After accepting a $1500 settlement for damage to his truck, David Lynd allegedly began to harass various executives and employees of Bass Pro Shop, threatening them and demanding additional money. Bass Pro responded by filing a motion to enforce the releases in the settlement agreement and seeking injunctive relief. The trial court granted temporary and permanent injunctions, ordering Lynd not to contact Bass Pro personnel and to stay at least 100 feet away from Bass Pro’s locations and the homes of its directors, officers, and employees. Lynd — appearing pro se — asserted an impressive 33 issues on appeal. The Court of Appeals affirmed. The Court was unwilling to consider the errors Lynd claimed from the original lawsuit, which had not been appealed and could only be attacked on bill of review. The Court rejected Lynd’s attempts to argue that the settlement had been procured by fraud, as well as his complaint that he had been “betrayed by own counsel” in that lawsuit. More notably, the Court affirmed the trial court’s injunction, holding that Lynd’s pattern of harassment demonstrated imminent harm that could not be remedied by an award of damages. An injunction was proper, the Court held, because Lynd’s demands for additional money were in violation of his settlement agreement with Bass Pro, in which he had released all his claims concerning his truck, including all claims against the company’s personnel.

Lynd v. Bass Pro Outdoor World, Inc., No. 05-12-00968-CV

A memorandum opinion demonstrates the downside of failing to respond to a discovery request. Alfredo Cornejo sued Anthony Jones for causing a multi-vehicle accident. Jones filed a general denial and alleged that someone else’s negligence proximately caused the collision. Cornejo served Jones with basic contention interrogatories, but Jones never answered them. Cornejo did not move to compel, but instead sought to exclude Jones’ testimony at trial. The trial court allowed Jones to testify, and the jury returned a verdict for the defense, apparently crediting Jones’ testimony — contrary to the police report of the incident — that he had been the victim of a rear impact that spun him into the other lanes of traffic. The Court of Appeals reversed and remanded, holding that the testimony should have been excluded under Rule 193.6(a) because Jones had failed to answer the contention interrogatories and could not show either good cause for that failure or lack of unfair surprise or prejudice to Cornejo. Contrary to the trial court’s ruling, a motion to compel is not a prerequisite to the exclusion of evidence under Rule 193.6(a), which provides for automatic exclusion if the proponent of the evidence did not answer the discovery and cannot establish those two exceptions to the exclusionary rule.

Cornejo v. Jones, No. 05-12-01256-CV

The Court of Appeals has once again reiterated that the sole issue in a forcible detainer case is the right to immediate possession of the property. Both the justice court and the county court at law sided with Wells Fargo, which had purchased the home in foreclosure. On appeal, the borrowers argued that Wells Fargo had not shown itself to be an assignee of the original deed of trust, and that notice of the foreclosure sale had not been properly recorded. Because those issues alleged defects in the bank’s title and the foreclosure process, and not the right to immediate possession, they could not  be addressed in a forcible detainer action. The Court of Appeals therefore affirmed the lower courts’ rulings awarding possession to Wells Fargo.

Noye v. Wells Fargo Bank, N.A., No. 05-12-00997-CV

In a products liability and wrongful death lawsuit, Fisher & Paykel Appliances was ordered to produce three reports it had made to the Consumer Product Safety Commission regarding the safety of its gas clothes dryers. F&P objected to the discovery based on Texas Rule of Evidence 502, which states that reports required by law to be made are privileged “if the law requiring it to be made so provides.” The Court of Appeals denied mandamus relief to F&P. The Court rejected application of the Rule 502 privilege because the Consumer Product Safety Act does not provide for any privilege for reports mandated under the statute. The Court rejected F&P’s attempt to have it recognize a more general “self-critical analysis privilege,” holding that such privileges can only be created by statute. The Court also considered the “selective waiver doctrine,” under which the federal Eighth Circuit has held that the privilege for attorney work product is not waived when the material is turned over to a government agency pursuant to subpoena. Noting that most courts around the country have rejected that rule, the Court of Appeals held that “documents transmitted to a regulator as part of an entity’s mandatory reports are not protected from disclosure simply because an attorney chooses which documents or other materials to produce to the regulator or because an attorney prepares or compiles portions of the report to the regulator.”

In re Fisher & Paykel Appliances, Inc., No 05-13-01498-Cl

In this oil and gas case, a pair of working interest owners sued to recover alleged overcharges made by the operator to the joint account. The trial court found that the joint operating agreement was ambiguous and submitted the matter to a jury, which ruled in favor of the operator. The Court of Appeals affirmed. The contract provision at issue was from a pre-printed form, but included a typewritten addition at the end. The form language permitted the operator to allocate a portion of its overhead and charge it to the joint account, while the typewritten insert provided for flat-rate monthly charges. The working interest owners believed that the flat rate in the inserted language was all the operator could charge to the joint account, while the operator believed it could charge both its overhead and the per-well rate. The Court of Appeals held that the contract was ambiguous because both proffered interpretations were reasonable, and therefore affirmed the jury’s finding in favor of the operator’s interpretation.

MCS Minerals, Ltd. v. Plains Explor. & Prod. Co., No. 05-12-01309-CV

The Court of Appeals has reversed and remanded a summary judgment ruling obtained by Minyard Food Stores. The trial court ruled that Minyard was entitled to a setoff against North Central Distributors’ receivable. The receivable was originally owned by NCD Acquisition, an entity formed by members of the Minyard family to acquire the assets of North Central. After NCD Acquisition defaulted on its note, North Central foreclosed on NCD’s assets, including the Minyard Food Stores receivable. But in the meanwhile, NCD Acquisition also breached a sublease agreement with Minyard. NCD and Minyard settled that dispute with the lessor, but reserved its right of offset against NCD. Minyard contended that it was a buyer in the ordinary course of business for the goods underlying the NCD Acquisition receivable, but the evidence on that point was disputed. There was also conflicting evidence as to the proper date for the offset, as some of the unpaid rent may have accrued after Minyard received notice of North Central’s foreclosure on NCD’s receivable, and much of the claimed offset appeared to be for future rent payments. In light of these disputed fact issues, the Court of Appeals reversed and remanded the case to the trial court.

N. Central Distribs., Inc. v. Minyard Food Stores, Inc., No. 05-12-00418-CV

In 1986, Summers Electric Company extended credit to Stuart Electric, Inc., which backed its credit application with the personal guaranty of its owners, Barry and Zac Stuart. The guaranty was in favor of Summers or its assigns, for all money that may come to be due to Summers by Stuart Electric. Although Summers’ ownership and name changed over the years, Stuart continued to do business with the company.  In 2008, Barry and Zac sold Stuart Electric. The new ownership group continued to purchase materials from Summers, but failed to pay up. Summers turned to the Stuarts to make good on their 22-year-old written guaranty, which they refused. Summers then filed suit, obtaining a default judgment against Stuart Electric and a summary judgment against Barry and Zac.

On appeal, the Court of Appeals first sustained the trial court’s decision not to strike the Stuarts’ affidavits, in which they testified that Summers’ employees had told them they were no longer on the company’s account and were not responsible for any purchases made by Stuart Electric. Although the Stuarts were interested witnesses, their affidavits were still admissible because they were sufficiently “clear, positive, and direct, free from contradictions or inconsistencies, and could have been readily controverted.”  Tex R. Civ. P. 166(a)(c). That affidavit testimony also supported each of the elements of the Stuarts’ promissory estoppel defense, which precluded the trial court’s grant of summary judgment against them. The Court therefore reversed and remanded for further proceedings.

Stuart v. Summers Group, Inc., No. 05-12-00489-CV

In this derivative suit, the plaintiff sought a temporary injunction stopping officers of the defendant company who had each been granted a promissory note in lieu of salary (which note was then in default) giving them the right to foreclose.  Although the trial court granted the temporary injunction, the Court of Appeals held that the mere existence of unexercised contractual rights does not give rise to the “imminent harm” required to sustain a temporary injunction, reversing the trial court’s decision.

Schmidt v. Richardson

The Court of Appeals has granted mandamus to prevent three depositions sought by a homebuyer seeking to avoid an arbitration agreement. The trial court granted the builder’s motion to compel arbitration, but had not yet ruled whether the buyer’s claims against two individual employees of the builder were also arbitrable. While their motion was pending, the trial court granted a motion to compel the depositions of the employees and the company to explore whether they had engaged in any fraudulent or criminal conduct. The Court of Appeals held that order was an abuse of discretion. Under In re Kaplan Higher Education Corp., 235 S.W.3d 206 (Tex. 2007), agents who are nonsignatories to their principal’s arbitration agreement may still invoke equity to compel arbitration unless the claimant can demonstrate the agents had unclean hands in the formation of the arbitration provision. In this instance, the buyer alleged only that the individuals had unclean hands in the performance of the contract, not the formation of the arbitration clause. Accordingly, the issue of their unclean hands was an issue for the merits of the case that had to be determined in arbitration, making discovery of those facts inappropriate for a judicial proceeding. The Court therefore directed the trial court to stay the case so that all of the parties could proceed to arbitration. The Court also wrote separately to summarily deny the buyer’s mandamus petition challenging the arbitration order for her claims against the company.

In re Susan Newell Custom Home Builders, Inc., No. 05-13-01474-CV

Dan Lopez sues RS Clark & Associates for violating the Debt Collection Practices Act, the Texas Debt Collection Practices Act, and the DTPA. The dispute apparently arose out of a $54.34 cleaning charge assessed and turned over to the collections agency by Lopez’s former apartment complex. Lopez based his case on four unanswered phone calls the agency made to his residence during daytime hours, as well as its failure to inform credit reporting services that Lopez disputed the debt. The collections agency counterclaimed for sanctions and attorney fees, alleging that Lopez’s suit was groundless and brought in bad faith. The trial court granted summary judgment for the collections agency and, after a bench trial, awarded it attorney fees as a sanction against Lopez. On appeal, the Court of Appeals held that Lopez had failed to establish that he gave the collections agency written notice he no longer wished to communicate with them, as his letter only directed them not to call his cell phone or work number. With respect to his home phone, the letter stated only that it was “inconvenient” for them to call him at home. The letter also did not dispute the validity of the debt, stating instead that he just did not want it reported to the credit agencies. The Court of Appeals therefore affirmed.

Lopez v. RS Clark & Asscos., Inc., No. 05-12-00868-CV

In this whistleblower suit against Dallas County, the County filed a plea to the jurisdiction based on sovereign immunity.  The plaintiff, a former deputy constable, complained of illegal activity and retaliation in his employment division to the Dallas County Commissions Court.  The County contended, however, that this entity does not fall within the confines of the Whistleblower Act and, therefore, the plaintiff did not have an objective good faith belief that he was reporting the misdeeds to an appropriate law enforcement body.  While the Court found that “an appropriate law enforcement authority must be actually responsible for regulating under or enforcing the law allegedly violated,” it nevertheless remanded the proceedings to the trial court because the record did not show that evidence was presented about the plaintiff’s good faith belief that the Commissioners Court was the appropriate body.  This was particularly true given that some of the County’s jurisdictional arguments were newly raised on appeal.

Dallas County v. Logan

Raymundo Rico was fired after being accused of sexually assaulting a co-worker at L-3 Communications. He was acquitted on the criminal charges, and subsequently brought suit against L-3 and his accuser for intentional infliction of emotional distress and malicious prosecution. The trial court granted summary judgment for the defendants, and the Court of Appeals affirmed. The Court rejected Rico’s claim that he should receive the benefit of an adverse presumption due to the defendants’ alleged failure to preserve security videos, as he had not moved to compel any discovery on those tapes. On  the malicious prosecution claim, the Court concluded that there was no evidence in the summary judgment record to negate the legal presumption that a person who reports a crime does so in good faith and with probable cause. Likewise, the Court held that there was no evidence of extreme and outrageous conduct for the intentional infliction of emotional distress claim because Rico did not have evidence that the complainant had not honestly believed she had been a victim of assault when she reported it to the police.

Rico v. L-3 Communications Corp., No. 05-12-01099-CV

One of the legacies of Texas consumer protection laws was Article XVI, Section 50 of the Texas Constitution, which effectively prohibited home equity lending. In 1997, voters approved amendments to that section to permit home equity loans, but only under certain conditions. Among other restrictions, the loan cannot exceed 80% of the value of the equity in the home, and the lender must cure any violation of the constitutional requirements within 60 days of the date the borrower gives notice. If those requirements are not met, the lender forfeits all principal and interest and loses its lien on the property.

Lonzie Leath obtained a $340,000 home equity loan in 2005, and signed an acknowledgment that his home’s fair market value was $425,000. In 2008, the servicer sought to foreclose on the property, and Leath responded by alleging that the loan was illegal because it had actually exceeded 80% of the value of the home at the time it was made. The jury found that the property’s fair market value had been only $421,400, a finding that placed the principal of the loan barely over the 80% limit. The trial court therefore entered judgment forfeiting the principal and interest and invalidating the lender’s lien.

Although the servicer claimed that Leath had failed to provide notice of the alleged constitutional deficiency, the Court of Appeals agreed with Leath that his pleadings had given notice and started the clock on the lender’s 60-day cure period. The Court also held that the jury’s valuation finding was adequately supported by the evidence, including the admission of the servicer’s appraisal expert that he had not accounted for $3,600 of electrical work that needed to be performed at the time of the loan. The Court of Appeals therefore affirmed the judgment in favor of the borrower, leaving the lender without principal, interest, or the right to foreclose.

Wells Fargo Bank, N.A. v. Leath, No. 05-11-01425