In 2008, the mother of plaintiff Bich Nguyen purchased a life insurance policy from Allstate, representing that she had not been diagnosed with a lung disorder in the last 10 years or treated by a doctor in the last five years. The next month, the mother was diagnosed with lung cancer, and she died just a few months later. Allstate investigated, and found that the mother had a history of lung problems, treatment, and hospitalization. Allstate therefore rescinded the insurance policy, and Nguyen filed suit.

Allstate moved for summary judgment, and Nguyen responded with 650 pages of summary judgment evidence. Allstate objected, asserting that Nguyen had failed to meet her burden of actually demonstrating where her controverting evidence could actually be located in those voluminous documents. The trial court and the court of appeals both agreed. While Nyugen’s brief contained a 28-page “Real Factual Background,” that section failed to reference any of the summary judgment evidence in support of her version of the facts, and elsewhere simply referred generally to lengthy documents in support of her claims. Because citing generally to voluminous summary judgment evidence is not sufficient to raise an issue of fact to defeat summary judgment, and because Allstate had met its own summary judgment burden, the court of appeals affirmed the trial court’s decision.

Nguyen v. Allstate Ins. Co., No. 05-11-01120-CV

Among other issues, appellants argued that the trial court erred in the amounts awarded in pre-judgment interest and by denying a motion for recusal.  The amount of pre-judgment interest could have been increased to include the time between when appellants submitted their proposed final judgment, which delineated the exact amount of prejudgment interest, and when that judgment was signed.  However, the court of appeals found that appellants waived this argument by not excepting to the judgment or bringing the complaint to the trial court’s attention.  The court affirmed the pre-judgment interest award, noting that the “invited error doctrine” precludes appellants from complaining when the trial court enters the appellants’ requested judgment.  The court of appeals also affirmed the denial of appellants’ motion for recusal, finding that a single comment by the Judge, and the reversal and remand of the Judge’s prior judgment did not evidence bias.

David L. Assocs. v. Stealth Detection, Inc., No. 05-12-00073-CV

The court of appeals affirmed the trial court’s order granting CFC’s special appearance and dismissed NexBank’s claims against it.  CFC negated personal jurisdiction by producing an affidavit, which alleged that CFC is a holding company that does not have business operations in Texas, does not own property or other assets in Texas, and does not maintain employees in Texas.  NexBank’s evidence showed only that CFC’s subsidiaries may have had sufficient contact with Texas.  But the court noted that it cannot exercise personal jurisdiction over a holding company based on the actions of its subsidiaries.  NexBank also cited three unrelated cases as evidence that CFC sought relief in Texas courts.  However, the court found that CFC defending itself in a lawsuit, failing to contest jurisdiction in two other suits, and filing a counter-claim in a third suit did not waive CFC’s right to contest jurisdiction in this matter.  Thus, NexBank failed to establish that CFC has some minimum, purposeful contact with Texas.

NexBank, SSB v. Countrywide Fin. Corp., No. 05-12-00567-CV

Twice before, Elite Door & Trim had prevailed at the court of appeals in its attempt to obtain a no-answer default judgment against the defendant in a dispute between the two contractors. See Elite Door & Trim, Inc. v. Tapia, 355 S.W.3d 757 (Tex. App.-Dallas 2011, no pet.); In re Elite Door & Trim, Inc., 362 S.W.3d 199 (Tex. App.-Dallas 2012, orig. proceeding). After the trial court again proceeded to hear the default motion, it entered an order denying it once again, finding that Elite had failed to establish liability because it had not proven various non-damages elements of its claims. The court of appeals rejected that finding, because Tapia’s failure to file an answer served as an admission of the contentions in Elite’s petition. The court of appeals also reversed the trial court’s finding that Elite had not submitted competent evidence of its damages, concluding that the testimony of Elite’s president had adequately established the amount and method of calculating the company’s damages, attorney fees, and prejudgment interest. However, the court of appeals rejected Elite’s request for $15,000 in sanctions against the trial judge for requiring Elite to pursue multiple appeals and mandamuses to obtain a no-answer default judgment, as 42 U.S.C. § 1983 no longer permits such relief against a judge for an act or omission taken in the judge’s official capacity in the absence of extraordinary circumstances. In all other respects, the court of appeals rendered judgment in favor of Elite.

Elite Door & Trim, Inc. v. Tapia, No. 05-12-00725-CV

AmeriPlan Corporation’s customers pay a monthly membership fee in order to access a network of healthcare professionals who have agreed to provide discounted medical services.  Anderson worked as an independent contractor for AmeriPlan, and recruited its customers, healthcare professionals, and other independent contractors.  AmeriPlan’s business model is based on multilevel direct marketing, and Anderson was compensated through commissions and bonuses.  After AmeriPlan terminated his employment, Anderson sued AmeriPlan claiming that he was promised “lifetime residual income,” but did not receive any commissions or bonuses after his termination.  The trial court rendered judgment for Anderson, and AmeriPlan appealed.

The issue on appeal was whether the evidence was legally sufficient to support the jury’s finding that AmeriPlan breached Anderson’s written sales contract.  AmeriPlan argued that the contract unambiguously required it to pay commissions and bonuses only during the continuation of the contract.  Anderson alleged that the jury was entitled to consider AmeriPlan’s promise of “lifetime vested benefits” contained in AmeriPlan’s marketing materials in deciding whether AmeriPlan breached the written contract.  The court of appeals concluded that the parol evidence rule barred the jury from considering the statements made in AmeriPlan’s marketing materials because the alleged promises were not a collateral consistent agreement.  The court also found that the fraud exception to the parol evidence rule was inapplicable because Anderson was not the defendant, and was not seeking to avoid the contract.  Because the jury was precluded from giving weight to AmeriPlan’s alleged promises, the court of appeals held that the evidence was legally insufficient to support Anderson’s breach of contract claim.  The court reversed and remanded to the trial court for consideration of the jury’s alternative liability and damages findings.

AmeriPlan Corp. v. Anderson, No. 05-11-00628-CV

Though we usually restrict ourselves to business related cases here at 600 Commerce, this criminal case was too interesting to ignore, so enjoy:

After William Youkers pleaded guilty to assaulting his pregnant girlfriend, he subsequently failed to abide by the his community supervision requirements. Youkers made a bunch of excuses for his failure to comply, but ultimately the trial judge sentenced him to eight years in prison. Youkers moved for a new trial, arguing that the trial judge’s undisclosed Facebook “friendship” with the father of his girlfriend biased the court’s decision.  During the hearing on Youkers’ motion for a new trial, the judge testified that he knew the father only because both had run for public office in the same election cycle, and nothing more.  Despite this fleeting relationship, the father had, through this Facebook friendship, sent a message to the judge, asking him to go easy on Youkers. The judge replied by telling the father that the communication was improper and that he didn’t even read the entire message once he figured out what it was about.  The judge then put a copy of the Facebook message in the court file and told the lawyers for both sides about it.  No other messages were exchanged.

On appeal, the Court noted that no Texas case has ever before addressed this topic.  It then explained that, as a general matter, “judges are not prohibited from using social media.”  Following the ABA’s commentary on this subject, the Court advised that simply being a  Facebook friend with someone does not provide any evidence of the degree of the parties’ relationship in the real world, and that further context is needed to determine whether bias exists.  On the facts in this case, the Court found that there was no suggestion of bias and that the trial judge acted just as he should have upon receiving the message.  The Court therefore sustained his denial of Youkers’ motion for a new trial and moved on to other issues.

Youkers v. State

BH DFW, the local franchise of the Blue Haven Pool & Spa group, took out an advertisement in the Dallas Morning News, claiming that it was the “World’s Largest!” That did not sit well with the Better Business Bureau of Metropolitan Dallas, whose guidelines require its members to be truthful when making statements of objective fact in their ads. When BH was unable to substantiate that it was, in fact, the “World’s Largest!”, the BBB revoked the company’s “Accredited Business” status and demoted its rating from A+ to F. BH sued for breach of contract, and the BBB moved to dismiss under the Texas Citizens Participation Act.

On interlocutory appeal, the court of appeals reversed the trial court’s denial of the BBB’s motion to dismiss. The court first rejected BH’s argument that there was no jurisdiction to hear the appeal, disagreeing with the Fort Worth Court of Appeals’ previous holding that the TCPA did not grant the right of interlocutory appeal when the trial court timely denies a motion to dismiss. Proceeding to the merits, the court held that the TCPA was not narrowly limited to cases involving a citizen’s participation in government, but was instead more broadly extended to matters of free speech involving a matter of public concern. Although the TCPA includes an exemption for certain types of commercial speech, that exemption was not applicable to BH’s claims because the BBB was not engaged in the sale or lease of goods or services. Finally, the court of appeals held that the trial court should have granted the BBB’s motion to dismiss because BH had failed to come forward with prima facie evidence of the existence of a contract requiring the BBB to maintain BH as an accredited business in exchange for its $1000 annual fee. The court therefore rendered judgment in favor of the BBB and remanded to the trial court for consideration of its attorney fees and expenses.

Better Business Bureau v. BH DFW, Inc., No. 05-12-00587-CV

Challenger Gaming Solutions made a loan to Mr. Earp.  Shortly after the loan was made, the Earps settled an unrelated lawsuit for $1.1 million, with an initial payment to the Earps of $200,000.  A few months later, Mr. Earp defaulted on his loan from Challenger, and the Earps divorced.  Under the divorce decree, Mrs. Earp was awarded all the community assets, including the settlement proceeds, and Mr. Earp was ordered to assume all the couple’s debts.  Challenger sued Mrs. Earp under the UFTA, contending that the transfer of settlement funds to Mrs. Earp constituted a fraudulent transfer.  Mr. Earp was designated a responsible third party in Challenger’s suit.  The jury found in favor of Challenger, but apportioned damages between the Earps.  Challenger appealed.

The court of appeals held that the proportionate responsibility statute does not apply to UFTA claims because they do not lend themselves to a fault-allocation scheme.  The focus of UFTA claims is to ensure the satisfaction of a creditor’s claim when the elements of a fraudulent transfer are proven.  The UFTA allows recovery against the debtor, the transferee, or the person for whose benefit the transfer was made, but does not distinguish the forms of relief based on culpability. The court concluded that the proportionate responsibility statute conflicts with the liability scheme in the UFTA and cannot be reconciled.  The court made Mrs. Earp liable for the entire award and affirmed the remainder of the trial court’s judgment.

Challenger Gaming Solutions, Inc. v. Earp, No. 05-11-01366-CV

For anyone who didn’t get a copy of the slideshow at today’s Litigation Section meeting, you can download a .pdf copy here. Thanks to everyone who attended, and we hope to do it again sometime when we have a new batch of cases to discuss.

After receiving a number of unresolved or unanswered complaints over several years, the Better Business Bureau (“BBB”) gave the Lloyd Ward & Associates (“Ward”) an “F” rating.  Ward was not happy about this and sued the BBB for libel, slander, and negligence, seeking an injunction preventing the BBB from including Ward in its listing service.  The BBB moved to dismiss on constitutional and other grounds, but the trial court denied their motion.

On appeal, the Court referred to its related opinion in another BBB-related lawsuit, which held that the BBB’s rating service provided a service to the marketplace and, thus, qualified as a matter of public concern under the Texas Citizens Participation Act (“TCPA”).  Because the TCPA applied to the BBB’s ratings, the burden shifted to Ward to establish “by clear and specific evidence” a prima facie case for each element of his claims.  But in his arguments on appeal Ward never presented any evidence for his case, instead relying entirely on the argument that the TCPA did not apply at all.  The Court therefore found that Ward failed to meet his burden and reversed the trial court’s decision.

Better Business Bureau v. Ward

As you may have noticed the other day, there’s a new contributor to the blog. Melissa Case, who recently joined our firm, has volunteered to take the place of the departing Nick Chapleau.  Nick has been part of the blog since its inception, but he is headed back home (more or less) to Chicago. Chris Patton and I extend our great thanks to Nick for all his help in getting this enterprise up and running, and we welcome Melissa for her help in taking it forward.

Also: Lunchtime CLE today at the Belo. We hope to see you there.

A low-speed collision involving two eighteen-wheelers in Wythe County, Virginia has ended up in the Dallas Court of Appeals. Fernando Garza was injured in the accident, leading him to file suit against the other driver, Timothy Jones. Jones, however, is a resident of Memphis, Tennessee, and he therefore filed a special appearance to contest the district court’s jurisdiction to hear the case, which the trial court denied.  On interlocutory appeal, Garza argued that Jones had minimum contacts with Texas because the rig he was driving bore the name of a Texas-based corporation.  According to Garza, that made Jones a statutory employee of a Texas company. The court of appeals rejected that argument as a basis for personal jurisdiction because it was aimed at the forum contacts of the employer, not of the specially appearing defendant. The court therefore rendered judgment dismissing Garza’s claims for lack of jurisdiction.

Jones v. Garza, No. 05-12-00532-CV

The court conditionally granted a writ of mandamus preventing disclosure of a “Confidential Quality Review Occurrence Report” protected by the medical committee privilege.  A visitor to the relator Hospital slipped and fell on Hospital premises, and sought damages in a premises liability suit.  The visitor sought production of all incident reports made by the Hospital related to her fall.  A two-page report titled “Occurrence Report Form” listed the visitor’s name and identifying information, the date and location of her fall, and a description of the occurrence and treatment provided; it was signed by a Hospital nurse.  The report also stated “Confidential Quality Review Committee Document (NOT PART OF MEDICAL RECORD).”  The Occurrence Reports are given to the Hospital’s quality review committee, which provides general governance for the Hospital’s quality of service.  The court held that the Hospital met the standard for claiming medical committee privilege through its privilege log and a doctor’s affidavit because the Occurrence Report was not created in the regular course of business and was not part of a patient’s medical file.  The court rejected the visitor’s argument that because this case involves a non-patient visitor, the medical committee privilege cannot apply.   Instead, the court found that the medical committee privilege is not limited to evaluation of occurrences relating only to direct patient care.

In re Methodist Dallas Medical Center, No. 05-13-00134-CV

Jeanette Hooper and her husband Charles sued their lawyers for legal malpractice. The underlying case had been a personal injury suit arising out of a car wreck, which was apparently dismissed after the lawyers sued the owner of the other vehicle instead of the actual driver. The jury awarded $235,000 in damages, based on the testimony of a legal expert who opined that the Hoopers should have recovered $130,000 for past medical expenses, $180,000 for lost earning capacity, $250,000 for pain and suffering, and $250,000 for damages such as loss of consortium and physical impairment. On appeal, however, the court of appeals held that the testimony did not establish a causal link between the underlying car wreck and the subsequent damages. While it was justifiable for the jury to compensate the plaintiffs for damages sustained in the immediate aftermath of the wreck, such as emergency room bills and initial pain and suffering, the “case-within-a-case” aspect of the legal malpractice claim required the plaintiffs to establish a causal connection between the accident and the health problems Charles experienced months and even years after the collision. That connection needed to be made by the testimony of a medical expert, and could not be demonstrated through bare medical records or inferred by the jury. Because some elements of the plaintiffs’ damages were valid and some were invalid, the court of appeals also sustained the defendants’ challenge to the trial court’s submission of a broad-form damages question, reversed the judgment, and remanded for further proceedings.

Kelley & Witherspoon, LLP v. Hooper, No. 05-11-01256-CV

Defendant Lafayette Escadrill Inc. lost on summary judgment for its breach of contract claim of wrongful termination against its former contract counterparty, CCU.  The Court of Appeals upheld the trial court’s decision on res judicata grounds because Lafayette previously had the opportunity to raise the wrongful termination as a counterclaim in a prior litigation (which it also lost) in which CCU sued Lafayette for breach of contract.  According to the Court, the wrongful termination counterclaim should have been raised in the earlier suit because it was “fully mature” as soon as CCU terminated the contract in accordance with the contract’s provisions.

Lafayette Escadrille Inc v City Credit Union

In the mid-1990s, Hydroscience Technologies, Inc. (“HTI”) sold shares of its preferred stock to Hydroscienc, Inc. (“HSI”).  HTI alleges that in 2001, in order to settle an unrelated dispute between Whitehall Corporation (HSI’s parent corporation) and itself, Whitehall orally agreed during a mediation session to transfer the HTI shares held by HSI back to HTI.  But the parties never reduced this agreement to writing and HSI never transferred the original stock certificate back to HTI.  The parties didn’t raise the question of HSI’s stock ownership  again until 2010, when HSI, as purported shareholder, requested to inspect the books and records of HTI.  When HTI refused, HSI filed a lawsuit seeking a declaratory judgment that HSI remained an HTI shareholder.  After the trial court granted HSI’s motions for summary judgment, HTI appealed.

The Court of Appeals addressed a number of issues in its opinion.  Most relevant, however, was its holding that while delivery of a stock certificate was not required to show a transfer of stock, the fact that HSI still possessed the certificate establishes its ownership unless HTI can present evidence of the stock transfer agreement the parties purportedly came to during the 2001 mediation.  But the Court found that HTI could not demonstrate that intent because, under Texas law, HTI is prohibited from using as evidence statements of the parties during a mediation session.  It explained that “to allow HTI to used alleged discussions from the mediation regarding the stock would undermine the very purpose of confidentiality in the mediation process.  Parties must not be allowed to use evidence from mediation to dispute terms of a settlement agreement, particularly years later, as is the case here.”  According to the Court, to hold otherwise would chill the overall purpose of mediation.   Thus, because the final 2001 settlement agreement did not show the stock transfer agreement, and because HTI could not show that the parties had orally agreed to make such a transfer, the Court upheld the trial court’s ruling.

Hydroscience Technologies, Inc. v. Hydroscience, Inc.

For those of you in and around Dallas, the blog will be making its in-real-life debut at the Belo Mansion a week from today. We’ll be speaking at the monthly meeting of the Dallas Bar Association’s Appellate Law Section on Thursday, May 16 at noon. One and all are invited to drop by, enjoy some lunch, and hear a little more about some of the recent cases and developments coming out of the Dallas Court of Appeals.

Also coming up next week, our colleague David Coale — proprietor of our sister blog, 600 Camp — will also be at the Belo. David will be speaking to the Business Litigation Section next Tuesday at noon on some of the commercial litigation trends to watch in the federal courts.

That’s two blogs, two lunches, and two hours of CLE credit. We look forward to meeting some more of our readers in person.

Charles Wunderlick and Martha Wilson ended their marriage in 1990 with a written agreement that required Wunderlick to pay Wilson alimony of $1000 per month indefinitely.  The payments were to end on the occurrence of certain contingencies, one of which was Wunderlick’s compensation being substantially reduced without “good cause” at the lumber company he owned and operated. In late 2008, the company responded to the recession by laying off employees and cutting the officers’ salaries to $1 annually. Wunderlick eventually stopped paying the monthly alimony payments, and Wilson sued for breach of contract. The trial court granted summary judgment for Wilson, and Wunderlick appealed.

The issue on appeal was whether Wunderlick had submitted summary judgment evidence showing that the company had reduced his compensation without “good cause,” a term which was not defined in the contract. For his part, Wunderlick argued that “good cause” should be interpreted in the employment context, which would require the employee to have done something wrong to justify termination or demotion. Wilson argued that the divorce agreement was not an employment contract, and “good cause” should therefore be given its ordinary meaning of “good reason” — and Wunderlick had admitted that the recession gave the company “good reason” to cut his salary. The court of appeals concluded that both constructions were reasonable, that the contract was therefore ambiguous, and a genuine issue of material fact existed as to the parties’ intent. The court of appeals therefore reversed the summary judgment and remanded to the district court for further proceedings.

Wunderlick v. Wilson, No. 05-11-01597-CV

The court affirmed the trial court’s judgment declaring Wilhoite’s quitclaim deed void and awarding Sims damages and attorney’s fees. The parties are sisters that each inherited a half interest in their grandfather’s house. In 2007, Sims signed a quitclaim deed transferring the interest in the property to Wilhoite for no consideration. Sims testified they agreed that after the house was sold, they would share the money from the sale equally; Wilhoite testified that Sims gifted her interest. Sims performed repairs on the house in 2008 and moved into the house in 2010 and performed maintenance. Sims testified that Wilhoite agreed to put those costs towards Sims’s interest in the house. In 2011, Wilhoite attempted to evict Sims for unpaid rent. Sims filed suit in district court seeking a declaratory judgment that the quitclaim deed was voidable and claims for statutory fraud and breach of contract. The jury found that Sims did not gift the property, that Wilhoite committed statutory fraud, and that Wilhoite breached her agreement to reimburse Sims for one-half of her repair and maintenance expenses.

The court first held that Wilhoite did not have adverse possession of the house by mere color of title through the quitclaim deed, and therefore the court was correct in refusing to apply a three-year limitations period. Second, neither agreement – to share in the proceeds from sale or reimburse for expenses – were contracts for the sale of real estate, so both were outside of the statue of frauds. Next, the court held that the declaratory judgment was proper, despite Sims’ failure to pursue a trespass to try title action, because the it merely canceled the deed and made no determination of title to the property. Finally, Sims’ counsel’s statement that her son was “protecting us in Afghanistan” was not an incurable argument. Thus, the court affirmed.

Wilhoite v. Sims, No. 05-12-00228-CV

The court affirmed a denial of the Dallas County Hospital District’s plea to the jurisdiction requesting dismissal of a breach of contract claim on the basis of governmental immunity, but reversed the decision with regards to a quantum meruit claim. The District entered into a written lease and purchase contract with Hospira for certain medical equipment and supplies. Several months after the end of the lease term, Hospira invoiced the District for the remaining amounts due under the lease. After unsuccessful attempts to recover the shortfall, Hospira sued the District asserting that immunity from suit had been waived by section 271.152 of the local government code. The District argued that its immunity from suit had not been waived under section 271.152 because it was not a local government entity as defined in section 271.151. The trial court denied the District’s plea to the jurisdiction, and the District filed an interlocutory appeal.

On appeal, the court noted that section 271.152 waives governmental immunity from suit for breach of contract claims against local governmental entities, defined as “a political subdivision of this state, other than a county or a unit of state government” and including a “special-purpose district.” The District contended that it is excluded from this definition because it is a “unit of state government” pursuant to the government code, but that code specifically excludes special purpose districts from the definition. Thus, the District could not assert immunity from the breach of contract claim. The court also held, however, that section 271.152 did not waive immunity from suit for Hopsira’s alternative claim based on quantum meruit. The statute expressly applied only to breach of contract.

Dallas County Hospital District v. Hospira Worldwide, Inc., No. 05-12-00902-CV

Natalie Holmes, a graduate student at SMU, has taken and failed twice the graduate comprehensive exam (“GCE”)–which she needed to pass to receive her Master’s Degree in Music Education.  After both tests, Holmes appealed the results to SMU’s internal academic appeals board as either “arbitrary and capricious” or “beyond the scope of the coursework.”  SMU offered Holmes the chance to re-take the exam a third time, but Holmes refused and instead insisted that SMU giver her the degree as well as monetary damages.  While her second appeal remained pending, Holmes sued SMU for breach of contract, fraud and DTPA violations.  SMU moved to dismiss the case for lack of subject matter jurisdiction, arguing that Holmes had failed to exhaust her administrative appeal rights before bringing suit.  The trial court agreed with SMU and dismissed the case.

The Court of Appeals, however, reversed the trial court, finding that SMU had failed to submit any evidence to establish that Holmes was required to proceed through an administrative appeal before bringing suit.  According to the Court, SMU’s only evidence was a “short and conclusory” affidavit that did not address the appeals process, and this was not enough to establish that the trial court lacked jurisdiction.

Holmes v SMU

In July 2011, the Dallas Court of Appeals ruled — in a rare en banc opinion — that an arbitration clause contained in a testamentary trust could not be enforced because there was no contract with the trust’s beneficiary to arbitrate his claims. Rachal v. Reitz, 347 S.W.3d 305 (Tex App.-Dallas 2011). This morning, the Texas Supreme Court reversed that decision, holding that the beneficiary was bound to arbitrate his claims against the trustee due to the doctrine of direct benefits estoppel. In brief, that doctrine means that if the plaintiff accepts the benefits of the trust, he also has to accept the arbitration clause contained in the trust. In reaching that decision, the Supreme Court noted that the Texas Arbitration Act requires an “agreement” to enforce arbitration, not a “contract” with the claimant. Such an agreement could be satisfied through direct benefits estoppel, as the beneficiary failed to disclaim his interest in the trust, thereby accepting both its benefits and its burdens.

Rachal v. Reitz, No. 11-0708

A temporary injunction order is void if it doesn’t set a specific date for trial on the merits. In this case, the county court at law issued a temporary injunction that only said it “shall remain in effect until final disposition of this case or until further order of the Court.” Neither “final disposition” nor “further order” is a date certain, so the TI was reversed on appeal as void without further reference to the merits.

ACI Healthcare Staffing, LLC v. V-Platinum Consulting, LP, No. 05-12-01060-CV

When Emily Hairston was a high school sophomore, the women’s soccer coach at Southern Methodist University, Brent Erwin, sought to recruit her to play on SMU’s team when she graduated. In May 2007, Erwin verbally offered Hairston a “100%” scholarship if she came to play at SMU. Over the next few years, Hairston and the coach communicated about the SMU soccer program, and Erwin even encouraged Hairston to try to graduate early from high school, which Hairston did. Hairston enrolled at SMU in early 2009, and joined the women’s soccer team. In February 2009, Hairston was told that she needed to pay $25,000 in tuition for that semester. Surprised, Hairston spoke with Erwin, who informed her that she did not, in fact, have an athletic scholarship. After some further discussion, Erwin and her father sued SMU and Erwin for, among other things, breach of contract. The trial court dismissed the case in SMU’s favor on summary judgment.

On appeal, the Court found that the statute of frauds barred Hairston’s breach of contract claim in at least two ways. First, to the extent Hairston claimed the scholarship was for all four years of her college career at SMU, the oral agreement could not be performed within a year of acceptance and, thus, had to be in writing under the statute of frauds. Alternatively, the Court noted that Hairston purported to accept the offer in May 2007, when she was a sophomore in high school. Because she could not have realistically enrolled in SMU within a year of her sophomore year of high school, the statute of frauds required the contract to be in writing. As a result, the Court affirmed the trial court’s decision.

Hairston v. SMU

Elizabeth Rebeles thought she was in a common law marriage with Paul Leighton, and with good reason — they had been living together since 1984, purchased property and filed tax returns as husband and wife, and started a business together. But after Rebeles filed for divorce in 2006, she discovered that there was no documentation of her divorce from her previous husband, meaning that she could not prove she had ever been validly married to Leighton. The parties nonsuited the divorce case, and Rebeles filed a new suit in which she claimed the parties had formed a general partnership during the time they were together.

The jury found that the parties had indeed formed a partnership back in 1984 and that an event requiring wind-up had occurred in 2006. In accordance with that finding, the trial court wound-up the business and divided the partnership assets. The court of appeals affirmed that aspect of the case, rejecting Leighton’s contention that Rebeles had released  her interest in the partnership through a document she had signed to relinquish “all past, present, and future interest in Paul’s Pit Sand and Gravel, and in Hutchins Sand & Gravel and any dealings by Paul M. Leighton.” That release made no reference to the partnership itself, and both parties testified that they had not intended it to release any claim to other property owned by the partnership. To the court of appeals, those facts supported the jury’s finding that Rebeles had not released her interest in the partnership itself. However, the court of appeals also reinstated a $31,000 verdict in favor of Leighton, based on his claim that Rebeles had breached a post-breakup oral contract for her separately owned company to perform billing and clerical services for one of their jointly owned gravel pits. Even though the oral contract related to the partnership business, there was sufficient evidence to show that the parties were representing their independent interests at the time it was made, and not as agents of the partnership itself. Accordingly, the breach of contract finding could still be harmonized with the general partnership finding, and the court of appeals rendered judgment in favor of Leighton.

Leighton v. Rebeles, No. 05-11-01519-CV