The Texas Supreme Court reversed 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; March 27, 2026) 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 argued that its expert’s 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.
In an opinion by Justice Sullivan, SCOTX reversed and remanded for new trial. The question was whether Diamond showed good cause for its untimely designation of the substitute expert. Beginning the analysis with Alvarado v. Farah Mfg. Co., 830 S.W.2d 911 (Tex. 1992), the court observed that “[t]he good cause requirement is neither so loose as to ‘impair its purpose,’ nor so insurmountable as to be a dead letter.” In the present case, Diamond met the good cause standard by showing that: (1) its prior expert’s unavailability was beyond its control; (2) Diamond made a good faith effort to induce that expert to show up at trial, while Austin refused to negotiate with it regarding a substitute; and (3) since causation was at the center of the case, the exclusion of Diamond’s expert crippled its defense. The court went a step further than usual, admonishing the trial court for “acting arbitrarily and unreasonably” when it accorded the parties differential treatment. “Austin Crane complains about Diamond’s tardiness,” the court observed, “yet Diamond was not the only party to make a late designation” (Austin designated its rebuttal expert more than 600 days after the deadline).
The court addressed the court of appeals’ opinion that “Diamond could’ve asked questions of its own witness during his deposition and that the failure to do so was its own fault.” But, the court observed, “Diamond can’t be faulted [] for failing to anticipate [the expert’s] unavailability. Lawyers usually save questions of their own witnesses until trial—why give away a sneak peek [sic] of your trial theories?”
It’s a bit unclear what precedential value this decision may have. The court declined to address “whether a party could make an untimely designation of a less central expert” than the causation expert the trial court excluded here. The fact that the trial court allowed one party to designate past the deadline but not the other seems like an outlier as well. In any event, the decision, in our view, doesn’t allow the exception to swallow the rule.
