This is a cross-post from 600Hemphill, which follows commercial litigation inthe Texas Supreme Court: ______ If you doubted that the written word carried dispositive weight in the current Texas Supreme Court, please consider these cases that lead up to an oil-and-gas opinion of last week:

• In 2019, Bombardier Aerospace Corp. v. SPEP Aircraft Holdings holds that the written word matters: “Under our strongly held principles of freedom to contract, we hold that the limitation-of-liability clauses are valid limited warranties that were the basis of the parties’ bargain. … Although Bombardier’s conduct in failing to provide SPEP and PE with the new engines they bargained for was reprehensible, the parties bargained to limit punitive damages, and we must hold them to that bargain.”

• In 2020, Energy Transfer v. Enterprise emphasized that the written word matters: “We hold that parties can conclusively negate the formation of a partnership under Chapter 152 of the TBOC through contractual conditions precedent. ETP and Enterprise did so as a matter of law here, and there is no evidence that Enterprise waived the conditions.”

• During 2021, in In re the Estate of Johnson, the Court noted that actions also matter: “MacNerland was put to an election: either seek to set the will aside or accept the benefits Johnson bequeathed to her. She chose the latter. As a result, she ‘must adopt the whole contents of the instrument, so far as it concerns [her], conforming to its provisions, and renouncing every right inconsistent with it.’ Because MacNerland accepted benefits under Johnson’s will, the trial court properly dismissed her challenge to its validity.” (citation omitted).

• But last week, in BPX Operating v. Strickhausen, the Court again gave primacy to the written word: “Strickhausen bargained for a strong anti-pooling clause, she consistently withheld the written consent the clause requires, and she reiterated her objections multiple times. Although she accepted BPX’s money, she reasonably believed that one way or another she was owed an amount in the same ballpark as the checks she deposited.”

A recent “Writing Wednesday” post on this blog examined the distinctions among “signing,” “entry,” and “rendition.” Midwest Compressor Systems v. Highland Imperial reviews the contours of “rendition” and found that one occurred when the trial court orally stated: “Motion for directed verdict is granted. Court finds that this case does fall under the statute of frauds requirements.” Accordingly, a motion for a trial amendment that came after that announcement was untimely. No. 05-19-01115-CV (June 22, 2021) (mem. op.).

Solving several years of mischief arising from unclear statutory language, the governor recently signed an amended version of Tex. Civ. Prac. & Rem. Code § 38.001 to clarify when attorneys’ fees may be recovered in breach-of-contract actions. It is effective to cases filed on or after Sept. 1, 2021:

The Fifth Court had good news, and bad news, for the plaintiff suing for breach of an alleged oral contract in Midwest Compressor Systems v. Highland Imperial, Inc.:

GOOD NEWS: “Gerber testified not only that Prince solicited the compressors and urged him to deliver them quickly, but also testified about Highland’s receipt and use of the compressors. This evidence creates at least a question of fact regarding the existence of oral leases. See Tex. Bus. & Com. Code § 2A.204(a) (‘A lease contract may be made in any manner sufficient to show agreement, including conduct by both parties which recognizes the existence of a lease contract.’)”.

BAD NEWS: “Midwest did not bill in advance for each day of Highland’s use; it billed in arrears for the 30 days’ use that had already occurred. Hence an invoice dated June 30 expressly stated it was for ‘June compressor rental.’ Thus, although the amount required for each lease could have been less than $1,000 if the leases had terminated after one day, each lease on which Midwest sought payment continued for thirty days and Midwest admitted the total amount fell within the statute [of frauds.]” No. 05-19-01115-CV (June 22, 2021) (mem. op.).

Reversing a Fifth Court opinion that had held otherwise, the Texas Supreme Court held: “A limited partnership’s agents for service of process are its general partner, Tex. Bus. Orgs. Code § 5.255(2), and its registered agent, id. § 5.201(b)(1). The evidence establishes that Miraki served only a WWLC employee described as its ‘owner,’ ‘president,’ and ‘CEO.’ Accordingly, we hold that WWLC demonstrated that it was not properly served.” WWLC v. Miraki, No. 20-0173 (June 18, 2021).

The long-running defamation case continues about a D Magazine article called “The Park Cities Welfare Queen,” most recently with the Fifth Court affirming the denial of the defendants’ summary-judgment motion: “There are multiple fact issues about whether Bender committed a crime by providing false or incomplete information to the HHSC to obtain thousands of dollars of SNAP benefits to which she was not entitled. Having reviewed the entire record, we conclude there is more than a scintilla of evidence that the gist of the Article is not substantially true.” D Magazine Partners LP v. Bender, No. No. 05-19-01525-CV (June 9, 2021) (mem. op.).

On Thursday, June 17 at noon, I’m giving an update on commercial cases of note from the past year in the Dallas Court of Appeals. It will be by Zoom and you can register here, and here is the PowerPoint that I’ll use (subject to continuing proofreading!)

With respect to court orders and judgments, the words “signed,” “rendered,” and “entered” are often used interchangeably. But those words have specific, technical meanings, and it is wise to remember those meanings when differences matter.  Accord, Burrell v. Cornelius, 570 S.W.2d 382, 384 (Tex. 1978) (“Judges render judgment; clerks enter them on the minutes.  …  The entry of a judgment is the clerk’s record in the minutes of the court.  ‘Entered’ is synonymous with neither ‘Signed’ nor ‘Rendered.’”).

Two rules set the background as to when critical countdowns commence:

• Tex. R. Civ. P. 306a: “The date of judgment or order is signed as shown of record shall determine the beginning of the periods prescribed by these rules for the court’s plenary power to grant a new trial or to vacate, modify, correct or reform a judgment or order and for filing in the trial court the various documents that these rules authorize a party to file …”
• Similarly, Tex. R. App. P. 26.1 begins: “The notice of appeal must be filed within 30 days after the judgment is signed, except as follows …”

By contrast, “[j]udgment is rendered when the trial court officially announces its decision in open court or by written memorandum filed with the clerk.”  E.g., S&A Restaurant Corp. v. Leal, 892 S.W.2d 855, 857 (Tex. 1995) (per curiam).  And the above-quoted paragraph from Rule 306a concludes: “… but this rule shall not determine what constitutes rendition of a judgment or order for any other purpose.”

By contrast, entry of judgment refers to the recording of a rendered judgment in the court’s official records. See, e.g., Lone Star Cement Corp v. Fair, 467 S.W.2d 402, 405 (Tex. 1971) (“The law is settled in this state that clerical errors in the entry of a judgment, previously rendered, may be corrected after the end of the court’s term by a nunc pro tunc judgment; however, judicial errors in the previously rendered judgment may not be so corrected.” (emphasis added)).

I gratefully acknowledge the excellent insights of Ben Taylor in preparing this post!

Dallas-Fort Worth is the fourth largest metropolitan area in the United States, and it is only a matter of time until it passes Chicago to become #3. Dallas is routinely ranked among the nation’s best cities. Yet it is significantly underrepresented on the Texas Supreme Court. Hopefully, geographic diversity will play a role in the appointment of a successor to Justice Eva Guzman.

Continuing a series of Retail Services WIS Corp. v. Crossmark, Inc., a preliminary-injunction case, the Fifth Court examined how the injunction addressed electronic information:

Weekley involved rule 196.4 discovery rather than a temporary injunction and was not a trade secrets case. Appellants cite no authority mandating Weekley’s application here and we have found none. Further, the law governing mandatory injunctive relief is consistent with Weekley’s requirement that ‘trial courts should be
mindful of protecting sensitive information and utilize the least intrusive means necessary to facilitate discovery of electronic information.’  As described above, rule 683 requires an injunction order to be specific and detailed and to ‘set forth the reasons for its issuance.’ And a preliminary mandatory injunction is proper only if a mandatory order is ‘necessary’ to prevent irreparable injury or extreme hardship. Though the DTO in this case is deficient for the reasons described in our analysis above, we cannot conclude Texas law entirely precludes mandatory injunctions requiring production of digital storage devices when the applicable standards—including rule 683’s specificity and irreparable injury requirements—are met.

No. 05-20-00937-CV (May 4, 2021) (citations omitted).

This post follows up on a recent post about Retail Services WIS Corp. v. Crossmark, Inc., a preliminary-injunction case involving the alleged misuse of trade secrets. The Fifth Court identified problems with the emphasized terms in various parts of a temporary-injunction order (some of which were repeated throughout the order):

• “The Court further finds that the CROSSMARK Confidential Information and Trade Secrets and other confidential and proprietary business information of CROSSMARK and business relationships of CROSSMARK are assets belonging solely to CROSSMARK.”
• “For purposes of this Temporary Injunction, ‘Covered Clients and Customers’  means those persons or entities that CROSSMARK provided services to and that the Former Employees either had contact with, supervised employees who had contact with, or received proprietary information about within the last twenty-four (24) months period that they were employed by CROSSMARK.”
• A ban on recruiting “any persons formerly or currently employed by or associated with Crossmark.”
• “directly or indirectly . . . taking any steps to cause any current client or
  customer of CROSSMARK, including [Client X and Client Y], to divert, withdraw,
  curtail or cancel any of their business with CROSSMARK.”
• Deletion of data about “existing or prospective customers or clients of CROSSMARK, as well as ”CROSSMARKinformation” and “other digital storage devices.”

No. 05-20-00937-CV (May 4, 2021) (mem. op.).

Article VI, clause 2 of the Constitution provides: “This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.”

That principle animates the two sides of Toyota Motor Sales v. Reavis, No. 05-19-00075-CV (June 3, 2021), in which a 2-1 Fifth Court majority affirmed a $200+ million judgment in a products-liability case. Greatly simplified, the dispute between majority and dissent can be summarized with two quotes. The majority emphasizes state law and procedure:

At the heart of this case, like many product liability cases, was a battle of the experts. Plaintiffs’ experts examined physical evidence, performed tests, reviewed data, performed calculations, criticized Toyota Motor’s experts, and concluded the vehicle was defective. Toyota Motor’s experts did the same and concluded the vehicle was not defective. The jury properly exercised its prerogative to resolve this  conflicting evidence and believed the plaintiffs’ experts. This Court may not second guess the jury’s decision.

(emphasis added). The dissent, federal regulation:

“The Reavises’ theory of liability—that choosing to design a car with seatback strength far in excess of federal minimum standards and utilizing seatbelt design options permitted after decades of comprehensive federal regulation could support a conclusion that federal regulations are inadequate or that the overall design is defective as a matter of law—is unsustainable. …  I accept it as theoretically possible that every car ever marketed and sold to this point could be ‘defective’ and that their manufacturers could all be subject to exemplary damages on this basis, or, that virtually all such cars are defective for failure to employ ‘locking/cinching’ lap belts without regard to seatback rigidity, the proof should be up to the task.”

(footnote omitted, emphasis in original). This dialogue strongly echoes the “two narratives” at play in United States ex rel. Harman v. Trinity Indus., Inc., 872 F.3d 645 (5th Cir. 2017), which reversed a $600+ million judgment based on an allegedly-defective highway guardrail:

The trial in this case offers two narratives. One of a hardworking man who, angered by failures of guardrails installed across the United States — with sometimes devastating consequences — persuaded a Texas jury of a concealed cause of those failures. The other of the inventive genius of professors at Texas A&M’s Transportation Institute, who, over many years of study and testing, developed patented systems including guardrails that, while saving countless lives, cannot protect from all collisions at all angles and all speeds by all vehicles — guardrails that have been installed throughout the United States with an approval from which the government has never wavered as it reimbursed states for the installation of a device integral to the system.

The Greeks saw the all-powerful Zeus as the god of the skies; Haitian vodou, the storm-spirit Agau; and so forth throughout all the world’s cultures. Despite that tradition, the Fifth Court reversed a jury instruction that posed the following comparative-fault question:

 

 

 

 

“Though the jury here made no finding that the occurrence was proximately caused by the acts or omissions of more than one person, question number two of the charge allowed the jury to find a ‘percentage of the negligence’ attributable to ‘Weather/Road Conditions,’ which was not a person or party whose negligence was found to have been a proximate cause. This was not consistent with section 33.003(a) or rule 277.” Panameno v. Williams, No. 05-19-01496-CV (June 1, 2021) (mem. op.) (emphasis added).

 

In an 8-1 decision, the Texas Supreme Court reversed the Fifth Court’s judgment in Fifth Court’s judgment in Aerotek v. Boyd, a dispute about whether employees agreed to arbitration via their employer’s electronic system. The court observed:

“It may be that the use of electronic contracts already exceeds the use of paper contracts or that it will soon. The [Texas Uniform Electronic Transactions Act] does not limit the ways in which electronic contracts may be proved valid, but it specifically states that proof of the efficacy of the security procedures used in generating a contract can prove that an electronic signature is attributable to an alleged signatory. An opposing party may, of course, offer evidence that security procedures lack integrity or effectiveness and therefore cannot reliably be used to connect a computer record to a particular person. But that attribution cannot be cast into doubt merely by denying the result that reliable procedures generate.”

(footnote omitted). A dissent would have evaluated the record differently. No. 20-0290 (Tex. May 28, 2021).