A Texas state appeals court has reversed the ruling of a lower court, siding with the maker of artificial sports fields in a breach of warranty case involving a public high school district.
The appeal dispute involved the New Braunfels Independent School District (NBISD) and FieldTurf USA, Inc. (FieldTurf), concerning the installation of an artificial sports field at one of its stadiums in 2009. FieldTurf’s “Duraspine” field was marketed to be more durable and long-lasting than other fields.
The 8-year warranty provided as follows:
“FieldTurf warrants that if FieldTurf FTOM 1F for football/soccer synthetic turf proves to be defective in materials or workmanship, resulting in premature wear, 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 charge, to 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 the exclusive remedies available under this warranty, and all other remedies or recourses which might otherwise be available are hereby waived by the Buyer, 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.”
By 2011, the fibers making up the field began “splitting” and “breaking off,” according to the school district. The issues with the field were particularly noticeable when the area received significant rain because the “fibers would pool on the sideline. You could see the volume of them.” Moreover, the logo in the center of the field “had started to come undone.” The head football coach contacted FieldTurf to report the problems with the field. He also sent an email in September 2011 to Bryan Cox, NBISD’s main contact with FieldTurf, and to the regional sales manager. In that email, the coach noted the splitting and broken fibers and said the players were tracking a lot of the broken fibers into the fieldhouse.
The coach’s email was sent to another employee of FieldTurf, Chuck Bailey. That email correspondence indicated that other FieldTurf fields were showing signs of similar problems to those at issue in this case. The coach sent additional emails about a month later, informing FieldTurf of more broken fibers. He included pictures in the emails. FieldTurf notified its legal department, and an employee conducted a site review in early November 2011. The report included conclusions that the white fibers were splitting and shedding and that the green fibers were splitting but “stable.” The report was not provided to NBISD until after it filed suit. FieldTurf sent NBISD a letter, dated November 30, 2011, stating in part, “While there is some early minor field fiber fibrillation on the Non-Green fibers[,] we do not feel that the fibers are exhibiting any playability or hazardous concerns at this time and will continue to monitor the field going forward. Another site evaluation will be scheduled during the spring of 2012.”
According to NBISD, the matting and breaking of fibers continued. The football coach inquired of FieldTurf what options were available to clean up the accumulating broken fibers. Of significance, however, NBISD never requested that FieldTurf “repair or replace” the field. FieldTurf provided options and NBISD chose the option to pay $5,500 for additional maintenance under a service program. That service occurred in October 2012, but the condition of the field did not improve. FieldTurf conducted another site review in February 2013. A report generated after that review concluded that the “[w]hite fibers are degrading rapidly” and the “[g]reen fibers are showing uniform wear for the field.” FieldTurf did not provide a copy of that report to NBISD. A second maintenance service was performed in August 2013. The field still did not improve but rather, the broken fibers now appeared in the fieldhouse and on the clothes and shoes of those on the field. In February 2014, while the warranty period was still valid, NBISD filed suit against FieldTurf alleging breach of contract, breach of express and implied warranty, product liability, and negligent misrepresentation/fraud. It requested damages “for the repair and replacement of the property damage from the defective work” and also sought attorney’s fees. It also sought exemplary damages for the alleged fraud but did not seek specific performance of the warranty provision.
In the summer of 2016, again while the warranty period was still valid, NBISD replaced the field at its own expense – a cost of $378,507.00.
Meanwhile, after a 2017 trial, a jury found FieldTurf had failed to comply with an express warranty and that its failure was a producing cause of damages to NBISD. The jury also found NBISD had provided FieldTurf reasonable notice and opportunity to cure the breach. NBISD did not request an issue as to whether circumstances caused an exclusive remedy, if any, to fail of its essential purpose. The jury awarded NBISD $251,000 as the cost to repair or replace the field as damages for a breach of warranty.
Both sides appealed. Of note in the article herein, FieldTurf made fine arguments on appeal: (1) NBISD is barred from recovering any damages under the Texas Uniform Commercial Code because the warranty made repair or replacement the exclusive remedies available; (2) NBISD could not recover any monetary damages for breach of warranty because it failed to plead, prove, or obtain a jury finding that the warranty failed of its essential purpose under section 2.719(b); (3) NBISD’s failure to produce any evidence of breach of warranty damages precluded its recovery for breach of warranty; (4) NBISD cannot recover a judgment based on replacement cost because it lacked proof that those damages were reasonable and necessary; and (5) at a minimum, FieldTurf was entitled to a settlement credit and a reduced judgment amount.
By far, the most important issue was the first argument. Of note, the language of the warranty provides that, at “FieldTurf’s option, [it will] either repair or replace the affected area without charge, to the extent required to meet the warranty period (but no cash refunds will be made) . . . .” The warranty further provides that “[t]his warranty is limited to the remedies of repair or replacement, which shall constitute the exclusive remedies available under this warranty, and all other remedies or recourses which might otherwise be available are hereby waived by the Buyer” and “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.” FieldTurf argues that from the plain language of the warranty and section 2.719, it is clear that NBISD has two remedies: repair or replacement of the field. Accordingly, FieldTurf contends the trial court erred in denying its motion for judgment that NBISD “take nothing” on its claim for monetary damages.
NBISD counterargues that it is not limited to the remedy of “repair or replacement” because such a remedy would fail of the essential purpose of the warranty. Section 2.719 states that through a limited warranty, the parties may “limit or alter the measure of damages recoverable . . . as by limiting the buyer’s remedies . . . to repair or replacement of non-conforming goods or parts.” § 2.719 (a)(1). According to NBISD, it is clear that seeking “damages” is distinct from seeking “specific performance” of a contractual obligation as set forth in section 2.711 and section 2.716, which treat specific performance as a completely different remedy from damages. §§ 2.711; 2.716. NBISD argues, citing Wal-Mart Stores, Inc. v. Forte, 497 S.W.3d 460, 465 (Tex. 2016), that outside the Texas UCC, “damages” is specifically a reference to monetary remedies. Consequently, the only effect of section 2.719, NBISD contends, is that it allows the parties to elect a different “measure of damages” in lieu of the default measure based on difference in market value. Therefore, it asserts, a claimant can still elect the default measure of damages if it can demonstrate the agreed limited warranty fails of its essential purpose.
The court was unmoved.
It wrote that the warranty “contains the type of language courts have held to establish an exclusive or sole remedy provision.” See Equistar Chems., L.P., 579 S.W.3d at 522 (citing PPG Indus., Inc. v. JMB/Houston Ctrs. Ltd. P’ship, 146 S.W.3d 79, 98, 101 (Tex. 2004)
“We thus find NBISD’s claim for breach of warranty was limited to repair or replacement of non-conforming goods and that the trial court erred in denying FieldTurf’s motion for judgment that NBISD ‘take nothing’ on its claim for monetary damages,” the appeals court wrote.
Argument two, in which FieldTurf argued that NBISD “could not have recovered any monetary damages for breach of warranty because it failed to plead, prove, or obtain a jury finding that the warranty failed of its essential purpose under section 2.719 of the Texas UCC” was similarly pertinent. “NBISD responds that there was no need to find the warranty failed of its essential purpose because NBISD sought the measure of damages provided under the warranty.
“Based on our analysis of FieldTurf’s first issue, we find that for NBISD to recover damages for breach of warranty, it was required to show the exclusive or limited remedy failed of its essential purpose. § 2.719(b). NBISD candidly admits it did not prove that the exclusive or limited remedy failed of its essential purpose because its position was it was not required to do so. As such, it presented no evidence that it had requested repair or replacement of the field or that FieldTurf had refused such requests. It presented only evidence of FieldTurf’s offer of and NBISD’s acceptance of service under a ‘maintenance plan.’ Furthermore, NBISD replaced the field through another company at its own expense in 2016—at a time when demand could have been made on FieldTurf to perform according to its warranty. Had NBISD presented evidence proving that the exclusive or limited remedy failed of its essential purpose, the outcome of this matter might have been different. However, based on the facts of this case, we are constrained to sustain FieldTurf’s second cross-issue.”
New Braunfels Indep. Sch. Dist. v. FieldTurf USA Inc.; Ct. App. Texas, Seventh District, Amarillo; No. 07-20-00308-CV; 11/12/21
Attorneys of Record: (For New Braunfels Independent School District, Appellant) Valerie L. Cantu, Matthew R. Pearson, Brendan K. McBride. (For Field Turf USA, Inc., Appellee) Thomas C. Riney, E. Leon Carter, Joshua Bennett, David M. Prichard, David R. Montpas.
