HOUSTON (SE Texas Record) — Neither a suburban Houston fuels producer nor a United Kingdom-based engineering firm should get anything in a faulty pump dispute in which a Harris County court had awarded the latter company more than $150,000, a state appeals court has ruled.
The case involved a dispute between Equistar Chemicals, a chemicals, polymers and fuels producer based in Channelview, an oil refinery town in suburban Houston, and ClydeUnion, an industrial engineering company based in the United Kingdom. Equistar allegedly purchased pumps from ClydeUnion that "did not function well and became damaged," according the Texas 14th Court of Appeals May 16 opinion.
"We overrule Equistar's first two issues and sustain the latter two issues," the appeals court said in its 32-page opinion. "Accordingly, we reverse the trial court's judgment and render a judgment that both parties take nothing."
Texas Fourteenth Court of Appeals Justice Ken Wise
| txcourts.gov/14thcoa
Appeals Court Justice Ken Wise wrote the opinion in which Justice Margaret “Meg” Poissant and Justice Kevin Jewell concurred.
Equistar sued ClydeUnion for, among other allegations, breaches of warranties while ClydeUnion sued Equistar on its breach of contract claim because Equistar allegedly never paid the full price for the two allegedly faulty ethane pumps.
A Harris County district court jury found that ClydeUnion breached an express warranty, that Equistar breached the contract and awarded Equistar only a fraction of the damages that the company had asked for. The jury found Equistar had not given ClydeUnion "a reasonable opportunity to cure the breaches of warranties."
The trial court subsequently signed a judgment in which Equistar took nothing in damages while ClydeUnion recovered damages on its breach of contract claim based on a litigation cost offset.
Equistar appealed, arguing the trial court was wrong when it admitted and rendering judgment on "unreliable and conclusory expert testimony," excluded evidence of a letter written by ClydeUnion’s attorney and didn't disregard the jury's answer concerning its "opportunity to cure" question. Equistart also argued that the trial court should not have rendered judgment for ClydeUnion on its counterclaim after applying the offer-of-settlement statute and rule.
The appeals court sustained Equistar's issue about the jury question, finding ClydeUnion did not have a statutory or contractual right to cure but that the answer to the question "was immaterial because it should not have been submitted and cannot alter the effect of the verdict."
"If the trial court rendered a take nothing judgment on Equistar's claim because the court failed to disregard the jury's answer, the trial court erred," the appeals court's opinion continued.
On the offer-of-settlement statute and rule question, the appeals court found the trial court should have followed a procedure that would have offset ClydeUnion's damages against Equistar's damages to determine how much that Equistar would have recovered, minus ClydeUnion's litigation costs.
"Then, the trial court should have awarded ClydeUnion's litigation costs as an offset against Equistar's recovery, but no greater that the total amount Equistar would have recovered before subtracting the litigation costs," the appeals court's opinion said. "Following this procedure results in a take-nothing judgment for both parties."