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Is a failure to procure the right type of insurance for a construction contract a material breach of contract?  If so, what are the damages arising from that breach and are they actual or consequential?  A recent opinion from the Houston Court of Appeals answers these important questions. In Totalenergies Petrochemicals & Refining USA, Inc., v. Kinder Morgan Petcoke, LP, et al., an employee of Kinder Morgan Petcoke (Kinder Morgan), Gary Counts, died at a refinery owned by Totalenergies Petrochemicals & Refining (Total).  Counts’ estate filed suit against Kinder Morgan, Total and s

Recently, in a case in Alabama, an insurance company was able to deny coverage because the builder did not timely report the claim.  In American Builders Insurance Company v. Riverwood Construction, LLC., the issue was whether Riverwood Construction, the contractor and policyholder/insured, had to timely report lawsuits to its insurance carrier. Riverwood was sued in two residential cases in Alabama in 2017 and immediately hired an attorney to defend the case. But, Riverwood apparently failed to send notice of these lawsuits to its insurance carrier, American Builders, until 2019.  Once it

What happens when a clause in a construction purchase order conflicts with a similar, but not identical clause in a quote made part of the order?  The Houston Court of Appeals recently addressed this issue in the context of dueling arbitration clauses, voiding both of them. In Links Constr., LLC v. United Structures of America, Inc., the University of North Texas hired Links Construction, LLC (“Links”) to oversee construction of an indoor practice facility. Links subcontracted with United Structures of America (“United”) to design and provide materials for the roof using an executed P

Texas public policy has long favored freedom of contract. By in large, Texas courts will uphold what the parties bargained for in the contract. Of course, the parties negotiating the contract are in the best position to allocate risk as they see fit. However, there are several Texas statutes that cannot be waived or otherwise altered, thereby overriding, to some extent, the parties’ freedom of contract. A few notable examples of such “statutory overrides” impacting the construction industry are discussed below. Shortening the Statute of Limitations Under Texas Civil Practice and Remedies

In a recent opinion, the Texas Supreme Court reaffirmed the law school warhorse of Hadley v. Baxendale, an 1865 case from England, holding that consequential damages must be foreseeable to be recoverable.  In Signature Industrial Services v. International Paper Co., the principal issue was whether Signature Industrial Services (Signature) was entitled to recover consequential damages for breach of a construction contract. Signature had a contract with International Paper (IP) to upgrade a slaker—a large vessel that recycles chemicals used to make paper—at IP’s paper mill in Orange, Texa