# S upreme C ourt of T exas

══════════ No. 2 0

- 0079

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James Construction Group, LLC and Primoris Services

Corporation , Petitioner s ,

v

. Westlake Chemical Corporation ,

Respondent

═══════════════════════════ ══ ══════════ On Petition for Review from the Court of Appeals for the Fourteenth District of Texas

═══════════════════════════ ══ ══════════

J USTICE B OYD , joined by Justice Blacklock and Justice Huddle , dissenting in part

.

I agre e with the Court that substantial compliance can satisfy a
written

- notice requirement but oral notice cannot constitute substantial compliance. I also agree that Westlake cannot recover the costs it incurred when it replaced James because its oral notice f ailed to substantially comply with the contract’s written

- notice requirement and
the contract did not otherwise entitle Westlake to recover those costs. But I conclude that the parties’ agreement that “no claim shall be made” for consequential damages cons titutes a covenant not to sue for such2

damages. Because I would reverse the court of appeals’ holding as to the consequential

- damages provision, I respectfully dissent in part. The contract plainly stated that neither party “shall be liable to the other for any consequential .

. . damages .

. . and no claim shall be made by either [party] for such damages .” [Emphasis added.] The Court gives undue weight to the contractual languag e explicitly forbidding claims for consequential damages being “an independent clause.” Ante at ___. This grammatically inconsequential detail pales in comparison to the binding power of the conjunctive “and,” which links the waiver of consequential damage s to the covenant not to sue for such damages, ensuring both are valid, independently enforceable provisions. The Court’s rationales for its interpretation are unpersuasive. Its premier argument relies on the title of the contract section at issue (“Waiver of Consequential Damages”), ante at ___, and disregards the fact that the substantive text of the section clearly records the parties’ more expansive intent. See Enter. Leasing Co. of Hous. v. Barrios , 156 S.W.3d 547, 549 (Tex. 2004) (“Althou gh we recognize that in certain cases, courts may consider the title of a contract provision or section to interpret a contract, ‘the greater weight must be given to the operative contractual clauses of the agreement.’” (quoting Neece v. A.A.A. Realty Co. , 322 S.W.2d 597, 600 (Tex. 1959))). The contract spells out the parties’ agreement to both waive consequential damages and covenant not to sue for such damages

. A nd if the section’s title does not fully capture this manifestation of intent, the contract’s text must nevertheless control. The difference between these provisions is paramount because the mutual waiver of consequential damages simply3

bars recovery, while the promise not to sue constitutes a covenant that, if breached, enables the other party to recoup its costs incurred in defending that suit. These provisions are not duplicative, as the Court’s reading would ensure; rather, they accomplish different goals and avoid surplusage and superfluity. The Court attempts to rely on the distinction betwee n a “claim” and a “suit,” asserting that relinquishing “a claim to any consequential damages to which [the parties] may be entitled in the event of a lawsuit” is not the same as relinquishing “the right to bring a suit in the first place.” Ante at ___. But the contract bars both collecting consequential damages and making a claim for such damages. Westlake breached the contract when it asserted a claim against James for consequential damages. Finally, the Court errs by depending on the somewhat unpredictabl e line between direct and consequential damages, arguing that because a court might ultimately categorize damages as consequential when a party believed them to be direct, the contract here could not have barred suit for consequential damages. Ante at ___. But Westlake’s subjective belief that the damages it sought were direct, rather than consequential, was subject to judicial review and interpretation. To whatever extent judicial characterization of damages as direct or consequential impeded Westl ake’s ability to safely predict whether it was violating a covenant when it sued James, that does not alter the contract’s plain language. Whether it knew or not, Westlake was suing for consequential damages, which its contract straightforwardly forbids.4 B ecause Westlake breached the contract’s covenant not to sue for consequential damages, I would reverse the court of appeals’ contrary holding and reinstate the jury’s award of the attorney’s fees James incurred in defending against Westlake’s claims for co nsequential damages. Because the Court does not, I respectfully dissent.

Jeffrey S. Boyd
Justice

OPINION DELIVERED: May 20 , 2022