Beware of Boards in Government Facilities

600 Commerce always has its eye out for trends in litigation, and a new one may now be emerging: a plague of boards falling off of government walls onto innocent members of the public. A year ago, it was a whiteboard falling off the wall of Dallas Metrocare Services (held: no sovereign immunity because plaintiff pleaded a dangerous “condition” of property with allegation of an improperly secured whiteboard). This time, the Court of Appeals sustained the Texas Health and Human Services Commission’s sovereign immunity claim after a notice board fell on plaintiff Joseph McRae. The Court agreed with the Commission that McRae’s claim was one for premises defect, not for “negligent use or condition” of the notice board. Because it was in substance a premises defect claim, McRae was required to plead, and ultimately prove, that the Commission had actual knowledge of the condition that caused his injuries. But it was not clear that McRae would be unable to cure that defect in his pleading, so the Court remanded the matter to the trial court for further proceedings.

Texas Health & Human Servs. Comm’n v. McRae, No. 05-14-00894

Supreme Court Update: Reasonable Diligence Not Established

A year ago, the Dallas Court of Appeals affirmed the denial of an equitable bill of review in which the defendants claimed that the plaintiff had not exercised reasonable diligence in its attempts to effect service through registered mail and personal delivery. The Texas Supreme Court has now set aside that ruling, holding that the defendants had presented some evidence that their failure to receive notice of the default judgment resulted solely from the plaintiff’s failure to certify the defendants’ last known mailing address, and not from any negligence or fault on the defendants’ own part. The record contained evidence that the plaintiff’s owner had met with the defendants’ registered agent at their current address, rather than the outdated address on file with the Secretary of State, that raised a genuine issue of material fact as to the validity of the plaintiff’s “last known mailing address” certification.

Katy Venture, Ltd. v. Cremona Bistro, LLC, No. 14-0629

Arbitration Provision Trumps Subsequent Rule 11 Agreement

The parties in a workplace injury lawsuit entered into a Rule 11 agreement to abate the suit while they conducted limited discovery and mediation. A second Rule 11 agreement continued the abatement until one of the parties would file a motion to re-open the case. Notwithstanding those Rule 11 agreements, the parties were also subject to a binding arbitration clause contained in the employer’s injury benefit plan. The parties disputed whether they had each complied with their discovery obligations under the Rule 11 agreements, which led the employer to move to re-open and to compel arbitration. The trial court denied the motion and ordered that the case remain abated until the Rule 11 discovery was completed.

The Dallas Court of Appeals reversed. The Court first held that the case was subject to interlocutory appeal because the trial court’s order “affirmatively denies Baylor’s motion to compel arbitration over at least a portion of the proceeding . . . .” (The opinion noted that this holding conflicts with a pair of decisions out of the El Paso Court of Appeals, possibly setting up the case for further review by the Texas Supreme Court.) As to the discovery, the Court agreed with the defendant that the Rule 11 had expired by its own terms when the employer moved to re-open the lawsuit, mooting the completion of the agreed-upon discovery as an ongoing issue. But because the trial court had not actually ruled on the employer’s motion to compel arbitration, the Court of Appeals remanded for formal consideration of the case’s arbitrability.

Baylor Univ. Med. Ctr. v. Greeson, No. 05-14-01342-CV

Yes, Your Online Reviews Are Protected by the TCPA

A nasty Zillow review of a real estate agent prompted a defamation lawsuit, which these days pretty much inevitably leads to a motion to dismiss under the Texas Citizens’ Participation Act. In this instance, the agent had listed the seller’s house as “temporarily off market” instead of “active.” The Collin County trial court denied the seller’s motion to dismiss, but the Dallas Court of Appeals reversed. The seller’s claim that the agent had listed the house as being off market for “over 100 days” was incorrect, but the Court held that the falsity of that statement was immaterial because the agent had actually listed the property that was for 64 days instead. The plaintiffs also failed to establish that listing the house as off market was in accordance with the seller’s instructions, as her complaint that she “did not want her property shown” was not the equivalent of asking it to be listed as “temporarily off market.” Finally, the plaintiffs could not base their defamation case on the seller’s statement that the agent was “incompetent, mentally unstable, or raging from rejection” because those were non-actionable statements of opinion. The Court therefore rendered judgment for the defendant and remanded for a determination of her costs and recoverable attorney fees.

Ruder v. Jordan, No. 05-14-01265-CV

Lost in Translation

A premises liability case between tenant and landlord highlights a potential problem in obtaining a proper waiver of trial by jury. Concerned that the jury would be unable to understand the pro se defendant’s broken English, the trial court first requested a translator. After being informed that no translator would be available for another week, the court continued the trial, then asked the defendant whether he would agree to waive a jury. The defendant agreed, but was not asked to confirm his waiver a week later when the case proceeded to a bench trial with the aid of an interpreter. The trial court awarded $70,000 in damages to the plaintiff. On appeal, the defendant (now also represented by counsel) argued that the jury waiver was invalid because it was made before he had obtained the services of the court-appointed interpreter. The Court of Appeals agreed, holding once the trial court has exercised its discretion to appoint an interpreter, the defendant was entitled to have that interpreter for all purposes, including the decision whether to waive his constitutional right to a jury trial. Without the interpreter, the Court of Appeals could not conclude that the defendant had knowingly waived that right.

Trejo v. Huy, No. 05-14-00310-CV

Rational Interpretation Negates Malice in TCPA Appeal

Former GOP Senate candidate Chris Mapp sued the Dallas Morning News for defamation after it published an editorial stating Mapp had told the editorial board “that ranchers should be allowed to shoot on sight anyone illegally crossing the border on their land, referring to such people as ‘wetbacks,’ and called the president a ‘socialist son of a bitch.'” Mapp claimed that the “shoot on sight” comment had been taken out of context because he had actually said ranchers should be permitted to shoot when they were in “fear for their life” or in defense of property, the same as anybody else. The News filed a motion to dismiss under the TCPA, but the 30-day statutory period after the hearing passed without a ruling by the trial court. That caused the motion to be overruled by operation of law, and the newspaper perfected an interlocutory appeal. The trial court then issued an order granting the motion to dismiss, albeit outside the prescribed time period.

This raised two questions for the Dallas Court of Appeals: What was the effect of the late-issued dismissal order, and should the case have been dismissed on the merits in any event? As to the first question, the Court held that the untimely dismissal order was a nullity. On the merits, the Court held that Mapp (who was a public figure) had not met his prima facie burden of showing that the newspaper had published the allegedly defamatory statements with constitutional malice. Paraphrasing or deliberately altering another person’s words does not establish actual malice unless there is evidence the defendant misinterpreted the remarks on purpose or in circumstances so improbable that the mistake could only have been recklessly. The Court concluded that the newspaper’s paraphrase of the statements Mapp had made in his tape-recorded interview was a rational interpretation of what he had said, and Mapp had not submitted any evidence to contradict the reporter’s affidavit explaining his subjective intent. The Court of Appeals therefore concluded that the trial court had erred by allowing the motion to dismiss to be overruled by operation of law, rendered judgment that Mapp’s case be dismised, and remanded to the trial court for a determination of the DMN’s costs, fees, and other recoverable expenses.

The Dallas Morning News, Inc. v. Mapp, No. 05-14-00848-CV

Death Penalty Sanctions Reversed on Fabrication of Evidence and Immaterial False Testimony

A long-running suit over a 1999 contract for the sale of a house resulted in a mistrial, followed by cross-motions for death penalty sanctions. The seller sought sanctions for discovery abuse and fraud, while the buyer claimed the seller had testified falsely at trial. The trial court granted both motions, striking everyone’s pleadings. Both sides appealed, and the Court of Appeals reversed and remanded. As to the buyer, the trial court had not considered the availability of lesser sanctions, and the fabrication of one construction estimate did not give rise to a presumption that other claims not based on that document were meritless. As to the seller, the death penalty sanction was disproportionate to the seriousness of the offense. The seller had testified that she paid a property tax bill with a credit card when records showed it was actually paid with cash and a check. Although the trial court found that misstatement was intentional, the Court of Appeals did not consider the discrepancy to be material enough to warrant the striking of her entire case.

Kim v. Hendrickson, No. 05-13-01024-CV

Sometimes “Oops!” Is a Good Enough Excuse

A memorandum opinion setting aside a default judgment highlights one of the more forgiving standards for obtaining a new trial. FelCor/CSS Holdings sued Culinaire of Florida for failing to indemnify it in two personal injury suits. Culinaire received a courtesy copy of the lawsuit and put its insurer on notice. The insurer in turn hired defense counsel. But when the actual citation arrived, Culinaire’s CFO somehow forgot to forward it to the company’s insurance agent. Culinaire moved for a new trial under the familiar Craddock factors, but the trial court denied the motion. The Court of Appeals reversed and remanded, holding that losing paperwork is precisely the kind of “accident or mistake” that negates “conscious indifference” to the lawsuit.

Culinaire of Florida, Inc. v. FelCor/CSS Holdings, LP, No. 05-14-00832-CV

Jury Verdict Trumped by Lack of Verified Denial

For 15 years, Steven Anderson was a route driver for Greenville Automatic Gas Co. Anderson quit and went to work for Automatic Propane Gas & Supply, leading Greenville to invoke an employment agreement that it claimed included both a a covenant not to compete and a nonsolicit provision. Anderson and Automatic Propane sued for a declaratory judgment, alleging (after a series of amendments to the pleadings) that Anderson had only signed a shorter contract that contained neither of the terms claimed by Greenville. The jury found that Anderson has not agreed to the terms claimed by Greenville and awarded him approximately $75,000 in attorney fees. The Dallas Court of Appeals reversed, holding that Anderson and Automatic Gas could not dispute the validity of Greenville’s contract because they had failed to timely file a verified pleading denying its validity, as required by TRCP 93. The Court of Appeals also affirmed summary judgment against Greenville on its tort-based counterclaims and remanded the case for further proceedings.

Greenville Automatic Gas Co. v. Automatic Propane Gas & Supply, LLC, No. 05-13-01405-CV

Attorney’s Fee Award on Summary Judgment Reversed

Among other issues in this case, the Court reversed the trial court’s award of $15,000 in attorney’s fees on summary judgment.  The moving party submitted an affidavit that $53,714 was the reasonable amount of fees for the legal services rendered, but the opponent submitted an affidavit in which their expert stated that a reasonable fee would be no more than $15,000.  Because neither party offered uncontroverted evidence of an amount certain, the trial court improperly made a factual finding in awarding $15,000 in fees.

Myers v. HCB Real Holdings, LLC