New Trial Overturned on Mandamus

The Court of Appeals has granted mandamus relief to direct a Collin County trial court to vacate its order granting a new trial for the plaintiff in a product liability suit. The district court granted the motion based on both factual sufficiency and juror misconduct grounds. The Court of Appeals held that the new trial order could not be sustained on the basis of juror misconduct because the lower court had not conducted an evidentiary hearing — affidavits attached to the motion alone were not sufficient under Rule 327. The Court also concluded that the jury’s verdict for the defense was not contrary to the great weight and preponderance of the evidence, as conflicting testimony from the parties’ design experts adequately supported the jury’s decision that the medical implant at issue was not defective.

In re Zimmer, Inc., No. 05-14-00940-CV

Ambiguous Terms Means No Summary Judgment

In this lawsuit related to an asset purchase agreement, the Court addressed which party is entitled to the $5.7 million in escrow money when the sale failed to close.  Examining the complex terms of the APA, the Court found that the contract terms at issue were ambiguous and thus summary judgment was inappropriate.

KSWO Television Co. v. KFDA Operating Co. LLC

Take Nothing Judgment on Promissory Notes Affirmed

The plaintiff in this case sought to collect on promissory notes it had obtained from a failed bank.  After a bench trial that included only one witness and three exhibits, however, the trial court rendered a take nothing judgment against the plaintiff.  The Court of Appeals agreed with the trial court because the only two documents indicating the amount allegedly owed under the notes were unsigned “Prenegotiation Agreements.”  Moreover, these documents, even if they were signed, do not establish specific amounts due and owing; instead stating that the parties “believe” that “approximately” certain amounts are owing on the notes.

RES-TX Boulevard v. Boulevard Builders

Compass Bank’s Business Records Affidavit Fails To Find True North

In this suit by Compass Bank to recover money owed under a promissory note, Compass moved for summary judgment.  To support its motion, Compass submitted an affidavit by a custodian of records attaching copies of the note and the trial court granted summary judgment.  The Court of Appeals, however, overturned the trial court’s ruling because it found Compass’s affidavit could not satisfy the personal knowledge requirement.  In particular, “[t]he affidavit did not demonstrate whether [the affiant] was employed by Compass, what her job position and responsibilities were, or how her job duties gave her personal knowledge of the facts.”

Vince Poscente Int’l v. Compass Bank

 

 

Fixing a Hole

FedEx sued Smith Protective Services for breaching the parties’ services agreement after thieves cut holes in the fences on its property and looted several of its trucks. The trial court found that Smith had, indeed, breached the parties’ agreement. It found that the thieves had cut two holes in the shipping terminal’s perimeter fence over a period of two days (with a third cut several days later), through which the thieves entered and “off-loaded” valuable cargo by hand. FedEx investigated, finding that, while the contract purportedly required it, none of the guards present during the heist knew that one of their duties was to conduct patrols. FedEx also opined that the thieves knew about this failure and took advantage of it.

On appeal, Smith challenged the conclusion that the parties’ contract required its guards to patrol the premises. The court of appeals, however, pointed to express language in the contract along with testimony by several FedEx employees to refute this claim, and, accordingly, upheld the trial court’s findings of fact and conclusions of law.

Smith Protective Services v FedEx, No. 05-11-00715-CV

Second Verse, Same As the First

In 2005, Parkwood Creek Owner’s Association sued Aharon Chen for Chen’s failure to complete the repair work Parkwood had hired him to complete, as well as for Chen’s failure to repair the defective work that he did complete.  This suit settled in March 2008, with the parties entering into a Rule 11 Agreement whereby Chen agreed to make specified monthly payments to Parkwood and to remedy some of his previous shoddy work.  Several months later, Parkwood moved to enforced the Rule 11 Agreement, claiming that Chen had failed both to deliver the stipulated materials and to deliver them at the specified time.  After an bench trial, the court found for Parkwood and entered judgment against Chen for $30,000 (the agreed-to liquidated damages amount) and for $7,500 in attorney’s fees.

On appeal, Chen argued, among other things, that he substantially performed the contract and that Parkwood itself committed a prior material breach by not giving Chen a list of materials.  The Court of Appeals rejected Chen’s arguments, holding that the evidence was sufficient to establish a breach of the Rule 11 Agreement.  The Court found that  Chen did not, in fact, provide the right materials, and that he refused to show up to inspections.  It further found that Chen had met with Parkwood representatives and determined the precise materials needed for repair.  The Court thus sustained the trial court’s decision and upheld the liquidated damages provision.

Aharon Chen v. Parkwood Creek Owner’s Association, Inc., No. 05-10-015511

As Landlord, Tenet Wins

This landlord-tenant dispute involved Tenet Health Systems and Live Oak, a group of doctors, as tenants.  Live Oak entered into a lease with Tenet for a five year period, expiring on June 30, 2006.  Live Oak claimed that, before the lease expired, Tenent successfully encouraged them to relocate to a new space in Frisco, Texas, with the promise that Tenet would find someone to take over the lease.  However, sometime after Live Oak abandoned the original lease and stopped making payments, Tenet demanded unpaid rent for that lease.

The Court of Appeals first found that the doctors who signed the lease were personally liable for unpaid rent under the lease agreement, because “[t]he objective intent of the parties, as expressed in the unambiguous language of the lease, was that those persons comprising Live Oak . . . would be jointly and severally responsible for Live Oak’s obligations under the lease.”

On a separate issue, Live Oak also argued that they had raised sufficient facts for their defenses of mitigation and estoppel to survive summary judgment because they had submitted an affidavit asserting that (1) Tenet had a willing tenant to take over the lease, but purposefully waited until the term expired before letting this new tenant take over and (2) Tenet had made promises to induce them to move to Frisco.  The Court of Appeals rejected this argument, holding that conclusory statements in an affidavit not based on personal knowledge cannot present sufficient evidence to survive summary judgment.

In dissent, Justice Lang-Miers disputed the holding that the doctors should be individually liable under the lease because the lease’s terms were ambiguous and the landlord could not show that its interpretation of the contract should control.

Live Oak v. Tenent Healthsystem Hospitals Dallas, Inc., No 05-11-00342 (majority)

Live Oak v. Tenent Healthsystem Hospitals Dallas, Inc., No. 05-11-00342 (dissent)

 

That’s It?

In a memorandum opinion the court reversed as insufficient a summary judgment award to a neighborhood association against a delinquent property owner. Gashaye’s property is subject to a covenant to pay assessments to Candlewood, which Gashaye failed to do. Candlewood sought foreclosure of the lien securing Gashaye’s obligation and attorney’s fees, presenting evidence proving $1545 in unpaid assessments and late fees and $2500 in attorney’s fees. The trial court awarded Candlewood $50. The court reversed, holding that the award of $50 under these circumstances was so contrary to the overwhelming weight of the evidence that it was clearly wrong and unjust. The court noted that attorney’s fees are recoverable on a breach of a homeowner’s association covenant, but remanded for the determination of a proper damages and attorney’s fees award.

Candlewood Creek Neighborhood Association, Inc.v. Gashaye, No. 05-11-00380-CV