$21.6 Million Sewer Gas Verdict: Tarrant County Jury Faults Builder NAE Over Attic Plumbing Vents

A Tarrant County jury returned a $21.6 million sewer gas verdict on Tuesday, October 13, 2026, finding that Fort Worth builder NAE Enterprises, Inc., d/b/a NAE Contracting, knowingly and intentionally built Ronny and Mandy McCoy a Weatherford home whose plumbing vents ended in the attic, exposing the family to sewer gas and mold. The award includes $10 million in exemplary damages against NAE, and how much of the total the McCoys actually collect will now turn on Texas's statutory cap on exemplary damages, the jury's 77% fault allocation to NAE and the Chapter 7 bankruptcy of a related Dauenhauer company.

The trial opened on October 5 in Judge Don Cosby's courtroom, the 67th District Court in the Tom Vandergriff Civil Courts Building in Fort Worth, and jurors deliberated for a little more than two hours before answering the charge. The case is a residential construction defect suit, but the injuries the McCoys pleaded (migraines, respiratory and skin problems, dizziness) and the gross negligence finding put it squarely in personal injury territory, and the way the verdict was built offers a template that toxic-home plaintiffs' firms across Texas will study.

How much did the jury award the McCoy family in the sewer gas case?

The jury awarded more than $21.6 million in total. Of that, $10 million is exemplary damages assessed against NAE for gross negligence; the finding of gross negligence and the amount of exemplary damages were both unanimous, according to the family's counsel, Just Well Law. That unanimity is not decoration: Texas Civil Practice and Remedies Code § 41.003 allows exemplary damages only if the jury is unanimous on both liability for and the amount of the award, and only on clear and convincing evidence of fraud, malice or gross negligence.

The remaining roughly $11.6 million is compensatory. None of the outlets that covered the verdict (KERA, the Fort Worth Star-Telegram, Law360, The Texas Lawbook) or the plaintiffs' own press release has published the itemized verdict form, so the split between economic damages (repair or rebuild cost, diminished value, relocation and medical expense) and noneconomic damages (mental anguish, physical pain, impairment) is not yet public. That split matters more than the headline number, for reasons explained below.

Component	Amount or finding	Source status
Total verdict	More than $21.6 million	Reported by KERA, Star-Telegram, Law360, Texas Lawbook, plaintiffs' release
Exemplary damages (NAE)	$10 million	Reported by KERA and plaintiffs' release
Compensatory damages	About $11.6 million (total less exemplary)	Derived; not itemized publicly
Economic vs. noneconomic split	Not reported	Needed to compute the § 41.008 cap
Unanimity	Gross negligence and exemplary award unanimous	Plaintiffs' release
Deliberation	A little more than two hours	KERA

Who was found liable in the Tarrant County sewer gas verdict?

The jury placed 77% of the responsibility on NAE Enterprises, the only defendant left at the end of trial, and allocated 10% to Dauenhauer & Associates, LLC and 10% to Ricky Dauenhauer, who runs both NAE Contracting and Dauenhauer & Associates. The three reported shares total 97%; public reporting does not say where the remaining 3% fell, which could be a settling party or another designated responsible third party.

The liability findings against NAE covered every theory the McCoys pleaded:

• knowing and intentional violations of the Texas Deceptive Trade Practices Act (DTPA);
• breach of the implied warranty of good workmanlike construction and habitability;
• negligence;
• negligent hiring and supervision; and
• gross negligence.

The lawsuit, filed in June 2025, also named Prestige Plumbing & Construction, LLC, the Weatherford-area firm that installed the plumbing. Its owner, Michael Lansford, told the Star-Telegram that he is not liable for any part of the judgment, that a state investigation found no wrongdoing by him or his workers, and that NAE had asked him to hold off extending the vents through the roof during construction because of rain. That account has not been tested in any published ruling, and the reporting does not say how Prestige exited the case. It is, however, consistent with the jury's decision to put the overwhelming share of fault on the general contractor rather than the trade.

What went wrong with the plumbing vents in the McCoy home?

According to the McCoys' petition, the home's plumbing vents terminated in the attic instead of passing through the roof. Plumbing vents exist to carry sewer gases out of the drain-waste-vent system to the open air; model plumbing codes require vent terminals to open to the outdoors, which is why an attic termination is a textbook code violation. With the vents capped off inside the building envelope, the McCoys alleged, gases including hydrogen sulfide and methane circulated through the house and produced a "pervasive, unpleasant smell throughout the property."

The family moved into the custom home in 2018 and, according to the suit, problems began almost immediately. A plumber eventually traced the smell to the attic terminations. The petition also alleged that the foundation had not been fully sealed, allowing moisture intrusion and mold growth. The McCoys evacuated on the advice of the Texas State Board of Plumbing Examiners and have lived in a recreational vehicle on the property for more than two years. Their lawyers say the house must be razed and completely rebuilt.

Hydrogen sulfide at low concentrations irritates the eyes and airways and, at higher concentrations, deadens the sense of smell so that the odor stops serving as a warning. Methane displaces oxygen and is flammable. Those properties explain why the case was tried as a health exposure case and not only as a warranty dispute over a defective house.

Will the $10 million in exemplary damages be reduced under Texas law?

Very likely, at least in part. Section 41.008(b) of the Civil Practice and Remedies Code caps exemplary damages at the greater of (1) two times economic damages plus noneconomic damages found by the jury, with the noneconomic component limited to $750,000, or (2) $200,000. Section 41.008(a) requires the jury to find economic damages separately, so the cap can be computed from the charge.

The Texas Supreme Court sharpened that formula on May 22, 2026. In K&K Inez Properties, LLC v. Kolle, No. 24-0045, a unanimous court held that the cap is applied defendant by defendant, using each defendant's proportionate share of economic damages rather than the jury's total economic award. Applied here, the ceiling on NAE's $10 million is two times NAE's 77% share of the economic damages, plus up to $750,000 of noneconomic damages.

Because the economic figure is not public, the cap cannot yet be calculated. The arithmetic is still worth setting out, because it shows how quickly the exemplary award shrinks if economic damages are modest:

NAE's share of economic damages (illustrative)	Two times that share	Plus noneconomic (max.)	Cap on exemplary award
$1 million	$2 million	$750,000	$2.75 million
$3 million	$6 million	$750,000	$6.75 million
$4.63 million or more	$9.25 million or more	$750,000	$10 million (cap not binding)

The figures in the left column are illustrative only, not the jury's findings. The cap is not an affirmative defense that must be pleaded (Zorrilla v. Aypco Construction II, LLC, Tex. 2015), so NAE can raise it in a post-verdict motion to modify the judgment. A rebuilt-from-scratch custom home plus years of relocation costs can carry a large economic number, which is the plaintiffs' best route to preserving most of the $10 million.

A second constraint sits alongside the cap. Under Texas's one-satisfaction and election-of-remedies principles, a plaintiff who wins both DTPA additional damages (mental anguish and up to three times economic damages for knowing or intentional conduct under Business and Commerce Code § 17.50(b)(1)) and common-law exemplary damages for the same conduct generally cannot stack them and is left to the greater remedy; in PPG Industries v. JMB/Houston Centers the trial court did exactly that, electing the DTPA's greater recovery. The election will be made when the judgment is drafted, and it can move the final number in either direction.

Can you sue a builder for sewer gas exposure in Texas?

Yes, and the McCoy verdict shows the layered way such claims are pleaded. Homeowners typically combine contract-based theories (breach of the implied warranty of good workmanship and habitability), tort theories (negligence, negligent hiring and supervision, gross negligence), and the DTPA, which reaches a builder's misrepresentations and unconscionable conduct and, on a knowing or intentional finding, allows mental anguish damages and up to treble economic damages plus attorneys' fees.

Two procedural statutes govern the front end. The DTPA requires written notice at least 60 days before suit stating the complaint and the damages claimed (§ 17.505(a)). The Residential Construction Liability Act (RCLA), Property Code Chapter 27, separately requires a homeowner seeking damages for a construction defect to send written notice by certified mail, return receipt requested, at least 60 days before filing, and gives the contractor a right to inspect and make a written offer of repair. Skipping either step invites abatement. The DTPA carries a two-year limitations period under § 17.565, subject to the discovery rule, which is one reason the McCoys' 2018 move-in date and their June 2025 filing will draw scrutiny on appeal if limitations was contested at trial; the reporting does not say whether it was.

Does the Residential Construction Liability Act limit damages for sewer gas injuries?

Not for the bodily injury component. The RCLA was written to channel construction defect claims into a regime with a builder's right to repair and limited categories of recoverable damages, and courts have described it as designed to keep defect claims under its damage limits rather than the DTPA's treble-damage provisions. But § 27.002(a)(1) states that the chapter applies to an action arising from a construction defect "except a claim for personal injury, survival, or wrongful death or for damage to goods." The same section adds that "personal injury" does not include mental anguish.

That carve-out is the structural reason toxic-home cases like the McCoys' are tried as exposure cases. Physical injury claims tied to sewer gas or mold fall outside the RCLA's damage limits altogether, while the property-repair and mental anguish components remain subject to it. Expect NAE's post-verdict briefing to argue that portions of the compensatory award are RCLA-limited, and the McCoys to respond that the gross negligence and knowing-conduct findings, and the bodily injury evidence, place the bulk of the award outside the statute's reach.

What happens to the share of fault assigned to a bankrupt contractor?

Dauenhauer & Associates, LLC filed a Chapter 7 petition in August 2026, according to court records cited by KERA. The automatic stay in 11 U.S.C. § 362 bars collection against that entity outside bankruptcy court, so its 10% share of compensatory damages is likely recoverable, if at all, only as an unsecured claim against a liquidating estate.

Texas's proportionate responsibility statute shifts that risk to NAE. Under Civil Practice and Remedies Code § 33.013(b)(1), a defendant found more than 50% responsible is jointly and severally liable for the compensatory damages recoverable by the claimant. At 77%, NAE is above that line, so it can be made to pay the full compensatory judgment, including the shares allocated to the bankrupt entity and to Ricky Dauenhauer, and pursue contribution afterward. Joint and several liability does not extend to exemplary damages: § 41.006 requires an exemplary award to be specific to each defendant, and Chapter 33 does not apply to exemplary damages. Ricky Dauenhauer's 10% allocation, as an individual, matters for the same reason: Texas law holds corporate officers personally liable for torts in which they personally participate, which gives the family a second, non-bankrupt pocket.

Is the $21.6 million sewer gas verdict final?

No. A jury verdict in Texas becomes enforceable only once the court signs a judgment, and the reporting through October 15, 2026 does not show one. The next steps are a motion for entry of judgment, the plaintiffs' election between DTPA and exemplary recoveries, and defense motions for judgment notwithstanding the verdict, remittitur, application of the § 41.008 cap and a new trial. An appeal from Tarrant County would go to the Second Court of Appeals in Fort Worth. No defense statement on post-trial plans had been reported.

How the McCoy verdict compares with other Texas toxic-home cases

The same plaintiffs' firm, Austin-based Just Well Law, founded by former federal prosecutor Kristina Baehr, has now built a track record in Texas toxic-home trials. The McCoy award dwarfs its earlier results.

Case	Forum	Year	Defect	Reported result
McCoy v. NAE Enterprises	Tarrant County, 67th District Court	2026	Plumbing vents ending in attic; unsealed foundation, mold	More than $21.6 million, incl. $10 million exemplary
Baehr family v. builder and contractors	Travis County (Judge Jessica Mangrum)	2023	Oversized HVAC, roofing defects, toxic mold	$3.1 million family share of a $3.84 million judgment; about $700,000 exemplary against HVAC contractor
Family v. Whitestone Crossing Austin LLC (Cedar Park apartments)	Williamson County	2024	Water leaks, mold and ant infestation; landlord negligence and deceptive practices	$1.06 million

The trend is toward juries treating hidden environmental defects in homes the way they treat product defects: as exposure cases with long-tail health consequences rather than as repair disputes.

What it means for builders, insurers and plaintiffs' firms

Builders and general contractors. The verdict assigns the dominant share of fault to the general contractor even though a separate plumbing subcontractor did the installation. A contemporaneous record of inspections, sign-offs on rough-in and top-out, and documented instructions to trades is the main tool for shifting responsibility in a case like this. Requests to delay code-required work for weather, as Prestige's owner describes, are exactly the kind of instruction that a jury can read as knowing conduct.

Insurers. Commercial general liability policies commonly exclude or sublimit mold and pollution-related bodily injury, and Texas public policy limits insurability of exemplary damages in some settings. Coverage counsel will be parsing whether the sewer gas exposure is a "pollutant" under the policy language and how much of the verdict is covered compensatory loss versus exemplary exposure the insured bears.

Plaintiffs' firms. The McCoy result illustrates a pleading strategy that preserves value: pair RCLA-governed repair claims with personal injury claims that the RCLA expressly excludes, plead the DTPA for knowing conduct, and put a gross negligence question to the jury. Building a strong, separately found economic damages number is what keeps a large exemplary award from being cut down under § 41.008 and Kolle. Firms evaluating these cases on a contingency fee should also budget for the realities of collection where a co-defendant is insolvent.

Homeowners. The case underlines why a persistent sewer odor in a newer house warrants a licensed plumber's inspection of vent terminations, and why the 60-day notice letters under the DTPA and the RCLA are the first formal step toward any recovery.

FAQ

What did the Tarrant County jury decide in the McCoy sewer gas case?

On October 13, 2026, it found NAE Enterprises (NAE Contracting) liable for DTPA violations, breach of implied warranty, negligence, negligent hiring and supervision, and gross negligence, and awarded more than $21.6 million, including $10 million in exemplary damages.

Who is responsible for the $21.6 million sewer gas verdict?

NAE was allocated 77% of the fault, Dauenhauer & Associates, LLC 10% and Ricky Dauenhauer 10%. Because NAE is more than 50% responsible, it is jointly and severally liable for the compensatory damages under Texas law.

Why did sewer gas get into the McCoy home?

The plumbing vents, which should have exited through the roof, were terminated in the attic, so gases including hydrogen sulfide and methane were released inside the house. An unsealed foundation separately allowed moisture and mold.

Is the $10 million exemplary award capped in Texas?

Yes. Section 41.008 limits it to the greater of $200,000 or two times economic damages plus up to $750,000 of noneconomic damages, calculated on NAE's proportionate share of economic damages under K&K Inez Properties v. Kolle (Tex. 2026).

Can the verdict be appealed?

Yes. Once the trial court signs a judgment and rules on post-trial motions, NAE can appeal to the Second Court of Appeals in Fort Worth.