A fire at a hotel in Duncanville left the property owner unable to continue paying on the $3.4 million promissory note. The lender foreclosed and the property was sold for $500,000, leaving a substantial balance on the defendants’ personal guaranty obligations. The bank prevailed on summary judgment, a result that was not helped by the failure of defendants’ counsel to respond to the motion or appear at the hearing. The Court of Appeals affirmed.

The guarantors challenged the trial court’s denial of their motion for new trial. The Court of Appeals analyzed the case as a post-answer default, applying the Craddock factors of whether (1) the failure to answer or appear was a mistake or accident, (2) the defendant had a meritorious defense, and (3) the motion was filed at a time when granting a new trial would not delay or otherwise injure the plaintiff. In this instance, the motion for new trial failed to establish item (3), as the attorney’s affidavit did not address that factor, Neither the motion nor the affidavit  stated that the defendants were ready, willing, or able to go to trial immediately or offer to reimburse the plaintiff for its expenses. The Court also rejected the defendants’ claim of newly-discovered evidence, given that the affidavits failed to establish the proffered evidence (testimony from friends of the defendants) was actually newly discovered or could not have been discovered earlier through the exercise of due diligence.

Kahrobaie v. Wilshire State Bank, No. 05-13-01459-CV

A chiropractor provided treatment to a patient injured in a car accident and, in return, the patient assigned her right to any proceeds from a settlement, judgment, or verdict.  The patient settled her claim with the other driver’s insurance company, but, instead of sending the payment directly to the chiropractor, the insurance company paid the patient.  The chiropractor then sued the insurance company directly, seeking the amount it had paid to the patient.   The trial court granted summary judgment in favor of the insurance company and the chiropractor appealed.

The Court of Appeals affirmed, rejecting the chiropractor’s argument that it was an “account debtor” under the UCC because there had been no finding of liability.  Rather, the parties had settled and therefore there had been no determination of liability, so the chiropractor was not an account debtor.

Pain Control Institute, Inc. v. GEICO Gen. Ins. Co.

Victor Enterprise, Inc. filed and won a forcible detainer action to collect rent from his tenant, Clifford Holland, for August 2009.  While that action was appealed by Holland, VEI filed another forcible detainer to collect rent for December 2009, which he also won, but the county court signed an order suspending execution of the writ of possession.  VEI then filed a third forcible detainer action to collect rent for January 2010, which he also won, but the county court enjoined VEI from “initiating, prosecuting, or executing any litigation, action or writ that seeks possession of or eviction of the defendant form his residence.”   In the meantime, Holland sought (and obtained) a temporary restraining order in county court requiring VEI to cease prosecuting actions against Holland and to prohibit any sheriff or constable from executing any writ against Holland.  On appeal, the Court granted VEI’s request for mandamus, noting that “the county court lacks jurisdiction to interfere with the enforcement of the justice court’s unappealed judgments.” It also found that, given the history of this case, “the writ will issue instanter.”

In re Victor Enters., Inc.

In what appears to be only the third opinion in the state reviewing a motion to dismiss under Texas Rule of Civil Procedure 91a, the Dallas Court of Appeals has affirmed a trial court’s order that granted in part and denied in part a motion to dismiss on the pleadings. Similar to Federal Rule of Civil Procedure 12(b)(6), Rule 91a allows a party to move to dismiss a cause of action “on the grounds that it has no basis in law or fact,” based solely on the claimant’s pleadings. In this case, the plaintiffs sued the City of Dallas after emergency services failed to respond to a 911 call reporting their son’s drug overdose. The plaintiffs attempted to plead their way around governmental immunity by claiming the City had negligently used or misused the 911 system’s telephone and computer systems. The Court affirmed dismissal of negligence claims that the City had failed to properly respond to the 911 call, but also affirmed the denial of the motion as to claims that the equipment itself had failed or malfunctioned.

City of Dallas v. Sanchez, No. 05-13-01651-CV

Three roommates signed a residential lease for a house in Plano, but a month into the lease one of the parties moved out and stopped paying rent.  Her two former roommates sued her for breach of contract.  The Court of Appeals upheld the trial court’s determination that the plaintiffs had established an implied contract to lease the house jointly based on the acts and conduct of the three roommates.

Pettigrew v. Reeves

Graham Mortgage sued Holmes on a personal guaranty he had signed.  The trial court granted Graham’s motion for summary judgment, and Holmes appealed.  Among other things, he argued that the trial court had erred by refusing to deem his requests for admission admitted because Graham never responded to them. Graham argued that it had no obligation to respond to the requests for admission because they were served by email and the rules (at the time) did not allow service by email.  The Court of Appeals agreed, holding that even though Graham had received the requests for admission, its internal procedures were not structured to receive discovery requests by email, and “attorneys should be able to structure their internal procedures around their opponents’ compliance with the rules of civil procedure in such matters as service of documents.”

Holmes v. Grahma Mortgage Corp.

When a judgment judgment for breach of contract is entered that includes an award of attorney fees, the defendant is generally not required to supersede that fee award in order to suspend judgment. Instead, the defendant only has to supersede post-judgment interest on the award for the expected duration of the appeal. In this case, Highland Capital Management was awarded $2.8 million in attorney fees, but the defendant only bonded out $287,000. Highland moved to increase the supersedeas bond, arguing that the attorney fees were actually compensatory damages because the parties’ contract contained a clause requiring the defendant to pay Highland’s fees in the event of a breach. The Court of Appeals rejected that argument, essentially concluding that an award of attorney fees under the contract was no different than an award of attorney fees under Chapter 38 of the Civil Practice & Remedies Code (which Highland had also sought in its pleadings and at trial).

Highland Capital Mgmt., L.P. v. Daugherty, No. 05-14-01215-CV

The day before trial, the attorney for the defendant in a car wreck case stipulated to her client’s liability. The next day, the plaintiff moved for sanctions under Rules 13 and 215, based on the allegedly late stipulation. After securing a $44,591 jury verdict, the plaintiff re-urged the sanctions issue, which the trial court granted in the form of a $5,000 award of attorney fees. The Court of Appeals affirmed the jury verdict, but reversed and rendered on the sanctions. The Court held that the sanctions could not be justified for discovery abuse under Rule 215 because that rule requires a party who is aware of possible discovery abuse to obtain a ruling prior to trial. As to Rule 13, that rule requires particularized findings of good cause, which were not included in the trial court’s judgment here.

Hernandez v. Hernandez, No. 05-13-01219-CV

In this breach of contract claim, the trial court granted summary judgment on the grounds that the plaintiff had not satisfied the conditions precedent contained in the agreement.  The employment agreement at issue was to hire the plaintiff as President and CEO of the Dallas Housing Authority, but the agreement contained a condition that provided the agreement remained “nonbinding unless signed by the Chairman of the Board of Commissioners of the [DHA] and approved by the Board of Commissioners.”  The Court of Appeals rejected the plaintiff’s argument that a factual issue precluded summary judgment because the Board of Commissions told him, prior to executing the agreement, that they had already approved it.  The Court of Appeals, however, rejected this argument, and affirmed the trial court’s holding because “if the conditions stated in the letter agreement were satisfied before the agreement was presented to [the plaintiff], there would be no need to include such language in the agreement.”

Killingsworth v. Housing Authority

The Plaintiff hired Classic Superoof to build a metal roof for her house, which it did. The appearance of the roof, however, was marred by markings and scuff marks.  As a result, Plaintiff complained to (and ultimately sued) Classic.  At first, Classic thought the problem stemmed from the metal itself and therefore contacted the metal company, who then, in turn, contacted U.S. Steel, the provider of the metals used to make the roof.  Looking to investigate the issue, U.S. Steel sent its own metallurgical engineer to the Plaintiff’s home to inspect the roof.  The engineer performed an inspection and (perhaps not surprisingly) concluded that the coating on the roof was damaged during installation (thus absolving U.S. Steel of any responsibility and pinning the blame on Classic).

At trial, the Plaintiff used the U.S. Steel report and won a judgment against Classic.  On appeal, Classic argued, among other things, that the trial court erred by admitting the report because it was hearsay–specifically, because it was prepared in anticipation of litigation, it fell outside the business records exceptions. The Court of Appeals rejected that argument, noting that the engineer was not contacted by the Plaintiff, there was no lawsuit on file at the time, and that the engineer testified that his job was simply to investigate the cause of the concern.

Classic Superoof v. Bean

G.C. Buildings hired RGS Contractors to build an apartment complex in Oklahoma, funded by a $7 million loan insured by the Department of Housing and Urban Development. The contract provided that the date of final completion was the date that the HUD’s representative signed its final “Trip Report,” which turned out not to be signed until 161 days after the completion of work date called for in the contract. The construction contract contained a liquidated damages clause providing for a daily deduction from the contract price for each day past the construction deadline, but G.C. did not make any such deductions, instead paying the contractor in full. More than two years later, G.C. sued RGS in an attempt to recover either actual or liquidated damages. After a bench trial, the trial court ruled in favor of the contractor, finding that G.C. had not established a proper measure of damages for breach of contract.

G.C. argued that the interest payments it made during the period of the construction delays constituted its damages, but the Court of Appeals rejected that claim because G.C. was obligated to make those payments regardless of when or whether the construction on the apartment complex was completed. As to liquidated damages, the Court held that such damages could not be recovered because G.C. had not followed the procedures of the contract to determine whether a flat $2,101.68 charge or the actual cost of interest, taxes, and other fees should have been deducted from its payments to the contractor. Thus, the trial court’s findings were supported by legally and factually sufficient evidence, and the judgment was affirmed.

G.C. Buildings, Inc. v. RGS Contractors, Inc., No. 05-13-00151-CV

In this petition for for writ of mandamus, the Court of Appeals denied the relator’s petition to vacate the trial court’s order denying leave to file a fourth amended answer and counterclaim.  The Court found that although amendments of a “formal, procedural nature” typically will not result in surprise or prejudice, in this instance the proposed amendment “would have reshaped the case in a way that would require the Court to reopen discovery.”

In re City of Dallas

The grantor to a trust apparently changed his mind and sought to undo the trust.  After litigation on several fronts spanning several decades, the grantor filed a declaratory action seeking a declaration that he is the owner of an oil and gas lease called the Westbrook Lease, which was previously property of the trust he created.  The trustee opposed the grantor’s efforts, arguing that the trust was still intact and that the trust still owned the rights to the Westbrook Lease.

The main issue in the case was the effect of several judgments, dating as far back as 1980.  Specifically, the grantor moved for summary judgment, claiming that res judicata applied in his favor based on one of the prior orders.  The trial court agreed and granted summary judgment.  The Court of Appeals, however, reversed because the judgment upon which the trial court relied had been reversed on appeal.

Schmidt v. Ward