Leak Evidence = Triable Fact Issue

leaky faucetIn a time of much furor about “leaks” to the media, the Fifth Court addressed a more traditional form of “leak” in Allen v. State Farm Lloyds, reversing a directed verdict for the insurer in a coverage dispute about a homeowners’ “Water Damage Endorsement.” In a detailed opinion, the Court found that the plaintiffs’ experts made legitimate, non-conclusory points about whether home damage was caused by plumbing leaks, and thus whether “deterioration” occurred within the meaning of the Endorsement. In a footnote, the Court also reminds of the importance of moving to strike allegedly improper expert testimony, and continuing to assert the original objection as the testimony unfolds at trial. No. 05-16-0018-CV (Aug. 1, 2017) (mem. op.)

Preserve early, preserve often.

preservesBeasley v. Richardson, while involving facts unique to pro se litigation, provides a valuable reminder about preservation with relation to the handling of a nonsuit: “Error in dismissing a case with prejudice cannot be raised for the first time on appeal and must be presented to the trial court. To preserve a complaint of error in a judgment for appellate review, Beasley was required to inform the trial court of his objection by a post-judgment motion to amend or correct the judgment or a motion for new trial.” (citations omitted). No. 05-15-01156-CV (Sept. 20, 2016) (mem. op.)

A Quantum of Meruit

quantumA high-profile fee dispute led to holdings that (1) an attorney can recover in quantum meruit in connection with an oral contingent fee agreement, notwithstanding the other legal problems with such agreements; (2) legally sufficient evidence of the attorney’s “valuable compensable global settlement services” supported the verdict on his quantum meruit theory; (3) claimed error on the narrow scope of a fiduciary duty instruction was not preserved without a specific objection to the scope issue; and (4) the trial court did not abuse its discretion in refusing a spoliation instruction, when evidence showed that the destruction of the relevant emails resulted from a routine upgrade process.  Shamoun & Norman, LLP v. Hill, No. 05-13-01634-CV (Jan. 26, 2016).  The Court rendered judgment on quantum meruit.

Object early, object often.

digital_preservation_11783802_sAppellant complained that the trial judge had further proceedings after a nonsuit.  While also affirming as to whether a nonsuit occurred (finding that one did not happen), the Fifth Court reminded of the importance of timely objection: ” Generally, to preserve a complaint for appellate review, a party must timely present the complaint to the trial court and seek a ruling on the complaint . . . .  In this case, not only did appellants not object when the case was reinstated, they affirmatively indicated that they did not object. As a result, this issue was not preserved for appellate review.”  Gonzalez v. Gonzalez, No. 05-14-01361-CV (Dec. 29, 2015) (mem. op.)

Many Issues, But No Change in Result

The Court of Appeals has affirmed a jury verdict and judgment of approximately $705,000 in a contract dispute between a medical products manufacturer and a distributor. The parties’ agreement prohibited the distributor from selling undisclosed competing products and allowed the manufacturer to terminate the agreement for cause if the distributor violated that provision. The manufacturer terminated the agreement, and the distributor filed suit. On appeal, the manufacturer argued that multiple affirmative defenses should have defeated the distributor’s claim as a matter of law, but the Court of Appeals disagreed. There was some evidence in the record that the distributor had disclosed the competing products, and a rather confusing jury question that combined breach with the defenses of prior material breach and waiver led to the manufacturer’s failure to challenge all independent grounds for the jury’s verdict. And with respect to a number of additional issues, the Court of Appeals generally held that the manufacturer had failed to present them to the trial court of preserve their arguments for appeal.

Blackstone Med., Inc. v. Phoenix Surgicals, LLC, No. 05-13-00870-CV

Nonsuit Does Not Negate TCPA Motion to Dismiss

The Texas Citizens’ Participation Act continues to be a powerful tool in certain types of commercial cases. In this instance, the publisher of Petroleum News Bakken managed to obtain and affirm a judgment of dismissal and attorney fees in a business disparagement and tortious interference case. The dispute arose out of a newspaper article that stated no records could be found for wells that Breitling Oil & Gas claimed to have drilled in North Dakota. The publisher moved to dismiss under the TCPA, which shifted the burden to the burden to the plaintiff to come forward with prima facie evidence of each element of its claims. Breitling responded with a notice of nonsuit, but that didn’t stop the trial court from moving forward with the hearing and awarding the defendant $88,444.58 in attorney fees and expenses. The Court of Appeals affirmed, holding that the nonsuit did not moot the pending motion to dismiss because the defendant had already made a “pending claim for affirmative relief” through its request for attorney fees and sanctions. The Court also rejected Breitling’s argument that the attorney fees should have been tried to a jury, noting that the record did not show that Breitling ever objected to the trial court making findings on the reasonableness of the fees awarded.

Breitling Oil & Gas Corp. v. Petroleum Newspapers of Alaska, LLC, No. 05-14-00299-CV

Frivolous Appeal

A special appearance in a probate case has led to the exceedingly rare grant of a motion for sanctions for the filing of a frivolous appeal. In this instance, the appellant managed to make a general appearance in the case before filing the special appearance — a fact that the appellant had failed to even address in response to the appellee’s briefing in the probate court. On top of that, the appellant had failed to preserve his argument on appeal that the special appearance was somehow severable from the motion to show cause in which he entered his general appearance, nor had the appellant objected (and thereby preserved error) when the probate judge overruled the special appearance without holding a separate hearing on it. Although the appellee had not submitted any evidence of her damages to support the award of sanctions, the Court of Appeals granted her leave to file such evidence within ten days of the opinion.

Estate of Ardyce Deuel-Nash, Deceased, No. 05-14-00128-CV

Errors of Preservation

A builder sued the prospective buyers of a townhome for breach of contract and fraud after they backed out of the sale before closing. The Court of Appeals affirmed a jury verdict for the buyers. The seller’s first issue on appeal was simply that “the evidence demonstrates [buyers] committed fraud against [seller],” a complaint that was too broad and generic to preserve any specific error. The Court also affirmed an award of $9,675 in attorney fees to the buyers under a prevailing-party clause of the contract, holding that the seller’s briefing about that award failed to discuss the evidence concerning the fees and did not explain how the cited case law should be applied to the jury’s finding.

Davenport Meadows LP v. Dobrushkin, No. 05-12-01471-CV

Waiving the Fiduciary Shield

The Court of Appeals has issued a lengthy opinion affirming the denial of a special appearance. The appeal arises out of an apparently contentious case involving claims and counterclaims for breach of contract, fraud, and defamation. Defendant Sebastian Lombardo — an Italian citizen who lives in Belgium and works in France — challenged personal jurisdiction by invoking the fiduciary shield doctrine, which protects officers of corporations from being personally haled into court in Texas due to their contacts as representatives of the corporation. Unfortunately for Lombardo, his argument in the trial court had presented that issue as a matter of general personal jurisdiction, and the trial court had found him to be subject to specific personal jurisdiction. Having failed to present the fiduciary shield doctrine as a bar to the exercise of specific personal jurisdiction, the issue was also waived on appeal. The opinion goes on to affirm the legal and factual sufficiency of the evidence supporting the trial court’s findings of jurisdictional facts, as well as its application of the law to those facts, and therefore affirmed denial of the special appearance.

Lombardo v. Bhattacharyya, No. 05-13-01583-CV

Unanswered Question Now Answered

Last month, we noted an opinion that teased, but did not answer, an interesting question: Does Chapter 74 of the Civil Practice & Remedies Code require a plaintiff to produce an expert report for a breach of contract claim arising out of the provision of medical services? The Court of Appeals has now issued an amended opinion in that same case that addresses that very issue. While still holding that the defendant/counterclaimant had failed to preserve error by failing to make a proffer of the excluded evidence — namely, that his mother had been placed in a straitjacket despite the assisted-living facility’s contract stating that it was a “restraint-free community” — the revised opinion adds a new section on the expert report issue. The Court now concludes that even if the evidentiary issue had not been waived, the trial court still properly excluded that evidence because it was still a healthcare liability counterclaim that required the defendant to produce a Chapter 74 expert report. Since the defendant failed to do so, the trial court did not abuse its discretion in excluding evidence of the resident being placed in restraints.

Ferguson v. Plaza Health Servs. at Edgemere (amended opinion), No. 05-12-01399-CV