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Zachry Construction Corporation v. Port of Houston Authority of Harris County, Texas

Following a complex three-month jury trial against the Port of Houston Authority—and a resulting jury verdict for Gibbs & Bruns client Zachry Construction Corporation—the trial court entered final judgment on April 28, 2010 awarding Zachry $23.4 million in damages.  This breach of contract lawsuit arose from the Port’s last-minute rejection of a contractually approved construction method Zachry intended to use to build a 2000-foot wharf facility. 

 

Zachry began construction on a 1660-foot wharf at the Port’s Bayport terminal in June 2004, targeting a partial completion date of February 2006 in preparation for a specialized crane delivery from China.  Once construction was well underway, Port officials realized they underestimated the size of the wharf required and determined it needed to be 332 feet longer than originally planned.

 

Zachry originally intended to build the wharf under dry conditions by constructing a frozen soil wall around the facility. The wall would act as a temporary coffer dam allowing Zachry to construct the wharf using conventional methods.  Because it became necessary to expand the wharf mid-construction, Zachry proposed to divide the project in half using a frozen soil cutoff wall.  The frozen cutoff wall would permit Zachry to achieve a partial completion of the wharf that would accommodate the crane delivery from China and allow construction to continue on the rest of the wharf (including the 332-foot extension) under dry conditions.

 

After accepting Zachry’s proposal to build the additional section, the Port subsequently rejected Zachry’s planned construction methodology.  As a result, Zachry was precluded from using a frozen soil wall to excavate the site under dry conditions and was forced to use a more traditional excavation technique to be ready for the delivery from China.  The change in methodology caused Zachry substantial cost and time overruns.  At trial, the Port denied it breached the contract and alleged that Zachry’s own inefficiencies caused Zachry to change its construction methodology.

 

The three-month trial was heard before Harris County Civil District Judge Mike Engelhart.  Following three days of deliberation, the jury returned with a resounding verdict for Zachry, awarding the company over $18 million in damages.  The court’s final judgment of $23.4 million includes sums that the Court found the Port improperly withheld as a matter of law, as well as prejudgment interest.

 

American Lawyer Media included this verdict as one of the top Texas contract verdicts of 2010. 

Although the judgment was reversed by the Fourteenth Court of Appeals, the Texas Supreme Court on August 29, 2014, issued its judgment reversing the decision and remanding the case to the Court of Appeals for further proceedings.  The case currently remains in the Supreme Court pending the resolution of the Port’s motion for rehearing.


The Gibbs & Bruns trial team includes Robin Gibbs, Jennifer Horan Greer, Sydney Ballesteros, Mike Absmeier and Amanda Nathan.  Zachry is also represented by Brandon Allen of Reynolds Frizzell LLP.