Fort Worth Hotel Ltd. Partnership v. Enserch Corp.

• Decision Date: 27 July 1998
• Docket Number: No. 2-96-046-CV,2-96-046-CV
• Parties: FORT WORTH HOTEL LIMITED PARTNERSHIP d/b/a Fort Worth Hilton, Appellant, v. ENSERCH CORPORATION, d/b/a Lone Star Gas Company, Appellee.
• Court: Texas Court of Appeals

Page 746

977 S.W.2d 746

FORT WORTH HOTEL LIMITED PARTNERSHIP d/b/a Fort Worth Hilton, Appellant, v. ENSERCH CORPORATION, d/b/a Lone Star Gas Company, Appellee.

No. 2-96-046-CV.

Court of Appeals of Texas,

Fort Worth.

July 27, 1998.

Gardere & Wynn, L.L.P., Joseph W. Spence, Dallas, for Appellant.

Holman, Hogan, Dubose & Townsend, Roger Townsend, Houston, Martin, Farr, Miller & Grau, Michael Miller, Dallas, Fillmor & Harrington, H. Dustin Fillmore, Fort Worth, for Appellee.

Before LIVINGSTON, RICHARDS and HOLMAN, JJ.

CORRECTED OPINION

LIVINGSTON, Justice.

I. INTRODUCTION

The Court's March 5, 1998 opinion and judgment is withdrawn and this corrected opinion and judgment are substituted. ¹ Appellant Fort Worth Hotel Limited Partnership d/b/a Fort Worth Hilton (Fort Worth Hilton) appeals from the jury's verdict in its suit against Enserch Corporation d/b/a Lone Star Gas Company (Lone Star Gas) arising out of a gas explosion that allegedly damaged its hotel. In nine points, Fort Worth Hilton contends: (1) the jury's failure to find gross negligence is wrong as a matter of law or is against the great weight and preponderance of the evidence and manifestly unjust; (2) the trial court abused its discretion by allowing the interjection of life safety issues into the trial; (3) the trial court abused its discretion in excluding Jack Gilbert's expert report and evidence of the bias of several experts called by Lone Star Gas; (4) the trial court abused its discretion by denying Fort Worth Hilton's motion for mistrial and new trial based on Lone Star Gas's counsel's intentional and repeated misconduct; (5) the jury's award of zero damages for business interruption and/or loss of income was erroneous as a matter of law or was against the great weight and preponderance of the evidence and violates the "zero damage" rule; and (6) the trial court erred in its calculation and award of prejudgment interest.

In three cross-points, Lone Star Gas alleges the trial court erred in overruling: (1) its motion to disregard the jury findings because Fort Worth Hilton presented no legally sufficient evidence that the reasonable cost of repairs in Tarrant County was $140,298.01; (2) its motion for sanctions because Fort Worth Hilton committed perjury regarding its relationship with several experts employed by Travelers Insurance Company; and (3) its supplemental motion for sanctions because Fort Worth Hilton committed perjury regarding its claim for structural damage.

Because we find that Fort Worth Hilton failed to present evidence to show the reasonableness of repairs, we reverse the trial court's judgment and render a judgment that Fort Worth Hilton take nothing against Lone Star Gas.

II. PRELIMINARY FACTUAL BACKGROUND

In 1986, the City of Fort Worth hired L.D. Conatser Construction Company (L.D.Conatser) to do some excavation work on a water main near the Frank Kent Cadillac Building (Cadillac Building) on the outskirts of downtown Fort Worth, Texas. L.D. Conatser provided Lone Star Gas with its proposed path of excavation and Lone Star Gas sent one of its line locators, J.P. Goldsmith, to identify and mark Lone Star Gas's existing gas lines before the excavation began. Two gas lines were present near the excavation site: (1) a plastic line that ran under Lancaster Avenue to the east end of the Cadillac Building (the east line); and (2) a steel line that ran under Lancaster Avenue to the west end of the Cadillac Building (the west line).

Lone Star Gas normally relied upon its master line map system to identify and mark gas lines. However, the relevant master map, map D-243, ² did not portray the west line and, at trial, Goldsmith claimed to have remembered the whereabouts of the lines and marked them by memory without the help of the mapping system. Either way, Goldsmith failed to properly mark the west end line and L.D. Conatser encountered a gas line while working on the excavation project despite following its proposed path and the markings of Lone Star Gas. Lone Star Gas sent Goldsmith to the scene and he told L.D. Conatser it could continue on its proposed path after he determined the line did not contain any gas.

Then, at approximately 9:15 a.m. on March 16, 1986, L.D. Conatser's track-hoe snagged the west end line and pulled it from the ground despite following its proposed path and the markings of Lone Star Gas. Lone Star Gas dispatched one of its construction maintenance supervisors, W.C. Duebler, to the scene. However, Duebler stopped to have coffee with a co-worker before going to the site and, upon his arrival, he and his crew were unable to turn off the gas shutoff valve because it had been covered by asphalt and dirt and they did not have the correct tools to turn the valve. Meanwhile, gas from the ruptured line accumulated inside the Cadillac Building and, at 10:08 a.m., the Cadillac Building exploded.

The explosion sent a shockwave across Interstate 30 that blew out multiple windows in the north and south towers of Fort Worth Hilton and allegedly caused severe structural damage to the south tower of the hotel. Walker Harman, the president of Metro Hotels and part owner of Fort Worth Hilton, testified the blast: (1) caused multiple cracks in the south tower's vertical concrete columns; and (2) deflected the south tower's horizontal concrete slabs such that the floors were uneven, doors would not open, and the ceilings and walls were disjointed. The hotel remained open after the blast and some of the cosmetic damages were repaired. However, the extent of the structural damage was not immediately known and the south tower was closed down for the month of January 1987 to conduct tests on the alleged structural damage. Then, on January 8, 1988, the south tower was shut down for good on the advice of one of Fort Worth Hilton's structural engineers, James Mitchell. The entire hotel was foreclosed on September 6, 1988 and currently is operated by Ramada.

After the explosion, the owners of the Cadillac Building brought suit and obtained a judgment against Lone Star Gas in the 17 th District Court of Tarrant County. See Lone Star Gas v. F.F.F.Corp., No. 2-90-284-CV (Tex.App.--Fort Worth April 6, 1994, writ denied) (not designated for publication). The jury found that Lone Star Gas's negligence proximately caused the explosion. See id. Fort Worth Hilton filed suit against Lone Star Gas and L.D. Conatser ³ in 1988 and amended its petition after the decision in F.F.F. Corp. to ask for actual and punitive damages on grounds Lone Star Gas was collaterally estopped from contesting negligence as to the explosion.

Approximately seven years of prolonged discovery ensued, during which multiple, ancillary events occurred to shape the trial that was to come. Several events and revelations from this period are relevant for purposes of this appeal.

After the blast, Fort Worth Hilton, Lone Star Gas, L.D. Conatser, Travelers Insurance Company (Travelers) ⁴, and Metropolitan Life Insurance Company (Met Life) ⁵ all hired various structural engineering firms to inspect Fort Worth Hilton. During these respective investigations, which spanned a number of years, it was discovered that the south tower, which was completed in 1981, was not built to building code standards. Specifically, it was determined that the south tower had a deficient punching shear capacity, which meant the horizontal concrete floor slabs were susceptible to being punctured by the vertical concrete columns, a problem that could cause the slabs to deflect or collapse. Lone Star Gas seized on this information at trial, as well as the testimony of numerous former hotel employees, to argue the alleged structural damage was present before the explosion and was caused by the deficient design of the building.

Second, it was discovered that Travelers had suppressed an expert report by Jack Gilbert and hired new experts after Gilbert determined that the explosion had caused the structural damage to the hotel. Travelers apparently hired Gilbert soon after the blast, reviewed his unfavorable report (because coverage only extended to damage caused by the blast), then fired Gilbert and hired another group of experts (Travelers experts) ⁶ with the specific goal of gaining a determination that the structural damage predated the blast and therefore was not covered by the policy. Using the findings of the Travelers experts, Travelers contested coverage but agreed to enter into a December 29, 1987 litigation agreement with Fort Worth Hilton to pursue damages against Lone Star Gas while retaining Fort Worth Hilton's right to coverage under its policy for any structural damage caused by the blast. Fort Worth Hilton did not learn of Travelers' deception until years later when the Lone Star Gas case had stalled and Fort Worth Hilton and Travelers entered into arbitration to decide the coverage issue. The arbitrator found that the explosion had caused the structural damage and that the damage totaled over $4.5 million. Fort Worth Hilton sued Travelers for bad faith and later settled. None of this information was heard by the jury.

Meanwhile, in 1988, Lone Star Gas and L.D. Conatser learned of the existence of the Travelers experts and sought to discover their reports. Fort Worth Hilton moved for a protective order claiming the Travelers experts and their reports were privileged. This led to multiple motions and hearings on the discoverability of almost all experts involved in the case. In the end, the Travelers experts and numerous other experts were deemed discoverable and many testified at trial. Because of this ruling, Fort Worth Hilton filed, and the trial court granted, a motion in limine designed to prevent Lone Star Gas from commenting on the fact that the Travelers experts were hired by Fort Worth Hilton or its insurer.

During opening statements, Lone Star Gas named the various Travelers experts and told the jury they were not hired by Lone Star Gas, they did their...