It’s a note, but that doesn’t mean it’s negotiable.

Chase Bank sued a borrower; the threshold question was whether the longer limitations period for a negotiable instrument applied. While Chase sued on a note, the instrument did not qualify as a negotiable instrument because ” the sum-certain requirement is not met unless one can determine from the face of the note the extent of the maker’s liability.” Here, the Note (1) referred to a promise to pay “the total principal amount of $169,573.72 or so much as may be outstanding,” (2) “permit to pay ‘all or any part of the loan evidenced by this Note at any time,'” (3) said that “if prepayments are made, the Bank may apply them “in such order and manner as [the Bank] may from time to time determine in its sole discretion,'” and (4) referred to the “books and records of the Bank” to specify the precise amount owerd. Accordingly: “[b]ecause the Note fails to identify a sum certain on its face, we conclude it is not a negotiable instrument.” JP Morgan Chase v. Robinson & Hoskins, No. 05-17-00087-CV (Oct. 9, 2017) (mem. op.)

Dallas’s $4 billion back pay dispute heads to trial –

Today’s Dallas Observer has an excellent story about the City of Dallas’s $4 billion back pay dispute with police and firefighters, part of which is set for trial in December 2017 in Collin County. The case involves issues addressed by the Fifth Court in 2002 (yes, 2002) in Arredondo v. City of Dallas, 79 S.W.3d 65 (Tex. App.–Dallas 2002, pet. denied). Specifically, the Court found the word “maintained” to be patently ambiguous as used in this part of a 1978 ordinance: “The current percentage pay differential between grades in the sworn ranks of the Dallas Police Force and the Fire Fighter and Rescue Force shall be maintained.”

Sufficient evidence of an unwritten contract

images2“Examining the parties’ conduct and course of dealing, the fact finder could have inferred the element of mutual assent [between Miller and DML] from the circumstances.

  • Miller asked DML to remove the fountain,
  • DML subcontracted with a third party to do so . . .
  • The invoice submitted by the subcontractor to DML is part of the record and [DML’s witness] testified that DML’s practice is to submit such invoices to their customers
  • DML continued providing landscaping services after the fountain was removed.
  • Miller admitted he paid DML for some of the landscaping work. . . .
  • DML sent Miller a demand letter stating he was “in default of your obligation to pay the sum of $7,870.00 . . . and you have failed to pay despite repeated requests for payment by our office.” The record does not show Miller protested the demand letter or attempted to reconcile the account. . . .
  • Miller tacitly acknowledged he knew there would be compensation for the removal of the fountain and landscaping services when he testified he told Wetzel ‘the money would be held back until either I got the fountain back or he worked off the value of the fountain.’ . . .
  • [DML’s witness] testified the first time he heard about the alleged agreement for DML to work off the cost of the fountain was at trial, indicating this was not the parties’ agreement.” (punctuation added)

In sum, good recordkeeping (including recollection of a favorable admission) saved the day for DML. Miller v. Design Masterpiece Landscape, Inc., No. 05-16-00747-CV (July 28, 2017).

Effective release

let it goVerveba Communications and a former employee, Jewell Thomas, settled a dispute about travel expenses after a JP court trial with this release: “each party hereby: (1) releases all claims against the other; (ii) waives his/its right to file a motion for new trial, [and] (iii) waives his/its right to appeal the [JP court] judgment . . . .” Jewell then brought new claims, beyond the contract claim litigated in JP court, and the Fifth Court affirmed their dismissal: “None of these cases [cited by Thomas] held that the release must identify each claim or cause of action by name to be effective and, in fact, none of the releases in these cases identified the claims being released specifically by name.” Thomas v. Verveba Telecom, LLC, No. 05-16-00123-CV (March 31, 2017) (mem. op.)

Rounding error?

wheelThe dispute that rolled into court in Wheel Technologies v. Gonzalez was whether a shipment of wheels had been delivered. The companies’ records were important but not dispositive, as the Fifth Court rounded up the facts: “This case essentially came down to a ‘he said, he said’ between two parties’ explanations of accounting. Blaser testified WTI always created a purchase order when it received a delivery and because WTI had no record of any outstanding purchase orders owed to Gonzalez, then it never received the tires. Gonzalez testified to the contrary. . . . Further, Blaser admitted he could not say for sure Owens always created a purchase order upon receipt of tires because Blaser was never personally involved in any of the transactions. Rather, Gonzalez testified there were many times in which the deliveries occurred after hours so checks and other documentation were not always ready when he made a delivery.” No. 05-16-00068-CV (Feb. 8, 2017) (mem. op.)

Ambiguity defeats summary judgment

Directional Signs on a Signpost on White Background

The trial court granted summary judgment for the employer (oddly enough, a labor union) in a dispute arising from an employee’s benefits. The Fifth Court reversed, finding ambiguity in the underlying disability policy (noting, in particular, its interplay with separately-drafted legal instruments about the employment relationship – a recurring issue in disputes about arbitration clauses), and also finding related fact issues about whether the contract was unilateral or bilateral, and whether the employee had exhausted administrative remedies. The opinion recaps the major authorities about the role of contractual ambiguity in a summary judgment analysis. Videtich v. Transport Workers Union of Am., No. 05-15-01449-CV (Dec. 29, 2016) (mem. op.)

How to Merge

merge-ahead-signNations Renovations successfullly sued Hong in quantum meruit for unpaid construction work, and successfully defended against misrepresentation claims. The Fifth Court affirmed based on contract terms. As to the quantum meruit claim, it noted: “Because the four items [at issue] are listed only as recommendations and the other items of Extra Work claimed by Nations are not mentioned in the Contract, we conclude the Extra Work is not covered by the Contract. Therefore, the trial court properly submitted the quantum meruit question to the jury.” As to the misrepresentation claims, applying Italian Cowboy, the Court found this disclaimer of reliance to be effective: “17. ANY REPRESENTATIONS, STATEMENTS, OR OTHER COMMUNICATIONS NOT WRITTEN ON THIS CONTRACT ARE AGREED TO BE IMMATERIAL and not relied on by either party and do not survive the execution of this contract.” Hong v. Nations Renovations LLC, No. 05-15-01036-CV (Dec. 29, 2016) (mem. op.)

When is enrichment unjust?

enrichment_logoWhile affirming a relatively straightforward judgment in a home loan dispute, the Fifth Court observed: “The unjust enrichment doctrine applies principles of restitution to disputes where there is no actual contract and is based on the equitable principle that one who receives benefits which would be unjust for him to retain ought to make restitution.” Ihde v. First Horizon Home Loans, No. 05-15-01084-CV (Nov. 28, 2016) (mem. op.) (emphasis added) A counterpoint in this practical but rarely-visited area of remedies law appears in City of Harker Heights v. Sun Meadows Land Ltd., 830 S.W.2d 313, 317 (Tex. App.–Austin 1992, no writ), which observes: “An action for money had and received may be founded upon an express agreement or one implied in fact, but it is not dependent upon either.” (emphasis added).

Invoices and contracts – four years – oh my.

6501602_origIf ever a case illustrated a trap for the unwary, it is IDA Engineering v. PBK Architects, in which the plaintiff sued exactly four years after the termination of its contractual relationship. Unfortunately, the invoices upon which its damage claim relied were issued before the contract termination, and the contracts contained this language about payment: “Invoices will be issued monthly, per TexasBarToday_TopTen_Badge_VectorGraphicpercentage of completion or per phase and will be due upon issuance date.” (emphasis added). Accordingly, the claim was barred by limitations.  No. 05-15-01418-CV (Oct. 4, 2016) (mem. op.)