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No. 04-02-00808-CV
ALAMO COMMUNITY COLLEGE
DISTRICT,
Appellant
v.
BROWNING CONSTRUCTION COMPANY,
Appellee
From the 407th Judicial District Court, Bexar County,
Texas
Trial Court No. 2000-CI-05250
Honorable Karen Pozza, Judge Presiding Opinion
by:
Karen Angelini, Justice Sitting: Catherine Stone,
Justice Paul W. Green, Justice Karen Angelini, Justice Delivered
and Filed:
January 14, 2004 AFFIRMED This
case arises from a breach-of-contract suit between Browning Construction
Company (ABrowning@)
and Alamo College Community District (AACCD@). At trial, the jury awarded
Browning, the plaintiff, over $3,000,000 on its breach-of-contract claim.
The trial court entered judgment in accordance with the verdict. ACCD, the
defendant at trial, appeals the judgment of the trial court in fourteen
issues. Browning, appellee and cross-appellant,
brings one issue on appeal. We affirm the judgment of the trial
court. Background ACCD
and Browning entered into a contract whereby Browning agreed to serve as
the general contractor for the construction of a new campus for ACCD.
After disagreements over delay, Browning sued ACCD for breach of contract
and won damages of over $3,000,000. The key issue in the suit was whether
Browning could collect damages for delay when the contract had a
no-damages-for-delay clause. The jury answered yes, because 1) ACCD had
waived its right to rely on that clause; 2) ACCD is estopped from relying on that clause; 3) ACCD and
Browning had agreed to modify the clause; 4) the delays encountered by
Browning were caused by the active interference of ACCD; 5) ACCD committed
unreasonable delay such that Browning would have been justified in
abandoning the contract; and 6) ACCD committed fraud, misrepresentation,
or other bad faith. Browning also sued ACCD for violations of the Prompt
Pay Act and quantum meruit. The jury did not
find for Browning on these causes of action. ACCD,
appellant and cross-appellee, presents the
following issues for review: 1)
Does sovereign immunity protect ACCD from suit? Does sovereign immunity
protect ACCD from tort liability? 2)
Did ACCD have a duty to Browning for design errors? 3)
Was it proper for the trial court to instruct the jury that the architects
were agents of ACCD? 4)
Was it error for the trial court to permit the jury to assess damages for
Browning=s
liability to its subcontractors? 5)
Does Jury Question 5 submit an offensive theory of estoppel, and if so, was it error for the trial court
to submit it? 6)
Was it error for the trial court to omit from Jury Question 1 an
instruction on the specific contractual provisions at issue? Does Jury
Question 1(b) violate Casteel? 7)
Did the trial court submit an improper measure of damages? 8)
Was there legally and factually sufficient evidence of causation to
support a finding of damages for delay? 9)
Was there legally and factually sufficient evidence of consideration to
support the jury=s
finding that ACCD and Browning agreed to modify the
contract? 10)
Was there legally and factually sufficient evidence of design
error? 11)
Did the trial court abuse its discretion in denying ACCD=s
motion for new trial? 12)
Was there legally and factually sufficient evidence to support the
jury=s
finding that ACCD waived its right to rely on the no-damages-for-delay
clause as a defense to Browning=s
claims? 13)
Was there legally and factually sufficient evidence to support the
jury=s
finding that ACCD breached the contract? 14)
Was there legally and factually sufficient evidence to support the
jury=s
finding of overhead cost damages?
Browning,
appellee and cross-appellant, presents the
following issue for review: Did the trial court err in failing to render
judgment notwithstanding the verdict for Browning on its Prompt Pay Act
claim? Sovereign
Immunity A.
Immunity from Suit In
its first issue, ACCD argues that sovereign immunity protects it from
suit. Sovereign
immunity defeats a trial court=s
subject-matter jurisdiction over a lawsuit. Tex. Dep=t
of Transp. v. Jones, 8 S.W.3d 636, 638-39
(Tex. 1999) (per curiam). The State may assert
sovereign immunity from suit in a plea to the jurisdiction. Id. at
638. Because the question of subject-matter jurisdiction is a question of
law, we review de novo a trial court=s
order denying a jurisdictional plea based on sovereign immunity. Mayhew
v. Town of Sunnyvale, 964 S.W.2d 922, 928 (Tex. 1998). ACCD
argues that sovereign immunity protects it from suit. We have specifically
held, however, that junior college community districts like ACCD are
not immune from suit: ACCD
is a junior college community district organized pursuant to chapter 130
of the Texas Education Code. Under chapter 130, ACCD=s
board of trustees=
Apowers
and duties@
Ain
the . . . management and control of the junior college@
are governed by Athe
general law governing the . . . management and control of independent
school districts insofar as the general law is applicable.@
Part of the Ageneral
law@
governing the management and control of independent school districts is
the Texas Legislature=s
consent to suits against A[t]he
trustees of an independent school district . . . in the name of the
district . . . .@ . . . By
subjecting junior college districts like ACCD to
the same general law applicable to independent school districts, it
appears to us, clearly and unambiguously, the Texas Legislature granted
its consent to sue junior college community districts and we so
hold. Alamo
Cmty. Coll. Dist. v. Obayashi Corp., 980
S.W.2d 745, 747-48 (Tex. App.CSan
Antonio 1998, pet. denied) (citations omitted), abrogated on other
grounds by Gen. Servs. Comm=n
v. Little-Tex Insulation Co., 39 S.W.3d 591, 595-98 (Tex.
2001). In
Obayashi, we followed the supreme court=s
holding in Missouri Pacific Railroad Co. v. Brownsville Navigation
District, 453 S.W.2d 812 (Tex. 1970). See Obayashi, 980 S.W.2d
at 748 (citing Mo. Pac., 453 S.W.2d at 813). In Missouri
Pacific, the question was whether a 1925 statute clearly and
unambiguously waived Brownsville Navigation District=s
immunity from suit. Mo. Pac., 453 S.W.2d at 813. The statute
provided: AAll
navigation districts established under this Act may, by and through the
navigation and canal commissioners, sue and be sued in all courts
of this State in the name of such navigation district . . . .@
Id. (emphasis added). The court held: AIn
our opinion [the statute] is quite plain and gives general consent for
District to be sued in the courts of Texas in the same manner as other
defendants.@
Id. Similarly,
the statute we relied on in Obayashi provides: AThe
trustees of an independent school district constitute a body corporate and
in the name of the district may acquire and hold real and personal
property, sue and be sued, and receive bequests and donations or
other moneys or funds coming legally into their hands.@ Tex. Educ.
Code Ann. '
11.151(a) (Vernon 1996) (emphasis added). Thus, both Obayashi and
Missouri Pacific find a waiver of sovereign immunity where the
Legislature provides that the governmental entity may Asue
and be sued.@
Mo. Pac., 453 S.W.2d at 813; Obayashi, 980 S.W.2d at
748. ACCD
argues that two recent Texas Supreme Court cases, Texas Natural
Resource Conservation Commission v. IT-Davy, 74 S.W.3d 849 (Tex. 2002)
and Travis County v. Pelzel & Associates,
Inc., 77 S.W.3d 246 (Tex. 2002), suggest that community college
districts like ACCD are immune from suit. We disagree.
In
IT-Davy, a general contractor (IT-Davy) contracted with the Texas
Water Commission (predecessor of the Texas Natural Resource Conservation
Commission) to clean up a hazardous waste site in Houston. IT-Davy, 74 S.W.3d at 851.
IT-Davy cleaned the site, and the TNRCC paid IT-Davy the full contract
price. Id. IT-Davy claimed, however, that it was owed
additional monies under the contract because materially different
site conditions increased its clean‑up costs. Id. The TNRCC refused
to pay these additional costs, and IT-Davy brought suit against the TNRCC
for breach of contract, negligent misrepresentation, quantum meruit, and promissory estoppel. Id. at 851-52. In response, the TNRCC
filed a plea to the jurisdiction, alleging that sovereign immunity barred
IT-Davy=s
claims. Id. at 852. The trial court denied the plea. Id. The
TNRCC then filed an interlocutory appeal. Id. The court of appeals
affirmed the trial court=s
order, holding that IT‑Davy=s
allegations were Asufficient
to show that the [TNRCC] has engaged in conduct, beyond the mere execution
of a contract, that waives its immunity from suit.@
IT-Davy, 74 S.W.3d at 851 (citation omitted) (brackets in
original). At
the supreme court, IT‑Davy argued that the TNRCC waived its immunity from
suit by fully accepting benefits under the contract. Id. at 856. In
support of its argument, IT-Davy cited a footnote from Federal
Sign v. Texas Southern
University, 951 S.W.2d 401 (Tex. 1997), providing that there may be
circumstances Awhere
the State may waive its immunity by conduct other than simply executing a
contract . . . .@
See IT-Davy, 74 S.W.3d at 856 (quoting Federal Sign, 951
S.W.2d at 408 n.1). Thus, the issue for the supreme court in
IT-Davy was whether Texas law allows governmental entities to waive
their immunity by conduct. See id. (noting that several courts of
appeals have relied on the footnote in Federal Sign to create a
judicially-imposed, equitable waiver of immunity from suit). The court
held: We
again affirm that it is the Legislature=s
sole province to waive or abrogate sovereign immunity. . . . Because we
have consistently held that only the Legislature can waive sovereign
immunity from suit, allowing other governmental entities to waive immunity
by conduct that includes accepting benefits under a contract would be
fundamentally inconsistent with our established jurisprudence and with the
existing legislative scheme. Accordingly, we reject IT-Davy=s
argument that we should fashion such a waiver-by-conduct exception in a
breach-of-contract suit against the State. Id.
at 857 (emphasis added). The
court also found that the TNRCC=s
sovereign immunity was not waived by contract, legislative consent under
sections 5.351 and 5.352 of the Texas Water Code, or legislative consent
in the Declaratory Judgment Act. Id. at
856. In
the case before us, Browning does not argue that ACCD waived its immunity
by conduct. Accordingly, the
waiver-by-conduct holding of IT-Davy does not apply here.
Additionally, nowhere does the IT-Davy court address sovereign
immunity for community college districts under the Texas Education Code,
the issue in this case. Rather, IT-Davy reaffirms that it is the
Legislature=s
sole province to waive sovereign immunity. Id. at 857. We found in
Obayashi that the Legislature waived sovereign immunity for
community college districts by enacting sections 130.084 and 11.151(a) of
the Texas Education Code. Obayashi, 980 S.W.2d at 747-48.
Accordingly, with respect to waiver by statute, Obayashi and
IT-Davy are entirely consistent. ACCD
next argues that the Pelzel case suggests
that community college districts like ACCD are immune from suit. In Pelzel, a construction company (Pelzel) sued Travis County for breach of contract,
seeking monies allegedly due under the contract. Pelzel, 77 S.W.3d at 247. Travis County filed a
plea to the jurisdiction, alleging sovereign immunity. Id. The
trial court denied the plea. Id. Travis County brought an
interlocutory appeal, and the court of appeals affirmed the trial
court=s
order, concluding that Travis County waived its immunity by conduct.
Id. at 247-48. The court of appeals further concluded that
because Pelzel complied with section 89.004 of
the Texas Local Government Code by presenting its claim to the county
commissioners court before filing suit, the trial court had jurisdiction.
Id. at 247 (citation omitted). Section 89.004 provides:
A[A]
person may not file suit on a claim against a county . . . unless the
person has presented the claim to the commissioners court and the
commissioners court neglects or refuses to pay all or part of the claim. .
. .@
Tex. Loc. Gov=t Code Ann. '
89.004(a) (Vernon Supp. 2003). Thus, the issue for the supreme court in
Pelzel was whether the
presentment-of-claim language in section 89.004 clearly and unambiguously
waives Travis County=s
immunity from suit. The court held: AThis
statutory language does not clearly and unambiguously waive immunity from
suit.@
Pelzel, 77 S.W.3d at 249. The court goes
on to cite statutes that do clearly and unambiguously waive
immunity from suit. See id. (citing, as an example of a
clear and unambiguous waiver of suit, section 101.025(a) of the Texas
Civil Practices and Remedies Code, which provides that A[s]overeign immunity to suit is waived and abolished to
the extent of liability created by this chapter@).
The court also distinguishes section 89.004(a) from the statute preceding
it, stating: AOriginally,
the statute contained >sue
and be sued=
language, arguably showing intent to waive sovereign immunity for suits
against counties.@
Id. at 249-50 (citing Mo. Pac., 453 S.W.2d at
813). ACCD
relies on this language to support its argument that ACCD is immune from
suit. As shown by the direct quote above, however, Pelzel does not resolve the question whether
Asue
and be sued@
language waives sovereign immunity. Id. Nor does Pelzel overrule Missouri Pacific.
Id. We are bound by the authority of Missouri Pacific unless
the supreme court overrules it. Penrod
Drilling Corp. v. Williams, 868 S.W.2d 294, 296 (Tex. 1993); In re
K. S., 76 S.W.3d 36, 49 (Tex. App.CAmarillo
2002, no pet.). Accordingly, we must continue to follow Missouri
Pacific. We
recognize that the Fifth Court of Appeals has interpreted IT-Davy
and Pelzel to mean that the
Legislature did not intend to waive sovereign immunity for school
districts. See Satterfield & Pontikes Constr., Inc. v.
Irving Indep. Sch.
Dist., No. 05‑03‑00004‑CV, 2003 WL 22221024, at *2 (Tex. App.CDallas
Sept. 26, 2003, no pet. h.) (holding that the Asue
and be sued@
language in section 11.151 of the Texas Education Code merely speaks to
the City=s
capacity to sue and its capacity to be sued when immunity has been
waived). The effect of the court=s
decision, however, is to improperly overrule Missouri Pacific.
Satterfield, 2003 WL 22221024, at *17 (Lang, J., dissenting).We
believe that we are bound by Missouri Pacific unless the supreme
court overrules it. Therefore, we reiterate our
holding in Obayashi and hold that because the Legislature clearly
and unambiguously waived immunity for community college districts, ACCD is
not immune from suit. Obayashi, 980 S.W.2d at 748. Accordingly, we
overrule this issue on appeal. B.
Immunity from Liability ACCD
next argues that sovereign immunity protects it from
liability. Immunity
from liability protects the state from judgment, even if the legislature
has expressly consented to suit. Tex. Dep=t
of Transp. v. Jones, 8 S.W.3d 636, 638 (Tex.
1999) (per curiam). Generally, junior college
districts are not subject to tort liability for property damage, personal
injury, or death caused by the wrongful act or omission or the negligence
of an employee, except when the claim involves a motor vehicle. Tex. Civ.
Prac. & Rem. Code
Ann. ' 101.001(3)(B) (Vernon Supp.
2002); '' 101.021, 101.051 (Vernon
1997). ACCD argues,
therefore, that ACCD is immune from the fraud claims for which it was
found liable in Jury Question 11. Jury
Question 11, however, is not a fraud question. Rather, it asks whether
ACCD=s
fraud caused the delays. (The jury=s
answer of Ayes@
prevents ACCD from relying on its no-damages-for-delay clause.) Nowhere in
Browning=s
petition does it assert a cause of action for fraud. Also, contrary to
ACCD=s
assertion, the damages the jury assessed against ACCD are based solely on
breach of contract. Because
fraud is not a cause of action in the case, there are no fraud damages
from which to find ACCD immune. Accordingly, we overrule ACCD=s
immunity-from-liability issue. Duty for Design
Errors The
jury assessed $2,624,802.51 in damages against ACCD because it found ACCD
breached the contract in several ways, including failing or refusing to
correct design errors.[1]
ACCD argues that these damages are unenforceable because the contract does
not impose a duty on ACCD for such design errors. Thus, the issue turns
upon interpretation of the contract. Interpretation
of an unambiguous contract is a question of law and we are not required to
defer to any interpretation afforded by the trial court. MCI Telecomms. Corp. v. Tex. Utils. Elec. Co., 995 S.W.2d 647, 650 (Tex. 1999);
Birnbaum v. Swepi LP, 48 S.W.3d 254, 257 (Tex. App.CSan
Antonio 2001, pet. denied). Accordingly, we review the trial court=s
construction of an unambiguous contract de novo. MCI, 995
S.W.2d at 651. Texas
law provides: A[U]nless so expressed in the contract, an owner that
furnishes a prime contractor plans and specifications is not a guarantor
of the sufficiency of the plans and specifications.@
See City of San Antonio v. Forgy, 769
S.W.2d 293, 297 n.1 (Tex. App.CSan
Antonio 1989, writ denied) (citing Lonergan v. San Antonio Loan & Trust
Co., 101 Tex. 63, 104 S.W. 1061 (1907)). Texas law further
provides: If
there be any obligation resting upon the [owner], as guarantor of the
sufficiency of the specification, it must be found expressed in the
language of the contract, or there must be found in that contract such
language as will justify the court in concluding that the parties intended
that the [owner] should guarantee the
sufficiency of the specifications to [the
contractor]. Lonergan, 104 S.W. at 1066.
Here,
the contract between ACCD and Browning provides: The
Contractor shall carefully study and compare the Contract Documents with
each other and with information furnished by the Owner pursuant to
Subparagraph 2.2.2 and shall at once report to the Architect errors,
inconsistencies or omissions discovered. The Contractor shall not be
liable to the Owner or Architect for damage resulting from errors,
inconsistencies or omissions discovered. The Contractor shall not be
liable to the Owner or Architect for damage resulting from errors,
inconsistencies or omissions in the Contract Documents unless the
Contractor recognized such error, inconsistency or omission and failed to
report it to the Architect. If the Contractor performs any construction
activity knowing it involves a recognized error, inconsistency or omission
in the Contract Documents without such notice to the Architect, the
Contractor shall assume appropriate responsibility for such performance
and shall bear an appropriate amount of the attributable costs for
correction. This
paragraph indicates that ACCD was to be responsible for design errors.
Additionally, it is nearly identical to language that the Fourteenth Court
of Appeals found Aintended
that the owner guarantee the sufficiency of the specifications.@
N. Harris County Junior Coll. Dist. v. Fleetwood Constr. Co., 604 S.W.2d 247, 253 (Tex. Civ. App.CHouston
[14th Dist.] 1980, writ ref=d
n.r.e.). In Fleetwood, the contract
provided: The
Contractor shall carefully study and compare the Contract Documents and
shall at once report to the Architect any error, inconsistency or omission
he may discover. The Contractor shall not be liable to the Owner or the
Architect for any damages resulting from any such errors, inconsistencies
or omissions in the Contract Documents. Id. Because
the contract in this case contains language indicating ACCD had a duty to
Browning for design errors, we overrule ACCD=s
second issue. Agency The
jury instructions in this case provided: AACCD
means Alamo Community College District, the owner of the project and the
defendant in this lawsuit, and its agents, including Beaty Sanders Chesney
Morales & Fly, a Joint Venture, the architects on this project.@
ACCD argues that the trial court erred in so instructing the jury because
1) Browning did not plead the architects as agents; and 2) it was improper
for the trial court to instruct the jury that the architects were agents
as a matter of law rather than submitting agency as a fact question
for the jury to answer. We
review whether an instruction properly instructed the jury on a matter of
law de novo. M. N. Dannenbaum,
Inc. v. Brummerhop, 840 S.W.2d 624,
631 (Tex. App.CHouston
[14th Dist.] 1992, writ denied) (asserting that an instruction is improper
if it misstates the law); Villareal v.
Reza, 236 S.W.2d 239, 241 (Tex. Civ.
App.CSan
Antonio 1951, no writ) (finding an instruction that fails to instruct the
jury on the burden of proof issue erroneous). A
party alleging agency has the burden of pleading and proving the agency
relationship. S. County Mut. Ins. Co. v.
First Bank & Trust, 750 S.W.2d 170, 172 (Tex. 1988). If no special
exceptions are filed, we must construe the pleadings liberally in favor of
the pleader. Horizon/CMS Healthcare Corp. v. Auld, 34 S.W.3d 887,
897 (Tex. 2000). Here, Browning alleged AACCD
and its Architect@
in its petition. This language shows that Browning was seeking to hold
ACCD liable for the wrongful acts of its architects. Moreover, ACCD failed
to file special exceptions, so we must construe the pleadings liberally in
favor of the pleader. Id. Accordingly, we find that Browning did
plead the architects as agents. Second,
Texas law provides that whether an agency relationship exists is a
question of fact unless the evidence establishes the relationship as a
matter of law. Bhalli v. Methodist
Hosp., 896 S.W.2d 207, 210 (Tex. App.CHouston
[1st Dist.] 1995, writ denied). A court can determine, as a matter of law,
the existence of an agency relationship from an agreement between the
parties. Ward v. Prop. Tax Valuation, Inc., 847 S.W.2d 298, 300
(Tex. App.CDallas
1992, writ denied). An
Aagent@
is one who is authorized by a person or entity to transact business or
manage some affair for the person or entity. Tenn.‑La. Oil Co. v.
Cain, 400 S.W.2d 318, 325 (Tex. 1966). Here, the contract provides
that the architects are authorized to do the following: 1) review and
certify amounts due the contractor and issue certificates for payment in
such amounts; 2) reject work that does not conform to contract documents;
3) review and approve or take other action on submittals, including shop
drawings, product data, and samples; 4) prepare change orders and
directives; 5) conduct inspections to determine dates of substantial and
final completion; and 6) interpret and decide matters concerning
performance under the contract and concerning the requirements of the
contract. Because the contract provides that the architects are authorized
to act on behalf of ACCD, the contract establishes the agency relationship
as matter of law. Accordingly, we overrule ACCD=s
third issue. Active
Interference by Agents Jury
Question 7 provides: AWere
the delays encountered by Browning on the Project caused by the active
interferences by ACCD or its agents and/or Architects?@
The jury=s
answer of Ayes@
prevents ACCD from relying on its no-damages-for-delay
clause. ACCD
argues that this question is improper because the law does not extend the
Aactive
interference@
exception to agents. The case ACCD cites for this proposition, however,
deals with two issues: 1)
whether the requirement of conspicuousness applies to no-damages-for-delay
clauses (the court said no); and 2) whether a judgment predicated on
exceptions to a damages-for-delay clause can stand when none of the
specific exceptions were presented to the jury either by issue or
instruction (again, the court said no). Green Int=l, Inc.
v. Solis, 951
S.W.2d 384, 386-88 (Tex. 1997). The case does not address whether the
Aactive
interference@
exception applies to acts of the agent. Thus, ACCD has failed to present
any authority for its argument. Because
ACCD has offered (and we find) no legal authority for its argument, we
overrule this issue on appeal.
Insurance ACCD
next argues that the trial court erred in allowing Browning to make
references to the architect=s
insurance coverage. ACCD points us to two places in the record where
insurance is allegedly mentioned.[2] ACCD failed, however, to object in either instance.
Accordingly, it has waived error. Tex. R. App. P. 33.1 (a)(1). ACCD suggests that these references to insurance are
incurable error, implying it did not have to object. This proposition,
however, does not square with Texas law. See Dennis v. Hulse, 362 S.W.2d 308, 309 (Tex. 1962) (holding
that the mention of insurance does not always require reversal and that
the party appealing must also show that it probably caused the rendition
of an improper judgment); Meyers v. Searcy, 488 S.W.2d 509,
514-15 (Tex. Civ. App.CSan Antonio 1972, no writ) (following
Dennis). Because ACCD has waived any complaint to the alleged
mentions of insurance, and because mention of insurance is not incurable
error, we overrule this issue on appeal. Liability to
Subcontractors ACCD argues that it was error for the trial court to
submit Jury Question 3(b)(4). This question asked the jury to assess
damages for Browning=s liability to its subcontractors: AWhat sum of money, if any, paid now in cash, would
fairly and reasonably compensate Browning for its . . . liability to
subcontractors incurred by Browning to perform its work on the
Project?@ The jury answered: A$915,435.09.@ ACCD argues that it was error for the trial court to
submit this question for three reasons: 1) ACCD is not in privity with the subcontractors; 2) The subcontractors
did not assign their causes of action to Browning; and 3) Texas law does
not recognize Apass-through@ claims. Browning does not dispute the first two
arguments. Thus, the issue here is whether Texas law recognizes
pass-through claims. The submission of a theory of recovery or defense is
a question of law and is reviewable de
novo. Cont=l Cas. Co. v.
Street, 379 S.W.2d 648, 651 (Tex.
1964). In Interstate Contracting Corp. v. City of
Dallas, 320 F.3d 539, 543-44 (5th Cir. 2003), the Fifth Circuit
certified to the Texas Supreme Court the question of whether Texas
recognizes pass-through claims. Id. The court explains: In
breach of contract actions against the federal government, prime
contractors have long been permitted to present
subcontractors= claims
on a pass‑through basis against the government, even though the no‑privity rule has barred subcontractors from recovering
directly against the government. Similarly, a number of states have
permitted pass‑through claims in cases involving state government
entities. However, the specific contours and requirements for pass‑through
claims vary from jurisdiction to jurisdiction. For example, some states
permit pass‑through claims only when there is a liquidating agreement in
place that meets certain requirements, while other states permit
pass‑through claims when the prime contractor pleads the suit on behalf of
the subcontractor and has an obligation to render the recovery to the
subcontractor. The burden of proof also varies among jurisdictions.
Accordingly, in light of the absence of Texas authority on these issues
and the varied interpretations of these issues by other state courts, we
certify the following questions to the Supreme Court of Texas and the
Honorable Justices thereof. Id.
(footnotes
omitted). As the Fifth Circuit notes, federal law as well as a significant number of states recognize pass-through claims. Id.; see Severin v. United States, 99 Ct. Cl. 435 (1943) (holding that in a breach of contract claim against the federal government, a prime contractor may recover damages on behalf of its subcontractor only if the prime contractor suffered actual damages); see also J. L. Simmons Co. v. United States, 304 F.2d 886, 888 (Ct. Cl. 1962) (holding that a prime contractor suffers actual damages if the prime contractor 1) has reimbursed its subcontractor for the subcontractor=s damages; or 2) remains liable for such reimbursement in the future); see also Folk Constr. Co. v. United States, 2 Cl. Ct. 681, 685 (1983) (limiting the application of the Severin doctrine and holding that A[a] prime contractor is precluded from maintaining a suit on behalf of its subcontractor only when a contract clause or release completely exonerates the prime contractor from liability to its subcontractor | |