Commercial Building Owner Sues Manufacturer: Breach of Express Warranty Allows Recovery of Attorneys' Fees

On April 11, 2008, the Texas Supreme Court held that attorneys' fees are recoverable in an action for breach of express warranty.

In Medical City Dallas, Ltd. V. Carlisle Corporation, --- S.W.3d ---, 2008 WL 1146752 (Tex.), 51 Tex. Sup. Ct. J. 753 (4/11/08), Medical City Dallas contracted with Charley Company of Texas to re-roof one of its buildings. Carlisle Corporation issued express warranties to Medical City, one of which was a Twenty Year Membrane Material Warranty.  The Warranty promised that the roof membrane would not deteriorate prematurely. Within months of the installation, Medical City encountered leaks in the building's roof.  Despite Charley's repeated repairs, the leaking continued.

Medical City sued Charley and Carlisle, alleging breach of the express warranties, breach of implied warranties, and negligence. A jury returned a verdict in favor of Medical City, finding that Carlisle breached its Twenty Year Membrane Warranty. Carlisle appealed. The court of appeals affirmed in part and reversed in part; and Medical City petitioned for review on sole issue of attorney fees.

The Texas Supreme Court explained that attorneys' fees are recoverable in Texas only as allowed by statute or applicable law, and are recoverable in Texas for breach of oral or written contracts. Although recognizing that breach of warranty and breach of contract are distinct causes of action with separate remedies, the Court reasoned that an express warranty is a part of the basis of a bargain and is contractual in nature. Therefore, Medical City was entitled to attorney fees.

If you would like a copy of this opinion, or more information on the topic, please contact the Business Litigators at Clouse Dunn Khoshbin LLP at info@cdklawyers.com.