After a night of drinking in Uptown, Shawn Strumph was found by a jogger the next morning in a creekbed beneath a bridge owned by CC-Turtle Creek. Medical records contained several versions of how he ended up there, including assault, jumping, or simply falling. Shawn and his parents sued for dram shop and premises liability, but the trial court granted no-evidence summary judgment on the element of proximate cause. Because Shawn remembered nothing of how his injuries happened, and because there were no witnesses to the incident, the plaintiffs could not carry their burden under any theory of liability.

Stumph v. Dallas Lemmon West, Inc., No. 05-14-01044-CV

A group of plaintiffs collectively named as Nemaha Water Services moved to compel arbitration before FINRA. In a cross-motion, Esposito Securities moved to compel arbitration before the AAA. The trial court denied Nemaha’s motion and granted Esposito’s, sending the case to AAA arbitration. In a hybrid interlocutory appeal and mandamus proceeding, the Dallas Court of Appeals reversed and sent the case to FINRA. Nemaha had signed a letter agreement in which it had agreed to pay Esposito 5% of the total consideration received in a qualifying investment or merger. The contract included a AAA arbitration provision, but the Court of Appeals held that clause was trumped by the FINRA rules, at least in this instance. The case turned on the question of whether Nemaha was a “customer” of Esposito, which would entitle it to invoke arbitration under the FINRA rules. Applying the ordinary meaning of “customer,” the Court held that Nemaha qualified even though it had not paid Esposito the contractual commission. Because Nemaha had contracted with Esposito — a member of FINRA — to purchase financial services for a fee, the Court concluded that Nemaha was entitled to invoke FINRA arbitration. The Court noted, however, that there is authority for the proposition that FINRA arbitration can be superseded by contract, although that was not the case this time.

Morford v. Esposito Sec., LLC, No. 05-14-01223-CV

Last year, we reported on the Dallas Court of Appeals’ decision to affirm the trial court’s denial of the Office of Attorney General’s plea to the jurisdiction in a Whistleblower Act case. Today, the Texas Supreme Court has reversed and rendered, holding that the whistleblower’s report to her superior at OAG was not made to “an appropriate law enforcement authority,” as required by the Whistleblower Act. The plaintiff’s pleadings therefore failed to properly invoke the Act, meaning that OAG’s sovereign immunity was not waived.

Office of the Attorney Gen. v. Weatherspoon, No. 14-0582

On July 10, the district court orally denied the special appearance of Ann Stokley. The court did not sign a written order, however, which left Stokley unable to pursue an interlocutory appeal. On September 15, Stokley filed a petition for writ of mandamus with the Dallas Court of Appeals. Two days later, that Court has issued a brief memorandum petition denying relief. Although a trial court abuses its discretion when it fails to rule within a reasonable time, the Court could not conclude that the trial court had done so here in light of “the trial court’s actual knowledge of the motion, whether its refusal to act is overt, the state of the court’s docket, and the existence of other judicial and administrative matters which must be addressed first.” Ms. Stokley will presumably pursue an interlocutory appeal sometime after the trial court issues a written order.

In re Stokley, No. 05-15-01110-CV

The Texas Supreme Court granted a baker’s dozen worth of petitions for review this morning, including two cases that first made their way through the Dallas Court of Appeals. In CTMI, LLC v. Fischer, the Court of Appeals held that the earn-out provision in an asset purchase agreement was unenforceable because it left the percentages to be used in calculating the earn-out subject to a future agreement. And in Staley Family Partnership v. Stiles, the Court of Appeals rejected an attempt to impose an easement by necessity because one of the two tracts of land was not being used at all when they were severed from each other in 1866.

For over a decade, Sun Tec Computer has been tied up in litigation with its officers and shareholders in Tarrant County. At least one of those former officers formed Tax Debt Acquisition Company and used it to purchase an unpaid judgment against Sun Tec, then filed an application for a turnover order in Dallas County to enforce the judgment. The turnover order was not appealed, and the receiver auctioned off Sun Tec’s claims against the Tarrant County litigants to TDAC. That act of legal jujitsu meant that Sun Tec could no longer proceed with its claims against the shareholders and officers. Sun Tec filed a new suit for a declaratory judgment that the turnover order and the sale of its claims were invalid, but the trial court granted summary judgment for the defendants. The Court of Appeals affirmed, holding that the declaratory judgment was an invalid collateral attack on the turnover order, and that the order itself was not void.

Sun Tec Computer, Inc. v. Recovar Group, LLC, No. 05-14-00257-CV