Soon after the Plaintiff was sued for an alleged debt, she received a letter from a lawyer soliciting her to speak with him about representing her in the lawsuit.  The attorney’s letter violated a Texas law that made it a crime for lawyers to solicit clients within 31 days of a lawsuit being filed against them.  The Plaintiff brought a civil action against the lawyer pursuant to the 2012 version of the Texas Civil Barratry Statute, which allowed plaintiffs to bring civil barratry claims against attorneys who violated “the laws of this state.”

The trial court granted the lawyer’s motion for summary judgment, based on its findings that the Civil Barratry Statute was unconstitutional and that liability under the statute is predicated upon a criminal prosecution or conviction.  On appeal, the Court of Appeals reversed, holding that the 2012 statute does not require a criminal conviction.  Additionally, the Court overturned the trial court’s holding that the statute was unconstitutional, because deciding the constitutionality of a criminal statute requires the participation of a party “with authority to enforce” the law, which in this case was the Dallas County District Attorney.

Shearer v. Reister, No. 05-12-01475-CV

Mr. Spicer, an organist formerly employed  by the Pleasant Valley United Methodist Church, challenged on constitutional grounds the statutory exemption of unemployment benefits for ex-employees of religious organizations.  The Court of Appeals rejected Spicer’s arguments, holding that the religious exemptions in the Texas unemployment laws do not violate Establishment Clause because, among other things, these laws demonstrate neither sponsorship of nor hostility towards religion.

Spicer v. Texas Workforce Comm’n

The opinion in a premises liability case has rejected a novel attempt to defeat summary judgment by invoking the special exceptions process. The plaintiff, a mother whose minor son was injured after tripping on an escalator at Amazing Jakes, argued that summary judgment should not be based on a pleading deficiency that could be cured by amendment, and that the proper procedure for doing so was to file special exceptions. The Court of Appeals disagreed, holding that Amazing Jakes had moved for traditional and no evidence summary judgment based on the facts, not on the basis that the plaintiff had failed to state a cause of action or any other pleading deficiency. The Court noted that a pleading deficiency would not be a proper basis for summary judgment unless the trial court has first given the plaintiff an opportunity to amend the pleading, except when the defect is of the type that could not be cured by amendment.

Williams v. Adventure Holdings LLC, No. 05-12-01610-CV

In an interesting case on the scope of “minimum contacts,” the Court of Appeals held that serving as the representative plaintiff in a nationwide class action (with members from Texas) against a Texas company was not sufficient to create minimum contacts for purposes of personal jurisdiction.

The case arose out of a nationwide class action that the Appellees, as class representatives, filed in Illinois against King Supply Company, LLC alleging violations of the Telephone Consumer Protection Act (TCPA).  King settled the class action for $20 million, but as part of the settlement the Appellees covenanted that, except for $200,000 paid by King, their only source of payment would be King’s insurance policies.  King’s Texas-based insurance companies (Appellants) then filed a declaratory action in Dallas against Appellees seeking a declaration that they had no duty to defend or indemnify King.

Appellees filed a special appearance contesting personal jurisdiction, which the trial court granted.  Appellants appealed, arguing that by representing a nationwide class (12% of which were Texas residents) against a Texas company and seeking to recover funds from Texas insurance policies, Appellees’ contacts with Texas were sufficient to warrant personal jurisdiction over them.  The Court of Appeals disagreed, concluding that the evidence failed to show that Appellees “purposefully availed themselves of the privilege of conducting activities in Texas, thus invoking the benefits and protections of Texas law.”

Nat’l Fire Ins. Co. v. CE Design, Ltd., No. 05-13-00720-CV

Speed Boats of Texas brought suit against Fountain Powerboats and obtained a default judgment.  Fountain then filed a restricted appeal in which it sought to set aside the default judgment by arguing that the record did not establish that the secretary of state served Fountain with process.   The Court of Appeals agreed.  Because the record did not “affirmatively show that the secretary of state forwarded a copy of the process to the defendant,” the Court set aside the default judgment and remanded the case back to the trial court.

Fountain Powerboats v. Speed Boats of Texas, No. 05-13-006570-CV

The plaintiff in this case sought to collect on promissory notes it had obtained from a failed bank.  After a bench trial that included only one witness and three exhibits, however, the trial court rendered a take nothing judgment against the plaintiff.  The Court of Appeals agreed with the trial court because the only two documents indicating the amount allegedly owed under the notes were unsigned “Prenegotiation Agreements.”  Moreover, these documents, even if they were signed, do not establish specific amounts due and owing; instead stating that the parties “believe” that “approximately” certain amounts are owing on the notes.

RES-TX Boulevard v. Boulevard Builders

After having lost on summary judgment, the plaintiff filed an amended petition, omitting all but one defendant, and then appealed the decision.  The Court of Appeal found that, because the plaintiff had omitted these parties from his amended petition, his claims against these defendants were not preserved and dismissed the appeal.

Pipes v. Hemingway

A long-running dispute between former business parties and their attorneys has resulted in a lengthy opinion affirming the trial court’s determination that it lacked subject matter jurisdiction over the case. The original dispute had been submitted to arbitration, which resulted in a large award of damages and attorney fees against the defendants. The Court of Appeals eventually set aside that award, holding that the arbitrator’s failure to disclose his personal relationship with plaintiffs’ counsel constituted “evident partiality” that, under the circumstances, required vacatur of the arbitration award. Karlseng v. Cooke, 346 S.W.3d 85 (Tex. App.–Dallas 2011, no pet.). Following that ruling, the defendants in the original arbitration filed suit against the lawyers and law firm that represented the plaintiffs, as well as the arbitrator and the arbitration agency, for fraud and other related claims. Despite the fairly complex set of facts, the Court of Appeals affirmed the dismissal of the new lawsuit for lack of subject matter jurisdiction, concluding that jurisdiction was preempted by the Texas Arbitration Act because the substance of the case was a prohibited collateral attack on the vacated arbitration award. Thus, the plaintiffs could not seek to hold the arbitrator, the arbitration agency, or the attorneys liable for the expenses they incurred in defense of the original arbitration proceeding.

Patten v. Johnson, No. 05-12-01695-CV

The plaintiff sued his former employer, El Paisano, for unpaid wages and unpaid overtime.  After four unsuccessful attempts by a process server to serve El Paisano at the address of its registered agent, the plaintiff served the Texas Secretary of State, who then forwarded the process to the same address via certified mail.  That attempt at service also failed, and the process was returned to the secretary of state with the notation “unclaimed.”  The plaintiff then moved for a default judgment, which the trial court granted.

El Paisano eventually learned of the default judgment and sought to have it set aside.  The trial court denied its motion for a new trial, and El Paisano appealed.  El Paisano argued, among other things, that it was not properly served because the secretary of state did not send the process to its principal place of business.  The Court of Appeals rejected that argument and upheld the default judgment, noting that the plaintiff was entitled to use substituted service on the secretary of state and that the secretary of state had no obligation to send it anywhere other than the address of El Paisano’s registered agent.

El Paisano Nw Hwy v. Arzate, No. 05-12-01457-CV

An opinion issued on an emergency motion to stay a trial court’s order unsealing alleged trade secret materials highlights a difference between Dallas and some of the other courts of appeals when it comes to obtaining temporary stays. The trial court denied the defendant’s motion to permanently seal the disputed records under TRCP 76a and ordered that the documents were to be unsealed at 5 pm last Friday. Because unsealing orders are considered to be final for purposes of appeal, the defendant perfected an appeal and moved for an emergency order to stay the unsealing of the documents. The Court of Appeals granted that request, holding that a temporary stay was necessary to preserve the rights of the parties pending appeal. The Court noted that other appellate courts have applied a more stringent standard, under which the movant must show that it would be entitled to the issuance of an injunction to protect appellate jurisdiction under section 22.221 of the Government Code. The opinion expressly states that it was not ruling on the merits of the unsealing order, and that nothing in it was intended to bind the submission panel when the appeal proceeds to the merits.

Oryon Techs. v. Marcus, No. 05-14-00446-CV

The Court of Appeals has conditionally granted mandamus relief in a divorce proceeding to vacate an order requiring a trustee to withhold distributions from the husband and pay them instead to the wife. The trust instrument included a spendthrift provision, which prevents creditors from claiming distributable money or property from the trust, as well as any assignment of a beneficiary’s interest in the trust’s distributions. The Court of Appeals held that the spendthrift provision was enforceable, and that the trial court abused its discretion by ordering the trustee to make distributions in circumvention of the trust’s terms. Because the trustee was a non-party to the divorce proceeding, it also had no adequate remedy at law, thereby justifying the grant of mandamus relief.

In re BancourpSouth Bank, No. 05-14-00294-CV

In this negligent misrepresentation and fraud case, the Court of Appeals has affirmed summary judgment for the defendant based on the statute of limitations. Collective Asset Partners LLC sued Michael Schaumburg and his architectural firm after Schaumburg informed CAP about a property for sale in Tarrant County and took a $1 million fee in the resulting sale. Half of the property turned out to be located on a floodplain, which allegedly caused CAP to be unable to develop it. Schaumburg sought and obtained summary judgment that there had been no misrepresentation because the paperwork for the sale included disclosures that identified the floodlplain. Nor could CAP show a misrepresentation based on a $10.25 million appraisal on the property, as that appraisal was only intended for use by the bank that commissioned it and could not be justifiably relied upon by third parties.

Collective Asset Partners LLC v. Schaumburg, No. 05-13-00040-CV

In this insurance coverage dispute, the plaintiff argued that he did not fall with in the policy’s exclusions because the phrase “domestic employee” was ambiguous.  According to the plaintiff “domestic employee” could refer to either employees who work in a household or employees who are citizens of the United States.  The court rejected this argument, holding that the language of the policy combined with the regulatory framework unambiguously establish that “domestic employee” refers to household employees.

West v. S. County Mut. Ins. Co.

In a case that 600 Commerce believes is the first successful attempt at a permissive interlocutory appeal since the inception of the blog, the Court of Appeals has affirmed the trial court’s application of Texas law to a personal guaranty. (Check out https://600commerce.com/?s=permissive&submit=Search to see instances where the Court declined to hear interlocutory appeals)

Coca-cola had extended credit to Robert Winspear’s business pursuant to a credit agreement and a personal guaranty from Winspear.  The credit agreement contained a choice of law provision in favor of Georgia law.  The guaranty was included on the same page as the credit agreement, but it did not contain a choice of law provision.  After Winspear’s business defaulted, Coca-Cola sued Winspear in Texas (where he and his business were located and where the agreements were executed) on the guaranty.  Winspear filed a motion seeking to apply Georgia law based on the choice of law provision in the credit agreement, but the trial court denied his motion and held that Texas law applied.

Winspear sought a permissive interlocutory appeal based on his contention that if Georgia law applied to the guaranty, it would be unenforceable and thus dispose of the entire case.  Although the Court agreed to hear the interlocutory appeal, it ultimately affirmed the trial court’s decision because the choice of law provision in the credit agreement did not apply to the separate guaranty.

Winspear v. Coca Cola, No. 05-13-00712-CV

The Court of Appeals has issued its first-ever (so far as 600 Commerce is aware) decision in a case with its own Wikipedia page. The City of Carrolton annexed a portion of a privately owned airfield, then issued a new ordinance to regulate it. The city then ordered the airport to be closed based on violations of the ordinance, which led the nearby homeowners to sue the city in an attempt to invalidate the ordinance and the closure order, plus an additional lawsuit against the owners of the airport for failing to bring it into compliance with the ordinance. The homeowners prevailed on both summary judgment and in a jury trial, and the Court of Appeals largely affirmed, albeit on a modified basis.

Among other things, the Court’s 48-page opinion held that the ordinance was not a valid exercise of the city’s police power because it did not require notice to the homeowners whose easements burdened the airport property, thereby depriving them of due process. The ordinance was also determined to be unconstitutionally vague, as its use of the term “owner” was ambiguous and its reference to TXDOT’s Model Rules and Regulations did not provide sufficient guidance to tell the “owner” of the airport how it should be operated. The owners of the airport also could not escape judgment on the jury’s verdict merely because the judge retired after the trial and his successor issued the final judgment, nor were they successful in their attempt to inject the Noer-Pennington antitrust doctrine into breach of contract and fiduciary duty claims. The Court remanded the case to the district court for consideration of additional issues based on the Court’s modifications of the trial court’s rulings.

Noell v. City of Carrolton, No. 05-11-01377-CV

In this negligent misrepresentation case, Guarantee Company of North America sued Weaver and Tidwell LLP for issuing negligent audit reports on which Guarantee relied when issuing performance bonds.  The central issue on appeal was whether the two-year statute of limitations for negligent misrepresentation actions barred Guarantee’s claim.  The Court held that “a person suffers legal injury from faulty professional advice when the advice is taken.”  Thus, the claim in this suit accrued as soon as Weaver’s alleged misrepresentation induced Guarantee to act; that is, when Guarantee issued its first bond in reliance on the faulty audit, which was more than two years before it filed suit.  While Guarantee argued that the discovery rule applied to toll the statute of limitations, the Court refused to apply the discovery rule here because Guarantee did not obtain findings on when it knew or should have known of the facts that gave rise to its cause of action.

Weaver and Tidlwell v. Guaranty Co. of N. Am.

In this inverse condemnation action, the City of Dallas claimed that the case against it should be dismissed for lack of subject matter jurisdiction.  The Court of Appeals held that fact issues precluded dismissal because the plaintiff had alleged, among other things, that the City has: (1) prevented him from developing his property in order to reduce the City’s cost of acquiring that property in the future; (2) closed a street near his property, potentially reducing the plaintiff’s investment-backed expectation; and (3) refused to act on plaintiff’s application to build a privately funded bridge to connect to his property.

City of Dallas v. Millwee-Jackson JV

Southwestern Christian College fired its track coach after he allowed two ineligible athletes to run in a meet.  Later, when the college’s track program got audited, the athletic director chose not to respond and accepted a ban from that year’s national championship, because the penalty for running ineligible athletes would have been worse than the penalty for failing to respond to an audit request.  The athletic director then told the track team that the reason they could not compete in the national championship meet was because the coach ran ineligible athletes.  The coach disputed that explanation.  He claimed that the audit and resulting ban were due to the athletic director’s failure to submit certain forms.

The coach sued the college, the athletic director, and the college’s president, alleging, among other things, that the athletic director and college president had made slanderous statements that tarnished his reputation in the track and field community and prevented him from getting another job.  The trial court granted the defendants’ motion for summary judgment and dismissed all of the coach’s claims.  The Court of Appeals, however, reversed the trial court’s dismissal of the coach’s slander claims against the college and the athletic director, finding that the coach had raised a material fact issue as to the truth of the athletic director’s statements to the track team.

Porter v. Southwestern Christian College, No. 05-12-01737-CV

The Court of Appeals has reversed and rendered a trial court judgment in favor of the victim of a serious softball injury. Coleman and Dunagan were teammates on a slow-pitch softball team, but Coleman also had experience as a high school baseball player. While warming up to pitch the first game of the season, Coleman threw a couple of overhand curveballs to Dunagan at the catcher’s position, followed by an overhand fastball that smashed Dunagan in the mouth and caused significant injury. The jury returned a verdict in favor of the plaintiff on his claim for ordinary negligence, also finding that Coleman’s conduct had been reckless.

Citing its own precedent in Connell v. Payne, 814 S.W.2d 486 (Tex. App.–Dallas 1991, writ denied), the Court of Appeals held that a showing of mere negligence was insufficient for an injury occurring as a result of participation in a sports activity — instead, the defendant must have acted recklessly or intentionally. The Fourteenth Court of Appeals in Houston has adopted a nominally different standard for sports-related liability, holding that there is no negligence duty if the risk is one that is inherent to the sport, but that non-inherent risks are still subject to the duty of ordinary care. See Chrismon v. Brown, 246 S.W.3d 102 (Tex. App.–Houston [14th Dist.] 2007, no pet.).  However, the Court here did not view the two cases as establishing fundamentally different standards. Since being struck by a thrown ball is an inherent risk of the sport of softball, simple negligence alone could not justify a judgment for the plaintiff. And while the trial court had submitted the issue of recklessness to the jury, the Court of Appeals held that there was legally insufficient evidence to support that finding. As the Court noted, “inaccuracy is to be expected in every sport,” and nothing in the record showed that Coleman was aware his fastball created an unreasonable risk of harm that was substantially greater than mere negligence.

Given the novelty of the issue and the possibly different standards adopted by the intermediate appellate courts, this case could be a good candidate for review by the Texas Supreme Court. If the plaintiff takes it up to that Court, 600 Commerce will keep an eye on it.

Dunagan v. Coleman, No. 05-12-00171-CV

The DFW Airport Board sought to incentivize taxicabs powered by natural gas by giving them “head of the line” privileges at DFW.  In 2009, the Airport Board passed a resolution to that effect, and the Association of Taxicab Operators (the “Association”) brought suit, seeking a declaration that the resolution was void.  The trial court ultimately sided with the Association and declared the resolution as passed void.  The Airport Board did not appeal that ruling.

Instead, in 2012, the Airport Board passed a second, similar resolution, which gave “head of the line” privileges to “taxicab operators who invest in a CNG operated taxicab.”   Once again, the Association challenged the resolution, and again the trial court declared the resolution void.  This time, the Airport Board appealed.  The Court of Appeals reversed the trial court’s ruling, holding that the Airport Board has the exclusive power to operate DFW Airport, which includes the power to manage the flow of ground transportation.  The Court also rejected the Association’s argument that the trial court’s ruling on the first resolution was binding in this case under the doctrine of collateral estoppel.  Because the court’s ruling on the first resolution only applied to that resolution as passed, it did not determine whether the second resolution was valid.

DFW Airport Bd. v. Ass’n of Taxicap Ops., No. 05-12-00777-CV

A pair of attorneys sued each other for breach of contract and breach of fiduciary duty, with the plaintiff also asserting a claim for violation of the Texas Theft Liability Act. The jury found both attorneys at fault and awarded no damages. The defendant moved for an award of attorney fees as the prevailing party on the Theft Liability Act claim, but the trial court denied the motion. The Court of Appeals affirmed, holding that the defendant’s failure to plead a claim for recovery of attorney fees under the Act precluded him from recovering his costs of defense. Pleading for recovery of fees under the breach of contract counterclaim and in special exceptions was not sufficient to invoke a claim for recovery under the Theft Liability Act, even though that statute provides for a mandatory award of attorney fees to the prevailing party.

The Court also affirmed on the plaintiff’s cross-appeal, which challenged the trial court’s disqualification of him from personally conducting the examination of his computer forensics expert. Under Disciplinary Rule 3.08, an attorney is generally prohibited from appearing as both an advocate and a witness. However, the defendant failed to meet his burden of showing he would have been prejudiced by having his opposing party conduct the examination, so the trial court did abuse its discretion by ordering the disqualification. Nevertheless, the error was deemed harmless because the plaintiff failed to advise the trial court that his attorney was not prepared to question the witness and he did not point to any specific testimony that the attorney had failed to elicit from the expert. The Court also affirmed the trial court’s rulings on a pair of evidentiary issues and on special exceptions to the Theft Liability Act claim.

Shaw v. Lemon, No. 05-12-00903-CV

In 2003, Wayne Brown opened a brokerage account at Southwest Securities.  He listed his step-mother as the co-applicant on the account, and he selected “Joint Tenancy with Right of Survivorship” as the type of account.  After Wayne’s death, his wife brought a lawsuit against Wayne’s step-mother, challenging her right of survivorship and seeking the funds in the account.  The trial court granted summary judgment in favor of the step-mother, and the Court of Appeals affirmed, holding that Wayne and his step-mother owned the account as joint tenants with a right of survivorship.  Specifically, the Court held that parties are not required to use the exact language from the Texas Probate Code (now called the Texas Estates Code) to create a valid right of survivorship.  Instead, “[a]ll that is required to make an interest ‘survive’ to another party is a word or phrase expressing that the interest of the deceased party will survive to the surviving party.”

Mims-Brown v. Brown, No. 05-12-01132-CV

Former NBA point guard Allen Iverson (aka “the answer“) was sued for breach of contract because he failed to show up to an all-star game party in Dallas at which he had allegedly agreed to make an appearance.  Iverson filed a pro se answer asserting a general denial and various affirmative defenses, but failed to show up for trial. The trial court rendered a default judgment.  On appeal, the Court made clear that, because Iverson had answered, the plaintiff had to prove each element of its claim.  The Court then found that the plaintiff failed to establish the existence of a contract because it did not produce an actual written contract or provide any substantive testimony about the contract’s formation.

Iverson v. Dolce Mktg. Group

Deadlines in the Texas appellate courts can often be forgiving, with extensions of time routinely and even retroactively granted. A new memorandum opinion illustrates one of the limits to those generally flexible deadlines. James Polk’s notice of appeal was due on November 4, but it was not actually filed until November 18. That was within the 15-day permitted for an extension of time to file the notice of appeal, so the Court of Appeals directed the appellant to file a motion under Rule 26.3 that set forth a reasonable explanation of the need for the extension. When that motion was filed, however, it explained that the original deadline had been missed due to Polk’s need to determine whether to appeal at all, including whether it made economic sense to do so. Because that response showed that Polk had consciously ignored the November 4 deadline, rather than missing it inadvertently, the Court of Appeals denied the extension and dismissed the appeal.

Polk v. Dallas County, No. 05-13-01731-CV