In 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.)
Alpha Omega alleged that a law firm breached its responsibilities as an escrow agent. In ts findings of fact and conclusions of law, the trial court said: “11. Alpha Omega, Inc. did not prove by a preponderance of the credible evidence that a fiduciary relationship existed between it and the Defendants.” The Fifth Court disagreed, and then found harm because the trial court “did not evaluate the remaining elements of fiduciary breach under the proper legal standards” and “there was some evidence of the remaining elements of fiduciary breach, such that the trial court could have reached the opposite result had it not erred in finding 11.” Accordingly, it reversed and remanded. Alpha Omega CHL, Inc. v. Min, No. 05-15-00124-CV (June 16, 2016) (mem. op.)
A 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.
While otherwise affirming the plaintiffs’ victory in an easement dispute, the Dallas Court of Appeals struck a portion of the trial court’s declaratory judgment related to the legal rights associated with that easement. The Court found no request for judgment on that matter in the plaintiffs’ live pleading or summary judgment motion, and also found that general discussion of the applicable city regulations had been offered for other purposes. The Court reminded: “[A]n issue is not tried by consent when evidence relevant to the unpleaded issue is also relevant to a pleaded issue because admitting that evidence would not be calculated to elicit an objection and its admission would not prove the parties’ ‘clear intent’ to try the unpleaded issue.” United Services Pyramid Group v. Hurt, Noi. 05-14-00108-CV (Dec. 7, 2015) (mem. op.)
Defendant won summary judgment, with a combination of no-evidence and traditional grounds, on fraudulent transfer claims. Renate Nixdorf v. Midland Investors LLC, No. 05-14-01258-CV (Dec. 8, 2015) (mem. op.) The Dallas Court of Appeals reversed, finding problems with what defensive matters were appropriately addressed by a no evidence summary judgment motion and what specific transactions were at issue, as well as proof of “reasonably equivalent value” that was conclusory.
Highland Capital won a judgment for over $20 million based on the alleged breach of a contract by RBC Capital to sell a package of notes. RBC Capital Markets, LLC v. Highland Capital Management, LP, No. 05-13-00948-CV (Dec. 4, 2015) (mem. op.) The Dallas Court of Appeals reversed, finding no enforceable contract. The Court first reviewed the protean doctrines of judicial admissions and judicial estoppel, ultimately concluding that statements made by RBC in other litigation were not preclusive in this case, noting that RBC did not ultimately prevail in the other matter. It then rejected Highland’s argument that a contract was formed when the parties agreed upon “price and principal,” noting that RBC’s acceptance was expressly subject to further documentation (specifically, a written trade confirmation and purchase agreement). The Court noted that, as alleged by Highland, the claimed breach involved matters that remained to be resolved in those subsequent documents. (Another “conditional agreement” case is discussed today on sister blog 600Camp.)
A personal injury case led to an award of $4500 in attorney fees against the defendants’ attorneys after they lost a motion to compel. Among other things, the defendants sought to designate certain documents as “ATTORNEYS EYES ONLY” and objected to 14 of 21 document requests on the basis of trade secret privilege — in a car wreck case. The county court at law overruled the vast majority of the defendants’ objections, and awarded the $4500 to the plaintiff. On appeal, the defendants’ attorneys argued that the award was a sanction that could not be justified by any offensive conduct. The Dallas Court of Appeals disagreed, pointing to the trial court’s order stating that the award of fees and costs was granted for securing orders overruling the defendants’ objections to the plaintiff’s discovery requests. That made it an award of expenses on a motion to compel, which is required (but rarely observed) by TRCP 215.1(d). Reviewing the course of the proceedings in the trial court, the Court of Appeals could not conclude that the trial court had abused its discretion in determining that the defendants’ resistance to the discovery had not been “substantially justified.”
MacDonald Devin, PC v. Rice, No. 05-14-00938-CV
While the slow season for opinions continues at the Dallas Court of Appeals, a short memorandum opinion provides a procedural lesson that could prove useful for any appellate attorney dealing with a pro se opponent. In this case, the appellant filed an affidavit of indigence with the trial court, seeking to avoid prepayment of costs under TRAP 20.1. The clerk challenged the appellant’s indigent status on September 15, and the court reporter contested the affidavit on September 17. But when multiple challenges to an affidavit of indigence are filed, the trial court still has to rule within 10 days of the first challenge. The trial court signed an order sustaining the court reporter’s challenge on October 6, well outside the 10-day period that should have run from September 15. Accordingly, the Court of Appeals held that the trial court had abused its discretion, reversed the order sustaining the contest to the pro se appellant’s indigence, and held that he could proceed with the appeal without advance payment of costs.
Bell v. Harris, No. 05-15-01117-CV
After an automobile collision, the Gomez family sued Sol Ly for negligence. Ly was represented by the Herald law firm, which also employed attorney Tim Brandenburg. But while the suit was pending, Brandenburg left Herald to join the law firm of Domingo Garcia, which represented the plaintiffs. Based on the defendant’s oral objection, the trial court granted a mistrial and ordered the defendant to file a motion to disqualify, which was subsequently granted. The plaintiffs failed to obtain substitute counsel, and the case was dismissed for want of prosecution. The Court of Appeals affirmed. The plaintiffs’ pro se motion to reinstate the case following the dismissal challenged only the disqualification, and not the plaintiffs’ failure to appear at the new trial setting. Without a showing that the failure to appear was adequately justified, the Court of Appeals could not conclude that the trial court had abused its discretion in denying the motion to reinstate.
Jenner & Block took on the representation of Parallel Networks in patent infringement litigation. Their contingency fee agreement provided that Parallel was responsible for the payment of expenses, but Parallel ran up a $500,000 deficit before expenses were finally paid out of proceeds from settlement in another lawsuit. Jenner withdrew from the case, citing a termination clause that allowed it to withdraw if continuing was not in its economic interest. After the patent cases settled under successor counsel, Jenner invoked arbitration and sought to recover $10 million in fees. The arbitrator ruled that Jenner’s withdrawal was justified and awarded $3 million as an “appropriate and fair” portion of the contingent fee recovery, as provided in the parties’ contract. The trial court confirmed the award, and the Dallas Court of Appeals affirmed. The Court declined Parallel’s invitation to declare that the fee agreement was against public policy, holding that the statutory grounds for vacating an award under the FAA are exclusive, and that public policy therefore could not serve to vacate the award.