$285 million judgment affirmed in business dispute

At trial, Claymore Holdings won its fraud claim against Credit Suisse, establishing the loss of a $250 million investment as a result of a flawed appraisal. The Fifth Court affirmed, focusing on two bedrock principles of modern businesss litigation.

  1. “Specific provisions concerning an issue are controlling over general provisions.” Legally and factually, Claymore showed that Credit Suisse’s disclaimers of reliance did not foreclose liability for the specific issues about the appraisal raised by Claymore.
  2.  “[T]he trial court was not limited to the jury’s award of damages on Claymore’s fraudulent inducement claim in determining appropriate equitable relief on the claims for which the parties waived their right to jury trial.” On the facts of this case, “[h]aving obtained favorable findings from the jury on the fraud claim and from the trial court on the contract claim, Claymore could elect rescission as its remedy.”

Credit Suisse AG v. Claymore Holdings LLC, No. 05-15-01463-CV (Feb. 20, 2018) (mem. op.)

No jurisdictional interference, no mandamus

Enterprise Fleet Management obtained a judgment against Brazos Rock, and then sued several other parties in Dallas County for fraudulent transfers related to payment of that judgment. In the meantime, a receiver was appointed in Parker County to manage Brazos Rock’s assets. The Dallas defendants lost their plea to the jurisdiction and sought a writ of mandamus to compel transfer to Parker County, where they lived. The Fifth Court rejected their argument, finding no showing of interference with Parker County’s jurisdiction (and thus, an injury that cannot be addressed by direct appeal). “These are two separate suits seeking diffferent relief from different parties. . . . A judgment on the  claims asserted in Dallas County will not interfere with the Parker County court’s ability to manage the receivership or render a judgment in the Parker County suit. Enterprise’s collection efforts may ultimately be impacted by the Parker County suit, but that does not deprive the Dallas County court of jurisdiction over Enterprise’s claims.” In re Ameri-Fab LLC, No. 05-17-01458-CV (Feb. 7, 2018) (mem. op.)


Substantive error about liability = successful restricted appeal

A restricted appeal examines “the face of the record” for error in a default judgment case. That review often focuses on procedural matters – mistakes in the return of service, inadequate pleading to invoke the long-arm statute, etc. – but can also focus on substance, as occurred in Haynes v. Gay. The appellants, members of the relevant LLC, successfully showed that the debt sued upon arose before the LLC forfeited its charter, and thus could not have been individually liable upon that debt. No. 05-17-00136-CV (Feb. 8, 2018). h

Court contemplates the void (TRO)

In the case of In re Elavacity, the Fifth Court stayed trial court proceedings after the grant of a TRO (thus ensuring the matter did not become moot, given the short time frame associated with a TRO), and then granted mandamus relief. It identified three defects with the order that made it void:

  1. “[I]t does not include an explanation of why it was issued without notice to relators”;
  2. “[I]tt does not define the injury it is designed to prevent, does not explain why such injury would be irreparable, and is not specific in its terms”; and
  3. “[T]he order enjoins relators from taking certain actions related to Pruvit’s ‘trade secrets, confidential and/or proprietary information,’ and Pruvit’s existing promoters. However, the order does not describe what constitutes a trade secret, confidential information, and/or proprietary information or who is an ‘existing promoter.’”

No. 05-18-00135-CV (Feb. 16, 2017) (mem. op.)

How much is a car wash worth?

Pappas testified about his 50% interest in a car wash business, using an undisputed sale price for the business, undisputed evidence about the face amount of a relevant note, and corrobrating his calculation with a recent property appraisal that was admitted without objection. This foundation was sufficient to satisfy “the presumption that an owner is familiar with his property and its value,” which requires that “the owner must provide the factual basis on which his opinion rests, although this burden is not particularly onerous in light of the resources available today.”  Wash Technologies v. Pappas, No. 05-16-00633-CV (Feb. 6, 2018) (applying Natural Gas Pipeline Co. v. Justiss, 397 S.W.3d 150, 157 (Tex. 2012)).

Documents v. Witnesses – jury decides.

In a labor dispute: “Williams argues that the record is replete with evidence that contradicts the Flex Entities’ version of the events, including his driver logs that show during the time he was purportedly nonresponsive, he was in a remote area out of range for his cell phone, on break, or asleep in his truck,and he did in fact accept and deliver loads on the days referenced in the emails.”  The argument was unavailing: “The jury, as the fact finder, was in the best position to judge the credibility of the witnesses and the weight to be given their testimony, including the validity of the logs Williams created. In this case, the jury found the testimony of the Flex Entities’ witnesses and the internal emails documenting issues with Williams, which began a full month before Williams complained about his pay, to be more credible than the testimony of Williams and his account of why he did not respond to dispatch.” Williams v. FlexFrac Transport LLC, No. 05-16-01032-CV (Feb. 5, 2018) (mem. op.)

Duly noticed.

At least outside the Rule 91a context: “Texas follows a fair-notice pleading standard; the opposing party must be able to ascertain the nature and basic issues of the controversy and what testimony will be relevant from the pleading. Horizon/CMS Healthcare Corp. v. Auld, 34 S.W.3d 887, 896 (Tex. 2000); COC Servs., Ltd. v. CompUSA, Inc., 150 S.W.3d 654, 677 (Tex. App.—Dallas 2004, pet. denied). The purpose of fair-notice pleading is to provide a defendant with sufficient information to prepare a defense. Horizon/CMS Healthcare Corp., 34 S.W.3d at 897.” Cerna v. Smith, No. 05-17-00178-CV (Feb. 2, 2018) (mem. op.)

Only a cloud.

Appellant alleged that she established a “loss of ownership resulting from a legal proceeding” within the meaning of a real estate listing agreement, which would excuse the obligation to pay a broker’s commission. Unfortunately, while the relevant “divorce proceeding created a cloud on the [p]roperty’s title, and, as a result, the title company couldnot issue a title policy as required by the sales agreement,” that did not create the requisite “loss” – “By definition . . . a cloud on title does not equate to a loss of ownership. . . . [A] cloud is something with the potential to affect ownership if and when it is established as valid.” Ruder v. Jordan, No. 05-16-00742-CV (Feb. 2, 2018) (mem. op.)

New courtroom!

The Fifth Court’s website reports: “On January 30, 2018, the Fifth Court of Appeals held inaugural oral arguments in the historic Dallas County Merrill Hartman Courtroom located on the 8th Floor of the George Allen Sr. Courts Building [right]. Thanks to a joint effort between the Dallas County Commissioners, the Dallas District Courts, and the Fifth Court of Appeals, the Merrill Hartman Courtroom’s judicial bench was redesigned to accommodate the 13 appellate court justices in en banc settings as well as 3 member panels. The Fifth Court of Appeals also serves as the disaster recovery site for the nine member Texas Supreme Court. Both appellate courts, and district courts will utilize the courtroom. Upon final completion of renovations, a re-dedication ceremony is planned on a date to be determined in April 2018.”