By Mari Bryn Dowdy, Senior Associate, of Segal McCambridge Singer & Mahoney, Ltd.
The Texas Court of Appeals recently held that the plain language of a warranty for a synthetic-turf football field limited the available remedies for breach of the warranty to repair or replacement of the field as opposed to the cost of a replacement incurred by a school district after the manufacturer repeatedly refused to replace the field.[1]
As part of the construction of its new football stadium, Pleasant Grove Independent School District (“Pleasant Grove”) hired Altech, Inc. (“Altech”) as the general contractor. In turn, Altech hired FieldTurf USA, Inc. (“FieldTurf”) to manufacture and provide the field. The field’s lifespan was warranted for eight years, but the field began degrading within only five years. Unbeknownst to Pleasant Grove, as early as 2006, key FieldTurf executives were aware that the Duraspine turf was splitting and falling apart faster than expected.[2] So, after multiple inspections, repeated complaints, and several denied requests for replacement, Pleasant Grove “declared the turf struggle” in September 2015 and sued Altech for breach of warranty and FieldTurf for breach of warranty and fraud.[3] In May 2016, Pleasant Grove hired another field supplier to replace its football field at a cost of over $300,000.
At trial, Pleasant Grove asked for the turf’s replacement cost as damages. Pleasant Grove did not introduce any evidence of the difference in market value between the field it received and the field it was promised. This decision proved fatal to its breach of warranty claim on appeal. In the end, the jury found that FieldTurf breached its warranty and awarded Pleasant Grove $175,000.00 in actual damages. Both parties appealed and the case made its way up to the Supreme Court of Texas before it was remanded for the second time to the Sixth Court of Appeals.
Seven years after the lawsuit was filed, the Sixth Court of Appeals reversed the jury’s award of damages and rendered a take-nothing judgment in favor of FieldTurf. According to the Court, the clear language of FieldTurf’s warranty provided the exclusive remedy for breach of the warranty, specifically, the repair or replacement by FieldTurf, but not the cost to repair or replace the field. The Court also held that the jury was properly instructed on damages and that Pleasant Grove failed to produce evidence to support the jury’s award of damages, (i.e., the difference in market value between the field it received and the field it was promised). Therefore, judgment was reversed. Despite FieldTurf’s refusal to replace its defective synthetic-turf field, Pleasant Grove was left with the expense of replacing the field.
Examining the history of this case—including how the turf war between Pleasant Grove and FieldTurf arose—and the recent appellate decision sheds light on what parties engaging in similar transactions and alleging similar claims should consider. From limited warranty language to proving the correct measure of damages at trial, this case illustrates many potential pitfalls to avoid in business, in construction, and in court.
The Turf War Begins
In 2009, Pleasant Grove’s governing board selected FieldTurf’s Prestige XM-60 field with Duraspine fibers as its new synthetic-turf field for the Pleasant Grove High School football field. FieldTurf provided the turf materials, but a separate subcontractor installed the materials onto the field between August and October 2009. FieldTurf’s eight-year limited warranty for the artificial-turf field provided the following:
FieldTurf warrants that if Prestige XM-60 for football, soccer, synthetic turf proves to be defective in material or workmanship, resulting in a loss of pile height greater than 50%, during normal and ordinary use of the Product for the sporting activities set out below or for any other uses for which FieldTurf gives its written authorization, within 8 years from the date of completion of installation, FieldTurf will, at FieldTurf’s option, either repair or replace the affected area without chargeto the extent required to meet the warranty period (but no cash refunds will be made) . . . This warranty is limited to the remedies of repair or replacement, which shall constitute exclusive remedies available under this warranty, and all other remedies or recourses which might otherwise be available are hereby waived by [Pleasant Grove]. FieldTurf will have no other obligations or liability for damages arising out of or in connection with the use or performance of the product including but without limitation, damages for personal injury or economic losses.
Later, in the summer of 2014, Pleasant Grove notified FieldTurf that the field was degrading, and its fibers were becoming brittle, causing loss of traction and color loss. A FieldTurf representative walked and photographed the field shortly thereafter. During an alleged “off the record” conversation between the FieldTurf representative and Pleasant Grove’s athletic director and maintenance director, the FieldTurf representative admitted the field was in poor condition and that multiple FieldTurf fields were failing at a large rate. Pleasant Grove’s directors alleged that the representative suggested they “raise a fuss about [FieldTurf’s] product” because the “the squeakiest wheel [was] going to get attention.” After continued complaints from Pleasant Grove, a FieldTurf designated Duraspine field evaluator inspected the field and found the field showed signs of accelerated wear in the fiber colors and had significant amounts of loose, broken fibers. By the end of 2014, Pleasant Grove demanded that FieldTurf replace the field pursuant to the warranty. However, in January 2015, FieldTurf Customer Service Director responded and stated that FieldTurf’s inspection of the field found it to be in “fair/good condition.” FieldTurf believed the issues were merely cosmetic and presented no playability or safety hazards, and that the field merely needed a “laymor scrape” to remove some of the rubber infill. Pleasant Grove rejected the laymor scrape as an acceptable solution and demanded that FieldTurf honor its warranty and replace the field. FieldTurf refused to replace the field, claiming the fiber degradation was “predominately a problem of appearance.” Consequently, Pleasant Grove decided to file suit.
Procedural History
Prior to trial, the district court granted summary judgment in favor of Altech and partial summary judgment in favor of FieldTurf as to Pleasant Grove’s fraud claims without specifying the grounds on which it was granting the motions or whether it was granting the motions on traditional grounds or no evidence grounds. Pleasant Grove’s remaining claim for breach of warranty against FieldTurf proceeded to trial where the jury found that FieldTurf breached its warranty and awarded Pleasant Grove damages. Both FieldTurf and Pleasant Grove appealed. On appeal, the Court reversed Altech’s summary judgment against Pleasant Grove as to the breach of warranty claim, affirmed FieldTurf’s partial summary judgment against Pleasant Grove, and remanded the case for a new trial.
The parties appealed again to the Supreme Court of Texas, which affirmed the Sixth Court of Appeal’s holding dismissing Pleasant Grove’s fraud claims, reversed the judgment in part, reinstated the trial court’s award of summary judgment in favor of Altech, reversed the appellate decision to remand the case for a new trial back to the Sixth Court of Appeals so that the previously unaddressed points of error could be considered.
Texas Court of Appeals Round Two
On remand for the second time, the Sixth Court of Appeals considered FieldTurf’s challenges to the jury’s verdict awarding Pleasant Grove damages for its breach of warranty claim and Pleasant Grove’s argument that the jury was erroneously instructed on the measure of damages. As a part of its review, the Court began its analysis with the plain language of FieldTurf’s warranty.
Warranty Language: Plain and Simple.
FieldTurf argued that because Pleasant Grove’s sole remedy under the warranty and the Texas Uniform Commercial Code (UCC) was repair or replacement of the field, Pleasant Grove was not entitled to recover money damages and FieldTurf’s motion for judgment notwithstanding the verdict (“JNOV”) should be granted. The Court of Appeals examined the language in the warranty and found that the parties had agreed that repair or replacement were the “exclusive” and “sole” available remedies for a breach of warranty and that Pleasant Grove “waived” all other remedies. The Court noted that other Courts of Appeals and the Supreme Court of Texas have held similar contractual language as establishing an enforceable, exclusive remedy. Pleasant Grove attempted to argue that the warranty language meant the parties agreed to change the “measure of damages recoverable” from Tex. Bus. & Com. Code Ann. § 2.719(a)’s default measure based on the difference in market value to “the cost to repair or replace the field.” However, the Court held that under the plain terms of the warranty, Pleasant Grove’s remedy for FieldTurf’s breach of warranty was limited to repair or replacement of the field, unless it pled, proved, and obtained a jury finding on an exception under Tex. Bus. & Com. Code Ann. § 2.714 that would support damages. Moving forward, the Court then considered Pleasant Grove’s contention that the trial court incorrectly instructed the jury regarding the measure of damages.
Jury Instructions: It’s Not About the Cost.
Pleasant Grove argued that the trial court erred by refusing its proposed instruction that the measure of damages was the cost of replacing the field. Pleasant Grove requested an instruction that “[r]eplacement cost” is “[t]he cost to repair or replace the field with a field constructed from materials of good quality.” The Court rejected this argument because the remedy for a breach of an express warranty under Texas law is first found in the plain language of the warranty and the exclusive remedy for FieldTurf’s warranty did not allow for money damages in the event of a breach. The Court went a step further and considered the exception of when an exclusive remedy, like FieldTurf’s, fails of its essential purpose under UCC Section 2.719(b). The UCC allows the buyer to recover money damages under that exception. Specifically, “the difference at the time and place of acceptance between the value of the goods accepted and the value they would have had if they had been as warranted.”[4] Accordingly, even if Pleasant Grove had pled, proved, and obtained a jury finding that FieldTurf’s express, exclusive warranty had failed of its essential purpose, the only damages Pleasant Grove would be entitled to are those under Section 2.714(b) and, according to the Court of Appeals, the language of Section 2.714(b) closely tracked the instruction provided to the jury.[5] Pleasant Grove further argued that it was entitled to a measure of damages that compensated it for the cost of replacing the field. In support, it relied on general breach-of-contract law to assert its damages should have been “expectancy” damages, which provide the “benefit of the plaintiff’s bargain.” The Court again rejected Pleasant Grove’s argument, finding the breach-of-contract law relied on by Pleasant Grove to be inapplicable to the breach of warranty case at hand, noting that Pleasant Grove failed to provide, and the Court was aware of any breach of warranty case where the proposed instruction was given. Ultimately, because the instruction accurately stated the applicable breach of warranty law, was supported by the pleadings, and assisted the jury in answering the damage question, the Court of Appeals concluded that the trial court was within its discretion to instruct the jury as to the Section 2.714(b) measure of damages.
Damages: Prove It or Lose It.
Lastly, FieldTurf argued that it was entitled to JNOV because Pleasant Grove failed to produce evidence of its damages. The Court agreed, referring to Texas law establishing that even in the face of an exclusive, limited remedy for breach of warranty, a party may still recover money damages under Article 2 of the UCC for breach of warranty “[w]here circumstances cause an exclusive or limited remedy to fail of its essential purpose.” Specifically, a party seeking money damages in contravention of the remedy provided for in the warranty must plead and prove that the warranty failed its essential purpose and must also seek a jury finding on the issue.[6] However, because the Court found that Pleasant Grove did not produce evidence “to support the jury’s damages award,” the Court did not consider whether Pleasant Grove had pled, proved, and obtained a jury finding that the warranty failed of its essential purpose. Therefore, because Pleasant Grove did not provide any evidence of the difference in the field’s market value at the time of delivery, the Court found that Pleasant Grove’s claim for breach of warranty failed as a matter of law and rendered a take-nothing judgment in favor of FieldTurf.
Lessons From the Field
On August 15, 2022, Pleasant Grove filed a petition for review to the Supreme Court of Texas. Today, Pleasant Grove is left with the cost of having to replace its own football field, at least eight years’ worth of attorneys’ fees incurred in the legal battle against FieldTurf, and likely much regret for the decisions made thirteen years earlier. Those decisions serve as a cautionary tale for both end-users and attorneys in similar types of transactions and lawsuits. When purchasing and installing goods or equipment that are expected to undergo significant wear and tear, carefully review your contract and warranty to confirm if you are limited to dealing with only the seller for repair or replacement rather than making the repairs on your own. If sellers have concerns that the warranty is insufficient to properly protect them, they should consult an attorney and negotiate the terms of the warranty. Attorneys handling warranty cases must carefully review the terms of the warranty and—whether they dispute the way in which the warranty is construed or not—ensure they include damage models that support both interpretations of the warranty.
Mari Bryn Dowdy is a senior associate attorney with Segal McCambridge Singer & Mahoney, Ltd. and is admitted in state and federal court in Texas. Ms. Dowdy litigates in an array of matters, including complex and class action litigation, product liability, construction defect and premises liability. She also works within the firm’s Sports, Entertainment and Recreation practice group.
[1] Pleasant Grove Indep. Sch. Dist. v. Fieldturf USA Inc., 2022 Tex. App. LEXIS 4532, 2022 WL 2374396.
[2] Baxter, C. and Stanmyre, M. (2016) The 100-Yard Deception. NJ Advance Media. Retrieved from: https://fieldturf.nj.com/
[3] See Pleasant Grove Indep. Sch. Dist. v. FieldTurf USA, 634 S.W.3d 84 (Tex. App.—Texarkana 2020), rev’d in part, FieldTurf USA v. Pleasant Grove Indep. Sch. Dist., 642 S.W.3d 829 (Tex. 2022).
[4] Tex. Bus. & Com. Code Ann. § 2.714(b).
[5] The jury was asked “[W]hat sum of money, if any, if paid now in [this] case would fairly and reasonably compensate [the District] for its damages, if any, that resulted from the failure to comply?” This question was accompanied by the instruction: “Consider the following elements of damages, if any, and none other. The difference at the time and place of acceptance between the value of the goods accepted and the value they would have had if they had been as warranted.”
[6] See Great Am. Prods. v. Permabond Int’l, 94 S.W.3d 675, 684 (Tex. App.—Austin 2002, pet. denied).
