ECONOMIC LOSS RULE(S): Sharyland Water Supply Corp. v. City of Alton (Tex 2011)

OPINION
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Sharyland Water Supply Corp. v. City of Alton (Tex. 2011)(Opinion by Chief Jefferson)
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FULL TEXT OF OPINION [ forthcoming ]

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OPINION OF THE COURT OF APPEALS BELOW: Court of Appeals
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Also see: Texas Causes of Action | 2011 Texas Supreme Court Opinions | 2011 Tex Sup Ct Per Curiams

Sharyland Water Supply Corp. v. City of Alton,
No. 09-0223 (Tex. Oct .21, 2011) (Opinion by Jefferson)
SHARYLAND WATER SUPPLY CORPORATION v. CITY OF ALTON, CARTER & BURGESS, INC., CRIS
EQUIPMENT COMPANY, AND TURNER, COLLIE & BRADEN, INC.; from Hidalgo County; 13th district (13-06-
00038-CV, 277 SW3d 132, 02-05-09)
The Court affirms in part, reverses and renders in part, and reverses and remands in part the court of appeals'
judgment.
Chief Justice Jefferson delivered the opinion of the Court
View Electronic Briefs 09-0223 SHARYLAND WATER SUPPLY CORP. v. CITY OF ALTON (including multiple
amicus briefs)

EXCERPTS FROM THE TEXAS SUPREME COURT'S OPINION

A water supply corporation sued a city and the city’s contractors after the contractors
installed sewer lines above portions of the corporation’s water system. A jury found that the city
breached its contract with the water supply corporation and that the contractors were negligent. The
court of appeals disagreed, rendering a take-nothing judgment against the water supply corporation,
except as to its claim against the city for attorney’s fees related to its declaratory judgment action.
We agree that the water supply corporation cannot recover against the city, but we disagree that
attorney’s fees may be awarded. Thus, we affirm in part and reverse in part the judgment as to the
city. Because we conclude that the economic loss rule does not preclude a negligence claim
against the contractors, however, we affirm in part and reverse in part the court of appeals’ judgment
with respect to the contractors. We remand this case to the court of appeals to consider issues it did
not reach.

Conclusion

We reverse the court of appeals’ judgment with respect to the contractors, because the
economic loss rule does not preclude Sharyland’s negligence claim against them. We also reverse
and render that part of the court of appeals’ judgment regarding Sharyland’s attorney’s fees against
Alton for the declaratory judgment claim. We affirm the remainder of the court of appeals’
judgment with regard to Sharyland’s breach of contract claim against Alton; Sharyland’s third party
beneficiary claim against the contractors; Sharyland’s claim for attorney’s fees against the
contractors and Alton; joint and several liability against the contractors; and Sharyland’s claim for
equitable relief. Id. at 157. We remand to that court to address the issues it did not reach. We thus
affirm in part, reverse and render in part, and reverse and remand in part the court of appeals’
judgment. TEX. R. APP. P. 60.2(a),(c), (d)