During the course of this case, the defendant made numerous changes to his deposition testimony post hoc.  Ultimately, it was discovered that the defendant’s counsel had drafted the changes and told their client to adopt them.  The trial court judge, outraged at this behavior, forced the defendant to disclose emails reflecting that conduct (on the theory that they fell under the crime/fraud exception to attorney-client privilege).  Not surprisingly, the plaintiff had a field day attacking the defendant’s credibility at trial, leading to a multi-million dollar verdict in its favor, including substantial punitive damages.

After trial the plaintiff moved for sanctions based on the plaintiff’s conduct, which the trial court awarded.  On appeal, the Court of Appeals reversed, because the motion for sanctions should have been brought before trial and because, even under the trial court’s inherent power to sanction, the Court concluded that allowing the plaintiff’s counsel to use emails between the defendant and his counsel for cross examination was “enough to make the point” and further sanctions were excessive.

Cherry Petersen Landry Albert LLP v. Cruz

For the second time this month, the Court of Appeals has decided that Oncor Electric Delivery Company was not responsible for causing a fire that damaged a plaintiff’s property. In this instance, Schepp’s Dairy alleged that Oncor’s negligence led to a fire starting with a transformer at Schepp’s facility. At trial, three different electrical engineering experts variously testified that the fire was caused on either Schepp’s side or Oncor’s side of the transformer. The jury specifically rejected the conclusions of two of those experts, leaving only one expert for Schepp’s. In a highly fact-specific opinion, the Court of Appeals held that the last expert’s opinion was unreliable. Among other problems, the witness had failed to exclude other possible causes of the fire, and he had only testified as to Oncor’s negligent maintenance of the transformer without opining as to what was the direct cause of the fire. Without that testimony, Schepp’s had no evidence of causation, and the judgment against Schepp’s was therefore reversed.

Oncor Elec. Deliv. Co. LLC v. So. Foods Gp. LLC, No. 05-12-01223-CV

In a case of first impression, the Court of Appeals ruled that if a court determines that a mechanic’s lienholder has a perfected statutory mechanic’s lien and is entitled to recover damages for unpaid labor and materials, the court must issue a judgment of foreclosure and order the sale of the property.

In the specific case in front of the Court, the lienholder sought to foreclose on its lien, but the trial court refused to order a foreclosure, noting that the language of the statute (Texas Property Code 53.154) provides that mechanic’s liens “may be foreclosed only on judgment of a court of competent jurisdiction.”  The Court of Appeals, reversing the trial court’s decision, noted that the use of the passive voice implied a meaning that mechanic’s liens may be enforced by the lienholder, thus giving the lienholder–not the court–the discretion.

Crawford Servs., Inc. v. Skillman Int’l Firm LLC

Last December, the Court of Appeals issued an interim opinion vacating a trial court order that almost quadrupled the supersedeas amount to be paid by TierOne Converged Networks during the appeal of a judgment evicting it and its equipment from the water towers of Lavon Water Supply Corp. Now, the Court has reversed and rendered judgment in favor of TierOne on the merits of the forcible detainer case. The Court agreed with TierOne that it had validly exercised its contractual option to renew the lease of the property for an additional five-year term. Because the lease did not require notice of any renewal, TierOne’s continued occupation of the property and payment of the monthly rent following the expiration of the initial term was sufficient to constitute an election to renew.

TierOne Converged Networks v. Lavon Water Supply Corp., No. 05-13-00370-CV

In this fraud case, the Court of Appeals rejected the plaintiff’s argument that its fraud claim should survive summary judgment because the defendant failed to disclose information that it “should have known”  According to the Court, a fraud claim based on a failure to disclose theory requires that the defendant actually knew the information because “[t]here is . . . no duty if a defendant fails to disclose material facts it ‘should have known.'”

Dontos v. Banco Popular

A former Halliburton employee who had worked at the company designing and manufacturing wellbore plugs left and formed his own company that designed and manufactured wellbore plugs.  Halliburton sued the former employee and his company.  Ultimately, a jury found in Halliburton’s favor, awarding it damages, and the trial court entered an injunction barring the former employee from using Halliburton’s trade secrets for eighteen months.

Not satisfied, Halliburton appealed, seeking a permanent injunction.  The Court of Appeals sided with Halliburton, holding that the trial court erred by refusing to enter a permanent injunction because the former employee failed to show that anything less than a perpetual injunction would protect Halliburton’s rights and “remove the competitive advantage obtained through the misappropriation.”  Halliburton Energy Servs., Inc. v. Axis Tech. LLC, 444 S.W.3d 251 (Tex. App.-Dallas 2014, no pet.)

One year ago, the Dallas Court of Appeals held that a homeowner’s negligence claims against the company that installed the home’s plumbing were barred by the economic loss doctrine. Today, the Texas Supreme Court has reversed that ruling in a per curiam opinion. Although the plumber’s liability to the homebuilder was contractual, the negligent performance of a contract that injures a non-party’s person or property is sufficient to state a claim for negligence. The Supreme Court reiterated that the economic loss rule does not permit a party to avoid tort liability to the rest of the world simply by entering into a contract with another person.

Chapman Custom Homes, Inc. v. Dallas Plumbing Co., No. 13-0776

In an opinion that never mentions the name “Ross Perot Jr.” (a.k.a. Hillwood Investment Properties III), the Court of Appeals has affirmed summary judgment in favor of Mark Cuban (a.k.a. Radical Mavericks Management LLC) in a case alleging that Cuban spent too darned much money on payroll for the Mavs. Or, more technically speaking, that the Mavs were spending more money than they were taking in, rendering the team insolvent and requiring the appointment of a receiver. Sports fans and legal observers may recall this case as the one in which Cuban filed a particularly amusing pleading shortly after the Mavs won the 2011 NBA title. In any event, the Court of Appeals affirmed the trial court’s ruling that Hillwood had no evidence of insolvency, holding that its expert had failed to consider “third-party contributions to the Mavericks” (a.k.a. Cuban’s personal footing of the bills). The Court also affirmed the trial court’s decision to seal certain business records under Rule 76a, holding that the lower court had not abused its discretion in determining that the financial and collective bargaining documents were sufficiently sensitive to justify their sealing.

Hillwood Investment Props. III, Ltd. v. Radical Mavericks Mgmt., LLC, No. 05-11-01470-CV

In this legal malpractice case, the Court rejected the plaintiff’s expert opinion as based on invalid assumptions.  The expert opined that the value of sale of an interest in certain oil and gas wells would have been $960,000 greater in April 2008, when the interest should have sold but for a law firm’s malpractice.  Among other faulty assumptions, the Court noted that the expert wrongly assumed that (1) the later sale, in September 2008, was a simple asset sale, when, in fact, it involved a partial settlement of a lawsuit; (2) the projections of actual drilling costs, as opposed to actual results, were the proper measure of costs; and (3) that wells would have been drilled at a certain specified rate.

Thompson & Knight v. Patriot Exploration LLC

An architectural firm subcontracted with Pavecon Commercial Concrete to pour the foundation for a wedding facility in Carrollton. The architect failed to pay the last of Pavecon’s invoices, prompting Pavecon to sue the architect and the owner of the facility. The defendants counterclaimed for breach of contract and negligence, alleging that the concrete services had been performed improperly. Pavecon moved for summary judgment on the counterclaims. The trial court granted the motion and the Court of Appeals affirmed, holding that the architect had failed to submit admissible evidence of any specific pecuniary loss and that the negligence claims were barred by the economic loss doctrine. Justice Moseley dissented in part, arguing that the trial court should not have sustained Pavecon’s objection that the defendants’ summary judgment affidavit was conclusory in averring their damages.

Trebuchet Siege Corp. v. Pavecon Commercial Concrete Ltd., No. 05-12-00945-CV

Trebuchet Siege Corp. v. Pavecon Commercial Concrete Ltd. (dissent)

In this wrongful foreclosure action, plaintiffs sued the law firm handling the foreclosure, alleging, among other things, fraud.  The trial court granted the law firm’s motion for summary judgment based on the attorney immunity doctrine, which generally provides that “an attorney’s conduct, even if frivolous or without merit, is not actionable as long as the conduct was part of the discharge of the lawyer’s duties in representing his or her client.”

The Court of Appeals reversed the trial court’s decision, however, because the attorney immunity doctrine does not extend to allegations of fraud.

Santiago v. Mackie Wolf Zientz & Mann PC

An April 2009 wildfire that damaged nearly 400 acres in Palo Pinto County led to a lawsuit in which a developer’s insurance company ultimately sought to pin the blame on Oncor Electric Company.  The insurance company’s theory of the fire was that an Oncor worker lit a cigarette and tossed it in some brush, igniting the blaze.  To support this theory, the insurance company found several expert fire reconstructionists who conducted tests and re-enactments and determined that the most likely cause of the fire was “the careless disposal of a cigarette” by the Oncor worker.

The trial court excluded the experts’ opinions, pointing to the fact that they did not have any “real experience” with wildfires and did not demonstrate a proper foundation to reach their conclusions.  On appeal, noting the deferential standard of review for the admission/exclusion of expert testimony, the Court of Appeals affirmed.

Club Vista Dev. II, Inc. v. Oncor Elec. Deliv. Co., LLC

In this lawsuit against guarantors on promissory notes, the Court addressed, among other issues, the standard for adequate summary judgment affidavits.  The appellants argued that the two affidavits supporting appellee’s motion for summary judgment demonstrated that the witness lacked personal knowledge.  The majority opinion, however, found that the affidavits properly reflected the witness’ personal knowledge because the witness asserted that (1) he had personal knowledge of the matters in the affidavit; (2) his job responsibilities included “servicing and collection of indebtedness” owed by appellant; (3) he was the custodian of records familiar with appellee way of maintaining its books and records (which he had reviewed); and (4) appellee’s business records support the statements in the affidavit.

Bagwell v. Ridge at Alta Vista Investments I, LLC

The dissenting opinion pointed out that these affidavits were defective because appellee was not the original lender on the loans, and nothing in the affidavits demonstrated that he had any personal knowledge of the events occurring before the loans were acquired in January 2010.

Bagwell v. Ridge at Alta Vista Investments I, LLC (dissent)

In this commercial paper case, Jason Kang signed several checks made out to various businesses and drawn on the bank account of his business, Ever Construction.  Unfortunately, the checks ended up the hands of wrongdoer Kwan Sup Choi, who was not the named payee on the checks but took and cashed them at Lee’s Check Cashing.  When Kang found out that his intended payees did not receive their money, Lee’s Check Cashing was forced to bear the loss and pay them.

Lee’s, however, blamed Kang for the forgery and sued him and Ever Construction under theories of negligence and fraud.  After a bench trial, the trial court awarded judgment in favor of Lee’s, and Kang and Ever Construction appealed.  The Court of Appeals reversed, holding, among other things, that Kang and Ever Construction had no duty to ensure that the checks it wrote were only presented to third parties for payment by persons who were authorized to cash them.

Ever Constr. Corp. v. Su

Hurricane Ike damaged property owned by Optimum Deerbrook LLC. Optimum’s lender, ViewPoint Bank, was a loss payee on Optimum’s property insurance policy with Allied Property & Casualty. Allied paid the claim, issuing checks jointly to Optimum and ViewPoint, but Optimum endorsed and deposited the checks in its own account. As a result, ViewPoint never received any of the insurance funds. ViewPoint sued Allied for breach of the insurance contract and a claim under article 3 of the UCC. The trial court granted summary judgment for the insurer, but the Court of Appeals reversed. Citing the Texas Supreme Court’s recent decision in McAllen Hospitals, LP v. State Farm, the Court held that the insurer had not fulfilled its payment obligation by delivering the checks only to the insured, and that delivery to both payees is required because neither of them, acting alone, could enforce or negotiate the instrument. The Court also held that summary judgment should have been granted in favor of the bank on its UCC claim because the drawer of a check is not discharged from its obligation when the check is issued to nonalternative copayees and is paid without one of their necessary endorsements. However, the Court held that the bank’s attorney fees affidavit was not sufficiently detailed to support summary judgment and remanded the case for further consideration of an award of attorney fees.

ViewPoint Bank v. Allied Prop. & Cas. Ins. Co., No. 05-12-01370-CV

In this interlocutory appeal of a motion to compel arbitration, the Court held that the broad arbitration provision at issue (“[a]ny dispute, claim or controversy arising out of or relating to [the agreement] or breach, termination, enforcement, interpretation or validity thereof” must be arbitrated) required the trial court to grant the defendants’ motion to compel arbitration.  Moreover, because the provision itself stated that “the determination of the scope or applicability of this Agreement to arbitrate” must be determined by an arbitrator, the Court found that the responsibility for establishing whether the provision even applies rests with the arbitration proceeding.

Seven Hills Commercial LLC v. Mirabal Custom Homes, Inc.

A pathologist and his former employer sued each other over a covenant not to compete provision in the pathologist’s employment contract.  Among numerous issues before the Court of Appeals was whether the geographic scope of the non-compete provision was unreasonable.  The agreement provided that the pathologist was restricted from being employed by a practice that operates within 50 miles of Dallas County.

The pathologist argued that the scope of his non-compete was overly broad because he only worked in Dallas and Collin counties and because it was actually unlimited in scope since he was restricted from working for any practice that operates in Dallas, even if he worked far from the Dallas area.

The Court rejected those arguments and held that the geographic scope of his non-compete was not unreasonable, noting that the pathologist was also part of his former employer’s management team, causing him to be responsible for pathology practices across the Dallas area.  Consequently, the Court reasoned that “even if [the pathologist] were working in New York, for example, his management knowledge of and experience with appellants’ Dallas-area operations would be valuable to his new employer.”

Ameripath v. Hebert

In this products liability case, the plaintiffs alleged that Goodyear was grossly negligent with respect to its tire manufacturing practices at its North Carolina plant and that the design of the tire was defective because it failed to include a nylon cap ply.  Ostensibly to help prove their case, the plaintiffs sought to tour and videotape parts of Goodyear’s plant in North Carolina.  The trial court obliged, ordering Goodyear to allow plaintiffs’ counsel, expert witness, and a videographer to enter the facility and document the manufacturing process.

Goodyear resisted by filing a writ of mandamus challenging the trial court’s order permitting the tour.  The Court of Appeals sided with Goodyear, reasoning that the main reason the plaintiffs wanted to tour the facility was to create demonstrative evidence (namely, a video to show the jury), not to discover new information.  Because that is not a valid purpose to seek entry onto another party’s property, the Court granted Goodyear’s mandamus petition.

In re the Goodyear Tire & Rubber Company

In this landlord-tenant dispute, the tenants sued the landlord for wrongfully withholding their security deposit in violation of Section 92 of the Texas Property Code.  The trial court granted the tenants’ motion for summary judgment, and the landlord appealed.  The Court of Appeals reversed, finding that there was a disputed issue of material fact as to whether the tenants provided the landlord with a valid forwarding address where the landlord could provide the written notice required by the statute.

Franzin v. Sauty

In this lawsuit related to an asset purchase agreement, the Court addressed which party is entitled to the $5.7 million in escrow money when the sale failed to close.  Examining the complex terms of the APA, the Court found that the contract terms at issue were ambiguous and thus summary judgment was inappropriate.

KSWO Television Co. v. KFDA Operating Co. LLC

In this breach of contract action, the Court of Appeals held that nonresident limited partners who were passive investors in a Texas limited partnership were not subject to personal jurisdiction simply because the limited partnership was formed under Texas law.

Nacho Remodeling v. Calsherm Partners

In this case, the appellee was sued for, among other things, aiding and abetting an alleged misappropriation of trade secrets.  The Court of Appeals held that, even if the appellant could establish the underlying tort of trade secret misappropriation, the claim would still fail.  According to the Court, a cause of action for aiding and abetting exists for a “specific and narrow purpose:  to deter antisocial or dangerous behavior.”  Examples of this type of behavior included “drag racing or similar conduct posing a high degree of risk to others.”  The Court found that misappropriation of trade secrets does not qualify as sufficiently antisocial or “deviant” to support an aiding and abetting cause of action.

West Fork Advisors v. Sungard Consulting

Plaintiff sued defendant for breach of a lease agreement and unpaid rent. Shortly before the hearing on the plaintiff’s motion, the defendant’s counsel filed a motion for leave to file a late response.  The trial court denied the defendant’s motion and granted the plaintiff’s MSJ.  The Court of Appeals affirmed the trial court’s decision, noting that the defendant did not attach any evidence to its motion and also failed to address all of the relevant factors in its argument.

Dawn M. Brown v. Melissa 121 Partners, Ltd.

In this breach of lease case, the appellant argued that the appellee’s damages expert opinion was unreliable and erroneous because it relied on a hypothetical market rent study.  During trial, appellant objected to the relevance of the of the market rent study, but the trial court did not rule on the objection.  The expert then testified in detail about each component of her calculation without objection from appellant about her methodology.  The Court of Appeals, however, found that because the appellant had “failed to object to the expert’s testimony on the basis of improper methodology before or during trial and obtain a ruling form the court,” appellant waived any error.

Transcontinental Realty v. Wicks

In this garnishment action, the Court of Appeals permitted the appellant, as lessor, to recover past due rent under a commercial lease against a sub-lessee.  Among many other issues, the Court rejected the appellee’s argument that the sub-lease was invalid because it was obtained without the landlord’s consent, as required by the lease.  On this point, the court held that “this limitation is for the benefit of the landlord” and that sub-lessee “cannot take advantage of their own wrongs.”

Tenet Health Sys. Hosps. Dallas Inc. v. N. Tex. Hosp. Physicians Gp. P.A.

The appellant (brother to appellee) claimed the probate court lacked personal jurisdiction over him.  Appellee asserted that the appellant’s individual assistance to the parties’ quadriplegic mother in a probate matter in 2008 (the appellant’s only contact with Texas) required the court to exercise jurisdiction over her brother.  The Court held, however, that at the time he assisted his mother in the prior lawsuit, the appellant was not serving as trustee of the Trust at issue in the present lawsuit, and thus his contact with the state was in a separate, individual capacity.

Stauffer v. Nicholson

In this mortgage foreclosure-related lawsuit, the appellants challenged the trial court’s decision to grant summary judgment on a no-evidence basis.  The Court of Appeals, however, affirmed the trial court’s decision because the appellees did not present any evidence to overcome each of the appellees’ no-evidence grounds.  The Court rejected the appellant’s argument “[b]ecause they have not challenged on appeal all possible grounds upon which summary judgment could have been granted.”

Puricelli v. Saxon Mortgage Services`