Republican candidates swept the eight races for positions on the Fifth Court; the Texas Lawbook has a good summary.

An arbitration provision was not illusory when:

“[T]he arbitration provisions apply equally to all parties. The arbitration provisions cannot be amended or terminated unilaterally by the LPs—that would require the approval of partners owning the requisite supermajority of capital interests under the partnership agreements. As previously discussed, amendments to partnership agreements may be duly adopted in accordance with the terms of the partnership agreement to which the limited partner initially agreed.”

Caprocq Core Real Estate Fund, LP v. Essa K. Alley Revocable Trust No. 2, No. 05-22-01021-CV (Oct. 25, 2024) (mem. op.).

Hyde v. GACP Fin. Co., LLC reversed a $1.7 million judgment because of a pleading-amendment problem. The Fifth Court found that the trial court erred by allowing GACP to amend its petition during trial, to argue for the first time that it sought damages as an agent on behalf of another entity, rather than its own damages. The Court said:  “Fair notice is not notice to dig deeper to determine the parties’ claims and damages,” and detailed why GACP’s second amended petition did not give adequate notice of the agency relationship it later claimed.

As a fallback, GACP argued that this challenge failed for lack of a special exception or a verified denial. The Court held that appellants were justified in relying on the second amended petition (which didn’t assert agency), and that the appellants had no reason to file a verified denial about capacity when the relevant agency claim wasn’t in the pleading in the first place. The Court concluded that the appellants timely raised the capacity issue as soon as it became apparent at trial. No. 05-23-00873-CV, Oct. 24, 2024 (mem. op.).

Despite adequate service, a default judgment nevertheless failed to withstand a restricted appeal when the pleaded cause of action didn’t match the judgment:

The Agreement as described by Struge conflicts with the terms of the Agreement attached to the petition. Because none of the alleged breaches, taken as true, actually constitute breaches of the Agreement under its plain terms, Struge’s pleadings fail to state a valid breach of contract claim and the petition cannot support a default judgment on the grounds of breach of contract.

Albanian-American Cultural Center, Inc. v. Struge Cultural Center, Inc., No. 05-23-01134-CV (Oct. 15, 2024) (mem. op.) Incidentally, the Albanian-American Cultural Center appears to be a thriving celebration of Albanian culture in the Dallas area, which I was unaware of but am certainly happy to see.

The dispute about the execution of Robert Roberson reached the Texas Supreme Court late last week, producing a stay order until lower courts can evaluate the merits of the Legislature’s last-minute subpoena to Mr. Roberson. A concurrence, joined by three Justices, mused about the separation-of-power questions at issue. Despite the obvious merits of Mr. Roberson’s case, one does wonder what future mischief may be enabled by encouragement of assertive exercise of the Legislature’s subpoena power.

The Fifth Court of Appeals has open staff attorney positions. If you or someone you might recommend for employment is interested is pursuing such an opportunity, please click the link for additional information – Full-Time Central Staff Attorney

Combs v. Crepeau involved a substantial judgment on a fiduciary-duty claim. The Fifth Court found legally insufficient damages evidence, holding as to past damages:

… there is no evidence of the value of the estate absent Michael’s fraud or breaches of fiduciary duty and no evidence from which a reasonable jury could find Diane and Lari’s combined one-half share of the estate was valued at $1,300,000.

That straightforward, high-level holding is supported by a painstaking review of many discrete components of that award. This case, and the damages arguments advanced in it, warrants study by anyone involved in document-intensive litigation about closely-held companies and family finances. No. 05-23-00088-CV (Oct. 7, 2024) (mem. op.).

In Gore v. Trans Union LLC, the Fifth Court addressed whether the Fair Credit Reporting Act preempts Texas statutes about the award of attorney’s fees to a prevailing defendant in a credit-reporting dispute.

The Court rejected this argument, noting that the FCRA does not expressly preempt the attorney’s fees provision in TBCC Section 20.08(c).  The court emphasized that the FCRA’s preemption provisions “have a narrow and targeted scope,” and Sections 1681n(c) and 1681o(b) of the FCRA, which govern attorney’s fees, are not among the provisions intended to preempt state law. No conflict arises: “That TBCC Section 20.08(c) allows attorney’s fees for the prevailing party in the absence of a finding of bad faith or harassment by the opposing party does not create an impossibility for compliance or stand as an obstacle to accomplishing Congress’s purposes in enacting the FCRA.” No. 05-23-00659-CV, Oct. 9, 2024.

In In re Peters, the Texas Supreme Court addressed an assertion of the Fifth Amendment privilege against self-incrimination in the context of civil discovery—an uncommon but critically important Constitutional limit on discovery. The case arose from a tort lawsuit against a defendant who was allegedly driving while intoxicated. Among other holdings, the Court said:

• Ongoing Criminal Proceedings: Active criminal proceedings are not required to claim the privilege. Here, the State was prosecuting Peters on the same facts underlying the civil case, which justified his assertion of the privilege.
• Waiver of Privilege: For a waiver to be valid, it must be “made voluntarily, knowingly and intelligently.” The court found that Peters’ statements to a police officer at the time of the accident did not meet this high standard for waiver, given his confused and disoriented state at the time.
• Potential for Further Incrimination: The court concluded that compelling Peters to disclose the names of the bars he visited could further incriminate him by leading to evidence that he drank more than he claimed. The court emphasized that the amount of evidence already collected against Peters is irrelevant; the witness need only show that an answer to the specific question at hand is likely to be hazardous to him.

No. 23-0611 (Tex. Oct. 4, 2024).

As part of a broader arc of cases in which the Texas Supreme Court has reversed lower-court rulings that it sees as overly technical, that Court reversed the Fifth Court in Verhalen v. Akhtar, concluding:

When a litigant demonstrates good cause to file a late response to a motion for summary judgment, the trial court must allow the filing. Johnston did not raise this argument in her briefing. We hold that when, as here, a litigant shares the response with the opposing party one day after the response deadline, files an affidavit explaining that the late filing was the result of a mere mistake, and no prejudice will result to the opposing party, the denial of that motion is an abuse of discretion.

No. 23-0885 (Tex. Oct. 4, 2024).

If you enjoyed my article in the Cornell Law Review Online earlier this year about the party-presentation principle, hopefully you will also enjoy a new article of mine in the Texas Law Review Online. Examining cases from the 2023-24 Supreme Court term, it considers whether “originalism” and modern economic theory can comfortably coexist.

Last week, the supreme court denied mandamus review, of the Fifteenth Court’s denial of emergency relief, in the Attorney General’s lawsuit against the firearms ban of the State Fair of Texas. A concurring opinion noted some oddities in the Attorney General’s litigation position, including:

1. “The State’s presentation to this Court takes no position on whether the State Fair of Texas, a private entity, has the legal authority to exclude patrons carrying handguns from the Fair.”
2. During the litigation, the Attorney General withdrew a 2016 opinion involving the Fort Worth Zoo that appeared inconsistent with its position in the State Fair case, as to which the opinion noted: “Withdrawing the Opinion is not the same thing as repudiating its analysis or explaining why it was wrong, which the State has not attempted to do in this Court.”

No. 24-0813 (Sept. 26, 2024).

In in re Mescioglu, the Fifth Court denied a mandamus petition because it:  (1) it lacked a proper Tex. R. App. P. 52.3(j) certification stating that every factual statement in the petition was supported by competent evidence; (2) omitted or mismatched relevant exhibits admitted into evidence at the hearing; and (3) failed to include every document that was material to the petitioner’s claim for relief and that was filed in the underlying proceeding.  No.  05-24-01096-CV (Sep. 27, 2024) (mem. op.).

In Conexiones Tornado S. de Rl. de CV, the Fifth Court reversed the denial of a special appearance, made by a Mexican bus company sued for negligence after a bus crash in Mexico. A key issue presented was whether, on this record, the U.S. Supreme Court’s recent opinion in Ford Motor Co. v. Montana Eighth Judicial District Court required reconsideration of the Texas Supreme Court’s focus on the “operative facts” of a case as part of the inquiry about specific jurisdiction.

Legally, the Court held that the supreme court’s “‘“substantial connection’ test was not abrogated by Ford Motor,” and factually, the Court found that Ford Motor was distinguishable, noting: “Unlike Ford, Conexiones has not conceded purposeful availment in Texas. Conexiones argues not only that it lacks Texas contacts, but also that it has structured its business in such a way as to avoid subjecting itself to personal jurisdiction here.” No. 05-23-00353-CV (Sept. 23, 2024) (mem. op.).

In Virtuolotry LLC v. Westwood Motorcars LLC, among other holdings, the Fifth Court reversed a judgment that awarded actual and exemplary damages to a tenant who claimed to have been constructively evicted by the landlord’s owner. The damages were assessed against the owner, individually. The Court noted that the tenant was actually evicted as a result of an FED case, and thus held that “[i]f an actual eviction occurs, there can be no constructive eviction.” In this regard, the Court also noted the distinction between constructive eviction and wrongful eviction claims. No. 05-19-01055-CV (Sept. 17, 2024) (mem. op.). LPHS represented Virtuolotry in the case.

Zurich Am. Ins. Co. v. MB2 Dental Solutions, LLC declined to take a permissive appeal, stating:

Regarding [Tex. Civ. Prac. & Rem. Code] section 51.014(d)’s second requirement, generally, a trial court will make a finding that an appeal will facilitate final resolution of the case “when resolution of the legal question dramatically affects recovery in a lawsuit.” Conversely, when other issues are left pending in the litigation, ultimate termination of the litigation is not advanced by allowing immediate appeal of an otherwise interlocutory order.

No. 05-24-00288-CV (Sept. 20, 2024) (mem. op.).

In re Dallas HERO grants mandamus relief in a dispute about amendments to the Dallas city charter. The supreme court held that the City’s additions to an election ballot about proposed amendments failed to satisfy the necessary standards for clarity and definiteness, stating:

… the propositions contradict each other, and the ballot language as a whole will confuse and mislead voters because it does not acknowledge these contradictions or address the effect of the primacy provisions, which are chief features central to the character and purpose of the council-initiated propositions. Because the citizen-initiated propositions must appear on the ballot and the parties have agreed to the ballot language for those propositions, we conclude the proper remedy is to direct the city council not to include its duplicative propositions on the ballot.

No. 24-0678 (Tex. Sept. 11, 2024).

A party sought to avoid the effect of a “prevailing party” attorneys’ fee provision in MRT of Kemp TX-SNF, LLC v. Lloyd Douglase Enterprises LC. The Fifth Court disagreed:

“MRT is not a party to PSA 1. But MRT embraced PSA 1 by seeking to enforce its terms. By doing so, MRT subjected itself to the entirety of the terms of PSA 1, including the attorney’s fee provision in Article 28.”

No. 05-23-00574-CV (Sept. 5, 2024).

State of Texas v. Richardson presented an interesting issue–whether the allocation of cases among intermediate appellate districts creates constitutional or Voting Rights Act problems–but did not present a claim against any of the defendants: “[T]he Secretary [of State] or Governor … play ‘no role in the redistricting procedure delegated’ to the legislature, the supreme court, the Judicial Districts Board, or the Legislative Redistricting Board.” No. 05-23-00325-CV (Aug. 29, 2024) (mem. op.).

TCHDallas2, LLC v. Espinoza, a dispute about the certificate of occupancy for a poker club, turns on an issue about the standard of review for a Board of Adjustment decision about zoning. As the Fifth Court sumarized:

The verified record reflects that the BOA’s decision was based upon significant historical facts relating to governmental oversight, review, and approval. Specifically, TCH was issued a C.O. after two years of due diligence during which time TCH worked with the city attorney and the city council to ensure the planned  operations would comply with all relevant laws and local ordinances. TCH conducted its operations without making any changes for nearly fourteen months after the issuance of the C.O., and TCH was not prosecuted by the district attorney or any other agency. Nevertheless, in December 2021, the building official revoked TCH’s C.O. on the basis that TCH’s operations at the location as described in the land use statement violated Texas Penal Code section 47.04. The discussion among the members of the BOA reflected that the issue of whether TCH’s operations were legal or illegal had not been determined by a court of law, and it was not clear whether TCH’s operations came under the safe harbor provision of penal code section 47.04. In this specific context, the BOA voted unanimously to reverse the building official’s revocation of TCH’s C.O. 

Acknowledging that a question of law (the legality of the club’s operations in light of the state’s gambling laws) was presented to some degree, the Court held that the BOA was within its discretion this specific decision, such that “the trial court effectively substituted its discretion for that of the BOA in this case in which the BOA could have reached multiple decisions.” No. 05-22-01278-CV (Aug. 27, 2024) (mem. op.).

In Powerhouse Ministries v. Friendly Church, the Fifth Court reversed a trial court’s judgment that awarded church property to a group of members who had left the original church and formed a new and independent entity.

The Court first held that ecclesiastical immunity didn’t apply to the trespass-to-try-title claim in the case. Then, the Court determined that the original church, which had changed its name to “Powerhouse,” was the same entity that had acquired the property over time through five deeds–while the new entity, which had adopted the name “Friendly,” had no claim to the property based on its name alone.

“[T]he fact that the entity later changed its name does not change the facts of its acquisition, possession, and operation of the Property,” said the Court, and “when the members of the Separated Friendly Church left the Original Friendly Church, they abandoned any claim to the Property.” No. 05-23-00824-CV (Aug. 27, 2024) (mem. op.).

In In re State Farm Mut. Auto. Ins. Co., the Fifth Court held that the trial court abused its discretion by ordering an attorney to pay up to $88,240 as a sanction before final judgment, without making express written findings as to why the sanctions did not impair State Farm’s access to the courts.

Reviewing the supreme court’s precedent in the area, the Court held that when a litigant contends that a monetary sanction precludes access to the court, the sanctioning court must either (1) provide that the sanction is payable only at a date that coincides with or follows entry of a final order terminating the litigation, or (2) make express written findings, after a prompt hearing, as to why the award does not have such a preclusive effect. No. 05-24-00229-CV (Aug. 23, 2024) (mem. op.).

Ostteen v. Holmes presented a conflict between a developer and a neighborhood activist. The Fifth Court affirmed the trial court’s denial of Ostteen’s motion to dismiss under the TCPA, concluding that Holmes’s claims were not based on or in response to TCPA-protected activity: “Holmes’s allegations and claims indicate his suit was based on or in response to Ostteen’s trespassing, interference or harassment of Holmes’s agents and contractors, and disparaging remarks about Holmes or the property allegedly made to locals or social media followers.”

The Court also reversed the trial court’s award of attorney’s fees because Homes did not provide sufficient detail about the particular services performed, who performed them, and the reasonable amount of time required for those services. No. 05-23-01150-CV, Aug. 22, 2024 (mem. op.).

In Feeney v. Morfin Capital Group, the Fifth Court considered whether the fiduciary-shield doctrine could protect a corporate officer from personal jurisdiction in Texas. The officer, at the time CEO of One Health Medical Systems, was alleged to have traveled to Texas to negotiate the purchase of MedOne’s assets. During these meetings, Feeney and other defendants allegedly made false representations about One Health’s financial capability to complete the transaction, inducing MedOne to enter the asset purchase agreement.

The Court found that the officer’s actions, which included making specific fraudulent statements during face-to-face meetings in Texas, were sufficient to establish personal jurisdiction. The fiduciary-shield doctrine does not apply when an officer is alleged to have personally committed a tort. No. 05-22-01375-CV, August 21, 2024 (mem. op.).

The Texas Supreme Court ended debate over the constitutionality of the 15th Court of Appeals in In re Dallas County, No. 24-0426 (Aug. 23, 2024), concluding that its statewide jurisdiction was permissible:

So whatever else it means for the State to be divided into appellate districts, it does not mean that each district will be a distinct division of the State, that any case is free from being sent across Texas to a far-flung court of appeals, or that one court may not be given effective statewide reach over at least some cases. These departures from a purely geography-based appellate system—in which each appellate court would resolve every appeal arising from its geographic territory—confirm that flexibility is a paramount value of [Tex. Const.] Article V, § 6(a).

No. 24-0426 (Tex. Aug. 23, 2024).

In Hurt v. Goswami, the Fifth Court reversed part of the trial court’s summary judgment concerning the award of damages for repairs to a leased property. The Court found that the evidence provided by the landlord was insufficient to establish the reasonableness and necessity of the claimed repair costs. Specifically, the Court noted that “[m]ere proof of amounts charged or paid does not raise an issue of reasonableness,” and without expert testimony or other supporting evidence, the summary judgment awarding over $32,000 in repair costs could not stand. No. 05-22-00389-CV (Aug. 6, 2024).

Deutsche Bank Nat’l Trust Co. v. Kingdom Group Investments, Inc. reversed a default judgment due to improper service of process. Kingdom Group tried to serve Deutsche Bank using substituted service through the Secretary of State, claiming that the bank was a foreign fiduciary without a registered agent or place of business in Texas.

But Tex. Civ. Prac. & Rem. Code § 17.028 specifies that service on a financial institution must be carried out by serving either the registered agent of the institution or, if no registered agent exists, serving the president or a branch manager at any office within Texas. These steps are not optional; they are exclusive and mandatory for valid service on financial institutions. Kingdom Group’s failure to follow these specific procedures meant service was invalid. No. 05-23-00656-CV. Aug. 12, 2024 (mem. op.)

Hipps v. CBRE Inc. summarizes the present state of the law on several key issues about the enforcement of noncompetes (while federal-court litigation proceeds, nationwide, about the viability of the FTC’s new regulation that would substantially ban them). The Fifth Court’s holdings include:

• Global? The worldwide restriction imposed by the agreement was unjustified because there was no evidence that the appellant’s work responsibilities extended to all the areas covered by the covenant.
• Harm. The Court agreed that irreparable harm had been established, citing evidence showing that the appellant had already engaged in activities that violated the noncompetition and non-solicitation provisions, including furthering business relationships with the appellee’s clients on behalf of a competitor.
• Consideration.  The appellee had provided substantial consideration, including access to additional training, clients, proprietary information, and a substantial financial incentive.
• Specificity. The opinion quotes the provisions of the temporary injunction that satisfied the requirements for specificity about (a) the “reasons for issuance” of the injunction under Tex. R. Civ. P. 683, (b) the relevant confidential information, (c) prohibited conduct, and (d) prohibited clients (noting that “the trial court’s injunction order restrains only [the employee]” and not the new employer).

No. 05-24-00056-CV, August 16, 2024 (mem. op.).

In re Marsana de Monserat denied a mandamus petition about the grant of a new trial. As one basis for its holding, the Fifth Court said:

The mandamus record also fails to show that relator made a predicate request to the trial court to correct the alleged deficiencies in its written order. See In re Eagleridge Operating, LLC, 642 S.W.3d 518, 525 (Tex. 2022) (orig. proceeding) (“Due to the extraordinary nature of the remedy, the right to mandamus relief generally requires a predicate request for action by the respondent, and the respondent’s erroneous refusal to act.”). Based on the circumstances here, we conclude that this is not one of those rare occasions where the predicate requirement may be relaxed.

No. 24-00466 (Aug. 9, 2024) (mem. op.). The opinion does not state whether the petitioner’s response to the motion for new trial could have potentially satisfied this requirement.

In Horton v. Kansas City Southern Ry. Co., the Texas Supreme Court walked back a line of authority about the Casteel harmful-error presumption for certain types of charge error, stating that the presumption does not apply to legal-sufficiency issues that arise from proof failure rather than legal infirmity:

For this reason, and in an effort to clarify the law and simplify the process, we hold that reviewing courts should not presume harm when a broad-form submission permits a jury to make a finding based on a theory or allegation that is invalid only because it lacks evidentiary support. Because the broad-form negligence question submitted in this case was erroneous only for that reason, we conclude that Casteel’s presumed-harm rule does not apply. 

Fair enough. Now what? The court explained:

After determining whether [the Casteel presumption] applies, and assuming the parties point to the record to support their conflicting positions, reviewing courts should focus on the ultimate question of whether “a review of the entire record provides [a] clear indication that the contested charge issues probably caused the rendition of an improper judgment.”  Focusing on that ultimate issue, reviewing courts should explain in their opinions why the record as a whole does or does not establish harm in each particular case.

No. 21-0769 (June 28, 2024) (citations omitted). Time will tell whether this clarification enhances the efficiencies of broad-form submission, or produces Baroque case law about various indicia of harm, since a jury’s actual thought process is privileged.

Two statements in Cooper v. TCH Altera AHCC, LLC capture key concepts in appellate waiver for Texas practice today:

1. Briefing waiver. “Because briefing waiver is disfavored, we will construe appellants’ brief to also challenge the declaratory relief to the extent reasonably possible. See Anderson v. Gilbert, 897 S.W.2d 783, 784 (Tex. 1995) (per curiam) (“An appellate court should consider the parties’ arguments supporting each point of error and not merely the wording of the points.”).
2. Malooly waiver. “Altera raised multiple grounds attacking appellants’ breach of contract counterclaims, including a ground that appellants could not show that a condition precedent—approval of appellants’ fee by the City of Allen—had been satisfied. Appellants do not address this condition precedent argument in their appellate brief, so we must affirm the judgment on their breach-of-contract counterclaims. See Rosetta Res. Operating, LP v. Martin, 645 S.W.3d 212, 226–27 ‘(Tex. 2022); Malooly Bros., Inc. v. Napier, 461 S.W.2d 119, 121 (Tex. 1970).”

Madonna reached #2 on the charts in 1985 with “Material Girl.” In Bain & Schindele Tax Consulting, LLC v. EW Tax & Valuation Group, LLP, the Fifth Court found that when the trial court found a party’s breach of a non-solicitation obligation to be material and unjustified, it erred by not fully excusing the other contracting party from further performance of the contract obligations (in that case, certain note payments). No. 05-23-00560-CV (Aug. 7, 2024).

The able David Gunn has written a provocative article in the Baylor Law Review about damages under Texas law for fraudulent inducement claims. While that topic has been the subject of considerable and thoughtful attention by the Texas Supreme Court in recent years, his article points out that those opinions don’t fully mesh with the supreme court’s emphasis on horizontal stare decisis / orderliness — and much older cases from that court on that topic in years past.

This question is particularly relevant as the new business courts and 15th Court of Appeals work to identify their controlling precedent, a process that I’ve analyzed in this short article.

The supreme court is seeking comment on new rules about legal work by nonlawyers, designed to solve significant problems with access to justice. Justice Brett Busby recently provided some useful background about these important new measures.

The U.S. Eventing Association escaped personal jurisdiction in Texas when the plaintiff’s jurisdictional argument didn’t align with its live pleading, either in substance, or in relationship to the elements of the pleaded claims (the Moki Mac “operative facts” requirement). The Fifth Court also emphasized that the Association’s relevant decisionmaking occurred in Pennsylvania, and other allegations involving Texas activity involved the unilateral acts of other parties. US Eventing Association v. Pegasus Eventing, No. 05-23-01287 (Aug. 5, 2024) (mem. op.).

While most TCPA litigation has faded away after significant amendments to its scope, the statute still has impact when it applies. In Buttles v. Infinite Fin. Corp., for example, the Fifth Court reversed the denial of a TCPA motion as to a business-disparagement claim when the plaintiff’s evidence “is devoid of any specific facts illustrating how [his] alleged misrepresentations … caused any specific, demonstrable loss.” No. 05-23-00138-CV (July 30, 2024) (mem. op.).

Twice in recent days, the Fifth Court has reminded: “A relator who delays seeking mandamus relief, even a delay of only a few months, may waive the right to mandamus unless the relator can justify the delay.” So when planning for a potential mandamus, try to avoid having this sentence appear in the opinion about it:

“Based on the petition and the record before us, relators waited until the eve of trial and over ten months from the challenged ruling before seeking mandamus relief.”

E.g., In re Auto Club County Mut. Ins. Co., No. 05-24-00867-CV (July 24, 2024) (mem. op.).

Putnam wanted $6,000 back from the county courts, that he had posted earlier as a supersedeas deposit. Unsuccessful in obtaining the money from the clerk’s office, he sued the county clerk, who obtained dismissal on jurisdictional grounds. The Fifth Court, after modifying the dismissal to be “without prejudice,” encouraged Putnam to seek relief from the probate judge rathe than the clerk:

Putnam’s claim is for the return of a deposit he paid to supersede a probate court order issued in connection with the administration of Powell’s estate. We conclude his claim arises from an estate administration and is thus a probate proceeding. Further, Putnam’s claim does not fit within the examples of “matters related to a probate proceeding” in [Tex. Probate Code] § 31.002, most of which involve claims brought by or against an estate’s personal representative. The probate court had exclusive jurisdiction over Putnam’s claim, and the county court did not err in granting Warren’s plea to the jurisdiction.

No. 05-23-00235-CV (July 26, 2024) (mem. op.).

The defendant in Porturas v. Anglobaldo argued that as a citizen of Peru, she was not subjet to personal jurisdiction. But the Fifth Court affirmed the rejection of her special appearance, because she had been personally served with process in Texas. No. 05-23-00919-CV (July 22, 2024) (mem. op.) (applying Burnham v. Superior Court, 495 U.S. 604 (1990)).

The plaintiff in Moore v. Dallas Morning News had an unusual argument against the one-year statute of limitations claim for a libel claim: he was incarcerated and couldn’t access the article at issue. The Fifth Court didn’t accept his argument, particularly when the plaintiff was – literally – aware of his alleged injury:

Moore complains that because he had no access to a telephone with an internet connection, he did not actually see and read the Article until months after he was released from incarceration. But the Article was not hidden or undetectable; it was readily available to the public. The fact that Moore himself did not read the Article within one year did not mean his injury was undiscoverable.  It is the plaintiff’s injury that must be inherently undiscoverable to invoke the discovery rule. As we have repeated, Moore learned of the injury to his reputation when he was attacked in prison.

No. 05-22-01286-CV (July 17, 2024) (mem. op.).

In MGO, LLC v. Accessology Too, LLC, a frustrated judge said:

If I need to order additional production, if you have objections that you are not sure about, I would urge you not to make frivolous or unnecessary objections, because, on the 14th, if it looks like people are still stalling, or trying not to hand over relevant information, I have been known to award attorney’s fees for that kind of behavior. And since we are coming up on the eve of trial, if it looks like you have something that is relevant and clearly within the scope of discovery and you’re hanging it up on some kind of technicality, that Friday is not going to go very well for your client.

While sincere and pointed, that statement didn’t satisfy the prerequisite for death-penalty sanctions of considering lesser sanctions:

[A]n order compelling discovery responses, coupled with an unequivocal warning that noncompliance would result in dismissal, constitutes a lesser sanction that can support a subsequent death-penalty sanction. However, equivocal warnings of future sanctions do not constitute lesser sanctions.  The trial judge’s remarks in this case were equivocal warnings about  future sanctions and did not specifically mention the possibility of death-penalty sanctions at all.

No. 05-23-00100-CV (July 17, 2024) (mem. op.) (citations and emphasis omitted).

New TRAPs confirm that appellate filings need to include bookmarked .pdf files. A good practice anyway, the rules now make this practice an express requirement.

If you enjoyed David Coale & Ben Taylor, Judgment Rendition in Texas, 75 Baylor L. Rev. 354 (2023), then you will enjoy Serafine v. Crump‘s resolution of whether an appeal begins a new “case”:

[T]he question is whether the proceeding “commences” a new civil action or “maintains” the original one. In other words, an appeal to an intermediate appellate court and a petition for review to a supreme court are within the same “litigation” if they are a part of the same “civil action” that is simply “pending” in different courts. A long and unbroken line of our precedent answers this question clearly and unequivocally: an appeal is simply the “continuation of the action in suit brought in the trial court.”

No. 23-0272 (Tex. June 21, 2024).

At issue in Green v. City of DeSoto was whether an exception to horizontal stare decisis–an intervening decision by a higher court–allowed a plaintiff’s otherwise-barred claim to proceed. The question developed as follows:

• An earlier Fifth Court case upheld a defense summary judgment on immunity grounds because “the evidence showed the damage to the [railroad] tracks was caused by the derailment, not directly by the vehicles while placing the road-base material on the tracks.”
• An intervening supreme court case found no immunity when a government employee failed to set the emergency break in a parked van, and the van caused damage when it went into motion.
• This case was controlled by the earlier Fifth Court opinion. The collision of the van in the supreme court was a material distinction here: “[T]he Greens’ damages were not caused directly by the motorized equipment. The City’s equipment created the condition, the dirt dam, that led to the flooding of the Greens’ property and the Greens’ damages. This is insufficient to create the required nexus between the City’s use of motor-driven equipment and the Greens’ damages.”

No. 05-23-00740-CV (July 9, 2024) (mem. op.).

A recent need for maintenance on my F-150 pickup caused me to read through the manual, which led me to appreciate how well-organized and readable it was. So I wrote “Why You Should Write Briefs Like Car Manuals” for the Bar Association of the Fifth Federal Circuit (available along with many other practical short articles in the “for members” section of its website). I hope you enjoy it and find the article of some use in your practice!

The history-minded will recall that Marbury v. Madison, 5 U.S. 137 (1803), turned on a tension between the Judiciary Act and the Constitution’s grant of federal-court jurisdiction. So too, Justice Young’s concurrence in the denial of the mandamus petition in In re Dailey, No. 24-0382 (Tex. July 5, 2024), in which the petitioner challenged the handling of an FED petition by a justice of the peace:

Article V, § 3(a) of the Texas Constitution, however, provides that “[t]he Legislature may confer original jurisdiction on the Supreme Court to issue writs of quo warranto and mandamus in such cases as may be specified, except as against the Governor of the State.” In turn, the statute describing this Court’s general mandamus jurisdiction simultaneously announces some proper respondents (“a statutory county court judge, a statutory probate court judge, a district judge, a court of appeals or justice of a court of appeals, or any officer of state government”) and excludes some potential respondents (“the governor, the court of criminal appeals, or a judge of the court of criminal appeals”). Tex. Gov’t Code § 22.002(a). The only constitutionally impermissible respondent is the governor. See Tex. Const. art. V, § 3(a). But given the enumeration in the current statute, and that the enumeration does not include justice courts (although they are not expressly disclaimed by statute, either), the sounder approach has been to regard this Court’s mandamus jurisdiction as not reaching such courts unless it is necessary to enforce our own jurisdiction. See Pope v. Ferguson, 445 S.W.2d 950, 952 (Tex. 1969).

No. 24-0382 (Tex. July 5, 2024).

Liebbe v. Courtney, discussed earlier this week as to its holding about damages, also reversed a sanctions order, stating:

… from the record before us, we cannot conclude the evidence gives rise to an inference of intent or willfulness or indicates improper motive on Liebbe’s part. As a result, we conclude the trial court abused its discretion by assessing sanctions against Liebbe under its inherent authority without finding bad faith, both with regard to the order to pay TLAP and take additional CLE hours, as well as with regard to the order to pay attorneys’ fees, a matter we address next.

No. 05-22-00158-CV (July 5, 2024) (citations omitted, emphasis added).

GDS Transport, LLC v. MV Transp., Inc. reversed a dismissal under Rule 91a, in no small part because of a mismatch between the grounds in the motion and the plainitff’s specific theories of liability.

Specifically, the plaintiff’s breach-of-contract claim alleged that the defendant wrongfully deducted “maintenance costs” from the amount owed under the contract. The defendant cited a limitation-of-liability provision that, admittedly, foreclosed liability for operational costs. But “the damages sought are not maintenance costs,” said the Fifth Court: “Rather, they are the amount of an offset improperly taken from amounts owed ….” No. 05-23-00067-CV (June 24, 2024) (mem. op.).

A substantial tort judgment in favor of a doctor was reversed in Liebbe v. Courtney, in which the Fifth Court held:

there was no evidence, or, at a minimum, no more than a scintilla of evidence, of any causal link between Liebbe’s and Rute’s tortious conduct and the damages awarded on those claims. In short, we conclude there was legally insufficient evidence that Liebbe’s or Rute’s tortious conduct caused the lost profits the jury assessed at trial, particularly when appellees themselves identified the WFAA/Channel 8 stories as the root of the harm.

No. 05-22-00158-CV (July 5, 2024).

Hopefully the big water leak at 600 Commerce can be repaired soon and return the courthouse to normal operations.

The capable Doug Gladden posted this remarkable story on X about an appointed attorney in a criminal appeal who repeatedly recycles the same two, stale arguments — and explains why that practice has led to considerable injustice.

Brown v. Joe Jordan Trucks, Inc. involved a claim that the wrong Frederick Altyman Brown may have been named in the citation by the elimination of “, Jr.” after the defendnant’s name. The Fifth Court disagreed:

In the present case the petition, citation and return all identify the defendant as “Frederick Altyman Brown.” The designation or suffix “Jr.” is a nonessential part of the defendant’s name for purposes of service of process, and the omission of said designation or suffix does not render the defendant’s name misstated, rather the omission merely renders the defendant’s name abbreviated in a common form.

No. 05-23-00676-CV (June 20, 2024) (mem. op.).

Deaguero v. Commission for Lawyer Discipline repeatedly reminds of the importance of bringing forward a complete record–for example, when challenging a summary judgment ruling, it’s a problem when “the appellate record does not include the Commission’s motion, Deaguero’s response, or the order granting partial summary judgment.” No. 05-22-01002-CV (March 28, 2024).

Hernandez v. Ayala involved a dispute about the value of a “barndominium“–basically, a barn that you can live in–and turned on the “property owner” rule about testimony as to value:

Ayala provided no basis for his valuations of the property. He did not testify that he was familiar with the market value of the partnership property or otherwise explain how he determined the value of each item, except for his testimony that an appraiser told him the barndominium was worth $120,000.

No. 05-23-00549-CV (June 18, 2024).

The supreme court’s recent opinion in Pay & Save, Inc. v. Canales involved a grocery-store customer who got his foot stuck in a forklift pallet used to display watermelons.

The court of appeals was unimpressed with the plaintiff’s case, but distinguished between legal and factual sufficiency in its analysis, and thus remanded for a new trial instead of rendering judgment for the defendant. As the supreme court summarized:

“The court of appeals correctly recognized that the evidence shows only ‘a possibility that someone’s foot might enter a pallet opening.’ It still erroneously concluded, however, that such evidence is legally sufficient evidence of an unreasonably dangerous condition. In doing so, it reasoned that ‘the jury could have reasonably inferred that a customer could get a foot stuck in a pallet side opening, which could cause the customer to fall and be injured.’”

The supreme court disagreed, characterized the problem as ine of legal sufficiency, and rendered judgment for the defendant:

“The court of appeals’ error was twofold. First, it assumed that a mere possibility of harm suffices to legally establish the existence of an unreasonable risk of harm. Second, it assumed that it needed to credit the jury’s flawed inference to that effect. We have long held to the contrary.  … As the evidence shows only a mere possibility of harm, it is legally insufficient.”

No. 22-0953 (Tex. June 14, 2024) (per curiam).

In re State of Texas helpfully clarifies the standard for when temporary relief is appropriate during the pendency of an appeal. Eliminating some uncertainty that had crept into the sparse case law about this topic, the supreme court observed:

Rather than describe the purpose of relief under Rule 52.10 as “preservation of the status quo,” we find Rule 29.3’s analogous formulation more helpful. An appellate court asked to decide whether to stay a lower court’s ruling pending appeal or to stay a party’s actions while an appeal proceeds should seek “to preserve the parties’ rights until disposition of the appeal.” The equitable authority weexercise today, under Rule 52.10, serves the same purpose—preservation of the parties’ rights while the appeal proceeds. A stay pending appeal is, of course, a kind of injunction, so the familiar considerations governing injunctive relief in other contexts will generally apply in this context as well.

No. 24-0325 (Tex. June 14, 2024). The court then examined how those general equitable considerations–including likelihood of success on the merits–applied in that case. This clarification of the law serves to generally align Texas and federal practice on the issue of appellate stays (setting aside the hot-button topic of “administrative stays”).

The Fifteenth Court’s new judges do not start empty-handed when it comes to precedent, as that Court has several sources of precedent to draw upon by operation of law.

Governor Abbott has announced the judges of the Dallas Division of the new business court–Hon. Andrea Bouressa of Collin County, and appellate stalwart Bill Whitehill of Dallas.

Governor Abbott has appointed the three inaugural members of the new Fifteenth Court of Appeals: Hon. Scott Brister, presently of Hunton Andrews Kurth, well-known statewide from his service on the Texas Supreme Court, and the author of City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005); Hon. April Farris, of the First Court of Appeals; and Hon. Scott Field, of the 480th District Court in Williamson County, and formerly of the Third Court of Appeals.

At issue in Robinson v. Boral Windows LLC was the scope of a release, which addressed “any and all actions … from the beginning of time to the present, including any and acts or omissions occurring to date … specifically includ[ing] without limitation all matters arising out of … the Employment Agreement ….”  After a comprehensive review of case law involving similar terms, the Fifth Court held:

• The release was not limited to the identified Employment Agreement, given the other, broader language in the release;
• For similar reaons, the release included claims based on two other instruments, even thought they were not specificaly identified in the release;
• The release extended to a successor-in-interest to one of the parties, by operation of law and because it had a standard “all predecessors, successors [and] assigns” clause.

No. 05-22-01184-CV (June 10, 2024) (mem. op.).

A popular meme shows Oprah Winfrey giving cars away to everyone in sight. In Pack Properties XIV, LLC v. Remington Prosper, LLC, the Fifth Court found fact issues all ’round, and held that all parties summary-judgment motions should be denied in a dispute about a contract related to the establishment of a car dealership. Two key points were:

• Under Fifth Court precedent, the term “affiliate” in a contract “is generally defined as a ‘corporation that is related to another corporation by shareholdings or other means of control’ and as a ‘company effectively controlled by another or associated with others under common ownership or control.'” Applying that precedent, the record presented a fact issue about “whether sufficient control” existed among the relevant parties.
• “Materiality” arises in two distinct settings. In one, “a court must determine if the parties’ agreement is sufficiently certain to be an enforceable contract. The question generally arises when the agreement lacks a particular term or contains a term that is unclear. The ultimate issue in this kind of case is the existence of a valid contract, which is a legal question.” In the other, “the question is whether a breach by one party was sufficiently important to excuse the other party’s continuing performance, i.e., the affirmative defense of prior material breach. These cases do not address a missing term and its effect on the validity of a contract; instead, these cases look to the significance of a particular term within the total agreement. Courts performing this analysis address the materiality issue as a fact question.”

Judge Easterbrook’s recent opinion about good fonts for legal writing emphasized the importance of “x-height,” which is the relative size of a small “x” to a capital letter in a particular font. It’s important to note, though, that x-height is only one of the relevant size measures, and an excessively high x-height can cause problems with “descending” letters such as “p” and “y.” This excellent article, from which the below illustration is taken, further explains this point while defining the other relevant measurements.

Legendary Seventh Circuit judge Frank Easterbrook has written authoritatively on many topics. Thanks to AsymaDesign, LLC v. CBL & Assocs. Mgmnt, Inc., the choice of a good font is now among them.

Judge Easterbrook noted that he was writing in Palatino Linotype, the standard font of the Seventh Circuit (and one of two that I regularly use, alternating with Book Antigua). He explained that it’s a desirable font for legal writing because it has a large “x-height” (the height of a lowercase “x” compared to a capital letter), along with similar fonts designed for book publication:

The Appellant made the unfortunate choice of Bernhard Modern, a “display face suited to movie posters and used in the title sequence of the Twilight Zone TV show.” Because of that font’s low x-height, it’s hard to read in book-like writing:

He concluded: “We hope that Bernhard Modern has made its last appearance in an appellate brief. “

Claim preclusion barred a second lawsuit for unpaid rent, when the record showed as to an earlier lawsuit that:

When appellants filed the previous lawsuit, the lease entitled them, in part, to three categories of damages: (1) rent unpaid before termination, (2) rent unpaid after the lease’s termination and before appellants receive judgment therefor, “and” (3) “unpaid rent called for under the Lease for the balance of the term[.]” Moreover, appellants cite judicial opinions that provide a landlord may sue for future damages upon breach of lease. Consequently, appellants “could have” alleged in the previous lawsuit a claim seeking judgment for all three categories of damages authorized by the lease.  Instead, appellants alleged and recovered in the previous lawsuit only part of their claim by seeking solely unpaid rent that had accrued prior to the previous judgment.

(citations omitted). The judgment in the earlier case had a clause that said: “This Judgment does not preclude Plaintiffs from seeking additional damages as they accrue after December 2020.” That language didn’t change the Fifth Court’s ruling, however:

[A]ppellants “terminated” the lease August 5, 2020, and the lease expressly authorized appellants to seek damages they seek in this lawsuit at the time they terminated the lease. Consequently, appellants’ claim for the damages they claim in this lawsuit accrued—came into existence as a legally enforceable claim—on August 5, 2020, when they terminated the lease and before they filed the previous lawsuit. Therefore, we conclude the recital in the previous judgment concerning claims that “accrue after December 2020” cannot apply to appellants’ claim for damages for breach of lease in this lawsuit, which accrued August 5, 2020, prior to the previous lawsuit and judgment.

SJF Forest Lane LLC v. Phan, No. 05-22-00905-CV (May 31, 2024) (citation omitted).

This is a cross-post from 600 Camp:

Thryv, Inc. v. NLRB, a review of the NLRB’s handling of an unfair labor practices case, presents deft usage of a typographical device called the “dinkus”:

Thanks to the observant Cedric Bond for pointing this out!

The Fifth Court continued to cast a skeptical eye at spoliation instructions in Copper Creek Distributors, Inc. v. Valk. The Court found an abuse of discretion in two regards; first, as to the trial court’s assessment of the evidence about certain QuickBook records:

However, there is no evidence CCDI intentionally or negligently failed to preserve the QuickBooks data. In his deposition, Escoffie testified he had not attempted to log into QuickBooks and he had not called QuickBooks to attempt to access his books ks and records. He stated he would work with his attorney to determine whether he had access to QuickBooks — the record does not show whether this happened and, if it did, whether any documents or data were recovered. Considering the failure to provide any evidence about when CCDI “closed out” its online QuickBooks account and when CCDI migrated from the online platform to the desktop platform along with the lack of evidence about whether Escoffie searched for QuickBooks records and recovered any, the trial court abused its discretion by concluding Platinum met its burden to show CCDI intentionally or negligently breached its duty to preserve accounting books and records, including QuickBooks files. Accordingly, we conclude the trial court erred by instructing the jury that CCDI destroyed or failed to preserve accounting books and records, and the jury could consider that evidence would have been unfavorable to CCDI.

and second, by not considering whether lesser sanctions would be effective. The Court then found harm, and as a result, reversed and remanded. No. 05-23-00123-CV (May 24, 2024) (mem .op.).

A long-anticipated constitutional challenge to the new Fifteenth Court of Appeals was recently filed by Dallas County, who was able to avoid some justiciability issues as the likely subject of a transfer order to that Court later this year.

Kroger Specialty Infusion v. Sturns, No. 05-22-01276-CV (May 16, 2024), presents four important, “nuts and bolts” tips about summary-judgment affidavits:

1. Conclusory objection. An argument that an affidavit is “conclusory” is considered a “defect of substance” that may be raised for the first time on appeal.
2. Conclusory example. This statement, as a matter of law, is conclusory as to whether someone improperly solicited customers. If you’re drafting an affidavit, say more than this:
   

   “While employed by BioPlus, and shortly before becoming employed by BioPlus, Sturns solicited some of the same customers, referral sources and/or patients in her former Sales Territory, in violation of her Agreement with [Kroger]. Sturns: (a) provided BioPlus business cards and marketing materials to one or more customers, referral sources and/or patients within the Restricted Area and/or the Sales Territory (both as defined in the Agreement); (b) conducted meetings with one or more such customers, referral sources and/or patients; and (c) met with or spoke to such customers, referral sources and/or patients.”

3. Other objections. “Objections to the testimony of an interested witness or the absence of personal knowledge are defects in form” that must be raised in a specific objection that the trial court rules upon (emphasis added).
4. Still an other objection. The need for an objection includes testimony that starts with weasel words like “I have reason to believe” or “[u]nless stated otherwise, I have personal knowledge.” Those are still objections to form that must be raised by objection, ruled upon, etc.

(LPHS represented one of the successful appellees in this case.)

The facts of Lawton Candle v. BG Personnel were as follows:

1. Lawton Candle is an LLC organized under Oklahoma law. It is not registered to do business in Texas and does not have a registered agent in Texas.
2. BG Personnel sued Lawton Candle in Dallas.
3. BG Personnel had process served on Lawton Candle’s registered agent in Tulsa.
4. BG Personnel obtained a default judgment against Lawton Candle.

Lawton Candle filed a restricted appeal, arguing that under Texas law, the only acceptable means of service on a foreign entity is via the Texas Secretary of State. The Fifth Court agreed – rejecting BG Personnel’s argument that no Texas law foreclosed service in the above manner – and vacated the default judgment. No. 05-23-00449-CV. (May 13, 2024).

Last week’s Alonzo v. John opinion from the supreme court, in addition to its holding about impermissible jury argument, concluded with this provocative footnote about last year’s Gregory v. Chohan opinions:

Last term, the Court clarified that claimants cannot rely on unsubstantiated anchoring to sustain a damages award. See Gregory v. Chohan, 670 S.W.3d 546, 558 (Tex. 2023 (plurality op.) (“Unsubstantiated anchors . . . have nothing to do with the emotional injuries suffered by the plaintiff and cannot rationally connect the extent of the injuries to the amount awarded.”); id. at 569 (Devine, J., concurring) (“[Claimants] cannot engage in ‘unsubstantiated anchoring’ by asking fact-finders to rely on evidence that has nothing to do with the pain or anguish they’ve suffered.”); id. at 576 (Bland, J., concurring) (“Counsel’s unchecked directives to the jury to employ mental anguish measurements based on standards that depart from the evidence render the verdict legally infirm under long-standing common law.”).

No. 22-0521 (Tex. May 10, 2024).

Only a few weeks after the Fifth Circuit reversed on incurable argument grounds, the Texas Supreme Court did the same in Alonzo v. John holding that the injection of race-based argument into a significant personal-injury trial required reversal. The court noted, inter alia, this excerpt from the plaintiff’s rebuttal closing argument:

We don’t want the 4 or 5 million dollars. And now we certainly don’t want this $250,000. … We don’t want their 4 or 5 million dollars. That’s not fair. Because it’s a woman, she should get less money? Because she’s African American, she should get less money? No. We’re going to fight because we believe in the jury system.

No. 22-0521 (May 10, 2024) (per curiam).

In the musical Six, Anne Boleyn sings the song “Don’t Lose Ur Head,” with the refrain “Sorry, not sorry!” Similarly, in In re Lakeside Resort JV, LLC, the trial court’s default judgment ended with the confusing phrase:

“This Judgment finally disposes of all claims and all parties, and is not appealable. The Court orders execution to enter for this judgment.” 

The supreme court held that this judgment was not final under Lehmann, particularly given that it arose in the default-judgment context. No. 22-1100 (May 11, 2024) (emphasis added).

“Under [Tex. Civ. Prac. & Rem. Code] Section 41.003, a court may not imply a unanimous jury finding in imposing exemplary damages. The burden to secure a unanimous verdict is on the plaintiff and ‘may not be shifted.'” Oscar Renda Contracting, Inc. v. Bruce, No. 22-089 (Tex. May 3, 2024).

It’s an election year, which means election litigation, which brings this reminder from the Fifth Court about its jurisdiction in such cases:

“We do not have jurisdiction to grant any sort of writ other than a writ of mandamus in an original proceeding under the election code. ‘A suit for injunctive relief in an appropriate trial court is the proper avenue for relief if a person is in danger of being harmed by a threatened violation of the election code.'” 

In re Wernick, No. 05-24-00524-CV (May 3, 2024).

In Sanders v. The Boeing Co., No. 22-20317 (May 2, 2024), the Fifth Circuit summarized the two key holdings that resulted from certification of a question about the Texas limitations-savings statute (reproduced in full below):

1. “[Tex. Civ. Prac. & Rem. Code] Section 16.064(a)(1) applies whenever the previous court dismissed an action for lack of jurisdiction. Thus is so even when the court ‘erred and actually had jurisdiction or could have had jurisdiction had the claims been pleaded differently.'” (citation omitted)
2. “[A] dismissal or other disposition does not ‘become final’ for purposes of Section 16.064(a)(2) until the parties have exhausted their appellate remedies and the court’s power to alter the dismissal has ended.'” (citation omitted, cleaned up).

The Fifth Court denied en banc review of Monticello Asset Managment v. Wells, a premises liability case involving a gruesome accident involving contact between a flagpole and an electric line. Four Justices joined a dissent to the denial of en banc review.

The supreme court has approved a new rule about use of a sworn appendix instead of an official clerk’s record, aligning “conventional” appeal practice with the longstanding custom in mandamus proceedings.

The supreme court granted mandamus relief with respect to the denial of a pro hac vice motion in In re AutoZoners, LLC. Among other matters that didn’t support the trial court’s ruling, the Court noted:

Listing out-of-state attorneys whose pro hac vice motions have not yet been granted on a signature block below the name and signature of a Texas attorney is not a problematic practice and provides no grounds for denying a pending or subsequent pro hac vice motion.

The Court further held: “Kern’s participation in one or two Texas cases in the last two years—and five cases in fifteen years—is not ‘appearing in courts in  Texas on a frequent basis” as contemplated by [Tex.R. Govern. Bar Adm’n] 19. Facilitating this kind of rare, occasional participation in Texas cases by an out-of-state attorney is precisely why we allow pro hac vice admission in Texas courts. No. 22-0719 (Tex. April 26, 2024).

The supreme court provided guidance about the limits of “alter ego” liability in JNM Express, LLC v. Lozano, holding:

     The “injustice” prong requires more than a judge’s or juror’s “subjective perception of unfairness.”  Instead, it references “the kinds of abuse . . . that the corporate structure should not shield,” like “fraud, evasion of existing obligations, circumvention of statutes, monopolization, criminal conduct, and the like.” “Such abuse is necessary before disregarding the existence of a corporation as a separate entity.” A “plaintiff must prove that he has fallen victim to a basically unfair device by which a corporate entity has been used to achieve an inequitable result.”
    The court of appeals erred because it did not address the injustice prong. Had it done so, it would have recognized that the evidence here does not satisfy that prong’s standard. The Lozanos point to nothing in the record showing that the Marins abused the corporate form such that failing to pierce the corporate veil would result in “injustice” in the sense that our alter ego cases describe that concept. One relevant consideration in the tort context is whether the corporation was “reasonably capitalized in light of the nature and risk of its business.” Yet the Lozanos produced evidence at trial to demonstrate that the companies did have the resources to protect their drivers.

No. 21-0853 (April 19, 2024) (per curiam) (citations and footnotes omitted, emphasis added). (In the graphic, DALL-E illustrates “piercing the corporate veil”).

The supreme court recently reversed a court of appeals’ (not Dallas) conclusion about waiver of charge error, holding:

At the charge conference, defense counsel objected to the use of the federal regulations’ definitions at all, arguing that the trial court should have used the Texas Pattern Jury Charge instead. Counsel alternatively objected to the specific application of the federal regulations’ definitions to Omega. …

Petitioners’arguments on appeal are more nuanced than at the charge conference, but the upshot is the same: the jury charge should have used the common-law definitions from the Pattern Jury Charge, not the federal regulations’ definitions. … 

Petitioners repeatedly made similar arguments both before and after the charge conference, using common-law considerations (not the federal regulations’ definitions) to argue that no defendants, and certainly not all, were Mr. Lozano’s employer. Their answer to the Lozanos’ petition also stated that Mr. Lozano was not their employee. This sufficiently put the trial court on notice of the objection.

JNM Express, LLC v. Lozano, No. 21-0853 (Tex. April 19, 2024) (footnotes omitted). (The graphic was provided by DALL-E, asked to illustrate the concept of an argument becoming “more nuanced” from trial to appeal, wihch apparently involves a transition from printed documents to a tablet.)

Sidney Powell may have avoided trouble with the State Bar for her involvement in questionable litigation about the 2020 election, but a Fifth Court panel majority denied Ken Paxton’s immunity-based appeal about a similar sort of disciplinary action, arising from Texas’s effort to intervene in election litigation at the Supreme Court.

A dissent–by the Court’s lone Republican member–had a broader view of the Attorney General’s immunity. No. 05-23-00128-CV, Paxton v. Commission for Lawyer Discipline (April 18, 2024) (mem. op.). A petition for review is a certainty.

The Fifth Court affirmed a summary judgment for Sidney Powell against disciplinary claims brought by the State Bar in the wake of the ill-fated “Kraken” litigation of 2020-21. The panel — three Democrats, by the way — reviewed a number of record and record-citation issues with the Bar’s filings and concluded:

The Bar employed a “scattershot” approach to the case, which left this court and the trial court “with the task of sorting through the argument to determin what issue had actually been raised.”

Commission for Lawyer Discipline v. Powell, No. 05-23-00497-CV (April 17, 2024) (mem. op.) (cleaned up).

The classic children’s book “Caps for Sale” involved a peddler who had many caps. So too, section 52.006 of the Texas Civil Practice & Remedies Code, which caps the amount of a supersedeas bond at $25 million, but as to which “[t]here is a split of authority on whether the $25 million statutory cap … applies per individual judgment debtor or per judgment.”

In Greystar Devel. & Constr., L.P. v. Williams, the Fifth Court held that the cap applies per debtor, joining the Tyler Court of Appeals in so holding, but diverging from the analysis of the San Antonio Court of Appeals. Review by the state supreme court seems likely on this important but elusive issue of statutory interpretation. No. 05-23-001168-CV (April 10, 2024).

The most recent Advocate (the quarterly publication of the State Bar of Texas Litigation Section) has several articles about how the new Fifteenth Court of Appeals will get off the ground. I have a short piece on where the new court is likely to look for precedent, since it will have none of its own to start. I hope you find it useful in thinking about this important new appellate forum.

The Texas Supreme Court rejected a challenge to the unconscionabilty of an arbitration award (and thus, the delegation of arbitrability to the arbitrator) in Lennar Homes of Texas Inc. v. Rafiei, No. 22-0830 (Tex. Apr. 4, 2024). The challenge involved the cost of arbitration; the Court held:

Rafiei has presented no evidence that he sought a deferral or reduction of the administrative fees or an agreement to proceed with a single arbitrator. Without evidence that Rafiei sought to estimate the actual costs associated with arbitrating the arbitrability question, it is speculative to conclude that the delegation provision is itself unconscionable.

Your faithful blogger has been in Scotland the last few days, visiting the University of St. Andrews with my daughter. For inexplicable reasons, Scottish wi-fi services uniformly block the websites of the Texas Supreme Court and the Dallas Court of Appeals. Commentary will resume this week upon my return!

In In re CG Searcy LLC, the Texas Supreme Court clarified what hearing exhibits must be included in a mandamus record:

Rule 52.7 requires a relator to file (1) “document[s] . . . material to the relator’s claim for relief” and (2) “a properly authenticated transcript of any relevant testimony from any underlying proceeding, including any exhibits offered in evidence.” TEX. R. APP. P. 52.7(a) (emphases added). Because the prepositional phrase “including any exhibits offered in evidence” modifies “transcript of any relevant testimony,” an exhibit that is not relevant or material to the original proceeding need not be included in the mandamus record.

No. 24-0170 (Tex. March 28, 2024).

In a dispute about whether a property owner’s operation of a poker club violated City of Dallas ordinances, the Fifth Court found sufficient evidence to justify a tempoary injunction under one statute (that didn’t require proof of immediate, irrepable injury), and thus held:

Here, we must uphold the trial court’s decision to grant the temporary injunction on any legal theory supported by the record. Because the City pleaded and proved facts to show it was entitled to injunctive relief under section 211.112(c), any error by the trial court in also granting relief pursuant to sections 54.016 and 54.018 is harmless.

Badger Tavern LP v. City of Dallas, No. 23-496 (March 29, 2024) (mem. op.).

A valet service damaged the plaintiff’s 2018 Lamborghini Huracan (a 2017-model example of which appears in the graphic). The Fifth Court affirmed a small award for loss of use, noting the trial court’s consideration of evidence about other vehicles available to the plaintiff and the effects of the COVID-19 pandemic. It rejected the plaintff’s request for damages for dimunition of value, noting:

Jones failed to provide any factual basis on which his valuation opinions rested. While Jones testified about how much he paid for the car seven months before the accident, he provided no factual basis to support his speculation about the value of the car at the time of the accident or after it was repaired. The basis for Jones’s opinions were conversations with people who sell “these cars” and “internet sites for all those cars out there.”

Jones v. Mr. Valet, No. 05-23-00355-CV (March 20, 2024) (mem. op.).

The Fifth Court held in Rudnicki v. Thompson Petroleum Corp. that a former oil-company executive was not entitled to indemnity for certain litigation expenses, agreeing with the company’s position that: ““[Partnership’s] Agreement could have provided for indemnification of expenses incurred ‘based on,’ ‘arisin(g from,’ or similarly ‘related to’ a covered person’s performance of the obligations of the GP with respect to [the Partnership]. But that simply is not what it says.” The company was authorized to indemnify the executive, but was not required to do so. No. 05-23-00125-CV (March 20, 2024) (mem. op.).

Ziegler v. Origin Bank presents a waiver issue involving a summary-judgment response, arising from two problems:

1. Record. “The record shows that Hatter filed a response to Origin’s second traditional motion for summary judgment, arguing that there were genuine issues of material fact that precluded summary judgment and attaching evidence in support of his argument. The docket sheet reflects that Ziegler filed a “Motion to Adopt Response,” and the trial court’s order says the court considered “Defendant Robert Ziegler’s Motion to Adopt Walt Hatter’s Response.” However, the record on appeal does not contain Ziegler’s motion. As a result, we do not know the substance of that motion.”
2. Substance. “The trial court’s order granting Origin’s second motion for summary judgment states, in part, that the trial court considered Origin’s second traditional motion for summary judgment, Hatter’s response, “Defendant Robert Ziegler’s Motion to Adopt Walt Hatter’s Response,” Origin’s reply, and the parties’ supplemental letter briefing. The order also sustained Origin’s objections to Hatter’s letter brief, granted Origin’s second traditional motion for summary judgment, and awarded Origin damages against Hatter and Ziegler jointly and severally. However, the order does not grant Ziegler’s motion to adopt Hatter’s response. Rather, the order expressly states that “[a]ll relief not specifically granted herein is denied.”

No. 05-22-00160-CV (March 21, 2024) (mem. op.). Had the appellant simply filed a response that expressly incorporated the relevant response, the record would have been clearer on this point.

In re Lee reminds that, notwithstanding the strong interest in courtroom proceedings untainted by outside influence, the First Amendment presents a powerful countervailing interest such that:

“Gag orders are presumptively unconstitutional. To overcome this presumption, there must be an imminent and irreparable harm to the judicial process and the judicial action must represent the least restrictive means to prevent that harm. These elements must be supported by specific findings and evidence.”

No. 05-23-00768-CV (March 15, 2024) (mem. op.).

Zurvita Holdings, Inc. v. Jarvis offers a detailed analysis of an arbitration-waiver issue. Its holdings are, inter alia:

• In its 2023 TotalEnergies opinion, the supreme court clarified “who decides arbitrability when the agreement incorporates the AAA or similar rules that delegate arbitrability to the arbitrator,” but “dot not address waiver of the right to arbitrate.”
• “[A]n agreement that is silent about arbitraing claims against non-signatories does not unmistakably mandate arbitration or arbitrability in such cases.”
• “Substantial invocation of the judicial process” was established by a record involving an 11-month delay in asserting an arbitraion right, actively pursuing expedited discovery, and pursuing a summary judgment motion. (Consistent with current Texas law, the Court also reviewed whether the delay caused prejudice–an issue that the Texas Supreme Court is likely to consider after the U.S. Supreme Court recently did away with that additional waiver requirement under the Federal Arbitration Act.)

No. 05-23-00661-CV (March 14, 2024) (mem. op.)

The key facts of Vetri Ventures LLC v. Westridge Eagles Nest Owners Association were as follows:

• Judge A (a senior judge appointed by assignment) presided over a bench trial, in a dispute about assessments by a homeowners’ association, on April 6, 2021;
• A May 24 docket entry, followed by a May 25 email from the court coordinator, indicated Judge A’s ruling on all matters except the amount of attorneys’ fees, and requested submission of an appropriate order;
• In November 21, after a hearing on the motion for judgment, Judge B (the elected judge for the court) entered final judgment that included a fee award.
• Judge B then signed findings of fact and conclusions of law, after which Judge A signed amended findings and conclusions.

Held:

• The coordinator’s email was not an effective “rendition” of judgment: “The email was sent only to the parties’ counsel. The trial court did not orally announce, in open court, its decision on the issues addressed in the court administrator’s email. Nor did the court deliver the email to the clerk of the court for filing, entry, or inclusion in the public record or take any actions reasonably calculated to effectuate such delivery.”
• Because the email was not a rendition, Judge B lacked authority to “merely memorialize” that rendiition with a final written judgment.

No. 05-21-01172-CV (March 15, 2024) (mem. op.) Enthusiasts of this sort of Texas appellate arcana will enjoy my Baylor Law Review article about “Judgment Rendition in Texas,” co-authored with the able Ben Taylor.

Simons v. Medical Hyperbarics, Inc. reviews the need for a jury trial to determine the reasonableness and necessity of attorneys’ fees.

• Substance. “[CPRC] Section 38.001(b) permits the recovery of attorneys’ fees but does not dictate how to determine the attorneys’ fee amount, except that the award must be ‘reasonable.’ … When faced with a similar silent fee-shifting provision in [Transcon. Ins. Co. v.] Crump, the Supreme Court of Texas construed the statute as entitling the parties to have the jury determine the disputed issue of the reasonableness of the attorneys’ fees. … Similarly, because section 38.001(b) does not dictate the manner to determine the amount of attorneys’ fees, providing only that the award must be ‘reasonable,’ reasonableness remains a fact issue that a jury, upon proper request, may resolve.” 
• Preservation. “Simons filed his request for a jury trial and paid his fee. He objected to the trial court considering the fee issue in his response to MHI’s application for fees and objected throughout the hearing on MHI’s application for fees. … Because Simons was entitled to a jury trial on attorneys’ fees as a matter of right, his timely request was presumptively reasonable and should have been granted.”

No. 05-23-00053-CV (March 16, 2024) (mem. op.) (emphasis added).

In re Lozovyy presents a variation on a “failure to rule” mandamus proceeding; specifically, a “failure to set” the hearing required by the TCPA. The hearing is important because “[a]bsent a timely hearing, the movant forfeits TCPA relief and the court of appeals loses jurisdiction to consider any interlocutory appeal.” The Fifth Court granted mandamus relief after issuing an interim stay, directing the trial court to have a hearing in the remaining time. The opinion details the several steps taken by the petitioner to build the necessary record in a relatively compressed time period. No. 05-24-00195-CV (March 11, 2024).

The settlement agreement in Clendening v. Blucora, Inc. resolved an arbitration by requiring a series of settlement payments by one party (the former employer), conditioned on the acceptable provision of information by the other (the former employee). The arbitrator “retain[ed] jurisdiction” to hear a dispute about the adequacy of that information and order a deposition “to occur not later than February 27, 2022.”

A dispute arose, and the arbitrator ordered a deposition to occur after February 27. The Fifth Court held that this award exceeded the arbitrator’s powers and vacated it. No. 05-22-01190-CV (March 7, 2024) (mem. op.).

The jury in Rhino Linings Corp. v. 2×2 Partnership, Ltd. indicated that (1) eleven of twelve jurors agreed, generally, (2) all twelve agreed to the exemplary predicates about gross negligence and fraud, and (3) all twelve agreed to the amount of exemplary damages. And as for (2), those questions were predicated on unanimous answers as to the related liabliity questions. This record did not establish a reason to reverse:

We know that the jurors were not unanimous in every one of their responses. However, we have a specific certification that they were unanimous on the ultimate exemplary-damages questions. … [And w]e do not have a record establishing that the jury did not follow those [predicate] instructions ….

No. 05-22-00522-CV (March 1, 2024) (mem. op.) (citations omitted, emphasis in original).

A warehouse owner sued Rhino, a provider of waterproof roof coatings, for negligence for recommending an allegedly substandard contractor. The trial court rendered a substantial judgment for the owner and the Fifth Court affirmed in Rhino Linings Corp. v. 2×2 Partnership, Ltd.

Rhino argued that the negligence claim was foreclosed by a warranty that established “THE SOLE AND EXCLUSIVE AGREEMENT, REMEDY AT LAW OR IN EQUITY FOR DEFECTS IN MATERIAL SUPPLIED BY RHINO.” (The legal effect of CAPITALIZING CONTRACT TERMS I leave for another day.)

The Fifth Court disagreed, concluding that the owner’s claim did not involve “defects in material,” but rather “its reliance on Rhino’s knowing misrepresentation concerning Potter’s being qualified to apply Rhino’s products on 2X2’s roof, which led to 2X2’s hiring him.”

If you are an enthusiast of the three-step process for judgment formation in Texas (rendition, signing, and entry), then you should read my 2023 Baylor Law Review article that I co-authored with Ben Taylor about the general topic, and then read Baker v. Bizzle, No. 22-0242 (Tex. March 1, 2024), in which the Texas Supreme Court applies that framework to a letter ruling.

Specifically, it held that no “rendition” occured when: “It is undisputed that the trial court did not orally announce, in open court, its decision on the issues addressed in the October 4 email. Nor is it alleged that the court delivered the email to the clerk of the court for filing, entry, or inclusion in the public record or took any actions reasonably calculated to effectuate such delivery.”

A thoughtful concurrence recommends attention to this long-standing process in modern-day rulemaking, observing: “Our system’s tedious distinction among “rendering” judgments, “signing” them, and “entering” them was necessary in early Texas, when judges would travel by horseback to attend court in far-flung locations. The confusion sown by these distinctions today, however, is needless and intolerable.” 

Because the judicial-proceedings privilege is a powerful defense against defamation claims, it requires that “an allegedly defamatory statement must bear ‘some relation’ to the proceeding for the privilege to apply.” That said, the “some relation” requirement was readily satisfied in Mishkoff v. Garrett, where “the statement in question was made in a counterclaim for trespass and described Mishkoff’s alleged conduct in trespassing on Bryant’s property.” No. 05-22-01063-CV (Feb. 26, 2024) (mem. op.).

The plaintiff in Ramirez v. Bam! Pizza Management, Inc. obtained a default judgment on a claim for personal injury. The Fifth Court rejected his argument that a new trial should have been granted because of excessively low damages for pain and suffering, noting: [T]he trial judge may have disbelieved Ramirez’s affidavit testimony and that it was within his role as fact-finder to do so and to award no damages to Ramirez for his pain and suffering or physical impairment.” A concurrence would have resolved the appeal against Ramirez because his affidavit was conclusory. No. 05-23-00311-CV (Feb. 22, 2024) (mem. op.).

“[D]oes severing claims disposed of on partial summary judgment into a new action render the judgment final even though other claims between the parties remain pending in the original action? We answer yes. When claims are severed into separate actions, the two-part Lehmann test for finality applies to each action separately. Thus, any claims that remain pending in the original action are not relevant in deciding whether there is a final judgment in the severed action. And although severance is improper if the claims are interwoven, any procedural error in ordering severance—which carries its own consequences—does not affect judgment finality or appellate jurisdiction.” Sealy Emergency Room LLC v. Free Standing Emergency Room Managers of Am., LLC, No. 22-0459 (Tex. Feb. 23, 2024) (emphasis added, citation omitted).

In Longhorn Creek Ltd. v. Gardens of Connemara Ltd., the trial court applied Tex. R. Civ. P. 91a to dismiss a declaratory-judgment claim about the assessment of a transfer fee pursuant to a restrictive covenant. An issue was whether certain required notices had been made in compliance with a statute. Specifically:

“[Appellees] argue the notices were printed in fourteen-point boldface type and referenced records that sufficiently described the property subject to the private transfer fee—they rely on the notices attached as pleading exhibits to [Appellant’s] amended petition for this contention.”

The Fifth Court rejected this argument:

“[W]e may not consider evidence in deciding a rule 91a motion but only the pleading of the cause of action and the narrow class of exhibits permitted by rule 59. That narrow class includes ‘[n]otes, accounts, bonds, mortgages, records, and all other written instruments, constituting, in whole or in part, the claim sued on, or the matter set up in defense.’ The copies of the notices attached to the amended petition may be important future evidence for some of Longhorn Creek’s allegations, but they cannot be said to constitute the claim sued on.”

No. 05-22-00842-CV (Feb. 20, 2024) (citations omitted).

The Fifth Court rejected a judgment debtor’s challenge to the appointment of a receiver in Floyd v. MMWKM Advisors, LLC, distinguishing two sources of statutory authority:

The purpose of a [CPRC] Chapter 64 receivership is to preserve assets and resolve issues relating to a business entity’s affairs where there are allegations of fraud or improper activities. Chapter 64 does not apply here. The trial court appointed a receiver in this case [under CPRC Chapter 31] to enforce a monetary judgment that the creditors had difficulty satisfying, not because of concerns regarding fraud or corporate misconduct while litigation was pending. Appellees produced evidence that Floyd owned non-exempt property and that Appellees had an unpaid final judgment against Floyd.

No. 05-23-00638-CV (Feb. 12, 2024) (mem. op.) (citation omitted).

Willow Tree Consulting Group LLC v. Perkins Coie LLP, discussed last week also addressed an argument that limitations had been tolled because a company’s outside counsel was involved with the “adverse domination” of the relevant company by insiders. The Fifth Court declined to apply this argument against a law firm based on alleged activity of a partner, reminding that “limited liability companies and partnerships are legally distinct from their members.” The Court further held that “True Health was dominated by its own officers and directors and Texas’ application of the doctrine has not been expanded beyond insiders.” No. 05-23-00264-CV (Feb. 13, 2024) (mem. op.).

In an opinion reversing the denial of a TCPA motion to dismiss, the Texas Supreme Court made a helpful observation for the legal blogging community:

[A]nyone who appreciates lawyerly precision has probably read plenty of news stories about legal affairs that gloss over lawyerly distinctions or contain inadvertent mischaracterizations of legal or procedural concepts. These journalistic imprecisions are not to be applauded, and they certainly can mislead the average reader in some cases. But errors of law by those reporting on the law are not automatically actionable as defamation.

Polk County Publ. Co. v. Coleman, No. 22-0103 (Tex. Feb. 16, 2024).

In Willow Tree Consulting Group LLC v. Perkins Coie LLP, the Fifth Court affirmed summary judgment on several claims against a law firm, holding, inter alia, that limitations began to run when the relevant Chief Compliance Officer, who “was both a coroprate agent and an innocent insider,” received a Civil Investigative Demand about matters related to the claims. No. 05-23-00264-CV (Feb. 13, 2024) (mem. op.).

What is absurdism? In statutory interpretation, it means “really absurd,” as explained by the supreme court in Rodriguez v. Safeco Ins. Co. of Indiana:

We have, however, often said that statutes should be construed to avoid genuinely absurd results. But “the absurdity safety valve is reserved for truly exceptional cases, and mere oddity does not equal absurdity.” Instead, the result must land in the realm of the “unthinkable or unfathomable.”

No. 23-0534 (Tex. Feb. 2, 2024).

A sanction was reversed in Ariceaga-Banda v. Daftim, LLC:

We conclude the trial court’s statements in pre-trial hearings and on the day scheduled for trial demonstrate it imposed death penalty sanctions in response to appellant’s failure to pay the $1,000 sanction. As noted, a trial court may constitutionally impose death-penalty sanctions if the sanctioned conduct reasonably supports a presumption that a party’s claim is meritless.  However, as in Griggsand Khan, appellant’s failure to pay the $1,000 sanction reveals nothing about the merits of her claim. We find the reasoning in Griggs and Kahn to be apt and persuasive in this case. Consequently, we conclude the trial court’s imposition of death-penalty sanctions due to appellant’s failure to pay the $1,000 sanction was an abuse of discretion.

No. 05-22-00274-CV (Jan. 30, 2024) (mem. op.) (citations omitted).

The case of In re Estate of Ellard presented the question whether a jury trial was required in a proceeding to determine whether a probate estate’s retention of legal counsel had been properly ratified. Citing Justice Busby’s informative and comprehensive concurrence in In re Troy Poe Trust, 646 S.W.3d 771 (Tex. 2022), the Fifth Court concluded that this proceeding “does not have any of the attributes of a cause for which a Judicial Article jury-trial right exists” under the state constitution. No. 05-22-01449-CV (Jan. 25, 2024) (mem. op.).

This Instagram video with fonts talking to each other is really funny. Thanks to my law partner Mary Nix for sending it my way.

This language was sufficient–notwithstanding additional, similar language in other cases on the point–to allow a right of appeal from an artbitration award under the Texas Arbitration Act:

Notwithstanding the applicable provisions of Texas law the parties agree that the decision of the arbitrator and the findings of fact and conclusions of law shall be reviewable on appeal upon the same grounds and standards of review as if said decision and supporting findings of fact and conclusions of law were entered by a court with subject matter and present jurisdiction.

Multi-Housing Tax Credit Partners XXXI v. White Settlement Senior Living, LLC, No. 05-22-00721-CV (Jan. 26, 2024) (mem. op.).

In the atypical setting of an appeal from an arbitration award (under the TAA), the Fifth Court concluded that the price set by an option agreement was sufficiently definite:

[T]he Option Provision included a formula to determine the purchase price, limiting the purchase price to the greater of the mutually agreed upon appraiser’s calculations, including assumption guidelines for same, or a definite sum of taxes owing, present value of anticipated tax credits not yet received by limited partner, and $100.00. In reaching this conclusion, we reject MHT’s argument that this case is similar to that of Playoff Corp. v. Blackwell, in which the parties entered into an employment contract that promised the employee 25% of a portion of the company’s fair market value upon his termination but did not agree, however, on how the company’s fair market value would be determined, instead agreeing that it would be determined based on a specific formula that the parties would have to agree to in the future after “later negotiations.”

The Court also said: “[W]e agree with other courts that have held that when parties to an agreement specify that a third person is to fix the price, the contract is not unenforceable for lack of definiteness.” Multi-Housing Tax Credit Partners XXXI v. White Settlement Senior Living, LLC, No. 05-22-00721-CV (Jan. 26, 2024) (mem. op.).

The Fifth Court reversed in Monticello Asset Management, Inc. v. Wells, a case about unfortunate contact between a power line and a flagpole during construction work: “The families in this case suffered horrible losses. But Texas law strictly proscribes the liability of premises owners and occupiers for hazards created by the work activity of an independent contractor’s employees over which they had no control.” No. 05-22-00709-CV (Jan. 23, 2024) (applying Coastal Marine Serv. of Tex. v. Lawrence, 988 S.W.2d 223 (Tex. 1999)). A dissent argued that the majority characterized the accident too narrowly.

The Fifth Court affirmed a temporary injunction about unwanted surveillance in Daugherty v. Ellington, stating: “Under this record, we conclude Daugherty engaged in conduct that violated the ‘right to be left alone from unwanted attention’  and is properly protected by injunctive relief. The trial court could reasonably conclude Ellington proved a probable right of recovery on his invasion of privacy claim even though Daugherty engaged in conduct while on public property.” No. 05-22-00991-CV (Jan. 17, 2024) (mem. op.). (LPHS represented the appellee in this case.)

Confirming what Dallas-area appellate practitioners had noted in recent days, the Fifth Court’s case management system is down. Hopefully it will be back online again soon!

Start the New Year off right!

Please join the Dallas Bar Association Appellate Section at noon on Thursday, January 18, for a lunch presentation by me. I’ll be speaking on trends and cases to know from the past year in the U.S. Court of Appeals for the Fifth Circuit and the Fifth District Court of Appeals. I’ve done a similar presentation around this time of year for a few years now.

Here’s my PowerPoint. This CLE will be in-person at the Arts District Mansion, 2101 Ross in downtown Dallas.

The parties’ agreement said that “[Arbitrator’s] determination may not be appealed to any court or other third party but will be binding on all parties.” The Fifth Court held that this language was not a waiver of the right to vacate or modify an award under the Texas Arbitration Act: “[A] waiver of appeal in the arbitration agreement does not preclude judicial review of matters concerning [statutory modification].” Tye v. Shuffield, No. 05-02-00163-CV (Jan. 5, 2024) (mem. op.) (citations omitted).

The Fifth Court reversed an award of “loss-of-use” damages, involving the right to move a billboard, in Remington Sherman Automotive, LLC v. FMG North Texas, LLC:

FMG’s conversion claim is premised on Remington wrongfully refusing to allow FMG to remove and relocate its billboard after the lease’s termination. Thus, to recover damages for loss of the billboard’s use resulting from Remington’s conversion, FMG had to establish the profits it could have earned if Remington had not prevented it from removing and relocating the billboard. Instead, over Remington’s objection, FMG presented evidence only of the amount of revenue FMG could have earned if Remington had allowed it to keep using the billboard on Remington’s property—a measure inconsistent with the legal and factual basis of FMG’s conversion claim. Absent any vidence showing the profits FMG could have earned at another location if allowed to remove and relocate the billboard, which FMG acknowledges it did not provide, the evidence is legally insufficient to support any loss-of-use damages.

No. 05-22-01366-CV (Dec. 27, 2023) (mem. op.) (emphasis added).

The Fifth Court rejected a challenge, based on a contract’s venue clause, to the confirmation of an arbitration award, in Picone v. Cruciani:

The concept of venue speaks to the  place where a lawsuit is to proceed. See id. It does not speak to the manner in which a dispute will be resolved. Nor is a provision calling for venue in Dallas County courts mutually exclusive from an arbitration provision: even if the parties agree to arbitrate their differences, a court must confirm the arbitrator’s award, and a venue provision determines where that confirmation will take place. The venue provision in the 2020 Release and Settlement has no bearing on the arbitrability of any claim between these parties.

No. 05-22-00841-CV (Dec. 21, 2023) (mem. op.) (citations omitted).

Note that new supersedeas rules are now in effect, changing the rules about “alternate security” (for actions filed after September 2023), and eliminating the longstanding requirement the court clerk approve a supersedeas bond before it becomes effective (effective for all actions).

In a contract case, the Fifth Court rejected an appellant’s challenge to contract enforceability, when the record showed that the appellant judicially admitted the validity of the contract at trial to seek recover on a counterclaim.

While the opinion resolves the case by finding a judicial admission, that finding plainly arises not just from a few words in the counterclaim, but from the entire conduct of the trial (in other words, it’s not a “gotcha”).

That said, the opinion’s a reminder that to avoid later confusion, it can be important to identify when a matter is pleaded in the alternative. Advantage Aviation Technologies, Inc. v. Axcess Aviation Maintenance Servs., Inc., No. 05-23-00344-CV (Dec. 27, 2023) (mem. op.).

Start the New Year out right with “Get the Last Word in an Effective Reply Brief,” which I recently co-wrote for the Bar Association of the Fifth Federal Circuit with my skillful colleague Campbell Sode – available here along with many other valuable practice pointers by members of that great bar association.

In a per curiam opinion, the supreme court reversed a Thirteenth Court opinion involving persistent – if unlucky – efforts to get a case to the court of appeals: “Mother timely noticed her appeal from both judgments under consideration by the court of appeals. The court of appeals erred in rejecting jurisdiction after Mother relied on the appellate court’s ruling rendering her initial appeal interlocutory.” In the Interest of A.C.T.M., No. 23-0589 (Dec. 29, 2023).

The Bar Association of the Fifth Federal Circuit is the bar association to belong to if you’re interested in the work of the U.S. Court of Appeals for the Fifth Circuit. More information about member benefits is detailed on the BAFFC’s website. One of those benefits is a terrific set of short (c. 500 word) articles about appellate practice (here’s an example that I did about a year ago on oral-argument preparation).

Please consider writing one yourself! A link will be emailed out several times to the BAFFC’s thousands of members, as part of its daily updates about recent decisions, and it’ll be available to the membership online as part of the full collection of these pieces. Contact BAFFC administrator Mary Douglas at mary@baffc.org!

The National Court Reporters Association recently published a fascinating “white paper” about “ethical and legal issues related to the use of artificial intelligence … and digital audio recording of legal proceedings.” It’s succinct, thoughtful, and raises questions relevant to just about any area of law practice or court administration that’s touched by the influence of generative AI and related technologies.

Fagin v. Inwood Nat’l Bank rejected a request to recognize “truth” as a defense to a tortious-interference claim, holding:

We agree with our sister courts’ reasoning. As with affirmative claims, recognizing an affirmative defense that the supreme court has expressly declined to adopt raises a “litany of questions regarding the contours and scope” of the defense that we are ill-suited to answer. We conclude that neither this court nor the trial court below can legitimately recognize, in the first instance, an affirmative defense of truth to a claim for tortious interference with an existing contract.

No. 05-21-00878-CV (footnotes omitted) (mem.op.).

Continuing a theme begun earlier in the week, the Fifth Court again analyzed (and turned down) a permissive appeal in Singh v. Rategain Travel Techs., Ltd., this time on a question about arbitrability. (My LPHS colleague John Volney represented the successful respondent in this matter.)No. 05-23-01088-CV (Dec. 14, 2023) (mem. op.)

Hartline Barger LLP v. Denson Walker Properties, LLC provides insight on when the Fifth Court will (and will not) accept a permissive appeal: “Although the possibility exists that a controlling legal question as to which a substantial ground for disagreement exists might arise in determining whether a fact issue exists in the context of a summary judgment, it is rare, and this fact-intensive case is not that rare occurrence.” No. 05-23-00126-CV (Dec. 11, 2023) (mem. op.).

The supreme court granted mandamus relief in the high-profile abortion case of In re State of Texas, reminding that “we may grant mandamus relief when the trial court effectively resolves the merits of a case in a temporary restraining order,” and applying that principle to hold:

A pregnant woman does not need a court order to have a lifesaving abortion in Texas. Our ruling today does not block a life-saving abortion in this very case if a physician determines that one is needed under the appropriate legal standard, using reasonable medical judgment. If Ms. Cox’s circumstances are, or have become, those that satisfy the statutory exception, no court order is needed.

No. 23-0994 (Tex. Dec. 11, 2023). Not addressed (because not presented) is whether the courts will be so deferential to medical judgment if it is challenged in the context of a later criminal prosecution, as opposed to the unusual “pre-clearance” type of injunction at issue in this case.

In November, the supreme court gave final approval to a new rule of procedure about permissive appeals. The key provision is as follows:

The defendants in a bus-accident cases disputed venue in Dallas County, arguing that the bus was ordered from, and ultimately delivered to, Parker County. The plaintiffs responded that “bookends are meaningless without the books,” contending that “determining where the bus was supplied also includes all actions that made negotiation and final delivery meaningful.”  The Fifth Court ruled for the plaintiff,s concluding that the activities conducted in Dallas between order and delivery “were key components of an integral to [Defendant]’s transaction with [Plaintiff] for the sale of the bus. Rush Truck Centers of Tex. v. Sayre, No. 05-23-00775-CV (Nov. 30, 2023) (mem. op.). The Court continued: “[W]hile some of the Dallas actions involved clerical work, those actions are nonetheless relevant to determining whether the claim has substantial connection to the plaintiffs’ chosen venue.”

The Fifth Court’s website has added this notification, reflecting new laws that create a 15th Court of Appeals with jurisdiction over specified subject matters:

An antitrust case in Tennessee recently produced a remarkably contentious dispute about the definition of “double spacing,” as deftly summarized in this “Above the Law” article titled “Heated Litigation Fight Over Double Spacing Ends in Judge Telling Everyone to Shut Up.” While the dispute was picayune, the discussion of just what exactly “double spacing” means is interesting background for a modern word-processing feature that we seldom stop and think about. Thanks to my law partner Chris Schwegmann for flagging this for me.

683 is a prime number, as well as a prime reason for reversal of temporary injunctions. Most recently, in a contentious case about the governance of an Eritrean church that presented significant issues about the ecclesiastical abstention doctrine, the Fifth Court resolved the matter on technical grounds by holding that the temporary injunction failed to satisfy the requirements of Tex. R. Civ. P. 683. Teklehaimanot v. Medhanealem Eritrean Orthodox Tewahedo Church, No. 05-23-00579-CV (Nov. 17, 2023) (mem. op.).

Wakefield, a party to a civil lawsuit, disputed a judgment against him in favor of Rubio,  forensic expert retained by his counsel in that lawsuit. Wakefield argued that no evidence established a contract between him and the expert. But the identify of his counsel was undisputed (thus providing some evidence of agency), and additional evidence showed that he ratified his counsel’s dealings with the expert, establishing that he chose to proceed:

… after (1) learning Tadlock engaged Rubio to perform expert services with respect to his case, (2) understanding how important the admissibility of evidence from the watch was, (3) personally delivering the watch to Rubio, (4) instructing Rubio to do as his attorney instructed, and (5) learning upon his arrival at the courthouse for his hearing that Rubio’s bill was approaching $10,000. 

Wakefield v. Rubio Digital Forensics LLC, Nov. 21, 2023 (mem. op.).

Huffman Asset Management, LLC v. Colter, No. 05-22-00779-CV (Nov. 7, 2023) (mem. op.), a default-judgment case that I recently discussed for its analysis of substituted service, also provided two useful reminders about legal-sufficiency challenges to damages awarded in a default judgment:

• Insufficient proof = no damage. “While those statements provide some evidence of the Colters’ belief they suffered mental anguish, the testimony does not show the nature, duration, and severity of the mental anguish, a substantial interruption in the Colters’ daily routine, or a high degree of mental pain and distress that is greater than mere worry, anxiety, vexation, embarrassment, or anger. The affidavits also include no evidence to justify the amount awarded.  We, therefore, … sustain HAM and Prairie Capital’s fifth issue in part by reversing the mental anguish damages awarded to the Colters.”
• Insufficient proof = remand, not rendition. “We do not, however, render a take nothing judgment against the Colters as to the mental anguish damages. ‘[W]hen an appellate court sustains a no evidence point after an uncontested hearing on unliquidated damages following a no-answer default judgment, the appropriate disposition is a remand for a new trial on the issue of unliquidated damages.’ …
  in a no-answer default judgment, remand is necessary only as to the categories of
  damages for which the evidence presented was insufficient.”

The plaintiff in Vallejo v. Helge, faced with a dismissal for want of prosecution, timely filed a motion to reinstate and then obtained a default judgment.

So far so good. But the defendant appealed, and the Fifth Court noted that the motion to reinstate was not verified–a requirement of the relevant rule and supreme court precedent. The motion was thus ineffective, which meant that the Court had to then “vacate the void judgment and dismiss the appeal.” No. 05-23-00573-CV (Nov. 15, 2023) (mem. op.).

The supreme court has consistently rejected discovery requests as overbroad that seek requests about “other similar accidents,” etc. when the requested information is not obviously connected to the facts of the case at hand. In In re Liberty County Mut. Ins. Co., the supreme court clarified that discovery about a plaintiff’s other accidents and injuries is discoverable when it is relevant to proof of causation and damages. While the specific holding of this case is tied to personal-injury litigation, its logic applies to other types of discovery disputes as well. No. 22-0321 (Tex. Nov. 17, 2023).

The Fifth Court reversed the grant of a Rule 91a motion on issues involving limitations, privity, and standing, in 17714 Bannister v. TAS Env. Servcs. LP, No. 05-22-00820-CV (Nov. 9, 2023) (mem. op.).

The Fifth Court reviewed the interplay between the COVID pandemic and a “force majeure” clause in a commercial lease in BB Fit v. EREP Preston Trail II:

[T]he parties expressly agreed that delays due to enumerated causes beyond the parties’ reasonable control would be excluded from computations of time. They did not agree to discharge BB FIT’s obligation to pay rent; to the contrary, Lease § 4(d) provides that “[t]he obligation of Tenant to pay Rent and the obligations of Tenant to perform other covenants and duties hereunder constitute independent and unconditional obligations of Tenant to be performed at all times as provided hereunder.” We conclude these express terms govern, specifically providing for an extension of time to pay rent rather than a discharge of the obligation.

No. 05-22-00682-CV (Nov. 9, 2023). (Our firm represented the successful party.)

Service on uncooperative individuals often requires a motion for substituted service. For Texas-chartered business entities, the Secretary of State is an option, and in Huffman Asset Managment v. Colter the Fifth Court rejected an argument that the Secretary is required to serve process anywhere other than the designated addresses:

Under HAM and Prairie Capital’s interpretation of section 5.253, the Secretary of State would be required to ignore an entity’s filings concerning its registered agent and registered office in favor of information contained in a more recent filing that is unrelated to service of process and does not designate or change a registered agent, registered office, or their accompanying addresses. Such an interpretation ignores the overarching requirement that corporations maintain a registered agent and registered office for service of process and keep the addresses of both updated with the Secretary of State.

No. 05-22-00779-CV (Nov. 7, 2023).

The Byzantine rules about post-trial requests for findings of fact and conclusions of law were enforced by the Fifth Court in Mangum v. Mangum: “In his first issue, Roderick challenges the trial court’s failure to file findings of fact and conclusions of law despite his timely request and a subsequent notice of late findings of fact. Although his original request was timely filed, the notice of late findings was filed more than 30 days later and did not preserve this issue for appellate review.” No. 05-22-01118-CV (Oct. 31, 2023) (mem. op.).

In U.S. Polyco, Inc. v. Texas Central Business Lines Corp., the Texas Supreme Court reversed a contract case based on the definition of ambiguity. The court also rejected an argument for affirmance based on “context,” stating:

The task of harmonizing contracts entails reconciling otherwise conflicting contractual provisions. That task does not authorize courts to ensure that every provision comports with some grander theme or purpose, particularly when the parties have not said in the contract which purpose matters most or that everything else in thecontract should be read subject to that purpose. To hold otherwise would implicitly assume that contracting parties pursue a purpose (at whatever generality) at all costs.

No. 22-0901(footnote omitted).

Note that this concept is distinct from “commercial context”–the circumstances surrounding the  execution of a contract, within the reasonable awareness of parties. See, e.g., Kachina Pipeline Co. v. Lillis, 471 S.W.3d 445 (Tex. 2015) (“We may consider the facts and circumstances surrounding a contract, including ‘the commercial or other setting in which the contract was negotiated and other objectively determinable factors that give context to the parties’ transaction.'” (citation omitted)).

In U.S. Polyco, Inc. v. Texas Central Business Lines Corp., the Texas Supreme Court reviewed a contract dispute, and gave a reminder about a basic principle of contract interpretation.

The dispute involved the below language about “other items … as are agreed upon by TCB and [Polyco] in writing” (green, below).

One side contended that it applied only to the “other items” Designated Areas” referred to earlier in the clause (red, below). The other argued that it reached all items listed in the full paragraph (blue, below):

The trial court, court of appeals, and supreme court all agreed that the bettter reading of the “in writing” clause was that it only related to the “other items” (noting, among other matters, the importance of the “Oxford comma”). But the court of appeals found ambiguity, based on its characterization of the parties’ dueling interpretations as reasonable, and that is the point on which the supreme court reversed:

This analysis is erroneous for two basic reasons. First, like all other considerations beyond the contract’s language and structure, parties’ “disagreement” about their intent is irrelevant to whether that text is ambiguous. Parties who find themselves in a business dispute can always claim an extratextual “intent” that would serve a current litigation position. Second, the “multiple, reasonable interpretations” that the court of appeals invoked are illusory. If there were multiple interpretations and a court could not choose among them, then the text would be genuinely ambiguous and there would be no choice but to leave the question to a jury. But the multiple interpretations that the court was referencing here were merely the competing theories that the parties advanced about how to read the text—a dispute that both the trial and appellate courts had ably addressed as a matter of law.

No. 22-0901 (Nov. 3, 2023) (emphasis removed).

Thanks to a persuasive letter from a typographically sophisticated attorney, the Maryland Supreme Court recently recently modernized its list of acceptable fonts, as follows (omitting Palatino and Equity, however). Thanks to my law partner Greg Brassfield for drawing this to my attention!

Also of general interest, the letter links to an informative series of Tweets about the typography used in the federal courts of appeal.

Dallas-Fort Worth International Airport, by any measure one of the world’s largest airports, sprawls into the boundaries of four cities and two counties. But that undisputed fact does not automatically establish venue over American Airlines in Dallas County, as shown by American Airlines v. Halkuff:

American offered evidence that the facts giving rise to appellees’ claims arose in Tarrant County because the terminal where the incident took place is—like all DFW terminals—located in Tarrant County. American’s undisputed evidence included specific identification of Terminal D and Gate D-38 as the location where the flight at issue boarded. According to American’s evidence, Terminal D and its associated runways are located entirely in Tarrant County. This evidence not only disproved appellees’ venue fact, it also amounted to evidence that Tarrant County was a proper venue.

No. 05-23-00621-CV (Oct. 18, 2023) (mem. op.).

The Fifth Court confirmed the confirmation of an arbitration award arising from a dispute about the purchase of a surgical center in Minimally Invasive Surgery Inst., LLC v. MISI Realty CC Dallas, LP. It reminded about two basic points in challenging arbitration awards:

• “‘Manifest disregard of the law‘ is not a valid ground for vacating an arbitration award under the FAA or TAA.”
• “[T]he Final Award notes the four-day arbitration included offers of proof, counsel statements, witness testimony, deposition and documentary evidence, and post-arbitration briefs. The arbitration award also states: ‘All issues have been determined by the evidence presented during the full arbitration.’ The award provides findings and conclusions with analysis. But the record contains little more than the arbitration award, the lease agreement, and the trial court order granting the motion to confirm the arbitration award. There is no list of exhibits or witnesses, no record of exhibits admitted into evidence or rulings on evidentiary objections, and no transcript of the proceedings. The trial court and appellate records do not include a complete record of the arbitration, and what is included is insufficient to allow this Court to conduct a meaningful review of any claimed ‘manifest disregard of the law’ by the arbitrator.”

No. 05-22-00581-CV (Oct. 19, 2023) (mem. op.) (emphasis added).

The Fifth Court declined to resolve a dispute about a spoliation instruction when the relevant record was as follows:

It is not clear what happened. We are reasonably confident that a charge conference of some kind took place during the “Off-the-record discussion” noted in the reporter’s record passage quoted above. Judge Moyé said, “We are off the record,” just before the unrecorded discussion occurred, so perhaps the attorneys were on notice that the court reporter was not transcribing their objections to the final charge. Then again, perhaps they weren’t. Perhaps something happened during the unrecorded conference to make the Monzingos’ attorney reasonably but erroneously believe that the court reporter had begun recording the charge conference before he made his objections to the charge. And during this appeal, Flories has never argued that the Monzingos failed to preserve their second issue.

Monzingo v. Flories, No. 05-22-00719-CV (Oct. 12, 2023).