The parties in Ninety Nine Physician Services, PLLC v. Murray arbitrated a business dispute; the lingering issue at confirmation was an award of $341,680 in attorneys’ fees. The Fifth Court found that the award was proper, reasoning as follows:

1. “[U]nder the parties’ distinct agreement and incorporation of the AAA rules, there were three circumstances in which the arbitrator was vested with the authority to award attorney’s fees (1) if all parties requested such an award or (2) if it was separately authorized by law or (3) if it is authorized by the arbitration agreement.” (emphasis in original); and then
2. “Both parties submitted posthearing briefs in which they requested attorney’s fees. In their briefing, Appellees urged, as they do here, there was no basis in the general law to award fees to Appellant. … Appellees contend Appellant’s post-hearing brief is not a proper request for attorney’s fees. The arbitrator in interpreting the Commercial Rules evidently disagreed with Appellees and found the post-hearing briefs to be requests for attorney’s fees under Rule 47(d)(ii).” 

The Court thus reversed a trial-court ruling that vacated that portion of the award. A concurrence would have reached the same result for a different reason: “Because appellant did not file any pleading affirmatively seeking attorneys’ fees until after the arbitration hearing, the arbitrator abused his discretion in awarding attorneys’ fees to appellant. The arbitrator’s mistake of law, however, is not grounds to vacate the award,  and the trial court erred in doing so. Consequently, appellant was entitled to enforcement of the attorneys’ fees award but not on the basis relied upon by the majority.” No. 05-19-01216-CV (Feb. 22, 2021) (mem. op.).

The Texas Supreme Court heard arguments today in In re: Estate of Johnson, No. 05-18-01193-CV (Nov. 4, 2019) (mem. op.), which presents a fundamental issue in Texas probate law–whether a beneficiary’s acceptance of benefits under a will defeats that beneficiary’s standing to challenge that will.

If you have power and a little time for a half-hour of ethics CLE, the State Bar Litigation Section has put together this good video about the proposed new disciplinary rules. The voting period ends March 4 and you can do that on the State Bar website.

Allegations about a great deal of activity that does not implicate the TCPA,’s protection of the right of association, do not implicate the TCPA’s protection of the right of association: “Tiffany first contends that Rupert’s allegations of conspiracy and joint enterprise meet this standard because they involve the disposition of Marie’s estate (including certain community property) and ‘two decades of publicly filed lawsuits.’ She cites no authority for the proposition that the estate proceedings of a private individual involve public or citizen’s participation, and we have found no such authority. Likewise, we find no authority supporting the notion that extended litigation between and among these parties becomes a matter of public or citizen’s participation merely because of its volume or allegedly repetitive nature. On the contrary, the allegations made by Rupert are of an intensely personal nature, and they address actions involving the personal relationships within the Pollard family.”  Pollard v. Pollard, No. 05-19-00240-CV (Feb. 8, 2021) (mem. op.).

In a premises-liability case, the defendant challenged the expert testimony relied upon by the plaintiff. The Fifth Court rejected the challenge, reasoning: “Essentially, United contends that because English’s opinions have been excluded by other courts, we should “follow the lead” of these other courts and not consider them. We reject United’s invitation. United has not cited to any specific conclusory statements in English’s report. Rather, United argues that English’s report is conclusory because he provided a ‘cut-and-paste job’ that is a ‘rather generic’ opinion that ‘he regurgitates every time he
is hired.’ However, such statements provide no particular basis for United’s
objection. Objections that statements are conclusory may not be conclusory
themselves.” McIntyre v. United Supermarkets, No. 05-19-01252-CV (Feb. 4, 2021) (mem. op.).

Sherie McIntyre was injured when she fell in a pothole in a grocery store parking lot. The Fifth Court (in Justice Craig Smith‘s first appearance in this blog) reversed a defense summary judgment in McIntyre v. United Supermarkets, finding a fact issue on the question of the store owner’s constructive knowledge of the pothole: “Trevino testified that he inspected the parking lot approximately twenty to twenty-four times during the first six months of the store’s opening. He noticed the spot where McIntyre fell but ‘didn’t feel that it needed to be repaired . . . It never stood out as a hazard.’ Thus, Trevino’s repeated inspections put him in close proximity to observe the pothole, which he in fact did notice. Trevino acknowledged that the parking lot was restriped before United opened the new store and had not been restriped since then. A picture of the pothole shows the white stripe going over part of the pothole indicating it had been present for at least six months. Thus, McIntyre produced more than a scintilla of evidence to raise a genuine issue of material fact as to whether United had constructive notice of the pothole.” No. 05-19-01252-CV (Feb. 4, 2021) (mem. op.). The Court also found a fact issue on the question of unreasonable danger.

Toyota Motor Sales v. Reavis, a companion case to a still-ongoing appeal of a major products-liability judgment, affirmed the denial of Toyota’s motion to seal certain trial exhibits. After reviewing Toyota’s case for confidentiality, the Fifth Court then turned to available less-restrictive means, holding: “Beyond Toyota’s blanket assertions that a total seal is necessary and redaction would be meaningless, Toyota did not offer any additional testimony or evidence regarding whether the Toyota documents could be redacted or otherwise altered while still protecting its interest. Toyota also contends on appeal that it showed sealing was the least restrictive means to protect its interest here because it sought to seal ‘just four exhibits from a trial involving over 900 exhibits and [covering] pages of closed-courtroom testimony from more than 3,200 pages of trial
transcripts.’ This argument misses the point. Rule 76a imposes strict requirements to obtain a sealing order, and parties are not rewarded with a sealing order simply because they ask the court to only seal a few exhibits or a small amount of testimony. No matter how many exhibits a party seeks to seal, that party must still meet the
requirements of the rule.” No. 05-19-00284-CV (Feb. 4, 2021) (mem. op.).

Toyota Motor Sales v. Reavis, a companion case to a still-ongoing appeal of a major products-liability judgment, affirmed the denial of Toyota’s motion to seal certain trial exhibits. Noting the general presumption in favor of open records, the Fifth Court observed, inter alia:

• “[E]ven assuming the court records contain trade secrets, the existence of trade secrets standing alone is insufficient to overcome the presumption of openness and allow the records to be permanently sealed.”
• “Because Toyota did not take adequate steps during trial to protect the exhibits and related testimony from public disclosure and did not seek an instruction prohibiting the jury and other non-parties from discussing the documents beyond the setting of the trial, we conclude any interest Toyota had in maintaining secrecy of the records does not “clearly outweigh” the presumption of openness.”

No. 05-19-00284-CV (Feb. 4, 2021) (mem. op.).

A vote is underway – eight new Texas Disciplinary Rules have been proposed, and the supreme court has authorized a State Bar membership vote about them. This page has information about the proposed rules.

Singh v. Gill reminds of the importance of strict compliance with Tex. R. Civ. P. 106, the substituted-service rule:

• Location. “Gill’s affidavit stated only that Gill did not know where Singh could be found. Her attorney’s affidavit recounted e-mail and telephone conversations with Singh in which he refused to provide his location. Neither affidavit, however, stated facts showing that service under rule 106(a) had been attempted. … “
• Attempts. “Moreover, the affidavits do not exhibit the diligence necessary to support substituted service. ‘A diligent search must include inquiries that someone who really wants to find the defendant would make, and diligence is measured not by the quantity of the search but by its quality.’ Here, there is no indication that Gill’s diligence included searching public data or ‘obvious inquiries’ a prudent investigator would have made,’ such as attempting service by mail to obtain a forwarding address or locating and contacting other persons who would likely have information about Singh, beyond Singh’s immediate family in India.”

No. 05-19-01146-CV (Jan. 20, 2021) (mem. op.).

This is a crosspost from 600Hemphill, which follows business litigation in the Texas Supreme Court; the court of appeals opinion under review came from the Fifth Court.

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A per curiam opinion, based on the Court’s recent opinion in Federal Home Loan Mortgage Co. v. Zepeda, 601 S.W.3d 763 (Tex. 2020), reminded about a lender’s equitable-subordination rights:

“[E]quitable-subrogation rights become fixed at the time the proceeds from a later loan are used to discharge an earlier lien. A lender’s negligence in preserving its rights under its own lien thus does not deprive the lender of its rights in equity to assert an earlier lien that was discharged using proceeds from the later loan. Although we considered the lender’s negligence in Sims, that analysis is limited to the lien-priority context.

Applying Zepeda to this case, the court of appeals erred in concluding that PNC’s failure to timely foreclose under the deed of trust bars its subrogation rights. The availability of better credit terms and interest rates can make refinancing an attractive financial tool for borrowers. Subrogation operates as a hedge against the risk of refinancing the outstanding amount of an existing loan, opening this credit market to borrowers. Subrogation permits a lender to assert rights under a lien its loan has satisfied when the lender’s own lien is infirm.” PNC Mortgage v. Howard, No. No. 19-0842 (Jan. 29, 2021).