The key facts of Vetri Ventures LLC v. Westridge Eagles Nest Owners Association were as follows:

  • Judge A (a senior judge appointed by assignment) presided over a bench trial, in a dispute about assessments by a homeowners’ association, on April 6, 2021;
  • A May 24 docket entry, followed by a May 25 email from the court coordinator, indicated Judge A’s ruling on all matters except the amount of attorneys’ fees, and requested submission of an appropriate order;
  • In November 21, after a hearing on the motion for judgment, Judge B (the elected judge for the court) entered final judgment that included a fee award.
  • Judge B then signed findings of fact and conclusions of law, after which Judge A signed amended findings and conclusions.

Held:

  • The coordinator’s email was not an effective “rendition” of judgment: “The email was sent only to the parties’ counsel. The trial court did not orally announce, in open court, its decision on the issues addressed in the court administrator’s email. Nor did the court deliver the email to the clerk of the court for filing, entry, or inclusion in the public record or take any actions reasonably calculated to effectuate such delivery.”
  • Because the email was not a rendition, Judge B lacked authority to “merely memorialize” that rendiition with a final written judgment.

No. 05-21-01172-CV (March 15, 2024) (mem. op.) Enthusiasts of this sort of Texas appellate arcana will enjoy my Baylor Law Review article about “Judgment Rendition in Texas,” co-authored with the able Ben Taylor.

Simons v. Medical Hyperbarics, Inc. reviews the need for a jury trial to determine the reasonableness and necessity of attorneys’ fees.

  • Substance. “[CPRC] Section 38.001(b) permits the recovery of attorneys’ fees but does not dictate how to determine the attorneys’ fee amount, except that the award must be ‘reasonable.’ … When faced with a similar silent fee-shifting provision in [Transcon. Ins. Co. v.] Crump, the Supreme Court of Texas construed the statute as entitling the parties to have the jury determine the disputed issue of the reasonableness of the attorneys’ fees. … Similarly, because section 38.001(b) does not dictate the manner to determine the amount of attorneys’ fees, providing only that the award must be ‘reasonable,’ reasonableness remains a fact issue that a jury, upon proper request, may resolve.” 
  • Preservation. “Simons filed his request for a jury trial and paid his fee. He objected to the trial court considering the fee issue in his response to MHI’s application for fees and objected throughout the hearing on MHI’s application for fees. … Because Simons was entitled to a jury trial on attorneys’ fees as a matter of right, his timely request was presumptively reasonable and should have been granted.”

No. 05-23-00053-CV (March 16, 2024) (mem. op.) (emphasis added).

In re Lozovyy presents a variation on a “failure to rule” mandamus proceeding; specifically, a “failure to set” the hearing required by the TCPA. The hearing is important because “[a]bsent a timely hearing, the movant forfeits TCPA relief and the court of appeals loses jurisdiction to consider any interlocutory appeal.” The Fifth Court granted mandamus relief after issuing an interim stay, directing the trial court to have a hearing in the remaining time. The opinion details the several steps taken by the petitioner to build the necessary record in a relatively compressed time period. No. 05-24-00195-CV (March 11, 2024).

The settlement agreement in Clendening v. Blucora, Inc. resolved an arbitration by requiring a series of settlement payments by one party (the former employer), conditioned on the acceptable provision of information by the other (the former employee). The arbitrator “retain[ed] jurisdiction” to hear a dispute about the adequacy of that information and order a deposition “to occur not later than February 27, 2022.”

A dispute arose, and the arbitrator ordered a deposition to occur after February 27. The Fifth Court held that this award exceeded the arbitrator’s powers and vacated it. No. 05-22-01190-CV (March 7, 2024) (mem. op.).

The jury in Rhino Linings Corp. v. 2×2 Partnership, Ltd. indicated that (1) eleven of twelve jurors agreed, generally, (2) all twelve agreed to the exemplary predicates about gross negligence and fraud, and (3) all twelve agreed to the amount of exemplary damages. And as for (2), those questions were predicated on unanimous answers as to the related liabliity questions. This record did not establish a reason to reverse:

We know that the jurors were not unanimous in every one of their responses. However, we have a specific certification that they were unanimous on the ultimate exemplary-damages questions. … [And w]e do not have a record establishing that the jury did not follow those [predicate] instructions ….

No. 05-22-00522-CV (March 1, 2024) (mem. op.) (citations omitted, emphasis in original).

A warehouse owner sued Rhino, a provider of waterproof roof coatings, for negligence for recommending an allegedly substandard contractor. The trial court rendered a substantial judgment for the owner and the Fifth Court affirmed in Rhino Linings Corp. v. 2×2 Partnership, Ltd.

Rhino argued that the negligence claim was foreclosed by a warranty that established “THE SOLE AND EXCLUSIVE AGREEMENT, REMEDY AT LAW OR IN EQUITY FOR DEFECTS IN MATERIAL SUPPLIED BY RHINO.” (The legal effect of CAPITALIZING CONTRACT TERMS I leave for another day.)

The Fifth Court disagreed, concluding that the owner’s claim did not involve “defects in material,” but rather “its reliance on Rhino’s knowing misrepresentation concerning Potter’s being qualified to apply Rhino’s products on 2X2’s roof, which led to 2X2’s hiring him.”

If you are an enthusiast of the three-step process for judgment formation in Texas (rendition, signing, and entry), then you should read my 2023 Baylor Law Review article that I co-authored with Ben Taylor about the general topic, and then read Baker v. Bizzle, No. 22-0242 (Tex. March 1, 2024), in which the Texas Supreme Court applies that framework to a letter ruling.

Specifically, it held that no “rendition” occured when: “It is undisputed that the trial court did not orally announce, in open court, its decision on the issues addressed in the October 4 email. Nor is it alleged that the court delivered the email to the clerk of the court for filing, entry, or inclusion in the public record or took any actions reasonably calculated to effectuate such delivery.”

A thoughtful concurrence recommends attention to this long-standing process in modern-day rulemaking, observing: “Our system’s tedious distinction among “rendering” judgments, “signing” them, and “entering” them was necessary in early Texas, when judges would travel by horseback to attend court in far-flung locations. The confusion sown by these distinctions today, however, is needless and intolerable.” 

Because the judicial-proceedings privilege is a powerful defense against defamation claims, it requires that “an allegedly defamatory statement must bear ‘some relation’ to the proceeding for the privilege to apply.” That said, the “some relation” requirement was readily satisfied in Mishkoff v. Garrett, where “the statement in question was made in a counterclaim for trespass and described Mishkoff’s alleged conduct in trespassing on Bryant’s property.” No. 05-22-01063-CV (Feb. 26, 2024) (mem. op.).

The plaintiff in Ramirez v. Bam! Pizza Management, Inc. obtained a default judgment on a claim for personal injury. The Fifth Court rejected his argument that a new trial should have been granted because of excessively low damages for pain and suffering, noting: [T]he trial judge may have disbelieved Ramirez’s affidavit testimony and that it was within his role as fact-finder to do so and to award no damages to Ramirez for his pain and suffering or physical impairment.” A concurrence would have resolved the appeal against Ramirez because his affidavit was conclusory. No. 05-23-00311-CV (Feb. 22, 2024) (mem. op.).

“[D]oes severing claims disposed of on partial summary judgment into a new action render the judgment final even though other claims between the parties remain pending in the original action? We answer yes. When claims are severed into separate actions, the two-part Lehmann test for finality applies to each action separately. Thus, any claims that remain pending in the original action are not relevant in deciding whether there is a final judgment in the severed action. And although severance is improper if the claims are interwoven, any procedural error in ordering severance—which carries its own consequences—does not affect judgment finality or appellate jurisdiction.” Sealy Emergency Room LLC v. Free Standing Emergency Room Managers of Am., LLC, No. 22-0459 (Tex. Feb. 23, 2024) (emphasis added, citation omitted).

In Longhorn Creek Ltd. v. Gardens of Connemara Ltd., the trial court applied Tex. R. Civ. P. 91a to dismiss a declaratory-judgment claim about the assessment of a transfer fee pursuant to a restrictive covenant. An issue was whether certain required notices had been made in compliance with a statute. Specifically:

“[Appellees] argue the notices were printed in fourteen-point boldface type and referenced records that sufficiently described the property subject to the private transfer fee—they rely on the notices attached as pleading exhibits to [Appellant’s] amended petition for this contention.”

The Fifth Court rejected this argument:

“[W]e may not consider evidence in deciding a rule 91a motion but only the pleading of the cause of action and the narrow class of exhibits permitted by rule 59. That narrow class includes ‘[n]otes, accounts, bonds, mortgages, records, and all other written instruments, constituting, in whole or in part, the claim sued on, or the matter set up in defense.’ The copies of the notices attached to the amended petition may be important future evidence for some of Longhorn Creek’s allegations, but they cannot be said to constitute the claim sued on.”

No. 05-22-00842-CV (Feb. 20, 2024) (citations omitted).

The Fifth Court rejected a judgment debtor’s challenge to the appointment of a receiver in Floyd v. MMWKM Advisors, LLC, distinguishing two sources of statutory authority:

The purpose of a [CPRC] Chapter 64 receivership is to preserve assets and resolve issues relating to a business entity’s affairs where there are allegations of fraud or improper activities. Chapter 64 does not apply here. The trial court appointed a receiver in this case [under CPRC Chapter 31] to enforce a monetary judgment that the creditors had difficulty satisfying, not because of concerns regarding fraud or corporate misconduct while litigation was pending. Appellees produced evidence that Floyd owned non-exempt property and that Appellees had an unpaid final judgment against Floyd.

No. 05-23-00638-CV (Feb. 12, 2024) (mem. op.) (citation omitted).

Willow Tree Consulting Group LLC v. Perkins Coie LLP, discussed last week also addressed an argument that limitations had been tolled because a company’s outside counsel was involved with the “adverse domination” of the relevant company by insiders. The Fifth Court declined to apply this argument against a law firm based on alleged activity of a partner, reminding that “limited liability companies and partnerships are legally distinct from their members.” The Court further held that “True Health was dominated by its own officers and directors and Texas’ application of the doctrine has not been expanded beyond insiders.” No. 05-23-00264-CV (Feb. 13, 2024) (mem. op.).

In an opinion reversing the denial of a TCPA motion to dismiss, the Texas Supreme Court made a helpful observation for the legal blogging community:

[A]nyone who appreciates lawyerly precision has probably read plenty of news stories about legal affairs that gloss over lawyerly distinctions or contain inadvertent mischaracterizations of legal or procedural concepts. These journalistic imprecisions are not to be applauded, and they certainly can mislead the average reader in some cases. But errors of law by those reporting on the law are not automatically actionable as defamation.

Polk County Publ. Co. v. Coleman, No. 22-0103 (Tex. Feb. 16, 2024).

What is absurdism? In statutory interpretation, it means “really absurd,” as explained by the supreme court in Rodriguez v. Safeco Ins. Co. of Indiana:

We have, however, often said that statutes should be construed to avoid genuinely absurd results. But “the absurdity safety valve is reserved for truly exceptional cases, and mere oddity does not equal absurdity.” Instead, the result must land in the realm of the “unthinkable or unfathomable.”

No. 23-0534 (Tex. Feb. 2, 2024).

A sanction was reversed in Ariceaga-Banda v. Daftim, LLC:

We conclude the trial court’s statements in pre-trial hearings and on the day scheduled for trial demonstrate it imposed death penalty sanctions in response to appellant’s failure to pay the $1,000 sanction. As noted, a trial court may constitutionally impose death-penalty sanctions if the sanctioned conduct reasonably supports a presumption that a party’s claim is meritless.  However, as in Griggsand Khan, appellant’s failure to pay the $1,000 sanction reveals nothing about the merits of her claim. We find the reasoning in Griggs and Kahn to be apt and persuasive in this case. Consequently, we conclude the trial court’s imposition of death-penalty sanctions due to appellant’s failure to pay the $1,000 sanction was an abuse of discretion.

No. 05-22-00274-CV (Jan. 30, 2024) (mem. op.) (citations omitted).

The case of In re Estate of Ellard presented the question whether a jury trial was required in a proceeding to determine whether a probate estate’s retention of legal counsel had been properly ratified. Citing Justice Busby’s informative and comprehensive concurrence in In re Troy Poe Trust, 646 S.W.3d 771 (Tex. 2022), the Fifth Court concluded that this proceeding “does not have any of the attributes of a cause for which a Judicial Article jury-trial right exists” under the state constitution. No. 05-22-01449-CV (Jan. 25, 2024) (mem. op.).

This language was sufficient–notwithstanding additional, similar language in other cases on the point–to allow a right of appeal from an artbitration award under the Texas Arbitration Act:

Notwithstanding the applicable provisions of Texas law the parties agree that the decision of the arbitrator and the findings of fact and conclusions of law shall be reviewable on appeal upon the same grounds and standards of review as if said decision and supporting findings of fact and conclusions of law were entered by a court with subject matter and present jurisdiction.

Multi-Housing Tax Credit Partners XXXI v. White Settlement Senior Living, LLC, No. 05-22-00721-CV (Jan. 26, 2024) (mem. op.).

In the atypical setting of an appeal from an arbitration award (under the TAA), the Fifth Court concluded that the price set by an option agreement was sufficiently definite:

[T]he Option Provision included a formula to determine the purchase price, limiting the purchase price to the greater of the mutually agreed upon appraiser’s calculations, including assumption guidelines for same, or a definite sum of taxes owing, present value of anticipated tax credits not yet received by limited partner, and $100.00. In reaching this conclusion, we reject MHT’s argument that this case is similar to that of Playoff Corp. v. Blackwell, in which the parties entered into an employment contract that promised the employee 25% of a portion of the company’s fair market value upon his termination but did not agree, however, on how the company’s fair market value would be determined, instead agreeing that it would be determined based on a specific formula that the parties would have to agree to in the future after “later negotiations.”

The Court also said: “[W]e agree with other courts that have held that when parties to an agreement specify that a third person is to fix the price, the contract is not unenforceable for lack of definiteness.” Multi-Housing Tax Credit Partners XXXI v. White Settlement Senior Living, LLC, No. 05-22-00721-CV (Jan. 26, 2024) (mem. op.).

The Fifth Court reversed in Monticello Asset Management, Inc. v. Wells, a case about unfortunate contact between a power line and a flagpole during construction work: “The families in this case suffered horrible losses. But Texas law strictly proscribes the liability of premises owners and occupiers for hazards created by the work activity of an independent contractor’s employees over which they had no control.” No. 05-22-00709-CV (Jan. 23, 2024) (applying Coastal Marine Serv. of Tex. v. Lawrence, 988 S.W.2d 223 (Tex. 1999)). A dissent argued that the majority characterized the accident too narrowly.

The Fifth Court affirmed a temporary injunction about unwanted surveillance in Daugherty v. Ellington, stating: “Under this record, we conclude Daugherty engaged in conduct that violated the ‘right to be left alone from unwanted attention’  and is properly protected by injunctive relief. The trial court could reasonably conclude Ellington proved a probable right of recovery on his invasion of privacy claim even though Daugherty engaged in conduct while on public property.” No. 05-22-00991-CV (Jan. 17, 2024) (mem. op.). (LPHS represented the appellee in this case.)

Start the New Year off right!

Please join the Dallas Bar Association Appellate Section at noon on Thursday, January 18, for a lunch presentation by me. I’ll be speaking on trends and cases to know from the past year in the U.S. Court of Appeals for the Fifth Circuit and the Fifth District Court of Appeals. I’ve done a similar presentation around this time of year for a few years now.

Here’s my PowerPoint. This CLE will be in-person at the Arts District Mansion, 2101 Ross in downtown Dallas.

The parties’ agreement said that “[Arbitrator’s] determination may not be appealed to any court or other third party but will be binding on all parties.” The Fifth Court held that this language was not a waiver of the right to vacate or modify an award under the Texas Arbitration Act: “[A] waiver of appeal in the arbitration agreement does not preclude judicial review of matters concerning [statutory modification].” Tye v. Shuffield, No. 05-02-00163-CV (Jan. 5, 2024) (mem. op.) (citations omitted).

The Fifth Court reversed an award of “loss-of-use” damages, involving the right to move a billboard, in Remington Sherman Automotive, LLC v. FMG North Texas, LLC:

FMG’s conversion claim is premised on Remington wrongfully refusing to allow FMG to remove and relocate its billboard after the lease’s termination. Thus, to recover damages for loss of the billboard’s use resulting from Remington’s conversion, FMG had to establish the profits it could have earned if Remington had not prevented it from removing and relocating the billboard. Instead, over Remington’s objection, FMG presented evidence only of the amount of revenue FMG could have earned if Remington had allowed it to keep using the billboard on Remington’s property—a measure inconsistent with the legal and factual basis of FMG’s conversion claim. Absent any vidence showing the profits FMG could have earned at another location if allowed to remove and relocate the billboard, which FMG acknowledges it did not provide, the evidence is legally insufficient to support any loss-of-use damages.

No. 05-22-01366-CV (Dec. 27, 2023) (mem. op.) (emphasis added).

The Fifth Court rejected a challenge, based on a contract’s venue clause, to the confirmation of an arbitration award, in Picone v. Cruciani:

The concept of venue speaks to the  place where a lawsuit is to proceed. See id. It does not speak to the manner in which a dispute will be resolved. Nor is a provision calling for venue in Dallas County courts mutually exclusive from an arbitration provision: even if the parties agree to arbitrate their differences, a court must confirm the arbitrator’s award, and a venue provision determines where that confirmation will take place. The venue provision in the 2020 Release and Settlement has no bearing on the arbitrability of any claim between these parties.

No. 05-22-00841-CV (Dec. 21, 2023) (mem. op.) (citations omitted).

Note that new supersedeas rules are now in effect, changing the rules about “alternate security” (for actions filed after September 2023), and eliminating the longstanding requirement the court clerk approve a supersedeas bond before it becomes effective (effective for all actions).

In a contract case, the Fifth Court rejected an appellant’s challenge to contract enforceability, when the record showed that the appellant judicially admitted the validity of the contract at trial to seek recover on a counterclaim.

While the opinion resolves the case by finding a judicial admission, that finding plainly arises not just from a few words in the counterclaim, but from the entire conduct of the trial (in other words, it’s not a “gotcha”).

That said, the opinion’s a reminder that to avoid later confusion, it can be important to identify when a matter is pleaded in the alternative. Advantage Aviation Technologies, Inc. v. Axcess Aviation Maintenance Servs., Inc., No. 05-23-00344-CV (Dec. 27, 2023) (mem. op.).

Start the New Year out right with “Get the Last Word in an Effective Reply Brief,” which I recently co-wrote for the Bar Association of the Fifth Federal Circuit with my skillful colleague Campbell Sode – available here along with many other valuable practice pointers by members of that great bar association.

In a per curiam opinion, the supreme court reversed a Thirteenth Court opinion involving persistent – if unlucky – efforts to get a case to the court of appeals: “Mother timely noticed her appeal from both judgments under consideration by the court of appeals. The court of appeals erred in rejecting jurisdiction after Mother relied on the appellate court’s ruling rendering her initial appeal interlocutory.” In the Interest of A.C.T.M., No. 23-0589 (Dec. 29, 2023).

The Bar Association of the Fifth Federal Circuit is the bar association to belong to if you’re interested in the work of the U.S. Court of Appeals for the Fifth Circuit. More information about member benefits is detailed on the BAFFC’s website. One of those benefits is a terrific set of short (c. 500 word) articles about appellate practice (here’s an example that I did about a year ago on oral-argument preparation).

Please consider writing one yourself! A link will be emailed out several times to the BAFFC’s thousands of members, as part of its daily updates about recent decisions, and it’ll be available to the membership online as part of the full collection of these pieces. Contact BAFFC administrator Mary Douglas at mary@baffc.org!

The National Court Reporters Association recently published a fascinating “white paper” about “ethical and legal issues related to the use of artificial intelligence … and digital audio recording of legal proceedings.” It’s succinct, thoughtful, and raises questions relevant to just about any area of law practice or court administration that’s touched by the influence of generative AI and related technologies.

Fagin v. Inwood Nat’l Bank rejected a request to recognize “truth” as a defense to a tortious-interference claim, holding:

We agree with our sister courts’ reasoning. As with affirmative claims, recognizing an affirmative defense that the supreme court has expressly declined to adopt raises a “litany of questions regarding the contours and scope” of the defense that we are ill-suited to answer. We conclude that neither this court nor the trial court below can legitimately recognize, in the first instance, an affirmative defense of truth to a claim for tortious interference with an existing contract.

No. 05-21-00878-CV (footnotes omitted) (mem.op.).

Hartline Barger LLP v. Denson Walker Properties, LLC provides insight on when the Fifth Court will (and will not) accept a permissive appeal: “Although the possibility exists that a controlling legal question as to which a substantial ground for disagreement exists might arise in determining whether a fact issue exists in the context of a summary judgment, it is rare, and this fact-intensive case is not that rare occurrence.” No. 05-23-00126-CV (Dec. 11, 2023) (mem. op.).

The supreme court granted mandamus relief in the high-profile abortion case of In re State of Texas, reminding that “we may grant mandamus relief when the trial court effectively resolves the merits of a case in a temporary restraining order,” and applying that principle to hold:

A pregnant woman does not need a court order to have a lifesaving abortion in Texas. Our ruling today does not block a life-saving abortion in this very case if a physician determines that one is needed under the appropriate legal standard, using reasonable medical judgment. If Ms. Cox’s circumstances are, or have become, those that satisfy the statutory exception, no court order is needed.

No. 23-0994 (Tex. Dec. 11, 2023). Not addressed (because not presented) is whether the courts will be so deferential to medical judgment if it is challenged in the context of a later criminal prosecution, as opposed to the unusual “pre-clearance” type of injunction at issue in this case.

The defendants in a bus-accident cases disputed venue in Dallas County, arguing that the bus was ordered from, and ultimately delivered to, Parker County. The plaintiffs responded that “bookends are meaningless without the books,” contending that “determining where the bus was supplied also includes all actions that made negotiation and final delivery meaningful.”  The Fifth Court ruled for the plaintiff,s concluding that the activities conducted in Dallas between order and delivery “were key components of an integral to [Defendant]’s transaction with [Plaintiff] for the sale of the bus. Rush Truck Centers of Tex. v. Sayre, No. 05-23-00775-CV (Nov. 30, 2023) (mem. op.). The Court continued: “[W]hile some of the Dallas actions involved clerical work, those actions are nonetheless relevant to determining whether the claim has substantial connection to the plaintiffs’ chosen venue.”

An antitrust case in Tennessee recently produced a remarkably contentious dispute about the definition of “double spacing,” as deftly summarized in this “Above the Law” article titled “Heated Litigation Fight Over Double Spacing Ends in Judge Telling Everyone to Shut Up.” While the dispute was picayune, the discussion of just what exactly “double spacing” means is interesting background for a modern word-processing feature that we seldom stop and think about. Thanks to my law partner Chris Schwegmann for flagging this for me.

683 is a prime number, as well as a prime reason for reversal of temporary injunctions. Most recently, in a contentious case about the governance of an Eritrean church that presented significant issues about the ecclesiastical abstention doctrine, the Fifth Court resolved the matter on technical grounds by holding that the temporary injunction failed to satisfy the requirements of Tex. R. Civ. P. 683. Teklehaimanot v. Medhanealem Eritrean Orthodox Tewahedo Church, No. 05-23-00579-CV (Nov. 17, 2023) (mem. op.).

Wakefield, a party to a civil lawsuit, disputed a judgment against him in favor of Rubio,  forensic expert retained by his counsel in that lawsuit. Wakefield argued that no evidence established a contract between him and the expert. But the identify of his counsel was undisputed (thus providing some evidence of agency), and additional evidence showed that he ratified his counsel’s dealings with the expert, establishing that he chose to proceed:

… after (1) learning Tadlock engaged Rubio to perform expert services with respect to his case, (2) understanding how important the admissibility of evidence from the watch was, (3) personally delivering the watch to Rubio, (4) instructing Rubio to do as his attorney instructed, and (5) learning upon his arrival at the courthouse for his hearing that Rubio’s bill was approaching $10,000. 

Wakefield v. Rubio Digital Forensics LLC, Nov. 21, 2023 (mem. op.).

Huffman Asset Management, LLC v. Colter, No. 05-22-00779-CV (Nov. 7, 2023) (mem. op.), a default-judgment case that I recently discussed for its analysis of substituted service, also provided two useful reminders about legal-sufficiency challenges to damages awarded in a default judgment:

  • Insufficient proof = no damage.While those statements provide some evidence of the Colters’ belief they suffered mental anguish, the testimony does not show the nature, duration, and severity of the mental anguish, a substantial interruption in the Colters’ daily routine, or a high degree of mental pain and distress that is greater than mere worry, anxiety, vexation, embarrassment, or anger. The affidavits also include no evidence to justify the amount awarded.  We, therefore, … sustain HAM and Prairie Capital’s fifth issue in part by reversing the mental anguish damages awarded to the Colters.”
  • Insufficient proof = remand, not rendition. “We do not, however, render a take nothing judgment against the Colters as to the mental anguish damages. ‘[W]hen an appellate court sustains a no evidence point after an uncontested hearing on unliquidated damages following a no-answer default judgment, the appropriate disposition is a remand for a new trial on the issue of unliquidated damages.’ …
    in a no-answer default judgment, remand is necessary only as to the categories of
    damages for which the evidence presented was insufficient.”

The plaintiff in Vallejo v. Helge, faced with a dismissal for want of prosecution, timely filed a motion to reinstate and then obtained a default judgment.

So far so good. But the defendant appealed, and the Fifth Court noted that the motion to reinstate was not verified–a requirement of the relevant rule and supreme court precedent. The motion was thus ineffective, which meant that the Court had to then “vacate the void judgment and dismiss the appeal.” No. 05-23-00573-CV (Nov. 15, 2023) (mem. op.).

The supreme court has consistently rejected discovery requests as overbroad that seek requests about “other similar accidents,” etc. when the requested information is not obviously connected to the facts of the case at hand. In In re Liberty County Mut. Ins. Co., the supreme court clarified that discovery about a plaintiff’s other accidents and injuries is discoverable when it is relevant to proof of causation and damages. While the specific holding of this case is tied to personal-injury litigation, its logic applies to other types of discovery disputes as well. No. 22-0321 (Tex. Nov. 17, 2023).

The Fifth Court reviewed the interplay between the COVID pandemic and a “force majeure” clause in a commercial lease in BB Fit v. EREP Preston Trail II:

[T]he parties expressly agreed that delays due to enumerated causes beyond the parties’ reasonable control would be excluded from computations of time. They did not agree to discharge BB FIT’s obligation to pay rent; to the contrary, Lease § 4(d) provides that “[t]he obligation of Tenant to pay Rent and the obligations of Tenant to perform other covenants and duties hereunder constitute independent and unconditional obligations of Tenant to be performed at all times as provided hereunder.” We conclude these express terms govern, specifically providing for an extension of time to pay rent rather than a discharge of the obligation.

No. 05-22-00682-CV (Nov. 9, 2023). (Our firm represented the successful party.)

Service on uncooperative individuals often requires a motion for substituted service. For Texas-chartered business entities, the Secretary of State is an option, and in Huffman Asset Managment v. Colter the Fifth Court rejected an argument that the Secretary is required to serve process anywhere other than the designated addresses:

Under HAM and Prairie Capital’s interpretation of section 5.253, the Secretary of State would be required to ignore an entity’s filings concerning its registered agent and registered office in favor of information contained in a more recent filing that is unrelated to service of process and does not designate or change a registered agent, registered office, or their accompanying addresses. Such an interpretation ignores the overarching requirement that corporations maintain a registered agent and registered office for service of process and keep the addresses of both updated with the Secretary of State.

No. 05-22-00779-CV (Nov. 7, 2023).

The Byzantine rules about post-trial requests for findings of fact and conclusions of law were enforced by the Fifth Court in Mangum v. Mangum: “In his first issue, Roderick challenges the trial court’s failure to file findings of fact and conclusions of law despite his timely request and a subsequent notice of late findings of fact. Although his original request was timely filed, the notice of late findings was filed more than 30 days later and did not preserve this issue for appellate review.” No. 05-22-01118-CV (Oct. 31, 2023) (mem. op.).

In U.S. Polyco, Inc. v. Texas Central Business Lines Corp., the Texas Supreme Court reversed a contract case based on the definition of ambiguity. The court also rejected an argument for affirmance based on “context,” stating:

The task of harmonizing contracts entails reconciling otherwise conflicting contractual provisions. That task does not authorize courts to ensure that every provision comports with some grander theme or purpose, particularly when the parties have not said in the contract which purpose matters most or that everything else in thecontract should be read subject to that purpose. To hold otherwise would implicitly assume that contracting parties pursue a purpose (at whatever generality) at all costs.

No. 22-0901(footnote omitted).

Note that this concept is distinct from “commercial context”–the circumstances surrounding the  execution of a contract, within the reasonable awareness of parties. See, e.g., Kachina Pipeline Co. v. Lillis, 471 S.W.3d 445 (Tex. 2015) (“We may consider the facts and circumstances surrounding a contract, including ‘the commercial or other setting in which the contract was negotiated and other objectively determinable factors that give context to the parties’ transaction.'” (citation omitted)).

In U.S. Polyco, Inc. v. Texas Central Business Lines Corp., the Texas Supreme Court reviewed a contract dispute, and gave a reminder about a basic principle of contract interpretation.

The dispute involved the below language about “other items … as are agreed upon by TCB and [Polyco] in writing” (green, below).

One side contended that it applied only to the “other items” Designated Areas” referred to earlier in the clause (red, below). The other argued that it reached all items listed in the full paragraph (blue, below):

The trial court, court of appeals, and supreme court all agreed that the bettter reading of the “in writing” clause was that it only related to the “other items” (noting, among other matters, the importance of the “Oxford comma”). But the court of appeals found ambiguity, based on its characterization of the parties’ dueling interpretations as reasonable, and that is the point on which the supreme court reversed:

This analysis is erroneous for two basic reasons. First, like all other considerations beyond the contract’s language and structure, parties’ “disagreement” about their intent is irrelevant to whether that text is ambiguous. Parties who find themselves in a business dispute can always claim an extratextual “intent” that would serve a current litigation position. Second, the “multiple, reasonable interpretations” that the court of appeals invoked are illusory. If there were multiple interpretations and a court could not choose among them, then the text would be genuinely ambiguous and there would be no choice but to leave the question to a jury. But the multiple interpretations that the court was referencing here were merely the competing theories that the parties advanced about how to read the text—a dispute that both the trial and appellate courts had ably addressed as a matter of law.

No. 22-0901 (Nov. 3, 2023) (emphasis removed).

Dallas-Fort Worth International Airport, by any measure one of the world’s largest airports, sprawls into the boundaries of four cities and two counties. But that undisputed fact does not automatically establish venue over American Airlines in Dallas County, as shown by American Airlines v. Halkuff:

American offered evidence that the facts giving rise to appellees’ claims arose in Tarrant County because the terminal where the incident took place is—like all DFW terminals—located in Tarrant County. American’s undisputed evidence included specific identification of Terminal D and Gate D-38 as the location where the flight at issue boarded. According to American’s evidence, Terminal D and its associated runways are located entirely in Tarrant County. This evidence not only disproved appellees’ venue fact, it also amounted to evidence that Tarrant County was a proper venue.

No. 05-23-00621-CV (Oct. 18, 2023) (mem. op.).

The Fifth Court confirmed the confirmation of an arbitration award arising from a dispute about the purchase of a surgical center in Minimally Invasive Surgery Inst., LLC v. MISI Realty CC Dallas, LP. It reminded about two basic points in challenging arbitration awards:

  • ‘Manifest disregard of the law is not a valid ground for vacating an arbitration award under the FAA or TAA.”
  • “[T]he Final Award notes the four-day arbitration included offers of proof, counsel statements, witness testimony, deposition and documentary evidence, and post-arbitration briefs. The arbitration award also states: ‘All issues have been determined by the evidence presented during the full arbitration.’ The award provides findings and conclusions with analysis. But the record contains little more than the arbitration award, the lease agreement, and the trial court order granting the motion to confirm the arbitration award. There is no list of exhibits or witnesses, no record of exhibits admitted into evidence or rulings on evidentiary objections, and no transcript of the proceedings. The trial court and appellate records do not include a complete record of the arbitration, and what is included is insufficient to allow this Court to conduct a meaningful review of any claimed ‘manifest disregard of the law’ by the arbitrator.”

No. 05-22-00581-CV (Oct. 19, 2023) (mem. op.) (emphasis added).

The Fifth Court declined to resolve a dispute about a spoliation instruction when the relevant record was as follows:

It is not clear what happened. We are reasonably confident that a charge conference of some kind took place during the “Off-the-record discussion” noted in the reporter’s record passage quoted above. Judge Moyé said, “We are off the record,” just before the unrecorded discussion occurred, so perhaps the attorneys were on notice that the court reporter was not transcribing their objections to the final charge. Then again, perhaps they weren’t. Perhaps something happened during the unrecorded conference to make the Monzingos’ attorney reasonably but erroneously believe that the court reporter had begun recording the charge conference before he made his objections to the charge. And during this appeal, Flories has never argued that the Monzingos failed to preserve their second issue.

Monzingo v. Flories, No. 05-22-00719-CV (Oct. 12, 2023).

A contentious eviction case was resolved with a straightforward jurisdictional principle in In re Saving Grace #2, LLC:

Here, the county court’s final judgment was signed on September 1, 2022. No appropriate motion to extend the trial court’s plenary jurisdiction was filed within 30 days of the final judgment. Thus, the county court’s plenary jurisdiction expired on October 1, 2022. See Tex. R. Civ. P. 329b(d). The county court’s stay order was entered on May 19, 2023—well past that deadline. Because the county court may not issue a stay order after plenary power expires, see Tex. R. Civ. P. 329b(f) (explaining the limited actions a court may take after plenary power expires), we conclude that the stay order issued seven months after plenary power expired is void.

No. 05-23-00745-CV (Oct. 13, 2023).

Empowerment Homes LLC v. Aleman undid a series of unfortunate events surrounding a default judgment, as follows:

  • Incorrect, but well-intentioned, answer. “Arce filed a pro se answer using a standard “Defendant’s Answer” form. He incorrectly identified “Empowerment Homes LLC” as “Plaintiff,” but then listed his information under section “1. Defendant’s Information.” He signed the Answer in his individual capacity. He indicated in his affidavit attached to the motion for new trial he “thought I was answering on behalf of both myself and Defendant Empowerment Homes, LLC. I was not aware that I could not represent Empowerment Homes, LLC as I am not an attorney licensed in the State of Texas.” Under these facts, we conclude Arce tried, albeit deficient, to answer on behalf of Empowerment.”
  • Deemed admissions.The court held a hearing on the motions, and Arce attended. Appellants do not assert, and the record does not imply, Arce asked to withdraw the deemed admissions at the hearing. Instead, despite notice of the mistake prior to entry of final judgment, appellants did nothing and waited until the motion for new trial to request withdrawal of the deemed admissions. Thus, the equitable considerations that might permit a party to move post-judgment for withdrawal of deemed admissions are not present in this case.”
  • Misuse of deemed admissions.  “Because appellees failed to establish an element of their summary judgment burden—that Arce acted in bad faith or callous disregard to the rules by not answering the request for admissions—the trial court erred in granting summary judgment based on the deemed admissions.”

No. 05-22-01082-CV (Oct. 9, 2023).

Mode, a Texas-based provider of transportation services, had a contract with Boyer (and later, his company, MTSI) to act as its sales agent. After some years under the contract, Boyer sought to sell MTSI to an unrelated company called MX, while also discussing a potential sale of MTSI to Mode.

When Mode learned of the Boyer-MX communications, it sued all three parties (Boyer, MTSI, and MX) for taking trade secrets; Boyer and MTSI for breach of their sales-rep contract with Mode; and MX for tortiously interfering with that contract.

The Fifth Court affirmed the denial of the special appearance made by Boyer and MTSI, noting that significant business they conducted in Texas pursuant to their relationship with Mode. But the Court reversed the denial of MX’s special appearance, noting recent Texas and U.S. Supreme Court opinions about “stream of commerce” jurisdictional issues, and nevertheless concluding: “Mode seeks to premise specific jurisdiction over MX based on the ‘directed a tort’ or ‘effects’ theory” that the Texas Supreme Court has rejected. Boyer v. Mode Transp., LLC, No. 05-23-00008-CV (Oct. 4, 2023) (mem. op.).

Boyer v. Mode Transp., LLC, decided by the Fifth Court last week, provides a useful “update” of special-appearance law after some recent Texas and U.S. Supreme Court opinions, and I’ll have a post about it later in the week. A footnote involves an important practical issue in preparing a case for appeal:

The public clerk’s record will contain redacted versions of anything that was filed under seal, pursuant to a protective order, etc. Counsel has to identify such materials before briefing starts and find a way to get that material to the court of appeals before briefing begins. That often requires some coordination with the staff of both the relevant trial and appeals court.

Together with the able Ben Taylor, I have an article in the most recent Baylor Law Review called “Judgment Rendition in Texas.” The abstract is below. Our article was inspired by a 1975 article by Justice Robert Calvert in the Texas Tech Law Review called “Appellate Court Judgments or Strange Things Happen on the Way to Judgment.” We hope that we updated some of his insights for modern-day appellate practice.

The Fifth Court affirmed the denial of a TCPA motion to dismiss on procedural grounds in Quality Cleaning Plus, Inc. v. Preferred Staff, LLC:

“When a separate and independent ground that supports a ruling is not challenged on appeal, we must affirm the lower court’s ruling.” Here, Preferred argued in the trial court that the TCPA is inapplicable on several bases, each of which constituted an independent ground that could support the trial court’s ruling. QCP did not address or mention any of these bases in its appellate brief. Because QCP failed to challenge every independent basis supporting the trial court’s ruling, we must affirm that ruling.”

(citations omitted). Importantly for practitioners who file TCPA motions: the panel majority denied a sanctions motion about this TCPA filing, but a concurrence questioned whether the appeal – particularly, in light of the failure to address the issue noted above – had been taken in good faith or simply to obtain the benefits of the statutory stay. 

A declaratory-judgment claim in a will contest led to a counterclaim based on the will’s in terrorem clause. That counterclaim was met by a TCPA motion to dismiss, which was denied by operation of law. The Fifth Court reversed in Roach v. Roach, No. 05-22-00194-CV (Sept. 18, 2023) (mem. op.).

Specifically, the Court concluded that the TCPA applied, as the “counterclaim was based on or in response to” a pleading. Then, noting a handful of Texas cases involving comparable will cases, the Court held that “appellees failed to meet their burden to establish by clear and specific evidence a prima facie case that John’s declaratory action violated the will’s in terrorem clause.”

While Texas law does not find personal jurisdiction when the defendant “directs a tort” toward Texas with out-of-state activity, the analysis changes when the tort is, in fact, committed in Texas:

Trinity is registered with the Texas Secretary of State and operates a regional service center in Euless, Texas, which employs a manager and thirty-three employees. The record reflects Trinity recruited and employed Evenflow and Manselle while both were still working for TTS, and during such time Manselle disclosed to Trinity TTS’ confidential business information related to Texas customers and interfered with TTS’ business in Texas. Trinity’s regional service center in Texas permitted Trinity to capitalize on confidential and proprietary information concerning TTS’ customers and business operations in Texas. In fact, in the twelve months following Trinity’s appropriation of TTS’ confidential business information, Trinity earned approximately $475,000 in recurring Texas-based business.

TTS LLC v. Evenflow LLC, No. 05-22-00770-CV (Sept. 15, 2023) (mem. op.). The court also noted an interesting counterpoint to the often-cited principle that “[w]hen a trial court does not issue findings of fact and conclusions of law with its special appearance ruling, all facts necessary to support the judgment and supported by the evidence are implied”; namely, that “[a]lthough the trial judge acts as the factfinder and must resolve any factual disputes in the special-appearance evidence, the judge must accept as true any clear, direct, and positive evidence presented in an undisputed affidavit.” (citations omitted).

Below is a reminder email recently sent by the DBA Appellate Section about the annual joint Dallas-Tarrant meeting tomorrow (22nd), which will be at the Arts District Mansion and has lots of great material this year:

Greetings, colleagues! Welcome to your second-to-last reminder email about tomorrow‘s (September 22) Annual Joint Meeting with the Tarrant County Appellate Section.  We’ve got some terrific speakers lined up for you, a fun reception afterwards (generously underwritten by Duane Morris LLP), and a bonus ethics CLE opportunity over the lunch hour by also attending the DBA’s Day of Civility luncheon.

As a bonus you don’t have to go far – this year’s meeting will be at the Dallas Arts Mansion. Yay!

Register here for the joint meeting:

https://www.dallasbar.org/?pg=events&evAction=showDetail&eid=271565&evSubAction=viewMonth&calmonth=202309

Meeting Agenda:

8:00 am: Registration and continental breakfast

8:30 am: Practice and Procedure at the 5th Court of Appeals, presented by Justices Ken Molberg, Cory Carlyle, and Erin Nowell (Moderator: Anne Johnson)

9:45 am: Practice tips for success at the 2nd Court of Appeals, presented by Justices Elizabeth Kerr, Dana Womack, and Mike Wallach (Moderator: Chris Knight)

11:00 am: Supreme Court Q&A with Justices Jane Bland and Jimmy Blacklock

12:00 – 1:00: Lunch (Optional: Attend Day of Civility luncheon in adjoining room for                       additional 1.00 hour of CLE credit)

1:00 pm: The state of the Texas Judiciary with Chief Justice Nathan Hecht followed by a panel discussion with Chief Justices Hecht, Robert Burns, and John Bailey (Moderator: David Coale)

2:00 pm: Reception

The Fifth Court granted mandamus relief in a failure-to-rule case in In re Z Resorts Management LLC–an unusual hybrid of a wrongful-death lawsuit and a dispute about child guardianship. One of the motions addressed the authority of a party to represent a minor’s interests in the litigation. The court rejected an argument that an earlier ruling on a related topic prevented the pursuit of this mandamus petition:

Parguian argues that the Rule 12 Motion serves only to relitigate the trial court’s earlier ruling on the Amended Plea. Because both rulings address Parguian’s capacity to represent the Minor Children, we agree that some questions couldoverlap. But other questions will be new to the issue. The trial court will now have the SAPCR order and the intervening Paternal Grandparents before it when making the capacity decision. Moreover, even if circumstances had not evolved with the signing of the SAPCR order and the intervention of the Paternal Grandparents, the trial court always retained its plenary power to change its capacity ruling. Accordingly, requiring the trial court to rule on the Rule 12 Motion is not an empty or redundant directive

No. 05-23-00425-CV (Sept. 11, 2023) (mem. op.)..

While option agreements are an important part of commercial law, their specific legal requirements are not as frequently litigated as other contract-law concepts. Vertical Holdings, LLC v. LocatorX, Inc. holds that a failure to pay a specified $1,000 price precluded exercise of an option, because:

Under Texas law, to exercise an option, “strict compliance with the provisions of an option contract is required … [A]cceptance of an option must be unqualified, unambiguous, and strictly in accordance with the terms of the contract.” And “any failure to exercise an option according to its terms, including untimely or defective acceptance, is simply ineffectual, and legally amounts to nothing more than a rejection.

No. 05-22-00720-CV (Sept. 13, 2023) (mem. op.) (citations omitted).

The resolution of Verhalen v. Akhtar turned on the trial court’s rejection of a late  summary-judgment response. The Fifth Court affirmed the take-nothing judgment that resulted from that decision, making several observations of note for the careful practitioner.

1. Good cause. Counsel’s affidavit said:

“Due to an inadvertent calendaring error, the deadline for Plaintiffs to respond to the Motions for Summary Judgment filed by Defendants Adriana Akhtar and Evan Johnston did not appear on the firm’s company calendar. . . . As soon as this oversight became known, I immediately prepared the responses as well as a Motion for leave of the Court to file late responses ….”

At the summary-judgment hearing, counsel further explained that when the summary-judgment hearings were rescheduled from October 5 and 13 to October 12, “unfortunately our calendaring system did not pick that up, and it was a mere mistake on [our] part.” The Court found this record insufficient:

“We agree that the “slight excuse” standard applies, but the excuse offered here is only that the deadline to file responses did not appear in counsel’s calendar. Therefore, trial court could not conclude from that explanation that failure to prepare responses was an accident or mistake.  For example, nothing in the affidavit indicated that the hearings themselves did not appear in the counsel’s calendar such that counsel would be aware that responses would be due the week prior.” (citations omitted).

2.  Continuance. Counsel filed a motion for leave several days before the summary-judgment hearing, but did not move for continuance of the hearing unti making an oral motion at the hearing itself. Further complicating the picture, “although the motion for leave to file late responses also requested leave to file appendices greater than 25 pages long, the motion contained no attached responses or evidence,” allowing the conclusion that the hearing was the defendants’ first opportunity to review the responses.

3. Scope of appeal. Related to (2): “[Plaintiffs] assert that their counsel served the responses with supporting evidence on opposing counsel six days prior to the hearing. To support this assertion, they rely on the affidavits of their counsel and paralegal filed in support of their motion for new trial. However, those affidavits were not included in support of the motion for leave to file late responses, and the Verhalens do not appeal the trial court’s decision to deny their motion for new trial. No. 05-22-01364-CV (Sept. 14, 2023) (mem. op.).

 

Whether Texas needed a 15th Court of Appeals was (and on some points, continues to be) a matter of considerable debate. The supreme court’s recent opinion in In the Interest of AB and DB highlights another aspect of Texas’ intermediate court system that just hasn’t aged well.

Appeals from Gregg County proceed to both the Sixth and Twelfth Courts of Appeal; in that case, one parent appealed a parental-rights judgment to the Sixth Court, while the other appealed to the Twelfth. In the resulting confusion, the supreme court held that the father’s appeal was erroneously dismissed:

The Twelfth Court’s dismissal of the appeal upon Father’s motion did not divest the Sixth Court of jurisdiction. The Sixth Court concluded in error that the Twelfth Court’s dismissal fully adjudicated Father’s appeal.  Rule of Appellate Procedure 42.1(a)(1) provides that an appellate court may not dismiss an appeal if “such disposition would prevent a party from seeking relief to which it would otherwise be entitled.” The Twelfth Court’s dismissal, which explicitly withheld adjudication under Rule 42.1(a)(1), was without prejudice to Father’s pursuit of his appellate rights in the Sixth Court. The Sixth Court improperly interpreted the dismissal as a final disposition preventing Father from seeking further relief in a court of appeals.

No. 22-0864 (Tex. Sept. 15, 2023) (per curiam).

This situation is relevant to Dallas because appeals from Hunt County (Greenville) alternate between Dallas and the Sixth Court. While the supreme court’s opinion capably reviews the applicable procedure, the more relevant question is why? It’s not readily apparent what benefit results from a system that can produce this kind of satellite proceeding.

Novak v. State Farm Lloyds reminds of the importance of following through on the motion practice necessary to establish the receipt of an instrument: “Though appellants attempted to invoke the civil procedure rule 306a(4) and (5) procedure to have the trial court determine the date they received notice of the dismissal as October 11, 2021, such that their motion to reinstate was timely and properly invoked the court’s jurisdiction, they did not request the trial court to issue a ruling to that effect, and the trial court did not do so in any order. ‘Without a finding of the date notice was actually received,’ and a written order to that effect, the motion to reinstate was untimely.” No. 05-22-00061-CV (Sept. 5, 2023) (mem. op.).

AMPM Enterprises v. Borders, a dispute about alleged failures to pay for gasoline deliveries to service stations, presented a good example of a basic issue, and an interesting example of a less common one.

  • Proveup. “Here, Borders’ December 23, 2020 affidavit established that he was the vice president of Borders and was responsible for overseeing the maintenance of Borders’ books and records of sales and accounts and was the custodian of such records. The affidavit stated that the table showing a balance of $42,151.82 owed by AMPM and PTE was ‘a true and correct copy of Borders’ records reflecting charges incurred by AMPM and PTE for gasoline delivered to AMPM and PTE’s stores or related fees or services incurred pursuant to the agreement of the parties,’ and the table was ‘created in the ordinary course of business and reflects a systematic record of the amounts owed by AMPM and PTE to Borders.’”
  • Performance. “It is not disputed that AMPM and Asghar entered into contracts with Borders in October 2010 to provide fuel at four locations, and Borders continued to provide fuel, and AMPM continued to pay for it, until some time in 2017. Borders and PTE commenced an oral relationship involving requests and delivery of fuel in 2017. During that transactional history, AMPM, Asghar, and PTE did not complain about fees included in the price of fuel or challenge the validity of their contracts with Borders. Under the facts and circumstances of this case, we conclude neither the absence of a price specified in the underlying contracts nor the absence of provisions for the payment of “monthly fees, network fees, and mystery shoppers fees” raised a fact issue as to the amounts owed to Borders under the contracts.”

While In the Matter of J.W. involved an unusual problem–an Anders brief that, for the second time, appeared inadequate–it provided a reminder about a basic distinction that is sometimes overlooked. “Frivolity,” as to an appeal issue, is not the same as “reversibility”:

The two concepts are certainly not the same. An appeal is “wholly frivolous” or “without merit” when it “lacks any basis in law or fact.”  Arguments are frivolous when they “cannot conceivably persuade the court.”  An appeal is not wholly frivolous when it is based on “arguable” grounds.  Reversal only occurs if arguable error is found to have occurred, and was harmful. . Many nonfrivolous arguments identify errors that do not result in reversal.

No. 05-22-00556-CV (Aug. 28, 2023) (mem. op.) (citations omitted).

Pizza Hut LLC v. Pandya resolves two issues about waiver of jury trial:

  • Burden. “[T]he party objecting to the enforcement of a waiver in a facially valid contract bears the burden of showing the waiver’s unenforceability.”
  • Fraud? “[A] fraud claim must be alleged against the jury waiver specifically.”
  • Knowing? These, nonexclusive factors answer the question whether a pre dispute jury waiver is knowing or voluntary: “(1) whether both parties had an opportunity to negotiate the terms of the agreement, (2) whether the provision waiving jury trial was conspicuous, (3) the relative bargaining power of the parties, and (4) the business acumen or professional experience of the party opposing the waiver,” as well as “whether the party was represented by counsel.”
  • Scope. When the parties had a series of agreements, language in one agreement’s waiver that appies to “any litigation by or among” the parties reaches claims made under those agreements.

No. 22-4055 (Aug. 22, 2023).

The plaintiff in Galovelho LLC v. Abbott argued that a combination of emergency orders during the COVID-19 pandemic amounted to a taking in violation of the Texas constitution, citing their effect on its restaurant business. The Fifth Court affirmed dismisal, finding neither a “categorical” nor a traditional taking under established case law. No. 05-21-00965-CV (Aug. 29, 2023) (mem. op.).

The court noted an interesting textual difference between the state and federal takings provisions:

There is no dispute that the Texas constitution’s takings provision is different from the United States Constitution’s provision. The Fifth Amendment provides: “nor shall private property be taken for public use, without just compensation,” while the Texas counterpart provides: “[n]o person’s property shall be taken, damaged, or destroyed for or applied to public use without adequate compensation.”

That said, the court went to observe: “[W]e await [the supreme] court’s directive that the provisoins are to be analyzed differently when a takings claim is made for property temporarily ‘damaged.'”

The Appellate Section of the Dallas Bar Association recently sent around the following email, which I wanted to share more broadly, about two openings for briefing attorney positions at the Dallas Court of Appeals —

Colleagues:
Please see below for two appellate job openings that may be of interest.
https://jobs.dallasbar.org/jobs/view/staff-attorney/70601054/
Salary Range: up to $112,790.00
Location: Dallas, TX (hybrid, in-person and telework)
Position Available: Immediately
Justice Emily Miskel of the Court of Appeals, Fifth District of Texas, is accepting applications for a full-time, hybrid staff attorney position in her chambers. The Fifth District Court of Appeals has intermediate appellate jurisdiction of both civil and criminal cases appealed from the district and county courts in the counties that make up the Court’s District (Dallas, Collin, Kaufman, Rockwall, Grayson, and Hunt).

https://jobs.dallasbar.org/jobs/view/staff-attorney/70315081/
Salary Range: up to $112,790.00
Location: Dallas, TX (hybrid, in-person and telework)
Position Available: October 1, 2023
Justice Cory Carlyle of the Court of Appeals, Fifth District of Texas, is accepting applications for a full-time, hybrid staff attorney position in his chambers. The Fifth District Court of Appeals has intermediate appellate jurisdiction of both civil and criminal cases appealed from the district and county courts in the counties that make up the Court’s District (Dallas, Collin, Kaufman, Rockwall, Grayson, and Hunt).

In Moby-Dick, Captain Ahab nailed a gold coin to the mast as an incentive to spot the white whale. In Combs v. Crepeau, the judgment debtor deposited a gold coin into the trial court’s registry as part of the supersedeas for a substantial civil judgment. The Fifth Court distinguished a permissible order requring a cash deposit from an impermissible order appointing a post-judgment receiver (in the supersedeas setting), noting: “Placing money into the court’s registry is a means of keeping the money safe.” No. 05-23-00088-CV (Aug. 21, 2023) (mem. op.).

Topletz v. Choice affirmed, in part, a class action of tenants against the owners of several rental properties in Dallas. The reversal turned on the extent of the landlord’s liability under several sections of the Property Code, which in turn involved application of the supreme court’s recent opinion about a similar class action in American Campus Communities, Inc. v. Berry, 667 S.W.3d 277, 283 (Tex. 2023). No. 05-22-00781-CV (Aug. 22, 2023).

I had an op-ed in today’s Dallas Morning News about recent friction between the Supreme Court and Fifth Circuit on standing in some high-profile constitutional/administrative-law cases.

My grandfather was the postmaster of Orange, Texas in the 1930s and 1940s, so I have a family interest in cases involving mail. Long v. Paratheke Enterprises, LLC provides an instructive example about whether a key notice, sent by a landlord using certified and first-class mail, was received by the tenant:

  • The certified mailing was not delivered successfully. “The evidence showed the U.S. Postal Service attempted to deliver the certified mail letter on September 29, October 4, and October 14 and returned the letter to Landlord’s counsel as “UNCLAIMED” and with a stock printed sticker stating “RETURN TO SENDER INSUFFICIENT ADDRESS UNABLE TO FORWARD.”
  • As for the first-class mailing: “Landlord presented evidence that its counsel addressed the notice to vacate to Tenant and sent the notice to the Premises’ address, postage prepaid, by regular first-class mail. Thus, a presumption exists that the mailing was duly received by Tenant.”
  • Tenant sought to overcome that presumption with her testimony about difficulty using that mailbox (it was shared by the tenants and open to the street), and by noting the problem with the certified mailing. The Fifth Court held that the trial court was justified in not crediting that testimony: “As factfinder, the trial court is given great latitude to believe or disbelieve a witness’s testimony, particularly if the witness is interested in the outcome.”

No. 05- 22-00685-CV (Aug. 15, 2023) (mem. op.).

An ex-husband sought to obtain half of the money paid to his ex-wife as a result of an arbitration she won against her former counsel for legal malpractice. The Ffith Court acknowledged the longstanding but seldom-applied cases about the cause of action for “money had and received,” and held:

“David essentially argues that appellees should have paid a portion of what they were court ordered to pay Jennifer to him instead. Had appellees done so, they would have done so in defiance of the trial court’s judgment. David cannot claim that half of the $111,272 belonged to him in equity and good conscience when appellees handled the money in accordance with a court order. Although David argues that appellees’ payment to Jennifer does not insulate appellees from liability to him, the money-had-and received cases he relies on are distinguishable as they involve money mistakenly given to the wrong recipient.

Barnes v. Kinser, No. 22-30653 (Aug. 17, 2023) (mem. op.).

Among other expert-testimony issues in Smith v. Nexion Health, the Fifth Court reminded about the importance of excluding alternative causes:

There also was some evidence of other plausible causes of Smith’s death, and Dr. Gupta made no attempt to exclude those causes with reasonable certainty.  Smith’s attending physician at the hospital, in addition to attributing her death to cardiac arrest, made diagnoses of unspecified dementia without behavioral disturbance, essential hypertension, hypotension, hypolipidemia, unspecified, anemia, unspecified, and a personal history of TIA. Irwin Korngut, M.D., an expert witness designated by appellees, testified that the emergency physicians found no evidence to suggest that Smith was septic at the time of her death and did not list sepsis as a diagnosis. Dr. Korngut further testified that Smith’s anemia, her known coronary disease, or internal bleeding could have caused cardiac arrest.

No. 05-22-01140-CV (Aug. 11, 2023) (mem. op.) (citations omitted).

The appellant in Schoenbauer v. Deutsche Bank argued that an “order of nonsuit was improper because he had counterclaims pending.” But the Fifth Court held:

Counterclaims are subject to the payment of a mandatory filing fee. No right to be heard on counterclaims exists until the fee is paid and the filing is complete. Because the record before the Court reflects that appellant did not pay the required mandatory filing fee, the order of nonsuit of all of appellee’s claims against appellant rendered the case moot. 

No. 05-23-00416-CV (Aug. 1, 2023) (mem. op.) (citations omitted).

The plaintiff in Wooten v. Northwestern Mut. Life. Ins. Co. sued for alleged misrepresentations about the sale of disability-insurance policies. The Fifth Court affirmed summary judgment for the defense:  “‘[P]olicy provisions and other documentation addressed above demonstrate the policies did not provide the coverage or the payout appellees allegedly misrepresented. ‘His injury was not inherently undiscoverable because he easily could have discovered his injury by reading the policies.'” No. 05-20-00798-CV (July 31, 2013) (mem. op.).

I’m on a summer vacation road trip, blog posts will resume upon my return next week! I hope you are having an enjoyable summer with quality air conditioning. I also recommend that you see “Oppenheimer” — with or without seeing “Barbie” — as it offers some powerful insights about civil procedure run amok in Oppenheimer’s security-clearance hearings.

After a well-publicized debacle in New York involving “research” in which ChatGPT invented nonexistent cases, the phenomenon of “hallucinatory” generative AI has arrived in Texas. The Waco Court of Appeals recently faulted a lawyer for providing a brief with three nonexistent cases (and, like the New York counsel, not responding when the problem was pointed out by the appellee). While there is nothing wrong with using ChatGPT to help with legal analysis and writing, uncritical acceptance of purported caselaw found “on the Internet” is always risky.

The affidavit-counteraffidavit procedure in Tex. Civ. Prac. & Rem. Code § 18.001 streamlines the handling of evidence about whether services are reasonable and necessary. That said, the process can generate controversy, as it did in Ortiz v. Nelaplatla, where the defendant’s counteraffidavits in a personal-injury case only addressed some of the matters in the plaintiff’s affidavits.

The panel majority summarized: “Nelapatla filed counteraffidavits that satisfied the requirements of section 18.001 for the purpose of providing notice to Ortiz of the nature and basic issues in controversy so that Ortiz would have ‘sufficient information to enable [her] to prepare a defense or a response.’ Ortiz did not challenge the counteraffidavits. Under the circumstances presented, we conclude the trial court did not abuse its discretion in sustaining Nelapatla’s objections to admission of Ortiz’s section 18.001 affidavits and Nelapatla’s counteraffidavits as proof of the reasonableness and necessity of Ortiz’s medical services and charges.” (citation omitted).

A dissent expressed concern about the majority’s fidelity to the statutory text and the practical consequences of its opinion. No. 05-22-00531-CV (July 18, 2023) (mem. op.).

A nightclub shooting led to litigation. The trial court granted the defendants’ motion to dismiss and the Fifth Court reversed in Mendoza v. Milkshake, LLC, holding, inter alia:

  • As to a dispute about whether the proper parties had been sued: “We reject appellees’ assertion that Mendoza’s claims against them can be dismissed due to the verified denial. Assuming the verified denial conclusively proved appellees were improper parties, it cannot be included in the Rule 91a analysis. The trial court was required to decide the motion based solely on the pleading of the cause of action.”
  • Because “[a] motion to dismiss must state specifically the reasons the cause of action has no basis in law or in fact,” the court declined to consider arguments for dismissal made for the first time on appeal.

No. 05-22-01018-CV (July 11, 2023) (mem. op.)

In a case about allegedly defective ceiling work, the defendants complained about double recovery, arguing that the judgment for the plaintiffs let them “receive [both] the
smooth ceiling bargained for and a refund for that work.”

The Fifth Court disagreed. Accepting the legal principle that “[u]nder any of the theories of liability involved, the value of any goods and services provided by [defendants] factors into the measure of damages,” the defendants’ argument had a factual problem: “[T]he evidence at trial supports a finding that [defendants’] work provided no value to the Heflins. That evidence included the testimony of the Heflins and photographs showing the shoddy and incomplete work and additional damage caused by that work.”

Hizar v. Heflin, No. 05-21-0036-CV (July 10, 2023) (mem. op.).

The Fifth Court affirmed a severe sanction in Hizar v. Heflin. An issue was whether this admonition in an order on a motion to compel was a “lesser sanction” as understood byt by the case law about death-penalty sanctions:

“If Defendant fails to produce all responsive documents by Monday, July 12, 2021, Defendant’s pleadings will be struck.”

Aligning with several other appellate districts that have reached similar conclusions, the Court held that this language qualified as an unequivocal warning in the context of a death-penalty sanction. No. 05-21-00936-CV (July 10, 2023).

While the Supreme Court issued several opinions in Mallory v. Norfolk Southern Railway, No. 21–1168 (U.S. June 27, 2023), the part joined by a five-justice majority is straightforward. A condition for registering to do business in Pennsylvania is consent to be sued there, and the Court held that condition did not raise a due-process concern, reaffirming the validity of much older precedent on the point. Justice Jackson’s concurrence helpfully distinguishes the concepts of waiver and “minimum contacts.” No. 21-1168 (U.S. June 27, 2023).

The issue in Myers v. Raoger Corp. d/b/a Cadot Restaurant was whether Khan, a patron of Cadot Restaurant, had too much to drink while he was there. Specifically, the dram shop statute requires proof that “at the time the provision occurred it was apparent to the provider that the individual … was obviously intoxicated to the extent that he presented a clear danger to himself and others ….”

The Fifth Court reversed a summary judgment in favor of the defendant, finding a genuine issue of material fact.

The one clear fact is that Khan had a BAC of .139 at 3:09 AM, a few hours after he left Cadot and was involved in an accident. From there, the opinion described the conflicting testimony of Khan, the arresting officer, the bartender, the restaurant owner, and a toxicology expert, and concluded that the record contained sufficient circumstantial evidence to allow inferences in the plaintiff’s favor under City of Keller.

The Court also noted a legal error in the defendant’s summary-judgment position,in that the statute “does not require evidence that the provider actually witnessed the intoxicated behavior”–only that the behavior have been objectively “visible, evident, and easily observed.” No. 05-21-00988-CV (July 5, 2023) (mem. op.).

In Gregory v. Chohan, reversing the en banc Fifth Court, the Texas Supreme Court reversed an award of mental-anguish damages:

“To guard against arbitrary outcomes and to ensure that damages awards are genuinely compensatory, the plaintiff in a wrongful death case should be required to demonstrate a rational connection, grounded in the evidence, between the injuries suffered and the dollar amount awarded.” 

No. 21-0017 (Tex. June 16, 2023).

Eagle Remodel sued Capital One for honoring several forged checks drawn on its account. The bank sought refuge in the “same wrongdoer rule,” a UCC provision based on the obligation of the bank customer to diligently review statements, and that places the burden on the bank to establish the elements of that defense.

Unfortunately for the bank, while “[t]he record contains evidence that Ruiz [Eagle’s former employee] stole the checks … the record does not show who signed or altered the checks, and it also does not establish the checks were signed or altered by the same wrongdoer.”

Put another way: “The record contains no evidence demonstrating who signed or altered the checks the evidence shows who Eagle Remodel believes stole the checks.” Eagle Remodel LLC v. Capital One Fin. Corp., No. 05-22-00206-CV (July 6, 2023) (mem. op.) (emphasis added).

The Disaster Act “grants the Governor the authority to prohibit local governments from requiring the wearing of masks in response to a contagious disease.” The supreme court left for another day the outer limits of the Governor’s power under that Act. The Dallas mask case was decided in a separate cause number that referred back to the analysis in Abbott v. Harris County, No. 22-0124 (Tex. June 30, 2023).

Texas’s special-appearance process requires, as the second step, that the defendant bring forward evidence to negate the plaintiff’s averments about longarm jurisdiction.

The defendant’s affidavit in Nusret Dallas LLC v. Regan said the following;

The Fifth Court found that paragraphs 2-3 and 5-7 did not negate the plaintiff’s allegations. Paragraphs 4 and 8 addressed the general topic of the plaintiff’s allegations, but did not “squarely meet or negate” their substance. Paragraph 9 “is conclusory … and legally constitues no evidence.” No. 05-21-00739-CV (June 23, 2023) (mem. op.). The Court went on to review the merits of the plaintiff’s allegations and reversed the grant of the defendant’s special appearance.

Two New York lawyers filed a brief with “fake law” in it, having accepted at face value a “hallucination” by ChatGPT abouot several cases that did not in fact exist. The district court has now sanctioned them. The opinion is of broad general interest, given the great influence of generative AI in its few short months of widespread public availability. And it’s also of broad general interest in avoiding sanctions–the lawyers had at least one good chance, and maybe even two, of coming clean about their error, but instead “doubled down” with purported screenshots of the nonexistent cases.

The Emperor Justinian (right) ruled the Byzantine Empire, a society often criticized for its complex legal system. Justinian would likely feel at home with the Texas system of trial courts, which distinguishes among courts created by the state constitution and “statutory” courts created by the Legislature.

In Ditech Servicing, LLC v.  Perez, No. 21-1109 (May 19, 2023), the Texas Supreme Court reviewed that system to conclude that a county-specific statute controlled over a general, statewide limitation on statutory-court jurisdiction, letting a Hidalgo County court at law hear a counterclaim allowing a foreclosure.

The comprehensive review of the statutes, and the relevant canons for their interpretation, is a useful general reference. It remains to be seen if the new business-court system will create other such conflicts.

The recent case of City of Dallas v. PDH Holdings, in the course of rejecting the application of estoppel to bar the enforcement of a zoning ordinance, made two observations about procedural matters of broad general interest:

  • Deemed Findings. “PDT argues that because there are no findings of fact and conclusions of law, we imply all findings necessary to support the judgment. While this is true, implied findings must have support in the record on a theory of law applicable to the case. Contrary to what PDT seemed to suggest at oral argument, this does not mean we have carte blanche to craft a remedy based on a theory unsupported by the pleadings or imply findings that have no evidentiary support in the record.”
  • Other Districts. “[W]e are not bound by decisions from our sister courts.” (citation omitted).

No. 05-22-00730-CV (June 16, 2023) (mem. op.) (all emphasis added).

Applying City of White Settlement v. Super Wash, Inc., 198 S.W.3d 770 (Tex. 2006), the Fifth Court rejected the application of equitable estoppel to bar the City of Dallas’s enforcement of a zoning ordinance. The issue involved the acceptable height for a “parapet wall” of a duplex townhome; the estoppel argument involved communications with a building inspector during construction. The Court noted:

  • “While we do not endorse the City’s erroneous issuance of two permits, the errors cannot properly be characterized as affirmative misrepresentations or deliberate actions calculated to induce PDT’s reliance.”
  • “PDT’s argument that it reasonably relief on the City’s erroneous permits is similarly unpersuasive. The RPS ordinance is a matter of public record and PDT is charged with notice of its provisions.”
  • PDT showed no benefit to the City (contrasting another case involving a direct land conveyance to the municipality)

No. 05-22-00730-CV (June 16, 2023). Interestingly, the opinion notes that the precedent in this area involves equitable estoppel rather than quasi-estoppel (which does not require detrimental reliance)–a potential area for future litigation.

 

Texas R. Civ. P. 301 says that a judgment “shall conform to the pleadings.”

In In the Interest of SMG and AIG, a petition for name change asked that two children have their name changed from “Gonzalez Rodriguez” to “Rodriquez.” At the hearing, the petitioner said that “Gonzalez” could also be the middle name.

(In Mexico, the convention is to have two last names–a practice that does not always match with American legal forms.)

The children ended up with the hyphenated last name of “Gonzalez-Rodriguez.” The Fifth Court reversed because that relief did not comport with Rule 301. It expressed no view on the sufficiency of the evidence to support such a change. No. 05-22-00937-CV (June 13, 2023) (mem. op.).

A trust administrator based in South Dakota was not subject to personal jurisdiction in Texas: “South Dakota Trust Company is a trustee in a passive role in that its roles and duties are limited and there is no evidence it sought to conduct business in Texas. Indeed, the Trusts are managed completely in South Dakota. Similarly, the fact that the Trusts’ beneficiaries are Texas residents is insufficient to assert jurisdiction over South Dakota Trust Company.” Willow Tree Consulting Group LLC v. South Dakota Trust Co., LLC, No. 05-22-00176-CV (June 1, 2023).

The Fifth Court reversed a sanction, holding, inter alia, that the trial court’s inherent power did not extend to the matter at hand: “Frenkel’s failure to investigate the source of the Document at Issue before making his bold proclamation that the document was not forged was ill advised. However, reviewing the evidence in the light most favorable to the trial court’s ruling, we cannot conclude the evidence gives rise to an inference of intent or willfulness or indicates improper motive.” Frenkel v. Courtney, No. 05-21-01114-CV (June 9, 2023) (mem. op.) (citation omitted).

Reviewing its earlier precendent about a limitations-tolling statute, the Texas Supreme Court held in Ferrer v. Almanza that:

Ashley held that “absence from this state” under [Tex. Civ. Prac. & Rem. Code ] Section 16.063 depends not on physical location but, rather, on whether a defendant is subject to personal jurisdiction and service. That holding applies to resident and nonresident defendants with equal force. If a defendant is subject to personal jurisdiction in Texas and amenable to service, he or she is not absent from Texas under Section 16.063, and Section 16.063 does not apply.”

No. 21-0513 (Tex. April 28, 2023). A dissent argued that the majority strayed too far from an appropriate focus on the statutory text.

“Appellees substantially invoked the judicial process to appellants’ detriment when they chose the forum and filed suit in Collin County, Texas, in 2017, alleging numerous causes of action against appellants. Appellees did not raise forum non conveniens until 2020—after the parties had litigated back and forth, and after the trial court had partially granted appellants’ motion for summary judgment. Under these circumstances, allowing the plaintiff-appellees to use forum non conveniens—the point of which is to protect defendants from plaintiffs’ vexatious forum choices—to dismiss defendant-appellants’ counterclaims would be to turn the doctrine on its head.”

Munro v. Jagpal, 05-21-00125-CV (June 9, 2023) (mem. op.) (footnote omitted, emphasis added).

In the 2021 case of Aerotek v. Boyd, the Texas Supreme Court differed with the Fifth Court about the interplay of evidence rules and the Federal Arbitration Act. That case involved electronic signatures. he Fifth Court returned to this general subject, but on a different issue, in Fox v. Rehab. & Wellness Centre of Dallas, LLC, a wrongful death action against a nursing home.

The supreme court has observed that the statute requires consideration of submitted “affidavits, pleadings, discovery, or stipulations.” Here, “[r]ather than submitting with their motion [to compel arbitration] any ‘affidavits, pleadings, discovery, or stipulations’ to support their motion, appellees attached to their motion only the two-page unauthenticated Agreement, and they submitted no evidence at the later non-evidentiary hearing.” (citation omitted).

The Fifth Court noted its precedent that would allow rejection of the motion on that record, but did not decide on that basis. It instead holding that the record had no evidence establishing the authority of a husband (the plaintiff) to sign the agreement on behalf of his wife (the decedent) – despite a “certification” to that effect in the agreement.

The case presents an interesting return to a potentially fruitful topic for opponents of arbitration–reminding that arbitration rights are favored if proven, but still must be proven. The case also suggests that nursing homes should be careful about documentation, as the requisite power and authority will not always be presumed. No. 05-21-000904-CV (June 5, 2023) (mem. op.).

The majority and dissenting opinions in Davis v. Homeowners of Am. Ins. Co. differed about how to apply Tex. R. Civ. 91a to a limitations issue in a homeowner-coverage dispute. Foornote 6 in the majority opinion provides an interesting analysis of what materials, attached to pleadings, are fairly considered as an actualy part of those pleadings:

“Rule 59 permits as ‘pleading exhibits’ only ‘[n]otes, accounts, bonds, mortgages, records, and all other written instruments, constituting, in whole or in part, the claim sued on, or the matter set up in defense.’ …  Pleading exhibits are not evidence. They are exhibits in aid of, and to factually amplify allegations in, pleadings and, if used, must be incorporated by reference into the pleadings in some manner. In other words, they are viewed as constituting a part of the pleading to which they are attached. … [A] court may consider a movant’s pleading only to determine whether an affirmative defense has been properly raised in the pleading of the movant. Rule 59 hardly grants carte blanche to litigants to attach unauthenticated, hearsay, unduly prejudicial, or other traditionally objectionable documents to pleadings and have them considered as ‘evidence’ in the traditional sense. Rule 59 pleading exhibits merely imbue or augment the allegations of the pleading to which they are attached.”

No. 05-21-00092-CV (May 31, 2023) (citations omitted, emphasis in original).

Literature is filled with nonexistent books, such as the “Necronomicon” in the works of H.P. Lovecraft, the “Treatise on the Binomial Theorem” written by Sherlock Holmes’s menace, Professor James Moriarty, etc.

To that collection, we can now add Varghese v. China South Airlines, Ltd., 925 F.3d 1339 (11th Cir. 2019).

ChatGPT helpfully offered that opinion to a New York lawyer researching a technical limitations issue. Unfortunately for that lawyer, the opinion did not actually exist and neither did any of the cases that it purported to cite. An understandably vexed federal judge is now considering sanctions about the matter.

Language-model AI tools are extraordinarily powerful and making advances every day. But they aren’t designed to do legal research, and anything they say about a specific precedent needs to be verified (and not by asking ChatGPT to verify itself, as happened in the federal case cited above).

In Cato v. Smith-Cato, the Fifth Court reversed a default judgment when: “No one has asserted, and we do not find that the record contains any showing, that a return of service was filed with the trial court as required by [Tex. R. Civ. P.] 107. … Without proof of service, we cannot presume that service was valid.” No. 05-22-00068-CV (May 26, 2023) (mem. op.).

In describing the controlling legal principle, the Court cited authority running back to Roberts v. Stockslager, 4 Tex. 307 (1849). Showing the timelessness of this problem, in that case the legendary Chief Justice Hemphill confronted these facts:

“The return of the sheriff is that he left a copy of the writ and a true copy of the petition. This statement, without some additional facts as to the place or the person with whom the process was left, is unintelligible.”

And reached this conclusion, in language both archaic and modern:

“The provisions of the statute as to the mode of service and the fullness of the return are as plain as they are imperative. They cannot be mistaken, and the courts should not permit them to be disregarded. …  Every citizen is shielded by the Constitution from being deprived of life, liberty, property, or privileges, outlawed, exiled, or in any manner disfranchised, except by the due course of the law of the land.”

A participant in a parking-lot shootout was a licensee of the relevant business, rather than an invitee, on this record:

Despite Woodrum’s professed intention to purchase items at Walmart, there is no evidence that Woodrum made any purchases or even entered Walmart. Instead, the evidence shows Woodrum and Speights both arrived at the Walmart about the same time, confronted each other in the parking lot, and Speights shot Woodrum after a struggle over a gun. Thus, the record shows that, at the time of Woodrum’s injury, Woodrum had no business relationship with Walmart and was present in Walmart’s parking lot on business with Speights.

Woodrum v. Wal-Mart Stores Texas, LLC, No. 05-22-00561-CV (May 17, 2023) (mem. op.)

An unusual TRO challenge, involving a high-school transcript, and in which no response was filed to the challenger’s mandamus petition, produced several reminders about the requirements of Tex. R. Civ. P. 683 – including the required statement of irreparable injury:

The TRO simply states that the Chens have shown an irreparable injury because Jeffrey may be denied college admission, while also alleging that he had been denied admission to a number of schools. An irreparable injury, however, must be immediate “and not merely an injury that may arise at some point in the future.”  That Jeffrey may be denied admission to unnamed colleges and universities to which he has applied or may apply in the future does not evince immediacy, particularly when the Chens alleged the same imminent harm when they initiated the action in 2022. … There is no identification of pending admission decisions, planned or outstanding applications to any particular institutions, or the deadlines that may apply.

In re St. Mark’s School of Texas, No. 05-23-00369-CV (May 3, 2023) (mem.op.) (citation omitted and emphasis added).

Back during the pandemic, I got a copy of “Dallam’s Decisions.” It’s a one-volume work with the opinions of the short-lived Supreme Court of the  of Texas (1840-45, give or take). It’s fascinating stuff, some of that court’s work is terrible, and some is really insightful.

I wrote down some notes about how that court dealt with slavery, and recently turned those notes into a short article.

It just came out in the “Journal of the Texas Supreme Court Historical Society,” and you can read it starting at page 75 of this link. As you can see, I think those cases offer some good insights about our world, as well as that of the 1840s.

Fortuitously, a Justice with a mechanical engineering degree drew the opinion in Rosales v. Allstate Vehicle & Prop. Ins. Co., which involved the application of a (literal) statutory formula in a section of the Insurance Code, to answer the question whether the payment of all possible damages for a prompt-payment claim extinguished a claim for attorneys’ fees under the prompt-payment statute.

Here’s the formula, from section 542A.007(a) of the Insurance Code, edited slightly in the opinion for easier review:

In this case, the insurer paid the amount found by an appraisal on a home-damage claim (minus the deductible), plus an amount to cover any prompt-payment interest for the time period leading up to the payment. Under the statute, then, “the amount to be awarded in a [prompt-payment] judgment for a covered loss is presently zero dollars, and because the amount of attorney’s fees is a multiple of that amount, Chapter 542As formula must result in an award of zero attorney’s fees.”

The opinion also deftly summarizes the surprisingly voluminous federal district-court authority, distinguishing some adverse precedent as not accurately reflecting the Texas Supreme Court’s most recent guidance on similar issues. No. 05-22-00676-CV (May 16, 2023).

A strong receiver has a lot of influence (see, right). But that general principle does not automatically allow an affected party to supersede an order appointing a receiver, as illustrated by Mexico Foods Holdings, LLC v. Nafal:

At the supersedeas hearing, MFH argued that the receiver is “taking over our billion dollar company.” That is incorrect. The receiver is controlling a minority interest in MFH. MFH did not present any evidence that it will not be able to continue to operate its business during the receivership or that it would otherwise be harmed if it is not allowed to suspend enforcement of the order. In the absence of any evidence that refusal to allow MFH to supersede the order would cause it harm, we conclude the trial court did not abuse its discretion in denying MFH’s request to set a supersedeas bond.

No. 05-23-00108-CV (May 9, 2023) (mem. op., on motion to review supersedeas order).

Lisle v. Do-Mo Joint Venture arose from a dispute among neighbors about the care of the land between and around their respective properties. The case went to trial. The key damages question began:

and after some instructions, concluded:

Despite the benefit of the property-owner rule, an owner’s testimony was insufficient to support those figures when, inter alia, “the jury was asked to make separate awards for the damage caused by flooding and by trespassing trucks. However, Crandall made no effort to provide damages calculations resulting from these two categories; instead, Crandall provided a blanket, unsupported figure of $200,000 to fix the parking lot.” No. 05-22-00236-CV (May 10, 2023) (mem. op.).

A shareholder’s record request led to Third Eye, Inc. v. UST Global, Inc., which affirmed a judgment requiring compliance with the request. On the question whether the shareholder had an “improper purpose” for the request, the Fifth Court reminded that the “mere fact that stockholders seeking access to a company’s books and records are on unfriendly terms with the company is not a ground for denying mandamus relief,” and concluded:

“Given (1) UST’s undisputed evidence that Third Eye never provided it with the financial information it was contractually obligated to deliver, (2) UST’s stated concern regarding its investment in Third Eye, and (3) Third Eye’s own evidence that it began losing substantial business beginning in 2017, we conclude the evidence was factually sufficient to support the trial court’s conclusion that UST had a proper purpose in requesting to inspect Third Eye’s books and records.”

No. 05-22-00334-CV (May 3, 2023) (mem. op.).

  1. As to the required contents of a mandamus petition, Tex. R. App. P. 52.3(j) says: “The person filing the petition must certify that he or she has reviewed the petition and concluded that every factual statement in the petition is supported by competent evidence included in the appendix or record.”
  2. Tex. R. App. P. 52.7 says: “Relator must file with the petition: (1) a certified or sworn copy of every document that is material to the relator’s claim for relief and that was filed in any underlying proceeding … .”

The second requirement means an affidavit or a proper unsworn declaration, which ws not supplied in In re Lancaster: “[R]elators’ attorney declares that she has ‘reviewed the documents contained in the mandamus record’ and that they ‘are true and correct copies of the pleadings, orders, and documents they purported to be, which were filed, submitted, or received in the trial court proceedings and/or in the appellate proceedings in this matter.’ The attorney declares that the facts stated ‘in this affidavit are true and correct and are based upon [her] personal knowledge.’ But the attorney’s unsworn
declaration does not invoke the penalty of perjury.” No. 05-23-00381-CV (May 5, 2023) (mem. op.).

The winner of a substantial judgment in the Mexican courts, sought to domesticate the judgment in Texas under the Uniform Foreign Currency Money Judgments Recognition Act (referred to by the less-than-catchy acronym of  “UFCMJRA.”)

Dynaresource conceded that “the purported judgment debtor has no ties, no presence, and no assets in the forum state.”

The Fifth Court held that as a matter of due process, UFCMJRA could not be applied in such circumstances. The Court also concluded that a special appearance was the proper procedural vehicle to raise this challenge, and distinguished two earlier Houston cases on the general topic as involving a different jurisdictional issue and and a repealed statute. Dynaresource de Mexico S.A. de C.V. v. Goldgroup Resources, Inc., No. 05-21-00362-CV (May 2, 2023).

The issue in this case is not directly related to Mallory v. Norfolk Southern Railway Co. presently before the U.S. Supreme Court about the jurisdictional consequence of registering to do business in a state, but it involves a somewhat-similar interplay of a statute with traditional minimum-contacts principles.

The petitioners in In re Redbird Trails Apts, having been rebuffed once before due to problems with presenting a set of in camera documents to the court of appeals, encountered yet more problems on a second try:

In their re-filed petition, relators inform us that the trial court has destroyed the copy of the records it had inspected, but DFPS has printed out another copy of its records for the trial court. Relators thus advise us that they have a pending request for the trial court to forward that printout under seal.

Based on the particular circumstances here, we conclude that even if the trial court were to forward that printout to us, relators have not met their burden of showing that the documents tendered to this Court in camera are the same documents relators tendered to the trial court.

No. 05-23-00379-CV (April 27, 2023) (mem. op.).

The plaintiff in Engler v. Ritz-Carlton sued a well-known Dallas hotel for, inter alia, premises liability, alleging that it should have done more to prevent an unfortunate burglary that occurred on the eve of a wedding.

The Fifth Court noted that “a premises owner owes a duty of care to protect invitees from third-party criminal acts if the owner knows or has reason to know of an unreasonable and foreseeable risk of harm to invitees,” and that such knowledge can be proven “through evidence of specific crimes on or near the premises.” But the plaintiff’s evidence lacked the necessary information about recency, frequency, and similarity to be probative:

[I]t covers a three-year time period, and it does not specify when during that period the other crimes occurred. It also does not prove the frequency of the other crimes because the paragraph actually describes the number of police calls for “alleged and/or actual” crimes, not the number of actual crimes that occurred. That is, the paragraph leaves us to speculate how many of the police calls involved actual crimes as opposed to false or mistaken reports. Finally, the paragraph does not give any details about the police calls arising from alleged “thefts and/or burglaries” to show that those incidents were similar to the incident made the basis of this suit. The umbrella terms “theft” and “burglary” could involve crimes (such as pickpocketing, vehicle break-ins, and thefts by hotel guests or employees) quite dissimilar from the room burglary involved in this case.”

No. 05-22-00067-CV (April 28, 2023) (mem. op.).

In the classic tort case of Palsgraf v. Long Island Railroad Co., 162 N.E. 99 (N.Y. 1928), a foreseeable type of injury (equipment fell on a passenger waiting for a train) occurred through an unforeseeable chain of events (a dropped package contained fireworks, that exploded and caused a panic, which in turn caused the equipment to fall). The opinions in that case influence tort law to this day, both substantively, and as to the procedural issue of whether a judge or jury should resolve such questions.

In that tradition is the Fifth Court’s opinion in Cernak v. Studley, a suit about “the alleged negligent handling of a puppy.” The Court held that the foreseeability requirement of proximate cause was not established when “there is no evidence that [defendants’] should [have] reasonably anticipated that a third-party would leave the gate open and [defendant’s] father would open the back door to inadvertently facilitate Grayson’s escape out of the home and then the yard as [plaintiff] walked by on uneven terrain.” No. 05-22-00659-CV (April 26, 2023) (mem. op.).

The “anti-fracturing” rule is a powerful principle for professional-liability litigation in Texas. Under the rule, “Texas courts do not allow plaintiffs to convert what are really negligence claims into claims for fraud, breach of contract, breach of fiduciary duty, or violation of the DTPA.” But the rule is constrained by the facts, and the Fifth Court reversed a summary judgment when, inter alia, “[t]he focus of the breach of fiduciary duty claim was on conduct other than the preparation of the [financial statements] and beyond the duty of ordinary care owed to [the accounting firm’s clients] regarding the preparation of those documents.” Rivas v. Pitts, No. 05-21-00876-CV (April 25, 2023) (mem. op.).

Monkedia, a Texas-based LLC, loaned $40,000 to Sevenly, a business based in North Carolina. Monkedia sued Sevenly in Texas when a payment dispute arose, and the Fifth Court reversed the denial of Sevenly’s special appearance in Sevenly Outfitters LLC v. Monkedia LLC.

The Fifth Court summarized the law in this area as follows:

  • Yes jurisdiction: “[T]he courts of appeals of this state have generally found a nonresident defendant purposefully avails itself of this forum when it contracts with a Texas resident as a result of its solicitation of the Texas resident,” citing a 2017 First Court opinion about a similar interstate loan transaction.
  • No jurisdiction: “When the solicitation runs the other way and the plaintiff solicits business with the nonresident defendant, we have concluded there was no specific jurisdiction over the nonresident defendant, even though the defendant made payments to Texas under a contract that includes a Texas choice of law provision.”
  • Also no jurisdiction: “[W]hen the record is silent as to which party solicited the others business, courts have found the defendant did not purposefully avail itself of the forum.”

Accordingly, Texas courts lacked jurisdiction over Sevenly. While the reocrd showed some communications between the parties that involved Texas, “[a]bsent in the record … is any allegation or evidence showing that Sevenly solicited Monkedia’s business or that Monkedia was engaged by Sevenly to market Sevenly’s products to Texas customers.” No. 05-22-00096-CV (April 19, 2023) (mem. op.).

In re Redbird Trails Apts involved a mandamus petition, presented after the trial court conducted an in camera review of certain documents, and determined that none of them were relevant.

Citing Tex. R. App. P. 52.7, the Fifth Court noted: “Relators’ burden is to provide this Court with a sufficient record for mandamus review. … This burden requires them ‘to request that any documents submitted to the trial court for in camera inspection be carried forward under seal so that the appellate court can evaluate this information.'”

The Court then held: “Here, the mandamus record does not include the records inspected by the trial court in camera, and nothing before us reflects that relators have asked the trial court to carry the documents forward to this Court under seal. We are unable to assess the merits of the petition without them.” Accordingly, it denied the petition. No. 05-23-00332-CV (April 17, 2023) (mem. op.).

The Fifth Court granted mandamus relief as to a TRO requiring a law firm to make certain files available to a former firm attorney. It focused on this language in the TRO:

The Court further finds that Plaintiff has demonstrated she and the clients at issue will suffer imminent, irreparable, and extreme injury if the requested relief is not awarded by the Court. Specifically, Plaintiff has demonstrated that she – and the clients – will suffer imminent, irreparable harm for which there is no adequate remedy at law.

And the Court held:

The temporary restraining order … does not provide a nexus between the actions compelled (requiring PJD to give Cheek access to, and allow her to copy, all client files for clients she represented) and an irreparable injury to Cheek. The order merely recites the conclusory statement that Cheek would suffer immediate, irreparable harm for which there is no adequate remedy at law.

In re PJD Law Firm, PLLC, No. 05-23-00012-CV (April 11, 2023) (mem. op.) (applying, inter alia, El Tacaso, Inc. v. Jireh Star, Inc., 356 S.W.3d 740 (Tex. App.–Dallas 2011, no pet)).

The peititoners for mandamus relief in In re Vega Street 1, LLC argued that the trial court had failed to render judgment in a matter. The Fifth Court saw matters otherwise. Reminding that “an appellate court may not deal with disputed areas of fact in an original mandamus proceeding,” it held:

Here, the record shows respondent provided a path to obtain a judgment by requesting that relators provide a proposed judgment to her. The record contains emails showing that relators e-mailed proposed judgments to respondent at her official e-mail address for her consideration. However, in her response, respondent stated that she had not received the proposed judgments. And the record does not contain file-stamped copies of any proposed judgments. Under these circumstances, we cannot conclude the record conclusively shows respondent actually received the proposed judgments or that she has refused to rule on the motion for judgment.

No. 05-23-00160-CV (April 12, 2023) (mem. op.).

I’m part of a fun online CLE tomorrow April 13 at noon sponsored by the Dallas Association of Young Lawyers, about “what appellate lawyers wish trial counsel knew.” You can register here on the DAYL website.

 

The Fifth Court affirmed a $3 million fraud judgment, rendered after a bench trial, reaching these conclusions:

  • This choice-of-law provision did not encompass a fraud claim that did not involve construction of the referenced LLC agreeement: “This LLC Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of Delaware, without regard to any principles of conflicts of law that would result in the application of the laws of any other jurisdiction.” 
  • For similar reasons, Texas tort law applied in a Restatement-based choice-of-law analysis.
  • Sufficient evidence supported fraud liability when “BKSI disclosed certain facts to ECOM regarding the Promenade Project’s status and operating condition, creating the false impression that it intended to continue operating the project as a long-term investment, and thus obligated BKSI to disclose the ‘whole truth’ concerning the project, specifically the approaching sale of the project to Madera.”

BK Series Investors, LLC v. ECOM Series Investors, LLC, No. 05-22-00115-CV (Apr. 7, 2023) (mem. op.).

In In re Insight Neurodiagnostics, LLC, the Fifth Court granted mandamus relief as to these discovery requests:

In the underlying litigation, Jones contended that he had been undercompensated by his employer. The Court concluded that these requests by him were overly broad:

  • “These requests could cover financial information that does not involved Jones,” and
  • “The requests are impermissibly broad because they extend into a time period during which Jones did not work with [defendants].”

The court further observed: “The burden to propound discovery complying with the rules of the discovery should be on the party propounding the discovery, and not on the courts to redraft overly broad discovery so that, as re-drawn by the court, the requests comply with hte discovery rules.” No. 05-23-00014-CV (April 5, 2023) (mem. op.) (citation omitted).

The trial court ordered an increase in juror pay from the usual $40/day to $250/day, to be paid by the plaintiff. The Fifth Court granted mandamus relief against this order; describing a statutory problem and a broader, systemic concern.

  • Statute. Tex. Gov’t Code § 61.001 says: “In a specific case, the presiding judge, with the agreement of the parties inovled or their attorneys, may increase the daily amount” paid for jury service; which increase “shall be paid, in equal amounts by the parties involved in the case.” This order was not consistent with this statute.
  • Broader systemic concern. The plaintiff invoked the court’s inherent power, but the Fifth Court noted that the state constitution expressly places this issue under legislative control. Jurors are considered “officers of the court,” and art. III § 4 of the constitution says: “The Legislature shall provide by law for the compensation of all officers, servants, agents and public contractors, not provided for in this Constitution … .”

In re Oncor Elec. Deliv. Co., No. 05-23-00298-CV (March 31, 2023) (mem. op.).

As a companion to the Fifth Court’s recent opinion in Aflalo v. Harris, which addressed a home seller’s damages when the contract price exceeded the market price, the Texas Supreme Court recently decided MSW Corpus Christi Landfill, Ltd. v. Gulley-Hurst, LLC, which involved the opposite situation:

“When the property’s market value at the time of breach exceeds the contract price, the correct measure of benefit of the bargan damages is the difference between the promised contract price and what the seller received.

No. 21-1021 (Tex. March 24, 2023) (per curiam) (emphasis in original).

The Fifth Court found an abuse of discretion by not reinstating a case after a DWOP, (a matter evaluated under the same standard as “conscious indifference” under Craddock), stating:

The record of the hearing on the motion to reinstate shows the Weldas’ counsel relied on the trial court’s statement at a pretrial hearing that “you probably won’t get reached” on the day of trial to explain his failure to appear at the October 6 trial. Thus, counsel’s testimony established he mistakenly believed that trial would not proceed on October 6 and thus failed to appear for trial. When an explanation is reasonable, as we have here, a trial court abuses its discretion in failing to reinstate. Under these circumstances, we conclude the trial court abused its discretion in allowing the Weldas’ motion to reinstate to be overruled by operation of law.

Welda v. Mangavalli, No. 05-21-00145-CV (March 23, 2023) (mem. op.).

The concept of estoppel is recognized by modern Texas law in many distinct doctrines: quasi-estoppel, equitable estoppel, judicial estoppel, etc. And sometimes, just saying the right words at the right time creates an estoppel, as occurred in a recent Texas Court of Criminal Appeals opinion where this exchange occurred about a key jury instruction:

Held: “The record reflects Appellant specifically asked the trial court to ensure that the jury be instructed they had to agree ‘beyond a reasonable doubt’ that Hogarth was an accomplice. We hold that Appellant, once he stated ‘I’m good’ with the instruction, is estopped from thereafter claiming that the instruction was improper.” Ruffins v. State, No. PD-0862-10 (Tex. Crim. App. March 29, 2023). I thank my friend Doug Gladden, a keen observer of Texas criminal law, for drawing this case to my attention.

A recent order in a long-running commercial dispute illustrates the challenge of crafting protective orders in Texas state court: “On January 24, 2023, we transferred sealed volumes 9 and 10 of the clerk’s record filed in appellate cause number 05-13-01700-CV into this appeal. We gave the parties an opportunity to obtain a sealing order in compliance with Texas Rule of Civil Procedure 76a and cautioned that we would order the volumes unsealed should the parties fail to file either a sealing order or status report by February 23, 2022.” At that point, having not received either one, the court ordered the volumes unsealed. Orca Assets GP v. JP Morgan Chase Bank, No. 22-40043-CV (March 23, 2023) (order).

Olivares v. Chevron Phillips Chem.Co. distinguishes two closely related doctrines about the limits of judicial power, which are distinguished procedurally:

Unlike the exclusive jurisdiction doctrine, exclusive remedy is an affirmative defense. As an affirmative defense, exclusive remedy should not be disposed of with a motion to dismiss such as a plea to the jurisdiction; it should instead be raised through a motion for summary judgment or proven at trial. ‘Thus, pursuing the exclusive-remedy defense through a plea to the jurisdiction ‘is problematic and not to be encouraged.’”

No. 05-22-00057-CV (March 14, 2023) (mem. op.) (citations omitted).

In a dissent from a dismissal order in Chapman v. Doe, Justice Jackson questioned whether the Supreme Court had become too quick to vacate judgments, noting, inter alia, that “our common-law system assumes that judicial decisions are valuable and should not be cast aside lightly, especially because judicial precedents ‘are not merely the property of private litigants,’ but also belong to the public and ‘legal community as a whole.'” (reviewing United States v. Munsingwear, Inc., 340 U.S. 36 (1950)).

As she was the sole dissenter on this point, her views are apparently not shared by a majority of that court, but her analysis is still thought-provoking and deserves study, as it examines a part of the appellate process that often goes largely unnoticed. Thanks to Ben Taylor for drawing my attention to this one!

Aflalo v. Harris arose from a contract to sell a house. The question was (generally) how to calculate the value of the house at the contractually specified sales time, and (specifically) when a later resale of a home can be probative of that value. The Fifth Court reviewed the specific facts of this resale to determine that it was probative, discussing and distinguishing Barry v. Jackson,  309 S.W.3d 135 (Tex. App.–Austin 2010, no pet.) (LPHS represented the successful appellant in this case.)

Ryan, an accounting firm, made a claim on its professional liability policy for losses caused by a rogue director’s submission of fraudulent tax returns. The insurer acknowledged an obligation to pay for losses resulting from employee “theft,” but instead:

“… maintain[ed] that that Weaver did not unlawfully take money from Ryan but that, instead, he started a chain reaction that caused money to improperly flow from the taxing authorities to Ryan’s clients, to Ryan, and then to Weaver and other employees.”

The Fifth Court found coverage for $346,612 paid to the director in bonuses, as an “unlawful taking” of those funds by him, and remanded for further consideration of related issues. Ryan, LLC v. Nat’l Union Fire Ins. Co., No. 05-22-00286-CV (March 13, 2023) (mem. op.).

The Legislature is in session; thus, legislators are seeking continuances of trial settings pursuant to Tex. Civ. Prac. & Rem. Code § 30.003. While the trial court in In re Jones did not expressly deny a state senator’s request for a legislative continuance, it implicitly denied it by, inter alia, setting a status conference and making a docket entry that said “Proposed Order Denied,” That was sufficient to justify mandamus relief, since a proper motion had been made under section 30.003 and relator would not have an adequate remedy by appeal. No. 05-23-00070-CV (March 10, 2023) (mem. op.).

US Bank “prayed for a declaration that [appellant’s] equitable title was subject to US Bank’s lien.”

But US Bank pleaded a suit to quiet title as its cause of action. “In such a suit, the plainitff has the burden to show (1) an interest in a specific property, (2) title to the property is affected by a claim by the defendant, and (3) the claim, although facially valid, is invalid or unenforceable.”

Because that claim didn’t match the requested relief, the Fifth Court reversed summary judgment for the bank. TFHSP, LLC v. U.S. Bank N.A., No. 05-22-00002-CV (March 8, 2022) (mem. op.).

The interplay between appellate lawyers and courts (“we need the transcript now!”) and trial-court reporters (“I have twenty other transcripts due this month!”) is part of daily life in appellate practice. The situation in In the Interest of B.Q.L. goes to a whole other level, however, and presents a textbook application of Tex. R. App. 34.6. The Fifth Court reversed and remanded for a new trial, due to the lack of a reporter’s record, when the following facts were established in trial-court proceedings:

(1) Atkins [court reporter] testified she was not present at the trial held on June 8, 2021; (2) her testimony was untruthful; (3) Atkins was the reporter for the trial; (4) Atkins stated she has no notes from the trial; (5) Mother is not at fault for the reporter’s record not being transcribed; (6) the attorneys state the record is necessary to the appeal’s resolution; and (6) the record cannot be replaced by agreement of the parties. 

No. 05-21-01108-CV (March 6, 2023) (mem. op.).

Litigation between two parties about the ownership of a valuable Ferrari ended with a final judgment that awarded clean title to the car–except, lienholder Truist Bank was not joined as a party. Truist filed a bill of review; as the Fifth Court explained: “Ordinarily, a bill of review involves an independent action by a party to the former case. A nonparty, however, has standing to bring a bill of review if it had a then-existing legal right or interest that was prejudiced by the prior judgment.” The Court went on to reverse and render judgment for Truist on its bill, observing:

“Truist Bank asserted a meritorious defense based upon its unreleased priority lien, its possession of the original title to the Ferrari, and its challenge to Loyola’s right to relief in [another related] lawsuit. On this record, we are not persuaded by Loyola’s 2.403 Business and Commerce Code argument that, as a matter of law, he had a right to clear title, and we decline to so determine. … Truist Bank was prevented from establishing or protecting its priority lien rights by Loyola’s wholesale failure to serve, join, or notify Truist Bank in the … suit.”

Truist Bank v. Loyola, No. 05-21-00206-CV