The Texas Court of Appeals ruled on July 14, 2026, that Comal Energy Services, LP cannot pursue its negligent misrepresentation claim against Asset Risk Management, LLC (ARM). The court determined that the claim was barred by the economic loss rule, which generally prevents recovery for purely economic losses arising from contractual relationships. This ruling affects companies involved in similar contractual disputes, particularly in the oil and gas industry.
This case originated from a dispute over a natural gas pipeline construction project in West Texas and southern New Mexico. Salt Creek Midstream, LLC, a company affiliated with ARM, managed the project and contracted Comal to provide engineering and construction services. As the project progressed, tensions arose between Salt Creek and Comal, leading to litigation over unpaid invoices. Comal claimed it was owed over $4 million for work performed, while Salt Creek alleged that Comal had overcharged.
The legal battle escalated when Comal filed cross-claims against ARM, alleging that ARM had made negligent misrepresentations regarding the approval and payment of its invoices. A jury initially sided with Comal, awarding $9.3 million in damages. However, ARM appealed, arguing that the economic loss rule barred Comal's claim.
The court's ruling hinged on the economic loss rule, which stipulates that a party cannot recover for economic losses resulting from a breach of contract through tort claims unless the injury is distinct from the contractual damages. The court stated, "Comal’s negligent misrepresentation claim is barred as a matter of law." This decision underscores the importance of the economic loss rule in Texas, which aims to maintain a clear boundary between tort and contract law.
The economic loss rule serves to allocate risks through contracts rather than through tort claims. In this case, the court found that the alleged misrepresentations made by ARM were directly tied to the contractual obligations between Comal and Salt Creek. The court noted that Comal's claimed losses, such as depletion of working capital and layoffs, were purely economic and could have been sought under a breach of contract claim.
Moving forward, this ruling reinforces the application of the economic loss rule in Texas, particularly in the context of construction and energy projects. Companies engaged in similar contractual relationships may find it challenging to pursue tort claims for economic losses unless they can demonstrate injuries independent of their contractual agreements. This case may serve as a precedent for future disputes in the oil and gas sector, where contractual obligations often govern financial interactions.
As for next steps, Comal Energy Services has the option to appeal the ruling to the Texas Supreme Court. However, details about any related cases or further legal actions were not available in the court filing.