U.S. District Court in Texas Concludes that the Texas Supreme Court Would Not Follow Federal Spearin Doctrine Pertaining to Implied Warranty of Design

Harris Constr. Co., Ltd. v. GGP-Bridgeland, L.P.
2010 U.S. Dist. LEXIS 46477 (S.D. Tex. May 12, 2010)

The U.S. District Court for the Southern District of Texas determined that the issue whether the Texas Supreme Court would recognize a claim for breach of implied warranty against an owner or a design professional providing defective plans had been resolved by the Fifth Circuit in Interstate Contracting Corp. v. City of Dallas, 407 F.3d 708 (5th Cir. 2005). The Court concluded that the Texas would apply the Lonergan rule, which requires contractual language indicating an intent to shift the burden of risk of defective design to the owner or a design professional hired by the owner to make the plans and specifications.

In this case, Raba-Kistner Consultants (“Raba-Kistner”) entered into a series of contracts with GGP-Bridgeland (“GGP”) to provide full-time field technicians to test and verify the soil conditions of fill materials installed at Bridge B-3 of GGP’s Parkway project in Cypress, Texas. During construction, Raba-Kistner represented that the fill materials were of the type specified in the contract and were installed in accordance with the contract documents. In 2006, after the pavement on the bridge showed signs of distress, Raba-Kistner opined that the soils installed by Harris Construction (“Harris”) were not the soils specified in the contract documents and/or an insufficient number of tests were performed on the installed soils. Harris, on the other hand, claimed that Raba-Kistner owed and breached an implied warranty that its services were accurate and sufficient for the purpose in view, and that this breach caused Harris to suffer damages.

Raba-Kistner filed a Motion to Dismiss, arguing that Harris failed to state a claim because Texas does not recognize a cause of action for breach of implied warranty of design. In response, Harris argued that in the special context of construction law, Texas courts have held that professionals that provide plans and specifications impliedly warrant those plans and specifications are adequate for the job. Harris argued that this position was supported in federal law by the Spearin doctrine and by general principles of contract law.

In researching the issue, the Court found a history of conflicting decisions in Texas courts regarding the implied warranties of professionals who prepare plans and specifications used by contractors. Among these cases was Lonergan v. San Antonio Loan & Trust Co., 101 Tex. 63, 104 S.W. 1061 (1907). In Lonergan, the Texas Supreme Court concluded that “specifications are not, as a matter of law, guaranteed by either party to the other.” Thus, the Lonergan court concluded that the owner in that case “was not bound as guarantor of the sufficiency of the specifications as a legal consequence of submitting them for bids for work and entering into a contract.” It opined that any such obligations would only result from specific contractual language.

The Harris Construction court subsequently determined that the Fifth Circuit had already resolved this issue in Interstate Contracting Corp., when it concluded that the Texas Supreme Court would follow the Lonergan rule. The Court then extended the rule announced in Lonergan to professionals hired by the owner to provide the plans and specifications.

The rationale of the Texas courts appears to be that a contractor is obligated to satisfy itself with the sufficiency of the specifications before binding itself to construct in accordance with the specifications. The Court acknowledged that under its assessment, Texas law was inconsistent with the United States Supreme Court decision in United States v. Spearin, 248 U.S. 132 (1918).

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