CBI Na-Con, Inc. v. UOP, Inc.

MIRABAL, Justice,

dissenting.

I dissent.

We are asked to construe chapter 331 of the Texas Civil Practice and Remedies Code, the “Comparative Responsibility” and “Contribution” statute. This statute governs the rights to contribution among liable parties in actions based on (1) negligence, (2) products liability grounded in negligence, (3) strict tort liability, (4) strict products liability, or (5) breach of warranty claims under chapter 2, Texas Business & Commerce Code. Tex. Crv. Prac. & Rem.Code Ann. §§ 33.001 and 33.011 (Vernon 1987). The legal issues we are faced with are:

1. Does this case involve a claim grounded in tort (bringing it within chapter 33) or does it involve a claim only for breach of contract (and therefore not within chapter 33)?
2. If it does involve a claim grounded in tort, does a limitation of liability provision in plaintiffs contract with one tortfeasor prevent another tortfeasor from seeking contribution?

The third-party defendant (UOP) moved for summary judgment on the grounds that, assuming everything in the third-party plaintiffs (CBI’s) petition was true, CBI was still *343not entitled to judgment as a matter of law. Therefore, this Court must accept as true every material allegation in CBI’s petition. Abbott v. City of Kaufman, 717 S.W.2d 927, 929 (Tex.App.—Tyler 1986, writ dism’d w.o.j.); Gottlieb v. Hofheinz, 523 S.W.2d 7, 10 (Tex.Civ.App.—Houston [1st Dist.] 1975, writ dism’d w.o.j.). Accordingly, we presume that (1) Pina entered into an “Engineering Agreement” with UOP under which UOP agreed to furnish Fina engineering design specifications and installation procedures for a fluidized catalytic cracking unit (FCCU); (2) UOP’s design and installation specifications were defective; (3) Fina contracted with CBI to construct a portion of the FCCU in accordance with UOP’s design and installation specifications; (4) CBI followed UOP’s design and installation specifications; and (5) because UOP’s design and installation specifications were defective, the FCCU failed.

Fina did not sue UOP. Fina sued CBI for over $17 million. CBI filed a third party claim against UOP alleging negligent design and seeking contribution in the event Fina recovers a judgment against CBI.

The first ground asserted in UOP’s motion for summary judgment was that Fina could not sue UOP for a tort, and therefore chapter 33 does not apply and CBI has no right of contribution against UOP. UOP argued that it had a contract with Fina; any negligent design claim would arise out of that contract; and therefore the action would sound in contract, not tort. UOP relied on Southwestern Bell Tel. Co. v. DeLanney, 809 S.W.2d 493 (Tex.1991).

Contrary to UOP’s claim, DeLanney supports CBI’s position. In DeLanney, a customer sued Southwestern Bell Telephone Co. for failing to publish an advertisement in the Yellow Pages. 809 S.W.2d at 493. The customer alleged negligence and violation of the the Deceptive Trade Practices Act (DTPA).2 Id. at 493. The supreme court held that Bell’s failure to publish the ad was not a tort, reasoning:

If the defendant’s conduct — such as negligently burning down a house — would give rise to liability independent of the fact that a contract [to repair a water heater] exists between the parties, the plaintiffs claim may also sound in tort. Conversely, if the defendant’s conduct — such as failing to publish an advertisement — would give rise to liability only because it breaches the parties’ agreement, the plaintiffs claim ordinarily sounds only in contract. Of course, some contracts involve special relationships that my give rise to duties enforceable as torts, such as professional malpractice.

Id. at 494 (emphasis added). In his concurring opinion, Justice Doggett observed:

The court does recognize that in some as yet unspecified instances a tort action may lie between contracting parties. It appropriately observes that a tort action may arise based upon a number of relationships that could be created by contract. Although the court offers only one example of a contractual relationship creating duties the breach of which gives rise to actions both in tort and contract (the relationship between a professional and client), our developing jurisprudence recognizes others_ In addition, the court correctly recognizes that the breach of certain common-law duties creates liability in tort; the existence of a contract does not alter those duties.
It is thus incumbent upon the trial courts not to begin and end their inquiry with the contract but to examine the circumstances surrounding the parties’ relationship, including any duties imposed by law, in determining whether a tort action may be maintained.

DeLanney, 809 S.W.2d at 500 (Doggett, J. concurring).

In the present case, the contract between Fina and UOP involved a special relationship with professionals. Engineers or architects must use the skill and care in the performance of their duties commensurate with the requirements of their profession, and are liable for a failure to exercise reasonable care and skill commensurate with those requirements. Romero v. Parkhill, Smith & Cooper, Inc., 881 S.W.2d 522, 525 (Tex.App.—El Paso 1994, writ denied). I.O.I. Sys., Inc. v. *344City of Cleveland, 615 S.W.2d 786, 790 (Tex.Civ.App.—Houston [1st Dist.] 1980, -writ refd n.r.e.). It is clear from DeLanney that the special relationship between an engineer and a client gives rise to duties enforceable as torts, such as professional malpractice, just as special relationships involving other professionals who are licensed by the state give rise to such duties. The “Comparative Responsibility” and “Contribution” statute itself recognizes the existence of such torts in Section 38.001(c).

In an action in which a claimant seeks damages for harm ... arising out of negligence, including but not limited to negligence relating to any professional services rendered by an architect, attorney, certified public accountant, real estate broker or agent, or engineer licensed by this state, a claimant may recover damages only if his percentage of responsibility is less than or equal to 50 percent.

Tex. Civ. PRAC. & Rem.Code Ann. § 33.001(c)(Vernon 1987) (emphasis added).

I would hold that UOP’s first ground for summary judgment has no merit. In my opinion, assuming, as we must here, that UOP delivered defective engineering design specifications and defective installation procedures to Fina, Fina would have a cause of action against UOP for the torts of negligence and professional malpractice, and not just a claim for breach of contract. Therefore, chapter 33 of the Civil Practice and Remedies Code does apply, and CBI may have a right of contribution against UOP.

As an alternative ground for summary judgment, UOP asserted that the provisions in the Fina/UOP contract, regarding limitation of liability and limitation of remedies, prevent CBI from obtaining contribution from UOP in the event Fina is granted a judgment against CBI.

Paragraph 7(e) of the agreement reads in part:

UOP shall not be responsible or liable for property damage or bodily injury arising out of the work and services performed under this agreement unless caused by the willful acts or negligence of UOP.

(Emphasis added.) UOP concedes that, if Fina sued UOP for negligence under the contract, and UOP was found to be negligent in the case, Fina would be entitled to recover something under the contract. UOP simply argues that provisions in the contract limit the extent of recovery to which Fina would be entitled.3

Assuming, as we must, that UOP was negligent in providing defective designs and procedures, Fina has the right to sue UOP, and therefore CBI has the derivative right to seek contribution from UOP. Amoco Chems. Corp. v. Malone Serv. Co., 712 S.W.2d 611, 613-14 (Tex.App.—Houston [1st Dist.] 1986, no writ); Tex. Civ. PRAC. & Rem.Code Ann. § 33.016(a), (b) (Vernon Supp.1997). Accordingly, UOP’s alternative ground for summary judgment is without merit.

I would sustain CBI’s sole point of error, reverse the summary judgment, and remand the case to the trial court.

. As noted by the majority, the 1987 version of chapter 33 applies to this case.

. Tex. Bus. & Com.Code Ann. § 17.50(a)(1) (Vernon Supp.1997).

. UOP asserts UOP’s liability would be limited to reperforming, at UOP’s expense, the work or services performed negligently. The record does not reveal the value of the expense that would be incurred in preparing new and proper engineering design specifications and installation procedures. The cost could be in the millions of dollars. It is not necessary to decide in this appeal the extent to which CBI could be limited in its recovery against UOP, if any.