AZA Wins Jury Victory for KBR in $289 Million Energy Sector Breach of Contract Case
HOUSTON – A Harris County jury ruled in favor of AZA client Kellogg Brown & Root (KBR), the global technology and engineering giant, in a breach of contract case over $289 million in alleged lost profits and damages on a bid for a Mexican refinery build.
This was the second giant nine-figure verdict for an AZA trial team just this week.
In this case, Constructora Hostotipaquillo, a Mexican construction and engineering firm which goes by Hosto, sued KBR in 2021, claiming that KBR breached a contract and committed fraud in an agreement to bid jointly on a massive Pemex oil refinery in Tabasco, Mexico.
KBR countered that the companies never agreed to a joint venture and that KBR had no fiduciary duty to Hosto, which failed to perform well on an early phase of the project.
In the court of Harris County state District Judge Donna Roth, the jury heard 10 days of testimony and deliberated seven hours in a case that centered on what the two companies agreed upon in making a bid.
A key issue in the case was the translation of a portion of a contract the two companies created to bid jointly on the work for a new refinery that would eventually cost upwards of $18 billion. Hosto claimed the contract created a fiduciary duty to Hosto that was broken when KBR decided to stop seeking the work at the planned refinery. KBR argued Hosto did shoddy work on the front end and that KBR was fully within its contractual rights to stop the bid.
“We did not have a fiduciary duty to do the opposite of what the contract said,” AZA lawyer Cameron Byrd told the jury on behalf of KBR. “We did our job. We kept our word, and they did not.”
Mr. Byrd tried the case with AZA partners John Zavitsanos, Daryl Moore and Rey Flores and fellow associate Justin Kenney.
“When the other side talks about partnerships and joint ventures, they are trying to apply Mexican law. But you, the jury, are to apply Texas law,” Mr. Zavitsanos told jurors. “If anybody is suing anybody here, it should be us suing them, but we both agreed not to do that.”
The case is Constructora Hostotipaquillo, SA DE CV v. Kellogg Brown & Root, LLC, case number 2021-20545 in the 295th Harris County state district court. in the 295th Harris County state district court. The verdict was covered by Texas Lawbook in “KBR Gets Complete Defense Win in Houston Trial Over $18B Mexican Refinery Job” (subscription required).
In the other nine-figure verdict for an AZA trial team just this week, a federal court jury in Houston found in favor of Marathon Oil Co. in a lawsuit against Koch Energy Services over the delivery of natural gas during the February 2021 Winter Storm Uri. AZA’s client Marathon defeated Koch’s $123.7 million claim for breach of contract, and Marathon prevailed on a separate $9.8 million declaratory judgment claim against Koch.
AZA, or Ahmad, Zavitsanos & Mensing, is a Houston-based law firm that is home to true courtroom lawyers with a formidable track record in complex commercial litigation, including energy, healthcare, intellectual property and business dispute cases. AZA is recognized by Chambers USA 2024 as among the best in Texas in commercial law and intellectual property; has been listed by Best Lawyers’ Best Law Firms as one of the country’s best commercial litigation firms for 13 years; has been named Litigation Department of the Year by Texas Lawyer three times; and was previously dubbed a Texas Powerhouse law firm by Law360.