Ehring Enterprises and RD Management were both distributors of a French manufacturer’s skin-care products. Ehring’s exclusive distribution territory was the eastern U.S., while RD distributed product exclusively in the western U.S. After both distributors’ contracts had expired, RD sued Ehring for breach of contract due to sales it had made in RD’s territory. The trial court accepted RD’s argument that it was a third-party beneficiary of the agreement between Ehring and the French manufacturer. The Court of Appeals affirmed that ruling, noting that the sales RD complained of had begun while Ehring was still contractually obligated to stay out of RD’s sales territory.

Ehring Enters., Inc. v. RD Mgmt. Corp., No. 05-13-00711-CV

In this fraud and aiding and abetting breach of fiduciary duty case, the court addressed  the defendant’s no evidence motion for summary judgment.  The court held that the plaintiff had not properly responded to the no evidence motion because it merely stated the elements of the aiding and abetting claim in its response brief, without specifically “pointing out” any evidence to support the contention that the defendant “knowingly assisted” in the breach of fiduciary duty.  Although the plaintiff attached a “large amount of evidence” to its response, the court noted that the plaintiff’s response required specific references to the evidence that would support each element of the claim.

MaximusAlliance Partners, LLC v. Faber

Homeowners Nader and Fariba Daryapayma purchased a $1.5 million house and financed $735,000 of the purchase price with two loans secured by liens on the home.  Shortly thereafter, the Daryapaymas applied for and obtained a home equity loan from Countrywide for $937,500, the purpose of which was to pay off their current mortgage (i.e. the existing $735k loans).   Countrywide funded the home equity loan and the Daryapaymas used the proceeds  to pay off the first two loans.

A few years later, the Daryapaymas defaulted on the home equity loan.  Bank of New York Mellon (BONY), as the assignee of the loan, foreclosed on the Daryapaymas property and then filed a petition for forcible detainer.  The Daryapaymas counterclaimed, contending that the home equity loan violated the Texas Constitution, which limits the amount of home equity loans, when combined with existing mortgages, to 80% of a home’s fair market value.  The Daryapaymas argued that because the $937k home equity loan combined with their outstanding $735k mortgages exceeded 80% of the home’s value, the foreclosure was unenforceable.  The trial court agreed and granted the Daryapaymas summary judgment.

The Dallas Court of Appeals reversed, holding that because the loan documents reflected that the $937k home equity loan was made, in large part, to pay off the existing mortgages, the trial court erred in including the balance of those loans in its calculation of the total amount of indebtedness.

Bank of New York Mellon v. Daryapayama

Since In re Columbia Medical Center, 290 S.W.3d 204 (Tex. 2009), trial courts have been required to specify their reasons for granting a new trial, and the failure to do so has been subject to appellate review by way of mandamus. In a very short opinion arising out of a divorce case, the Dallas Court of Appeals has recognized a notable exception to that rule. When the trial has been to the court instead of a jury, the concerns about transparency in setting aside a jury verdict are not present. Thus, a trial court does not abuse its discretion in granting a new trial without explanation following a bench trial.

In re Foster, No. 05-15-00179-CV

In one of the last opinions of 2014, the Dallas Court of Appeals denied mandamus relief to VERP Investment LLC, which was seeking to overturn a trial court order requiring it to turn over a computer hard drive to a third-party forensic examiner. The Court denied mandamus because VERP had not included transcripts of the trial court’s hearings or a statement that no evidence was taken at them. That left the Court of Appeals unable to determine whether the trial court had abused its discretion in granting the motion to compel. But VERP persisted, filing a second petition that cured the original’s omissions, and that mandamus petition has now been conditionally granted.

On the merits, the Court of Appeals first noted that an order requiring direct access to an electronic device is burdensome because it is intrusive. Due to that intrusiveness, the party seeking direct access must establish via evidence that the opponent is in default of its discovery obligations. In this instance, however, the movant failed to come forward with any evidence, and “[m]ere skepticism or bare allegations” are not enough to warrant direct access to electronic devices. Therefore, the trial court abused its discretion, and the Court of Appeals directed it to vacate the order granting the motion to compel.

In re VERP Investment LLC (VERP II), No. 05-15-00023-CV

BB&T sought to collect a judgment against Brittania Construction by seeking to garnish funds held by an individual named Richard Heath.  BB&T claimed that Mr. Heath owed Brittania $178,000 that it was entitled to collect.

As it turns out, Mr. Heath also had a $185,000 unsecured obligation to a Trust that he had agreed to pay using the same funds BB&T sought to garnish.  The Trust sought to intervene to protect its interest in those funds, but the trial court granted the other parties’ motion to strike its intervention.  The Trust appealed.

On appeal, the Dallas Court of Appeals affirmed, holding that although Mr. Heath may owe the Trust money, the Trust could not “show ownership of or an equitable interest in the money held by Heath such that Trust was entitled to intervene in the garnishment action.”

Gregory B. Baten Trust v. Branch Banking & Trust Co.

In this suit to collect on a promissory note, the Court of Appeals found that the six-year statute of limitations to sue on a “negotiable instrument” did not apply because the note at issue was not, in fact, negotiable.  According to the Court, because the note represented a revolving line-of-credit, permitting the borrower to prepay all or any portion of the amount due without incurring any prepayment penalty, the note did not contain an unconditional promise to pay a sum certain for a fixed amount and was therefore non-negotiable.  Thus, the Court found that the six-year statute of limitations for negotiable instruments did not apply and affirmed the trial court’s decision.

Bank of Am., N.A. v. Alta Logistics, Inc.

In this negligent hiring case, the plaintiff bought a truck that she later discovered had been stolen.  The Court of Appeals upheld the trial courts grant of summary judgment in favor of defendants because the economic loss rule barred recovery of economic damages based on a claim of negligent hiring.  Instead, such a claim requires proof of physical injury from the negligent hiring, which the plaintiff could not establish.

Clark v. PFPP L.P.

In a dispute over an $1,800 monthly rental payment, the Court of Appeals affirmed a judgment in favor of the landlord and rejected several arguments by the tenant that the trial court had erred.  One such argument was the tenant’s contention that because the landlord had altered the memo line of several checks he had sent her, his obligation to pay rent was discharged.  Apparently, the landlord changed the memo line to reflect the month for which she applied the tenant’s payment.

Because the landlord had not acted with fraudulent intent, and because the notation did not change anything material about the check, the Court held that the affirmative defense of discharge did not apply.

Cunningham v. Anglin

Sign Effects Sign Company (the redundancy is sic) obtained a $22,000 default judgment in Ohia against SignWarehouse.com. Six years later, SESC sought to domesticate that judgment in Texas. SignWarehouse argued that the Ohio judgment was invalid because the company was not subject to personal jurisdiction in that state. The trial court and the Dallas Court of Appeals agreed. Relying on Michiana Easy Livin’ Country, Inc. v. Holten, 168 S.W.3d 777 (Tex. 2005), the Court of Appeals held that simply shipping purchased good to another state was insufficient to establish minimum contacts for specific personal jurisdiction, particularly where the parties’ contract specified that venue for any dispute was to be in Grayson County.

Sign Effects Sign Co., LLC v. SignWarehouse.com, No. 05-12-01301-CV