A group of landowners from Clint, Texas has recently filed a lawsuit because of structural and other damages that have allegedly resulted from excessive amounts of groundwater being pumped out of the water table beneath their land. Clint is a town in far west Texas near El Paso. The lawsuit contends that the defendants, the contractors and engineers on the project, pumped groundwater from their Project site too aggressively for an area with a high water table and loose soils.
The lawsuit alleges that the 33,000 foot sewer project, which was constructed at depths ranging from 6 to 12 feet, required water to be pumped from the water table to prevent trench flooding during construction. The pumping removed 1,300 acre-feet of water and discharged it into drainage systems rather than trying to reintroduce it into the water table after completion. As a result of the pumping, the lawsuit alleges that the ground has sunken, shifted, and twisted causing both structural and cosmetic damage to dozens of buildings.
This case is interesting because of its similarities to the City of Alton v. Sharyland case and the Martin K. Eby v. LAN/STV cases. In that case, sewer line were constructed too close to potable water lines, thereby causing concerns over contamination. Unlike the Sharyland case, which involved governmental entities and sovereign immunity, this case involves only private landowners. The City of Clint has not intervened in the suit. The Eby case involves negligent misrepresentation by a design professional that resulted in damages to a contractor because of reliance on the design professional’s representations.
In this case, the activities were all performed as a result of contractual obligations. The engineers and contractors working on the case have performed work in accordance with those contracts. However, rather than simply shifting risks between themselves via contract, their activities have allegedly resulted in damages to parties not in privity with the construction team.
Applying the facts as stated in the lawsuit, it appears that the economic loss rule would not bar recovery by these plaintiffs because of the presence of damage to property that was outside the scope of the contract. Both contractors and design professionals should consider the effects of this case. At times, actions performed under contract can lead to significant risks one might not anticipate when contracting for work. Also, while I have no information about the possible damages in this case, with dozens of potential claimants and occurrences, it is unlikely that the insurance coverage available to the defendants will cover all of the potential damages.
**Source – Lawsuits Filed Over Building of Clint Sewers, El Paso Times, by Marty Schladen.