Public Owner Wrongfully Interfered with Contractor's Work

Exactly two years ago, the authors wrote about a stunning decision by a Texas appeals court that dismissed a contractor's $19-million jury verdict and directed the contractor instead to "take nothing" and to pay the owner $11 million in attorneys' fees. Many in the Texas contracting industry were distressed that the court would disallow the delay claim when there was evidence that the owner had actively interfered with the contractor's performance. As it turns out, that ruling was erroneous. In Zachry Construction Corp v. Port of Houston Authority of Harris County, TX, the Supreme Court of Texas has overturned that decision, recognizing five exceptions to the no-damages-for-delay clause. The decision is a victory for Texas contractors, and owners may have misgivings regarding the subjectivity surrounding active interference.