by Chris Patton

Citibank sued a credit card account holder for breach of contract and account stated to collect the balance due on a cardholder’s credit card account.  In the trial court, Citibank moved for summary judgment, which the trial court granted in its favor.  On appeal, the defendant challenged the trial court’s decision on a number of grounds.  However, because the defendant, who was proceeding pro se, repeatedly cited to exhibits and other evidence that were not in the record, the court refused to address the issues related to breach of contract raised by the defendant.  The court also refused to address the issues related to account stated claim.  Because Citibank moved for summary judgment  on the alternative grounds of breach of contract and account stated, and because the trial court did not specify the grounds on which summary judgment was granted, the court found that it need not resolve the issues related to the suit on account claim.  Because “even if we resolved it in [Defendant’s] favor our decision would not change the outcome of this appeal.”

Burruss v. Citibank, No. 05-10-01376-CV

The court reversed and rendered judgment in a breach of contract action related to a letter of intent (“LOI”) to acquire the stock of a corporation. Corilant and FFSS executed an LOI for Corilant’s acquisition of FFSS’s stock. The LOI provided for future “Definitive Agreements” memorializing the precise terms and conditions of the sale. FFSS scuttled the deal before executing the Definitive Agreements. Corilant sued for breach of the LOI and a jury awarded it $1.8 million.

On appeal, the court held that the LOI was not an enforceable contract because the essential terms of two of its provisions were uncertain. First, the LOI provided for structured earn-out payments to Corilant but failed to sufficiently characterize the payments. The evidence showed the parties’ lack of mutual understanding with respect to this provision. Second, the LOI provided that FFSS’s Chairman would continue to be involved in management of the company but failed to specify the terms of his employment. This provision also specifically contemplated a future management agreement, which was actually drafted but never executed. Finally, the court rejected Corilant’s argument that enforceability of uncertain terms is a factual determination. In doing so it distinguished an earlier case in which parties disputed whether an LOI was intended to be the final expression of a contract, which neither Corilant nor FFSS argued.

Fiduciary Financial Services of The Southwest v. Corilant Financial, No. 05-10-00471-CV

The court issued a significant ruling related to the remedy for shareholder oppression, holding that the equitable relief of a “fair value” buy-out was not precluded by a provision in an Agreement mandating a “book value” buy-out. Joubran, the sole shareholder of a cardiac perfusion company, hired Hughes, sold him 10% of the corporation’s outstanding shares, and entered into an Agreement requiring Joubran to purchase Hughes’s stock at book value upon the severance of his employment. Years later a dispute arose, Hughes was terminated, and Hughes sued Joubran for shareholder oppression. The trial court held that that Joubran engaged in shareholder oppression and awarded Hughes what the jury found to be the fair value of his shares in the company.

On appeal, Joubran argued that the trial court should have calculated the value of the shares based on their book value as required in the Agreement because a party to a contract generally cannot recover equitable relief inconsistent with that contract. But the court held that the trial court had the equitable power to order a buy-out at fair value because the book value of Hughes’s shares was reduced by Joubran’s oppressive conduct and, additionally, Hughes was not suing for breach of contract. This holding squares with the court’s recent decision in Ritchie v. Rupe that the “enterprise value” method for determining stock’s fair value, i.e. determining the pro rata value of each share without any discount based on the stock’s minority status or marketability, is appropriate in shareholder oppression suits when the oppressive conduct of the majority forces a minority shareholder to relinquish his ownership position. 339 S.W.3d 275, 289 (Tex. App.—Dallas 2011, pet. filed)

As a secondary issue, the court addressed whether a shareholder that exercises dominating control over a corporation owes a formal fiduciary duty to the minority shareholders. In its verdict, the jury found that no informal fiduciary duty existed between the shareholders, but nonetheless found that Joubran breached a fiduciary duty to Hughes and awarded Hughes almost $2 million in actual and exemplary damages. The trial court declined to render judgment in favor of Hughes, who argued on appeal that the trial court should have disregarded the first jury finding because, under the circumstances, Joubran owed Hughes a formal fiduciary duty. The court disagreed, citing numerous Texas cases to the contrary and noting that the Texas Supreme Court expressly declined to recognize such a duty in Willis v. Donnelly, 199 S.W.3d 262, 276 (Tex. 2006).

Cardiac Perfusion Services, Inc. v. Hughes, No. 05-10-00286-CV

The court reversed a no-summary judgment against the employees of a lawn service company. The employees alleged that the lawn service issued them worthless paychecks for two months. The employer filed a no-evidence motion for summary judgment that neither referred to the facts alleged nor specified in what way the evidence failed to support the claims. The employees responded, attaching affidavit evidence and wage statements. The employers objected to the evidence as hearsay, but the court ruled that objection was waived because they failed to obtain a ruling from the trial court on their objection. The court also held that the affidavits and wage statements were sufficient evidence to defeat summary judgment because they indicated at least an implied employment contract that the employer breached, damaging the employees.

Gaspar, et al., v. Lawnpro Inc., No. 05-11-00861-CV

The court has issued some interesting comments in connection with the denial of a motion for rehearing in a condemnation case.  In the jury charge conference, Dallas County objected to the property owner’s proposed definition of “Cost to Cure,” but the specific basis of the objection was unclear.  The trial judge eventually summarized the objection as being that the instruction amounted to a comment on the weight of the evidence, and the County agreed.  The trial judge fixed that problem by modifying the instruction to award cost to cure damages, “if any.”  On appeal, the County attempted to argue that the definition was actually “an incorrect statement of Texas law,” but the court of appeals rejected that claim:

A party objecting to the jury charge must “point out distinctly the objectionable matter and the grounds of the objection.” Tex. R. Civ. P. 274. When the complaining party’s objection is, “in the opinion of the appellate court, obscured or concealed by voluminous unfounded objections, minute differentiations or numerous unnecessary requests, such objection or request shall be untenable.” Id.
Reviewing the reporter’s record of the charge conference, we cannot determine the County’s exact complaint to the trial court concerning “cost to cure” except that it constituted a comment on the weight of the evidence. The trial court addressed that complaint by modifying the statement of the definition.

The court also rejected the County’s argument that the property owner’s expert had offered conclusory opinion testimony, since the County had failed to raise an issue as to the legal sufficiency of the testimony.  In its appellate briefing, the County had challenged the trial court’s admission of the expert testimony as being an abuse of discretion, but did not attack the legal sufficiency of the testimony.  For that reason, the court declined to evaluate whether the testimony was conclusory, and therefore denied the County’s motion for rehearing.

Dallas County, Texas v. Crestview Corners Car Wash, No. 05-09-00623-CV

In a consolidated appeal, the court affirmed a district court’s summary judgment and a  county court at law’s forcible retainer judgment related to the foreclosure sale of the property. The court held that Texas Property Code Section 51.002(b)(2), which requires notice of a foreclosure sale to be filed “in the office of the county clerk of each county in which the property is located,” does not require notice to be recorded in the permanent deed records. The court also rejected the argument in the forcible retainer lawsuit that the mortgage servicer had no authority to sell the property because the only issue in a forcible retainer action is the right to actual possession – not the merits of the title.

Montgomery v. Aurora Loan Services, LLC, No. 09-11836

In a short opinion, the court has granted mandamus to a manufacturer of medical devices after the trial court had ordered the manufacturer to produce three emails from its privilege log.  The opinion does not go into much detail about the documents, but quickly concludes that they were privileged because they consisted of communications among employees and the company’s in-house counsel made for the purpose of facilitating the rendition of legal services to the company.  Accordingly, the court concluded that it was an abuse of discretion to compel their production.

In re Blackstone Medical, Inc., d/b/a Orthofix Spinal Implants, No. 05-12-00763

In a simple breach of guarantee case, the court of appeals issued a memorandum opinion affirming a summary judgment in favor of a creditor against a debtor on the debtor’s personal guaranty of an open account for his business.  The debtor raised several issues, contending that (1) the court erred by failing to grant his motion for continuance of the summary judgment hearing; (2) the summary judgment affidavit evidence was conclusory; (3) the motion failed to identify evidence in the record to support summary judgment; (4) the motion for summary judgment did not specifically seek attorney’s fees; and (5) both the guaranty and underlying contract were unenforceable and lacked consideration.  The court overruled each issue, holding that the motion for summary judgment was sufficiently specific to support the award, that it was supported by adequate evidence proving the creditor’s claims, and that the court’s refusal to continue the hearing was not an abuse of discretion.

Long v. Motheral Printing Company, No. 05-10-01128-CV

The court today issued an opinion in a products liability indemnification case arising out of a helicopter crash in North Carolina.  The company that operated the helicopter sued the manufacturer of a defective gearbox after the operator settled with the estate of the deceased pilot for $2.5 million.  The gearbox maker had agreed to indemnify the operator for all losses, claims, and expenses arising out of any defective work.  The jury found that the negligence of both parties had been a proximate cause of the accident, but the trial court set aside that finding with respect to the gearbox manufacturer and rendered a take-nothing judgment on the operator’s indemnification claim.  The court of appeals affirmed, holding that there was sufficient evidence that the operator’s negligence caused the helicopter  to crash.  The court then accepted the manufacturer’s argument that the express negligence doctrine barred the operator’s indemnity claim because the indemnity agreement failed to state that it would require the manufacturer to indemnify against the operator’s own negligence.  Even though the manufacturer’s own negligence had been found to be a proximate cause of the crash, the operator could not recover against the manufacturer because the parties did not contract for proportionate indemnity.

American Eurocopter Corp. v. CJ Systems Aviation Group, No. 05-10-00342-CV

The court of appeals has issued a memorandum opinion reinstating an arbitration award.  The case turned on the application of a “dollar-for-dollar credit” provided for in the parties’ written agreement.  The arbitration panel concluded that the credit only applied to certain cases brought by the defendant’s law firm, resulting in an award of $551,000 in damages on the defendant’s counterclaim.  After the plaintiff/counter-defendant filed suit to challenge the arbitration award, the trial court apparently accepted a different interpretation of the contract and lowered the amount of the award.  The court of appeals reversed and reinstated the arbitration award, holding that there was no “evident material miscalculation of figures” and that the award was supported by the parties’ evidence.

Petroff v. Shrager, Spivey & Sachs, No. 05-10-00159.

In a construction contract case, the court has reversed summary judgment in favor of an electrician subcontractor against a retail property leaseholder. The subcontractor alleged that he had performed 80% of the work at the property when the general contractor’s check bounced, and the subcontractor sued the property leaseholder for the difference. The district court granted summary judgment in favor of the subcontractor. The court of appeals reversed and remanded, holding that (1) a fact issue existed as to the proper amount of retainage the leaseholder was to retain and (2) the court erroneously awarded the subcontractor certain amounts under the Texas “Fund Trapping” statute that the leasehold had paid to replacement contractors.

Jewelry Manufacturer’s Exchange, Inc. v. Tafoya, No. 05-11-00065-CV

The court also issued a memorandum opinion in another governmental immunity case.  In this instance, the court of appeals affirmed the trial court’s denial of a plea to the jurisdiction, concluding that the plaintiff had properly alleged a waiver of sovereign immunity based on the government body’s use or condition of tangible personal property – namely, the 4×8-foot, improperly secured whiteboard that had fallen on the plaintiff’s head.

Dallas Metrocare Services v. Juarez, No. 05-11-01144-CV

In a governmental immunity case, the court has sustained a plea to the jurisdiction asserted by the City of Dallas in response to a slip-and-fall case.  The plaintiff alleged she had fallen while trying to open a locked door that had a puddle of fallen rainwater in front of it.  The City filed an interlocutory appeal after the trial court denied its plea to the jurisdiction.  The court of appeals reversed and rendered judgment dismissing the plaintiff’s claims, concluding that (1) the plaintiff had failed to raise a fact issue showing the City had knowledge of the allegedly dangerous condition, and (2) a plaintiff injured by a premises defect on governmental property can only assert a premises defect claim under the Texas Tort Claims Act, not a claim for general negligence.  Without an express waiver of governmental immunity under the TTCA, the court dismissed the case for lack of subject matter jurisdiction.

City of Dallas v. Prado, No. 05-11-01598-CV