Out of Bounds: The Dallas Cowboys Practice Facility Collapse and the Implied Covenant to Build to Code Presented to: 25 th Annual Construction Law Conference San Antonio, Texas Presented by: Mason P. Hester Coats | Rose Chase Center Oak Park, Suite 800 1020 NE Loop 410 San Antonio, TX 78209
T ABLE OF C ONTENTS Introduction..........................................................................................................................1 I. The Collapse: how the facility fell and who was involved......................................1 II. The Covenant: Tips v. Hartland and related case law ............................................4 A. Tips v. Hartland ...........................................................................................4 i. Background: facts, holding, key dicta..............................................4 ii. Cause of action created....................................................................7 iii. Evidence of an agreement voiding the implied covenant................8 B. Other opinions related to Tips ......................................................................9 III. The Consequences: issues left open by Tips .........................................................11 A. Will any code violation do?.......................................................................11 B. Does Tips only apply to design-build contractors?....................................14 C. Is privity required to assert a cause of action for code violations?............16 D. Does your contract comply? ......................................................................20 E. Does the Tips covenant apply to subcontractors?......................................24 F. With which “code” must the contractor comply?......................................26
Introduction 1 On May 2, 2009, the massive Dallas Cowboys practice facility collapsed. People were permanently injured. Property was decimated. And the devastation could have been worse. Storm winds of only approximately 60 miles per hour brought the structure down. Local building codes required the facility to withstand winds of 90 miles per hour minimum. A key issue arose during the subsequent litigation over the collapse: did the builder have an implied covenant to ensure the facility complied with local code? Surprisingly, there is only one Texas appellate opinion substantively addressing the issue: the 1998 San Antonio Court of Appeals Tips v. Hartland opinion. Tips answered many questions, but left others unanswered. I will attempt to analyze both. 2 In Section I., I will briefly provide as many details as possible regarding what caused the collapse and how the implied covenant issue arose. If the reader prefers, it may skip this first section and jump to the sections analyzing substantive legal issues: Section II. will discuss and analyze Tips and related cases; Section III. will address some key questions left unanswered by the opinion. I. The Collapse: how the facility fell and who was involved The Cowboys practice facility was like several other football practice facilities you have probably seen: these facilities look like a massive cloth bubble covering an entire football field. 3 More specifically, the Cowboys facility was comprised of a steel frame, with the roof in a semi- triangular (“gable roof”) shape at the top. The frame was roughly 200 by 400 feet horizontally and almost 90 feet high at the ridge, that is, approximately nine stories high at its peak. That steel frame was then covered by a tensioned fabric. The facility was designed and constructed in 2003, and in 2008 it was upgraded by reinforcing some steel members, adding purlins, 4 and installing a new roof covering. It was located in Irving, Texas, just west of Dallas. Before and after pictures of the facility are provided below: 1 Thank you to Bill Short and Frank Branson for involving me in the litigation discussed herein and to Mr. Short for his significant contributions to this paper, as well as law student Ashley Lucas for her help preparing the power point presentation. 2 I have focused on six issues/ questions unanswered, though there are no doubt additional questions/ issues that others can think of. 3 Some of the facts of the Dallas Cowboys case should not be discussed in this paper, due to the settlement between the parties. But the key facts relevant to the implied covenant are covered here. An excellent, detailed discussion of the circumstances which may have led to the collapse can also be found in the final report by the Commerce Department’s National Institute of Standards and Technology (“NIST”). I have relied on that report for some of the factual discussion contained herein. John L. Gross et. al. , Final Report on the Collapse of the Dallas Cowboys Indoor Practice Facility, May 2, 2009 (Jan. 2010), http://www.bfrl.nist.gov/investigations/pubs/NISTIR7661_January%202010.pdf (hereinafter NIST Report ). 4 That is, horizontal structural members in the roof that support loads from the roof deck. 1
An interior view of practice facility prior to the 2009 collapse (above) and an exterior view of the facility shortly after the collapse (below) The structure was governed by the 2000 International Building Code (the “Code”), which had been adopted under section 8.5 of the Irving City Code. The Code required a structure like the practice facility to be able to withstand winds of 90 miles per hour. Unfortunately winds of 55 to 65 miles per hour sufficed to raze it. The existence and roles of certain entities in the collapse were murky and convoluted. A detailed description of all entities and their roles need not be elaborated here. For our purposes, it will suffice to say that the property records listed the owner of the practice facility as Cowboys Center, Ltd. (“Cowboys Center”). However, the Certificate of Occupancy and the building permit listed Blue Star L.P. and/or Blue Star Land (“Blue Star”) as the owner. Blue Star and Cowboys Center also had an unclear oral contract between them. Adding to the confusion, though, was the fact that Blue Star was listed as the “general contractor” on several subcontracts for the project. Among these was a written “subcontract” with Summit Structures (“Summit”), for Summit to design and build the practice facility. But, finally, there also existed an oral 2
contract between Cowboys Center and Manhattan Construction Group (“Manhattan”). Many readers will probably recognize Manhattan as the same entity that constructed Cowboys Stadium, completed in May 2009. Deposition testimony in the practice facility litigation revealed that Manhattan had an oral contract with Cowboys Center for Manhattan to serve as something akin to a construction manager and advisor on the practice facility project. The building permit for the project also listed Manhattan as the “general contractor.” Confused yet? Here’s a diagram: Cowboys Center, Ltd Owner (per property records) Manhattan Construction Group Blue Star L.P./ Blue Star Land “GC” (per building permit); Listed as “GC” on subcontracts, construction manager/ advisor per but as “Owner” on Cert. of Occup. & building permit (oral contract) depo testimony (oral contract) Summit Structures Written “subcontract” w/ Blue Star to design & build structure One of the issues that arose in the litigation was Manhattan’s duty, if any, to ensure the Cowboys facility complied with local code. The waters were muddied by the fact that there was no written contract between Manhattan and Cowboys Center. The question then became: did Manhattan have an implied duty in its oral contract to ensure code compliance? And what role did code compliance play generally on the project? 3
Recommend
More recommend
