“Rhetorical Flourish” ≠ Defamation

card flourishThe Fifth Court affirmed summary judgment for D Magazine in a defamation suit by a former volunteer, finding that most of the statements at issue were unactionable opinions or accurate statements of fact. Summarizing the underlying principles of free speech, the opinion reminds that a “rhetorical flourish” that is “merely unflattering, abusive, annoying, irksome, or embarrassing, or that only hurts the plaintiff’s feelings, is not actionable.” The court lacked appellate jurisdiction over part of a related appeal by the Dallas Symphony, since it involved the denial of a summary judgment about a tortious interference claim rather then free speech issues, although the Court was able to address the civil conspiracy claim against the Symphony. D Magazine Partners LP v. Reyes, No. 05-16-00294-CV (April 18, 2017) (mem. op.)

Nope, not final.

In Viveri Youth Service v. Orme, the Fifth Court dismissed an appeal for lack of a final judgment. While the docket sheet indicated the case had been closed, the Court observed: “The last order, however, contains no language of finality or other indication the case was closed. While the trial court’s docket sheet reflects the case was closed, a docket sheet entry does not constitute a judgment or other appealable order of the trial court.” No. 05-17-00002-CV (April 11, 2017) (mem. op.)

A living opinion: same case and different outcome

The+Living+ConstitutionIn University of Texas Southwestern Medical Center v. Munoz, the Dallas Court of Appeals for the second time considered whether sovereign immunity barred the plaintiff’s claims. At the interlocutory stage, the answer was “no.” After a trial on the merits, the Dallas Court of Appeals said “yes,” and judgment was rendered for the University.

The issue in the case was whether the University had sovereign immunity from a suit arising from an injury caused by an air handling unit. If the air handling unit was personal property, the Texas Legislature waived immunity under the Texas Tort Claims Act. If it was a fixture attached to real property, then there was no waiver and the suit was barred because the plaintiff was aware of the danger.

In the first interlocutory appeal, the Dallas Court of Appeals held that the air handling unit was personal property, and thus the trial court had jurisdiction because sovereign immunity was waived. The plaintiff argued on the appeal of the final judgment that this was the law of the case. It was, after all, the same air handling unit discussed in the opinion from the interlocutory appeal.

The Dallas Court of Appeals disagreed. Noting that “[i]f the record in one appeal on a plea to the jurisdiction differs from the record on a second appeal following trial, we review the evidence challenging the existence of jurisdictional facts.” The court held that it was logical to assume the facts were better developed by the time of trial, and so it would consider those better developed facts. After reviewing those facts, the Dallas Court of Appeals concluded that the air handling unit was actually a fixture and reversed the final judgment in favor of the plaintiff. So governmental entities, despair not if you lose your interlocutory appeal, because it may turn out that the court trying your case does not have jurisdiction after all.

University of Texas Southwestern Medical Center v. Munoz

In the Battle of Animal Control vs. Ayn Rand, the Court of Appeals Washes Its Hands. As Should We All.

One thing every lawyer in Texas learns early on is that if you want to challenge personal jurisdiction, you have to file a special appearance before you answer the petition. Critter Control, Inc. sought to avoid that waiver point by filing a motion to withdraw its original answer in favor of a subsequently filed special appearance, which the trial court denied. Critter Control filed for interlocutory appeal, and Galt Strategies, LLC filed a motion to dismiss for lack of appellate jurisdiction. The Court of Appeals dismissed the appeal because it did not challenge the denial of the special appearance, but the Court notably did not foreclose the stratagem of moving to withdraw the answer in order to assert the untimely special appearance.

Critter Control, Inc. v. Galt Strategies, LLC, No. 05-15-01011-CV

FINRA v. AAA

A group of plaintiffs collectively named as Nemaha Water Services moved to compel arbitration before FINRA. In a cross-motion, Esposito Securities moved to compel arbitration before the AAA. The trial court denied Nemaha’s motion and granted Esposito’s, sending the case to AAA arbitration. In a hybrid interlocutory appeal and mandamus proceeding, the Dallas Court of Appeals reversed and sent the case to FINRA. Nemaha had signed a letter agreement in which it had agreed to pay Esposito 5% of the total consideration received in a qualifying investment or merger. The contract included a AAA arbitration provision, but the Court of Appeals held that clause was trumped by the FINRA rules, at least in this instance. The case turned on the question of whether Nemaha was a “customer” of Esposito, which would entitle it to invoke arbitration under the FINRA rules. Applying the ordinary meaning of “customer,” the Court held that Nemaha qualified even though it had not paid Esposito the contractual commission. Because Nemaha had contracted with Esposito — a member of FINRA — to purchase financial services for a fee, the Court concluded that Nemaha was entitled to invoke FINRA arbitration. The Court noted, however, that there is authority for the proposition that FINRA arbitration can be superseded by contract, although that was not the case this time.

Morford v. Esposito Sec., LLC, No. 05-14-01223-CV

The Knives Came Out in the Race for Kaufman County Commissioner

A Republican primary battle for the office of Kaufman County commissioner (precinct 2) resulted in a defamation claim against the challenger’s media consultant. It seems that two days before the election, a website went up that strongly implied the incumbent, Ray Clark, had intervened in multiple child molestation cases brought against his “nephew,” Stoney Adams. resulting in the charges being dismissed. A series of mailed-out fliers made similar allegations. In reality, Adams was only distantly related through a series of marriages on Clark’s wife’s side of the family, and Clark averred that he had never done anything to support or assist Adams in any criminal case. Based on those facts, the trial court denied the defendants’ motion to dismiss under the TCPA, finding that Clark had established a prima facie case for each element of his defamation claims. The Dallas Court of Appeals affirmed, rejecting the defendants’ argument that the statements were protected as “rhetorical hyperbole.” Similarly, the statements were not protected as non-actionable opinions just because they were attributed to Adams’ ex-wife, but were instead capable of being defamatory because they implied knowledge that Clark really had intervened in Adams’ child molestation cases. As for actual malice, the Court of Appeals credited Clark’s argument that the defendants had “carefully attempted to distance themselves” from the defamatory statements, which in turn demonstrated that they “entertained serious doubts” about them.

Campbell v. Clark, No. 05-14-01056-CV

Appellate Courts Can’t Fix Everything for You

A short opinion helps to illustrate the limited reach of an appellate court’s authority over the cases before it. On interlocutory appeal, both litigants agreed that the trial court should have vacated an order appointing a receiver in Texas to serve ancillary to a primary receivership in Minnesota. But in addition to vacting the order appointing the receiver, the appellant also wanted the Court of Appeals to undo all the receiver’s actions. That was beyond the appellate court’s powers however. Pointing to TRAP 43.2, the Court held that it could affirm, modify, reverse and render, reverse and remand, vacate, or dismiss — none of which permitted the Court to grant the additional relief sought by the appellant.

Burlington Resources Oil & Gas Co. LP v. Verde Minerals, LLC, No. 05-15-00014-CV

Court Reverses Trial Court, Finding No Personal Jurisdiction Over Third-Party Defendant

In this case involving corporate infighting, the defendant filed a third-party claim against Troy Brown.  Mr. Brown filed a special appearance asserting that the court did not have personal jurisdiction, which the trial court denied.  Mr. Brown appealed.

The Court of Appeals reversed, determining that Brown did not have minimum contacts with Texas such that he was subject to personal jurisdiction here.  The Court specifically found that several emails Brown sent to people in Texas did not “constitute a contact demonstrating purposeful availment.”

Brown v. Pennington

No Interlocutory Appeals for Partial Dismissals Under the TCPA

Three of four defendants filed motions to dismiss under the Texas Citizens Participation Act, all of which were granted by the district court. The plaintiffs sought interlocutory review of those rulings, but the Dallas Court of Appeals concluded that it did not have jurisdiction to review the rulings. Because the claims against the fourth defendant were still pending, there was no final, appealable judgment in the case. Under the 2013 version of CPRC § 51.014(a)(12), only orders denying a TCPA motion to dismiss are subject to interlocutory appeal, and the current version of the TCPA itself only authorizes interlocutory appeals when the motion has been overruled by operation of law due to the trial court’s failure to rule within 30 days. The plaintiffs will therefore have to wait until final judgment before appealing the TCPA dismissals.

Horton v. Martin, No. 05-15-00015-CV

On Receiverships

The Dallas Court of Appeals has reversed an order appointing a receiver to wind up the affairs of a business equally owned by two siblings who could not agree on selling the cattle ranch they operated. The opinion serves as a useful primer on the statutory criteria for appointment of a receiver. In this instance, the Court of Appeals held that a receiver could not be justified because there was no evidence that the company was under threat of an irreparable injury if the property was not sold.

Spiritas v. Davidoff, No. 05-14-00068-CV