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Formosa Plastics Corp., USA v. Presidio Engineers and Contractors, Inc.

Supreme Court of Texas
960 S.W.2d 41 (1998)


Facts

Formosa Plastics Corp., USA (Formosa) (defendant) solicited bids for an expansion project at one of its facilities. Formosa sent Presidio Engineers and Contractors, Inc. (Presidio) (plaintiff) an invitation to bid on a portion of the project requiring the construction of 300 concrete foundations. The invitation to bid included representations that Presidio would arrange and be responsible for scheduling, order, and delivery of all materials, and the project was to be completed in 90 days. Presidio relied on these representations and submitted the lowest bid, with an expected completion date of 120 days. The project was delayed and took over eight months to complete. Formosa misrepresented that contractors would be responsible for the ordering and scheduling of material. Before the project began, Formosa set up the ordering and delivery on its own in order to save costs. Additionally, Formosa scheduled multiple contractors, doing mutually exclusive work, to work in the same area at the same time. Formosa also refused to pay the full amount of the delay damages caused to contractors as a result of these delays. Presidio sued Formosa for breach of contract, fraudulent inducement of contract, and fraudulent performance of contract claims based on false representations made by Formosa. The jury awarded Presidio $1.5 million on the fraud claims and awarded $10 million for punitive damages because Formosa’s fraud was done willfully, wantonly, intentionally, or with conscious indifference to the rights of Presidio. The jury also awarded Presidio $1.267 million on the breach of contract claim. The trial court suggested a remittitur reducing the tort claims to $700,000 and the contract claims to $461,000. Presidio elected to recover the tort damages, and the trial court entered judgment for $700,000 of actual damages plus $10 million of punitive damages. Formosa appealed to the court of appeals, which affirmed. Formosa then appealed to the Supreme Court of Texas.

Rule of Law

Issue

Holding and Reasoning (Abbott, J.)

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