At trial, Claymore Holdings won its fraud claim against Credit Suisse, establishing the loss of a $250 million investment as a result of a flawed appraisal. The Fifth Court affirmed, focusing on two bedrock principles of modern businesss litigation.
- “Specific provisions concerning an issue are controlling over general provisions.” Legally and factually, Claymore showed that Credit Suisse’s disclaimers of reliance did not foreclose liability for the specific issues about the appraisal raised by Claymore.
- “[T]he trial court was not limited to the jury’s award of damages on Claymore’s fraudulent inducement claim in determining appropriate equitable relief on the claims for which the parties waived their right to jury trial.” On the facts of this case, “[h]aving obtained favorable findings from the jury on the fraud claim and from the trial court on the contract claim, Claymore could elect rescission as its remedy.”
Credit Suisse AG v. Claymore Holdings LLC, No. 05-15-01463-CV (Feb. 20, 2018) (mem. op.)
Pappas testified about his 50% interest in a car wash business, using an undisputed sale price for the business, undisputed evidence about the face amount of a relevant note, and corrobrating his calculation with a recent property appraisal that was admitted without objection. This foundation was sufficient to satisfy “the presumption that an owner is familiar with his property and its value,” which requires that “the owner must provide the factual basis on which his opinion rests, although this burden is not particularly onerous in light of the resources available today.” Wash Technologies v. Pappas, No. 05-16-00633-CV (Feb. 6, 2018) (applying Natural Gas Pipeline Co. v. Justiss, 397 S.W.3d 150, 157 (Tex. 2012)).
The economic loss rule, and the related debate about the proper handling of “con-tort” claims, can raise difficult and close questions. Hames v. JP Morgan Chase, however, presents a relatively clean example. Hames alleged mishandling of her bank account, and argued that her negligence claim could proceed independently of her breach-of-contract claim, as the bank’s duties arose from Article 4 of the UCC.The Court disagreed, finding that “[t]he duties that Chase allegedly breached were dependent on its contact with Hames,” and noting authority that “[t]he relationship of a bank to a general depositor is conrractual, that of debtor-creditor arising from the depository contract.” Additionallly, “the account funds that Hames seeks to recover relate to the subject matter of the contract . . . ” No. 05-16-00472-CV (Jan. 22, 2018) (mem. op.)
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.)
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.”
“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).
Verveba 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.)
“I-35 argues that, although the guaranty itself does not specify an interest rate, the guaranty incorporates the Note and the two must be read together. We agree.” Interstate 35-Chisam Road LP v. Moyaedi, No. 05-16-00196-CV (March 20, 2017) (mem. op.)
The 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.)
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.)