performed “the
destructive forensic testing” on the expansion joint in March 2007. Miner
explained that the results of the testing and investigation were first disclosed to
Miner Dederick when Gulf’s representative came to Miner Dederick’s offices in
June 2007 seeking $10,000,000 in damages.
Miner Dederick also asserted in its response that Gulf’s conduct with respect
to the expansion joint “severely prejudiced” its ability to present a defense. Miner
Dederick claimed “[t]he testing and repairs Gulf performed on the expansion joint
either destroyed or forever concealed evidence of the alleged construction defects
13
in the expansion joint, depriving Miner Dederick of any opportunity to investigate
and conduct its own testing.” Miner Dederick offered the affidavit of its
engineering expert, Randall Rosengarten, who testified that he would have
performed five additional tests at the site if he had been given the opportunity.
Miner Dederick asserted that Gulf’s conduct deprived it of the ability to show that
it had constructed the expansion joint according to the plans and specifications and
that it had not been the cause of injury to Gulf.
Miner Dederick requested that the trial court sanction Gulf for the spoliation
of the expansion joint. Specifically, Miner Dederick requested that the trial court
“either strike Gulf’s pleadings or preclude Gulf from introducing evidence of the
construction of the expansion joint, and Gulf’s inspection, investigation, and
testing of the expansion joint.” Alternatively, Miner Dederick asserted that it was
“entitled to a rebuttable presumption that the evidence Gulf destroyed was
unfavorable to Gulf on the issues of the cause of the oil leak and the existence of
the construction defects . . . and that the spoliated evidence supports Miner
Dederick’s claims and defenses.”
Gulf replied to Miner Dederick’s spoliation argument. Gulf asserted that it
did not breach a duty to preserve the expansion joint because Miner Dederick
never requested to test the joint. Miner Dederick also averred that the expansion
joint still exists, albeit buried under six inches of concrete. Gulf asserted that the
14
joint was covered with concrete in Gulf’s ordinary course of business. Lastly, Gulf
argued that Miner Dederick was not prejudiced because the expansion joint has
always been available for Miner Dederick to perform its own testing.
On July 10, 2010, the trial court granted Gulf’s motion for partial summary
judgment on its affirmative claim for breach of contract. In so doing, the trial court
implicitly denied Miner Dederick’s request for spoliation sanctions or a spoliation
presumption.
On August 3, 2010, Miner Dederick filed its “Motion for Sanctions for
Spoliation of Evidence.” Miner Dederick reiterated the arguments it had made in
its response to Gulf’s motion for partial summary judgment. Miner Dederick again
requested the trial court to issue spoliation sanctions or find that Miner Dederick
was entitled to a spoliation presumption. The trial court signed an order denying
Miner Dederick’s motion for sanctions.
The case was tried to a jury in February 2011. During trial, Miner Dederick
again moved for spoliation sanctions against Gulf and for a directed verdict based
on the element of causation. The trial court denied the motions.
Gulf also asked that a spoliation presumption instruction be given to the
jury. The trial court denied the request. In addition, the trial court rejected Miner
Dederick’s proposed jury instructions on prior material breach, impossibility, and
impracticability.
15
After a six day trial, the jury was asked to find whether Miner Dederick
failed to comply with an express warranty in connection with its work on CB2.
The jury answered in the affirmative. When asked whether Miner Dederick’s
failure to comply with the warranty was excused, the jury answered in the
negative.
Based on its earlier summary-judgment ruling on Miner Dederick’s breach
of contract liability, the trial court instructed the jury, over Miner Dederick’s
objection, as follows:
In a ruling issued before trial, the Court determined that Defendant
Miner Dederick Construction breached its construction contract with
Plaintiff Gulf by failing to comply with the plans and specifications.
This is not a question for you the Jury to determine, and Gulf was not
required to prove the fact of Miner Dederick’s breach to you.
With respect to breach-of-contract damages, the jury was asked, “What sum
of money, if any, if paid now in cash, would fairly and reasonably compensate
Gulf for its damages that resulted from Defendant Miner Dederick Construction’s
breach of contract?” The jury was asked a similar question with respect to breach
of warranty damages. For each claim, the jury was permitted to award three types
of damages: (1) remedial damages, (2) incidental damages, and (3) lost profits.
In the charge, remedial damages were defined as “[t]he reasonable and
necessary costs incurred by Gulf to repair the CB2 expansion joint.” The jury was
instructed that incidental damages are “[t]he reasonable and necessary costs
16
incurred by Gulf for storage of spent catalyst while CB2 was being repaired which
were a natural, probable, and foreseeable consequence of Miner Dederick’s
breach.” The charge defined lost profits to be “a natural, probable, and foreseeable
consequence of Miner Dederick’s breach.” For each claim, the jury awarded Gulf
$464,688 in remedial damages, $104,330 in incidental damages, and $158,446 in
lost profits. The jury also awarded Gulf attorney’s fees of $907,718 for trial
preparation and additional attorney’s fees, totaling $65,000, for an appeal to this
Court and to the Supreme Court of Texas.
Miner Dederick filed post-judgment motions, including a motion for
judgment notwithstanding the verdict and a motion for new trial. The trial court
denied the motions.
Based on the jury’s verdict, the trial court signed a judgment awarding Gulf
actual damages of $727,464.00, prejudgment of interest of $84,385.82, and costs of
$14,810.01. The trial court also awarded Gulf the attorney’s fees found by the
jury. This appeal followed.
Trial Court’s Jurisdiction to Render Judgment Following Trial
As an initial matter, we address Miner Dederick’s argument that the trial
court lacked jurisdiction to sign the judgment in this case following trial. Miner
Dederick asserts that the trial court’s July 16, 2010 order granting summary
judgment on Miner Dederick’s counter-claims, when taken with the July 2, 2010
17
order granting Gulf’s motion for partial summary judgment on its affirmative claim
for breach of contract, constituted a final, appealable judgment. Miner Dederick
argues that it follows that the trial court lost plenary power 30 days after signing
the July 16, 2010 order. Miner Dederick asserts that, as a result, the trial court was
without jurisdiction to render the March 7, 2011 judgment against Miner Dederick
following trial.
Generally, a judgment is final if it disposes of all pending parties and claims
in the record. Lehmann v. Har–Con Corp., 39 S.W.3d 191, 204 (Tex. 2001).
When there has been no conventional trial on the merits, a judgment is final for
purposes of appeal only if it either actually disposes of all claims and parties before
the court, regardless of its language, or if it states, with unmistakable clarity, that it
is a final judgment. Id. If other claims remain in the case, “an order determining
the last claim is final.” Id. at 200. Whether an order is a final judgment for
purposes of appeal must be determined from its language and the record in the
case. Id. at 204.
Here, Gulf’s breach of warranty claim and the damages portion of its breach
of contract claim remained pending after the trial court granted Gulf’s motions for
summary judgment. Nonetheless, Miner Dederick argues that there was a final
judgment following the summary judgment rulings for two reasons: (1) the July 2,
2010 order granting summary judgment on Miner Dederick’s counter-claims was
18
entitled “Order Granting Gulf’s Motion for Final Summary Judgment” and (2) the
order contained a Mother Hubbard clause; that is, it stated “all relief not expressly
granted herein is denied.”
Contrary to Miner Dederick’s contentions, finality of a judgment can no
longer be determined solely by the existence of a Mother Hubbard clause,
particularly when a judgment is rendered without a conventional trial on the merits.
Id. at 203–04. Nor can the status of an order be conclusively determined by its
title, either “final” or “interlocutory.” Id. at 200. The intent to finally dispose of
the case must be unequivocally expressed in the words of the order itself. Id.
In this case, neither summary judgment order unequivocally expresses that
the trial court had disposed of all claims. The record shows that, at that time the
orders were signed, Gulf’s breach of warranty and contract damages claims
remained pending. We conclude that the trial court’s orders granting Gulf’s
motions for summary judgment did not constitute a final judgment. Thus, we hold
that the trial court had jurisdiction when it signed the March 7, 2011 final judgment
following trial.
19
Summary Judgment on Miner Dederick’s Counter-Claim
In its fourth issue, Miner Dederick includes a challenge to the trial court’s
grant of Gulf’s summary judgment on Miner Dederick’s counter-claim for breach
of contract. 2
B. Unchallenged Summary Judgment Ground Support Ruling
In its summary judgment motion, Gulf asserted the following three grounds
as bases to support summary judgment on Miner Dederick’s breach of contract
counter-claim: (1) Miner Dederick had no compensable breach of contract
damages as a matter of law; (2) Miner Dederick “cannot identify any contractual
provision of the [construction contract] that Gulf allegedly breached”; and (3)
Miner Dederick failed to file its claim within the limitations period. The trial court
did not identify the basis on which it granted summary judgment.
In its opening brief on appeal, Miner Dederick offers arguments pertaining
to the first and third grounds on which Gulf sought summary judgment. As
pointed out by Gulf, Miner Dederick does not address whether summary judgment
could have been granted on the ground that Gulf did not breach a contractual
obligation to Miner Dederick.
2
Miner Dederick states in its brief that it does not dispute the granting of summary
judgment against it on its tort claims against Gulf. See Jacobs v. Satterwhite, 65
S.W.3d 653, 655 (Tex. 2001) (indicating that appellate courts should affirm a trial
court’s summary judgment on unchallenged claims).
20
When a party moves for summary judgment on multiple grounds and, as
here, the trial court’s order granting summary judgment does not specify the
ground or grounds on which it was based, a party who appeals the order must
negate all possible grounds on which the order could have been based. See Ellis v.
Precision Engine Rebuilders, Inc., 68 S.W.3d 894, 898 (Tex. App.—Houston [1st
Dist.] 2002, no pet.). To make this challenge, the appellant may either assert a
separate issue challenging each possible ground or assert a general issue that the
trial court erred in granting summary judgment and, within that issue, provide
argument negating all possible grounds on which summary judgment could have
been granted. See Jarvis v. Rocanville Corp., 298 S.W.3d 305, 313 (Tex. App.—
Dallas 2009, pet. denied); see also McCoy v. Rogers, 240 S.W.3d 267, 272 (Tex.
App.—Houston [1st Dist.] 2007, pet. denied). If an appellant does not challenge
each possible ground for summary judgment, we must uphold the summary
judgment on the unchallenged ground. See Ellis, 68 S.W.3d at 898; see also
McCoy, 240 S.W.3d at 272–73. Accordingly, we must affirm the summary
3
judgment on Miner Dederick’s breach of contract counter-claim. See Ellis, 68
S.W.3d at 898; see also McCoy, 240 S.W.3d at 272–73.
3
In its reply brief, Miner Dederick offers argument addressing Gulf’s assertion that
it was entitled to summary judgment because it did not breach a contractual
obligation to Miner Dederick. However, the rules of appellate procedure do not
allow an appellant to include in a reply brief a new issue in response to some
matter pointed out in the appellee’s brief but not raised in the appellant’s opening
21
B. No Evidence of Breach-of-Contract Damages
Even assuming that Miner Dederick successfully presented argument to
show that Gulf breached a contractual obligation, summary judgment on Miner
Dederick’s breach-of-contract counter-claim was nonetheless appropriate. Gulf
presented a combined traditional and no-evidence motion for summary judgment.
The trial court granted the motion without identifying the basis for its ruling.
We review a summary judgment de novo. Travelers Ins. Co. v. Joachim,
315 S.W.3d 860, 862 (Tex. 2010). The standards of review for traditional and no-
evidence summary judgments are well known. See Timpte Indus., Inc. v. Gish, 286
S.W.3d 306, 310 (Tex. 2009); Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548
(Tex. 1985). With respect to a traditional motion for summary judgment, the
movant has the burden to demonstrate that no genuine issue of material fact exists
and it is entitled to judgment as a matter of law. TEX. R. CIV. P. 166a(c); Nixon,
690 S.W.2d at 548–49. In contrast, to defeat a no-evidence summary judgment,
the nonmovant is required to produce evidence that raises a genuine issue of
material fact on each challenged element of its claim. Gish, 286 S.W.3d at 310;
see also TEX. R. CIV. P. 166a(i).
brief. See TEX. R. APP. P. 38.3; Howell v. Tex. Workers’ Comp. Comm’n, 143
S.W.3d 416, 439 (Tex. App.—Austin 2004, pet. denied); see also Barrios v. State,
27 S.W.3d 313, 322 (Tex. App.—Houston [1st Dist.] 2000, pet. ref’d) (“Pointing
out the absence of an appellant’s argument does not raise the argument or entitle
appellant to assert that argument for the first time in his reply brief.”).
22
Among its grounds, Gulf asserted summary judgment was proper because
Miner Dederick had no compensable damages as a matter of law. Damages are an
essential element of a breach of contract claim. See Winchek v. Am. Express
Travel Related Servs. Co., 232 S.W.3d 197, 202 (Tex. App.—Houston [1st Dist.]
2007, no pet.) (listing “damages sustained as a result of the breach” as an element
of a breach-of-contract claim). Gulf pointed out that the only damages sought by
Miner Dederick were its expenses for defending against Gulf’s claims. Miner
Dederick responded by offering a document, Exhibit 26, created to show the value
of the time spent by its employees and executives to investigate and to respond to
Gulf’s claims.
In its brief, Miner Dederick asserts that it produced evidence of damages.
Miner Dederick points to Exhibit 26 attached to its summary judgment response.
Exhibit 26, created during litigation, is an itemized statement of tasks performed
by several of Miner Dederick employees and executives. It lists the name of the
Miner Dederick employee or executive, the task completed by that person, the time
spent on the task, the hourly rate for that individual, and the total sum of money
attributed to each task.
In its summary judgment response, Miner Dederick explained that these are
tasks related to responding to and investigating Gulf’s claim against it. These tasks
included site visits, document review, and preparing a re-design of the expansion
23
joint. However, there is no evidence that Miner Dederick paid, or was obligated to
pay, the sums reflected in the document beyond the salary or compensation that
Miner Dederick already paid to each listed individual. In other words, the
document does not reflect that any of the sums listed are an actual measure of loss
sustained by Miner Dederick as a result of the alleged breach of the contract by
Gulf. See RAJ Partners, Ltd. v. Darco Const. Corp., 217 S.W.3d 638, 649 (Tex.
App.—Amarillo 2006, no pet.) (holding that company was not entitled to damages
for time spent by its executives to address breach of contract dispute, noting that
evidence did not show that company was obligated to pay sum requested or that
the sum reflected an actual measure of loss to the company); see also Nw.
Otolaryngology Assoc. v. Mobilease, Inc., 786 S.W.2d 399, 405 (Tex. App.—
Texarkana 1990, writ denied) (holding, in a breach of contract case, that
partnership—which was the defendant/counter-plaintiff—was not entitled to
compensation for time spent by partners in investigation and depositions).
We conclude that Miner Dederick did not raise a genuine issue of material
fact with regard to the element of damages for its breach of contract counter-claim.
See TEX. R. CIV. P. 166a(i). The trial court did not err when it granted summary
judgment in favor of Gulf on Miner Dederick’s breach of contract claim.
We overrule Miner Dederick’s fourth issue to the extent that it challenges
the trial court’s summary judgment on its breach of contract counter-claim.
24
Spoliation of Evidence
In its third issue, Miner Dederick asserts that the trial court abused its
discretion by failing to assess spoliation sanctions against Gulf with respect to its
failure to preserve the expansion joint for Miner Dederick’s viewing, inspection,
and testing.4
A. Standard of Review
We review a trial court’s order denying a motion for spoliation sanctions
under an abuse of discretion standard. See Wal-Mart Stores, Inc. v. Johnson, 106
S.W.3d 718, 723 (Tex. 2003); McMillin v. State Farm Lloyds, 180 S.W.3d 183,
199 (Tex. App.—Austin 2005, pet. denied); see also Clark v. Randalls Food, 317
S.W.3d 351, 356 (Tex. App.—Houston [1st Dist.] 2010, pet. denied). A trial court
commits an abuse of discretion only if its decision is arbitrary, unreasonable, and
without reference to guiding principles. Mercedes-Benz Credit Corp. v. Rhyne,
925 S.W.2d 664, 666 (Tex. 1996). An abuse of discretion does not occur when the
trial court bases its decisions on conflicting evidence. In re Barber, 982 S.W.2d
4
Gulf asserts in its brief that Miner Dederick did not request spoliation sanctions
before the trial court granted partial summary judgment in this case on Gulf’s
breach of contract claim. This is incorrect. Miner Dederick asserted its request
for spoliation sanctions in its response to Gulf’s motion for partial summary
judgment. When a summary judgment non-movant requests a spoliation
determination in its response to a motion for summary judgment, the trial court
implicitly makes a finding of no spoliation by granting the motion for summary
judgment. See Clark v. Randalls Food, 317 S.W.3d 351, 356 (Tex. App.—
Houston [1st Dist.] 2010, pet. denied) (citing Adobe Land Corp. v. Griffin, L.L.C.,
236 S.W.3d 351, 356–57 (Tex. App.—Fort Worth 2007, pet. denied)).
25
364, 366 (Tex. 1998). Nevertheless, a trial court has no discretion in determining
what the law is or in applying the law to the facts. Clark, 317 S.W.3d at 356.
B. Law of Spoliation
The inquiry regarding whether a spoliation sanction or presumption is
justified requires a court to consider (1) whether there was a duty to preserve
evidence, (2) whether the alleged spoliator breached that duty; and (3) whether the
spoliation prejudiced the non-spoliator’s ability to present its case or defense.
Clark, 317 S.W.3d at 356 (citing Adobe Land Corp. v. Griffin, L.L.C., 236 S.W.3d
351, 356–57 (Tex. App.—Fort Worth 2007, pet. denied)); Offshore Pipelines, Inc.
v. Schooley, 984 S.W.2d 654, 666 (Tex. App.—Houston [1st Dist.] 1998, no pet.)).
With these principles in mind, we determine whether the trial court abused its
discretion by denying Miner Dederick’s request for spoliation sanctions or a
spoliation presumption.
C. Analysis
1. Duty to Preserve Evidence
The duty to preserve evidence is not raised unless (1) a party knows or
reasonably should know that there is a substantial chance a claim will be filed, and
(2) evidence is relevant and material. Clark, 317 S.W.3d at 356–57 (citing
Johnson, 106 S.W.3d at 722).
26
A party knows or reasonably should know that there is a substantial chance a
claim will be filed if a reasonable person would conclude from the severity of the
incident, and other circumstances surrounding it, that there was a substantial
chance for litigation at the time of the alleged spoliation. See Tex. Elec. Coop. v.
Dillard, 171 S.W.3d 201, 209 (Tex. App.—Tyler 2005, no pet.) (citing Johnson,
106 S.W.3d at 722). “A party should not be able to subvert the discovery process
and the fair administration of justice simply by destroying evidence before a claim
is actually filed.” See Trevino, 969 S.W.2d 950, 955 (Tex. 1998) (Baker, J.,
concurring).
Here, the evidence shows that, prior to taking the core samples from the
expansion joint and then covering it with concrete, Gulf requested Miner Dederick
to repair the expansion joint under the warranty. Miner Dederick responded by
stating to Gulf that the leaks were not caused by defective construction but rather
by a flaw in the design of the joint. Miner Dederick also indicated to Gulf that the
repair work requested was not covered by the warranty because it was based on a
completely new design for the expansion joint. Additionally, Gulf’s act of
retaining ESI, a forensic engineering company, to conduct the core testing on the
expansion joint before the joint was covered with concrete also indicates that Gulf
knew there was a substantial chance that it would be filing a claim against Miner
Dederick.
27
The evidence at trial also indicated that Gulf denied Miner’s request to
inspect the expansion joint on the advice of its attorneys. In support of its
attorney’s fees request, Gulf offered the testimony of its counsel. On cross-
examination, the following exchange occurred:
Q. Are you aware that the response to Miner Dederick’s request for
inspection [on] March 8, 2007, was to deny that request?
A. Yes, I am.
Q. And that denial of that request was done with the input of your law
firm, and your law firm is purporting to request fees from this jury for
the time you spent to deny that request, correct?
A. I think that that’s a fair assessment, yes.
The involvement of counsel indicates that Gulf was aware there was a
substantial chance of litigation at the time of the spoliation. In short, the record
evidence shows that, at the time of the alleged spoliation, there was a substantial
chance Gulf would file a claim against Miner Dederick. See Johnson, 106 S.W.3d
at 722.
To show that the evidence is relevant and material, a party must demonstrate
that the alleged spoliator knew or should have reasonably known that the evidence
would be relevant to the action. See Clark, 317 S.W.3d at 357 (citing Johnson,
106 S.W.3d at 722). A party must preserve what it knows, or reasonably should
know, is relevant in the action or is reasonably calculated to lead to the discovery
of admissible evidence. See id. (citing Trevino, 969 S.W.2d at 957 (Baker, J.,
28
concurring)). Here, the expansion joint is the subject matter of the claims. It is
undisputed that it is relevant to the litigation.
In sum, Gulf had a duty to preserve the expansion joint. Given the evidence,
it would have been unreasonable for the trial court to have concluded otherwise.
2. Breach of Duty to Preserve
Although it need not take extraordinary measures to preserve evidence, a
party has a duty to exercise reasonable care in preserving potentially relevant
evidence. See id. (citing Trevino, 969 S.W.2d at 957 (Baker, J., concurring)). A
spoliator can defend against an assertion of negligent or intentional destruction by
providing explanations to justify its failure to preserve evidence. Id. Here, Gulf
defends against the spoliation complaint by asserting that the repair of the
expansion joint was in the ordinary course of its business. Such a justification has
been successful in some cases, but it is not successful in this case. Cf. Aguirre v. S.
Tex. Blood & Tissue Ctr., 2 S.W.3d 454, 457 (Tex. App.—San Antonio 1999, pet.
denied) (holding destruction of records in the regular course of business and
without notice of their relevance to future litigation did not raise spoliation
presumption).
A claim that the evidence was destroyed in the ordinary course of business
will not excuse the obligation to preserve when a party’s duty to preserve evidence
arises before the destruction. See Adobe Land Corp., 236 S.W.3d at 359. As
29
discussed supra, the evidence shows that Gulf’s duty to preserve arose before it
conducted the repair. Therefore, Gulf’s failure to preserve cannot be justified on
the basis that the evidence was destroyed in the ordinary course of business. See
id.
In its brief, Gulf also asserts that it “did not breach any duty to preserve
evidence because the defective expansion joint remains in place (but repaired) and
available to be tested.” We disagree with this assertion.
As mentioned, a party that has a duty to preserve evidence has a duty to
exercise reasonable care in preserving it. See Clark, 317 S.W.3d at 357 (citing
Trevino, 969 S.W.2d at 957 (Baker, J., concurring)). Implicit in the duty to
exercise reasonable care in preserving evidence is the duty to refrain from altering
or changing the evidence’s condition or integrity. Illustrating this precept is, for
example, Texas case authority explaining that a spoliation instruction is an
instruction given to the jury outlining permissible inferences it may make against a
party who has lost, altered, or destroyed evidence. See Dillard, 171 S.W.3d at
208; Brewer v. Dowling, 862 S.W.2d 156, 159 (Tex. App.—Fort Worth 1993, writ
denied).
Black’s Law Dictionary defines spoliation as the “intentional destruction or
alteration of evidence, or the knowing failure to preserve property for another’s use
as evidence in pending or reasonably foreseeable litigation.” BLACK’S LAW
30
DICTIONARY 1409 (7th ed. 1999). Courts in other jurisdictions have adopted a
definition of spoliation that expressly includes the act of altering evidence. See,
e.g., Kearney v. Foley & Lardner, LLP, 590 F.3d 638, 649 (9th Cir. 2009); West v.
Goodyear Tire & Rubber Co., 167 F.3d 776, 779 (2d Cir. 1999); Pyeritz v.
Commonwealth of Pa., 32 A.3d 687, 692 (Pa. 2011); Cahoon v. Cummings, 734
N.E.2d 535, 545 (Ind. 2000).
In this case, Ashkar Engineering’s design drawings for the repair project
required Cajun Contractors to “remove [from the existing joint] sufficient concrete,
joint sealant, joint filler and other materials to determine the cause of the failure of
the existing joint.” The undisputed evidence shows that, under Gulf’s direction,
Cajun Contractors removed approximately six inches of sealant—which had been
installed by Miner Dederick—before testing was conducted on the joint. Once the
sealant was removed, the joint was no longer in the same condition that it was
when Miner Dederick finished the construction project. At that point, the
expansion joint was missing one of the components that Miner Dederick had been
instructed to install. In other words, the joint was permanently altered even before
testing began.
As part of the testing, three eight-inch-diameter core samples were then
drilled from the expansion joint. Gulf directed Cajun Contractors to cut the
concrete along each side of the expansion joint and to install a new waterstop on
31
either side. Next, Cajun Contractors, pursuant to Gulf’s instruction, poured a new
six to eight inch concrete slab over the 140 foot long expansion joint.
Based on this undisputed evidence, it would not have been reasonable or
rational for the trial court to have concluded that Gulf exercised reasonable care in
preserving the expansion joint for the foreseeable litigation. To the contrary, Gulf
intentionally altered the condition and the integrity of the expansion joint without
affording Miner Dederick the opportunity to inspect it. Gulf’s insinuation that the
expansion joint was preserved under the concrete is not supported by the record.
Gulf also asserts that it did not breach its duty to preserve the evidence
because Miner Dederick never requested to conduct its own tests on the expansion
joint. Gulf further contends that Miner Dederick has waived its right to complain
of spoliation because, after suit was filed, Miner Dederick did not serve Gulf with
a discovery request to inspect or to test the joint nor did Miner Dederick seek a
motion to compel such discovery from the trial court. In making such argument,
Gulf misses the mark.
Significantly, Miner Dederick, through its CEO, John Miner, requested to
inspect the expansion joint in three separate correspondences. Miner indicated that
it needed to determine whether its work had conformed to the plans and
specifications. The requests were made before Cajun Contractors began
construction and before the performance of the water test and the core sampling on
32
the joint. Gulf expressly refused to allow Miner Dederick to inspect the expansion
joint. This was in March 2007.
John Miner’s affidavit indicated the reason why Miner Dederick did not
request to inspect the expansion joint before the time it made its first request.
According to Miner, until the time of his requests to inspect the expansion joint,
Miner Dederick was under the impression that it would be doing the new
construction work to remedy the leaking joint. Miner testified also that, until that
time, the expansion joint could not be viewed because it was covered with catalyst.
In other words, Miner thought his company would able to inspect the joint at the
time it completed the repairs.
Miner stated that, once Miner Dederick learned that another contractor
would be doing the work, it “requested, in writing, the opportunity to investigate
the expansion joint prior to work being performed so that Miner Dederick could
confirm the joint was constructed as planned.” He continued, “Miner Dederick
knew that Gulf would have to move the catalyst from the joint to perform the
work, and Miner Dederick wanted to investigate.”
The evidence showed that John Miner made his last request to inspect the
expansion joint on March 15, 2007. The request was denied. Gulf did not notify
Miner Dederick of the testing. The water test was conducted one day later on
March 16, and the core samples were taken less than a week later on March 21.
33
Cajun Contractor then began its work on the expansion joint, which was completed
in June 2007. It was also in June 2007 that Miner Dederick first learned of the
testing that Gulf had performed on the expansion joint.
By the time litigation was filed in November 2007, the expansion joint had
already been altered from its original condition. The opportunity to inspect and to
test the expansion joint in its unaltered condition was gone. Miner Dederick’s lack
of a discovery request to test the expansion joint did not waive its spoliation
complaint and does not absolve Gulf from its failure to preserve the evidence at a
time that litigation was foreseeable. 5 We conclude that it would not have been
5
Miner Dederick clarifies it is not suggesting that Gulf had an indefinite duty to
preserve the expansion joint in its original condition or to forestall repairs without
limitation. Instead, Miner Dederick states that it should have been notified of the
testing by Gulf and given the opportunity to attend the testing. Miner Dederick
also contends that it should have been given the opportunity to inspect the
premises before Cajun Contractors performed its work on the expansion joint. It
follows that, had it been given the opportunity to inspect the expansion joint and
attend Gulf’s testing, Miner Dederick may have determined that it did not need to
conduct its own testing. We note that courts in other jurisdictions have recognized
that a custodial party, who has a legitimate need to destroy the evidence, may
discharge its duty to preserve evidence by giving its opponent notice of the claim
and a full and fair opportunity to inspect the evidence before its destruction. See
Miller v. Lankow, 801 N.W.2d 120, 128–29 (Minn. 2011); Am. Family Mut. Ins.
Co. v. Golke, 768 N.W.2d 729, 737–38 (Wis. 2009) (citing N. Assurance Co. v.
Ware, 145 F.R.D. 281, 284 (D. Me. 1993) (holding that “reasonable notice to
likely adversaries” that the evidence was to be destroyed would be sufficient to
prevent a sanction for spoliation); Cooper v. United Vaccines, Inc., 117
F. Supp. 2d 864, 875 (E.D. Wis. 2000) (stating that claim might not have been
dismissed if plaintiff had notified defendant of its intention to engage in
destructive testing of evidence so that defendant could have participated or
conducted its own testing); Howell v. Maytag, 168 F.R.D. 502, 506 (M.D. Pa.
1996) (explaining that “plaintiffs could reasonably have given [the defendant]
34
reasonable for the trial court to have concluded that Gulf did not breach its duty to
preserve the evidence.
3. Prejudice
The last step of our analysis focuses on whether Gulf’s spoliation prejudiced
Miner Dederick’s ability to present its defense against Gulf’s claims. See Adobe
Land Corp., 236 S.W.3d at 359. In making this determination, we look to a variety
of circumstances such as (1) the relevancy of the missing evidence and (2) the
availability of other evidence to take the place of the missing information. Id.
(citing Trevino, 969 S.W.2d at 958 (Baker, J., concurring)).
As Miner Dederick correctly points out, the expansion joint was the most
important piece of evidence in the case. Gulf’s primary evidence offered in
support of its motion for partial summary judgment on its affirmative claim for
breach of contract were James Milner’s testimony of his personal observations of
notice of the potential claim, and provided it with an opportunity to conduct an in-
dependent investigation before the demolition of the fire scene”); Baliotis v.
McNeil, 870 F. Supp. 1285, 1290–91 (M.D. Pa. 1994) (stating that relevant
evidence should not be destroyed without giving the other party an opportunity for
inspection); Hirsch v. Gen. Motors Corp., 266 N.J. Super. 222, 251, 628 A.2d
1108, 1122 (Law Div. 1993) (holding that a “potential spoliator need do only what
is reasonable under the circumstances,” which included allowing defendants a
reasonable amount of time to inspect the evidence and giving notice of probable
litigation (citation omitted)); cf. Hamilton Mut. Ins. Co. of Cincinnati v. Ford
Motor Co., 702 N.E.2d 491, 493 (Ohio Ct. App. 1997) (holding that exclusion of
expert testimony as sanction for spoliation was improper because defendant had
been given multiple notices and opportunities to inspect the evidence and had
indicated that it would not do so)).
35
the expansion joint and ESI’s report and photographs taken during its forensic
investigation and testing.
In contrast, Miner Dederick was denied the opportunity to inspect the
expansion joint or to be present at the forensic testing. Although Gulf asserts that
it would have allowed Miner Dederick to conduct testing, had it asked, this
assertion is belied by the undisputed evidence that it refused to allow Miner
Dederick to inspect the expansion joint before Cajun Contractors began work.
Once the work began, the condition of the expansion joint was altered. Even
assuming Gulf would have allowed Miner Dederick to conduct testing at that point,
it would have been under different conditions than those under which ESI
conducted its inspection and testing.
By altering the condition of the expansion joint, Gulf deprived Miner
Dederick of the opportunity to gather evidence to rebut the evidence offered by
Gulf in support of its claims and to develop its affirmative defenses. Specifically,
Miner Dederick could not counter the testimony of James Milner, who described
his personal observations of the expansion joint, with its own witness testimony
regarding the condition of the expansion joint. Miner Dederick could not refute
similar observations made in ESI’s report or take its own photographs of the
expansion joint or of the testing. In short, Miner Dederick was deprived of the
36
ability to determine whether it could show that it had complied with the design
plans and specifications.
Nor could Miner Dederick fully develop its defensive theory that it did not
cause injury to Gulf. Miner Dederick could not fully critique ESI’s methodology
or easily refute the testing. Additionally, Miner Dederick offered the affidavit
testimony of its engineering expert, who identified additional tests that he would
have conducted.
With respect to availability of other evidence to take the place of the missing
information, the record shows that ESI and a Gulf employee took photographs of
the expansion joint and the testing. In addition, videotape was taken of some of the
testing processes. The three core samples were also made available for Miner
Dederick’s inspection.
Regardless of the value of the photographic evidence, none of this evidence
permitted Miner Dederick to conduct its own forensic testing on the expansion
joint as it existed in its pre-repair condition. In other words, there was no available
substitute for the expansion joint itself with respect to testing. Significantly, Miner
Dederick’s engineering expert, Randall Rosengarten, testified in his affidavit that,
when he inspected them at ESI’s offices, the three core samples were in a
deteriorated condition and could not be reconstructed to their original condition.
37
He stated that the concrete in the cores had been broken and “parts of cores were
incomplete with some parts of single cores in multiple boxes.”
Given the record, it would not have been reasonable or rational for the trial
court to have concluded that Miner Dederick was not prejudiced by Gulf’s
spoliation of the expansion joint. We hold that the trial court abused its discretion
when it denied Miner Dederick’s request to grant spoliation sanctions against Gulf.
Concomitantly, we also hold that the trial court erred when it granted partial
summary judgment on Gulf’s breach of contract claim against Miner Dederick.
See Clark, 317 S.W.3d at 356 (citing Adobe Land, 236 S.W.3d at 360–61) (“If the
trial court did abuse its discretion by denying the spoliation finding, then summary
judgment would be improper.”). We further hold that the trial court’s error in
failing to grant Miner Dederick’s request for spoliation sanctions was harmful error
because the error complained of probably prevented Miner Dederick from properly
presenting the case on appeal. See TEX. R. APP. P. 44.1(a)(2).
We refrain from determining what the appropriate measure is to remedy the
spoliation in this case. Rather, that is matter best left to the trial court’s discretion.
As recognized by the Supreme Court of Texas, trial courts “have broad discretion
to take measures ranging from a jury instruction on the spoliation presumption to,
in the most egregious case, death penalty sanctions.” Trevino, 969 S.W.2d at 953.
A trial court may also choose to exclude testimony or other evidence. Trevino, 969
38
S.W.2d at 959 (Baker, J., concurring). “As with any discovery abuse or
evidentiary issue, there is no one remedy that is appropriate for every incidence of
spoliation; the trial court must respond appropriately based upon the particular
facts of each individual case.” Trevino, 969 S.W.2d at 953.
We sustain Miner Dederick’s third issue.
Rendition vs. Remand
In issues one and two, Miner Dederick contends that the evidence was
legally insufficient to support the actual damages awarded by the jury. We
recognize that the legal sufficiency challenges raised by Miner Dederick in these
issues, if successful, result in rendition. See Holt Atherton Indus., Inc. v. Heine,
835 S.W.2d 80, 86 (Tex. 1992) (explaining that, as general rule, “when we sustain
a no evidence point of error after a trial on the merits, we render judgment on that
point.”). We do not separately address issues one and two, however.
Appellate courts have broad discretion to remand for a new trial in the
interest of justice. See TEX. R. APP. P. 43.3(b); Scott Bader, Inc. v. Sandstone
Prods., Inc., 248 S.W.3d 802, 822 (Tex. App.—Houston [1st Dist.] 2008, no pet.).
Gulf offered evidence that Miner Dederick’s work failed to comply with the design
plan and specifications for the expansion joint. This was shown through James
Milner of Ashkar Engineering, the ESI report, and Miner Dederick’s construction
expert. The evidence showed that the expansion joint was defective and needed
39
repair. Similarly, Gulf presented some evidence linking the need for the repair to
Miner Dederick’s failure to follow the design plan and specifications. For
example, Gulf presented evidence that there were holes and gaps in the expansion
joint. Given the purpose of the expansion joint, the jury could have reasonably
inferred that it needed repair. Gulf also presented some evidence that the work
completed by Cajun Contractors to repair the joint was reasonable and necessary.
For example, James Milner explained in a clear manner why the work was the
most efficacious and cost-effective repair that could be made to the expansion
joint. In other words, Gulf presented some evidence that it was entitled to recover,
at a minimum, remedial damages from Miner Dederick.
As discussed, Miner Dederick was hampered in its ability to defend against
Gulf’s claims due to Gulf’s spoliation of evidence. It is difficult, at this point, to
conduct a meaningful review of the evidence. Had Miner Dederick been permitted
to inspect the premises it may have found conclusive evidence, which the jury
could not ignore, negating an element of Gulf’s claim. See City of Keller v.
Wilson, 168 S.W.3d 802, 815–17 (Tex. 2005) (explaining that conclusive evidence
cannot be disregarded). Moreover, the entire presentation of the case was affected
by the trial court’s error in failing to remedy Gulf’s spoliation. It is not surprising,
then, that Gulf’s evidence supports its claims. Nonetheless, the strength of the
evidence supporting Gulf’s recovery in this case also cannot be ignored. For these
40
reasons, we conclude that it serves the interest of justice for this case to be
remanded to the trial court to permit it, in its broad discretion, to fashion an
appropriate spoliation remedy and to conduct further proceedings, as necessary. 6
See TEX. R. APP. P. 43.3(b).
Conclusion
We affirm the portion of the trial court’s judgment granting summary
judgment to Gulf on Miner Dederick’s counter-claims against Gulf. We reverse
the remaining portions of the trial court’s judgment. We remand the case for
further proceedings.
Laura Carter Higley
Justice
Panel consists of Justices Jennings, Higley, and Sharp.
6
We need not address Miner Dederick’s remaining issues.
41