The Texas Supreme Court has agreed to review an Austin Court of Appeals decision upholding a judgment against an Austin hydraulics company for breach of the implied warranty of good and workmanlike repair of a faulty hydraulic cylinder on a crane.
Diamond Hydraulics, Inc. v. GAC Equipment, LLC d/b/a Austin Crane Service (No. 24-1049; granted September 25, 2025) arose from a contract dispute involving the repair of a hydraulic cylinder on a crane. In 2018 the cylinder on one of Austin’s cranes began leaking hydraulic fluid. Austin contacted Diamond to repair it. Diamond offered to rebuild it for $26,988.76, but the work order didn’t specify the strength of material to be used in the repair. It also didn’t include an express warranty. Austin accepted the offer and paid the money. Diamond rebuilt the cylinder using a106 B/C carbon grade steel. The following year, however, the cylinder bent when the crane lifted an airbridge. Austin informed Diamond that it would hold onto the cylinder pending Diamond’s buying a new from the original equipment manufacturer. Diamond responded that it had to perform a failure analysis first and represented that it had rebuilt the cylinder with the same carbon grade steel as the original manufacturer. Austin hired a metallurgist who confirmed that that was not the case. Austin sued Diamond for breach of contract and breach of express and implied warranties.
The parties traded expert depositions, who made predictable findings in favor of their clients. Just prior to trial, Diamond’s designated expert took another job and would no longer be available to testify. Now 31 days out, Diamond served Austin with a supplemental disclosure designating a new testifying expert and a motion for leave. Diamond argued that it had good cause and that substituting experts would not cause unfair surprise or prejudice because Austin knew the expert was involved in testing the cylinder. The trial court denied the motion. At trial Diamond made an offer of proof that its excluded expert would have testified that the use of weaker steel in the rebuilt cylinder did not contribute to the accident. The jury found for Austin and awarded nearly $80,000. The trial court rendered judgment on the verdict and awarded Austin more than $381,000 in attorney’s fees. Diamond appealed.
In an opinion by Justice Theofanis, the court of appeals affirmed. Diamond’s first three issues concerned trial court rulings denying its motion for leave to designate the new expert and overruling its objections to two of Austin’s experts. On the first issue, Diamond argued that its experts sudden withdrawal constituted good cause because it had no way to anticipating that it would need to designate another expert more than 950 days after the expiration of the Rule 193 deadline. Austin countered that the expert didn’t withdraw but made himself unavailable for trial. In any event, there were other ways to get his opinion before the jury. Siding with Austin, the court observed that Diamond could have introduced the transcript of the expert’s deposition. Diamond further didn’t prove that the expert was unavailable for a supplemental deposition. In that event, the court ruled that the trial court could reasonably have concluded that Diamond failed to establish good cause. The court ruled further that the substitution of the new expert so close to trial would require Austin to complete a substantial amount of work in preparation. The trial court could thus have reasonably concluded that Diamond failed to show that permitting the new expert’s testimony would not unfairly surprise or prejudice Austin.
As to the trial court’s denial of Diamond’s motion to exclude the testimony of Austin’s metallurgist (who conducted the test on the cylinder), Diamond argued that since his opinions were mentioned in a rebuttal letter to Diamond’s first expert’s conclusions, they shouldn’t have come in when that expert didn’t testify at trial. The court brushed this argument aside, holding that the metallurgist’s measurements and calculations didn’t rebut anything but were “part of the basis of [his] opinion that Diamond’s use of carbon steel in the rebuild caused the cylinder to bend.” That evidence was admissible in the first instance, so the trial court did not err in denying Diamond’s motion to exclude. Likewise for Diamond’s argument that the court erred by permitting Austin’s rebuttal witness to testify during Diamond’s case-in-chief. Austin had requested this in advance on account of a scheduling conflict, and Diamond made no objection. And the witness’s testimony about overload logs was not rebuttal evidence anyway, since the trial court had already admitted them into evidence.
Diamond’s fourth issue challenged the legal and factual sufficiency of the jury’s liability findings. With respect to the alleged breach of the implied warranty of good and workmanlike repair, Diamond argued that because Austin’s metallurgist was not qualified to testify as an expert on that issue, there was no evidence to support the jury’s finding. The court, however, determined that the metallurgist was qualified to testify about whether a106 B/C carbon grade steel was “appropriate material to use in rebuilding a hydraulic cylinder that is part of a crane with a lifting capacity of 75,000 pounds.” The jury could thus have concluded that the expert correctly testified that Diamond used weaker steel than it should have. Since the breach of the implied warranty was sufficient to support the entire damages award, the court didn’t need to reach the express warranty and breach of contract claims.
Oral argument has been scheduled for December 4.
