The lease at issue in Apple Texas Restaurants v. Shops Dunhill Ratel, LLC, No. 05-20-01052-CV (March 25, 2022) (mem. op.), contained a “prevailing party” allowing either side to recover in a suit about the lease. The judgment included an award of “defensive” fees, and the Fifth Court concluded that that topic had fairly been placed at issue:

“[I]n addition to both parties’ repeated reliance on section 13.08 described above, Dunhill provided disclosure responses more than a year before trial describing its counsel’s expected testimony regarding defensive attorney’s fees, stating, (1) Dunhill “is entitled to damages pursuant to the Lease . . . and interest, attorneys’ fees, and costs,” and (2) its counsel “is expected to testify regarding the reasonableness and necessity of attorneys’ fees and costs related to the prosecution of Plaintiff’s claims . . . and defense against Defendant’s counterclaims.'”

No. 05-20-01052-CV (March 25, 2022) (mem. op.).

Under the most current precedent, this testimony was insufficient to prove up a contingent award of appellate attorneys fees:

“Dunhill will be required to incur additional attorney’s fees if Apple appeals the final judgment entered in this Action. In my opinion, Dunhill will likely incur at least $35,000 in reasonable and necessary attorney’s fees if Apple appeals the final judgment to the Court of Appeals. In addition, Dunhill will likely incur at least an additional $35,000 in reasonable and necessary attorney’s fees if Apple appeals the final judgment to the Texas Supreme Court and Dunhill is required to respond thereto.”

Apple Texas Restaurants v. Shops Dunhill Ratel, LLC, No. 05-20-01052-CV (March 25, 2022) (mem. op.) (applying Yowell v. Granite Operating Co., 620 S.W.3d 335 (Tex. 2020)).

Legally insufficient evidence was offered (under a clear-and-convincing proof standard, with case law that specifically addresses this evidentiary point) of an asset’s separate-property status when:

“The trial court .. questioned Moon concerning what evidence was presented at trial to show ‘that she had separate property before that got converted into the 51 percent community of Lakeside Vision.’ Moon did not cite any evidence but reiterated her contention that she would not have entered into the purchase if she had known it would be community property. The trial court noted the only evidence of tracing was Moon’s testimony regarding funds used for the purchase, but Moon and Scheef offered conflicting testimony as to the source of those funds, and Moon offered no evidence showing inception of title to the funds.”

Moon v. Scheef, No. 05-20-00105-CV (March 23, 2022) (mem. op.).

The difficulties of the COVID-19 pandemic led to reversal of a contempt finding in a family-law dispute about how to pass a child from one divorced parent to another:

“Here, the requirement that Hilburn surrender the child ‘at the school in which the child is enrolled’ became reasonably susceptible to more than one meaning when the child’s physical school closed, and the child moved to a virtual learning environment at his grandfather’s house. Although the child was enrolled at a public elementary school, he did not attend the physical school building nor was he enrolled in classes held at the school itself. Hilburn’s view that the physical location where the child is engaging in school constitutes the place of enrollment is, thus, one reasonable interpretation of the terms of the 2012 Order as applied to a virtual learning environment.”

In re Hilburn, No. 05-20-01068-CV (March 21, 2022) (mem. op.) (emphasis added).

“The Supreme Court of Texas recently determined that section 17.028 of the civil practice and remedies code provides the exclusive means for service of process on a financial institution. Section 17.028 requires service on the institution’s registered agent. The … court held that ‘service on the Secretary [of State] as a foreign corporate fiduciary’s “agent” under [Estates Code] Chapter 505 does not constitute service on a financial institution’s “registered agent” for purposes of section 17.028.'” Bank of New York Mellon v. FFGGP, Inc., No. 05-20-00384-CV (March 11, 2022) (mem. op.) (citations omitted) (applying U.S. Bank, N.A. v. Moss, No. 20-0517 (Tex. Feb. 25, 2022)).

The TCPA (still) did not apply to a discovery-related motion in Sorkin v. P.T. Atlas Mfg., notwithstanding procedural differences from prior Fifth Court precedent:

The matter before us is in a procedurally different posture than Misko in that P.T. Atlas did not bring his complaints predicated on discovery abuse in the Harris County Lawsuit where the discovery was being conducted. … Had P.T. Atlas instead filed a petition in intervention in the Harris County Lawsuit to challenge the alleged discovery abuse, our Misko opinion would support the denial of a TCPA motion to dismiss and would be consistent with the rationale in both Misko and Dow Jones. Likewise, here, while the reason for this lawsuit––abusive discovery–– arose in the context of the Harris County Lawsuit, this suit itself does not attack any of the substantive claims in the Harris County Lawsuit nor is the suit based on, or in response to, any of the substantive allegations in that suit.

No. 05-21-00657-CV (March 16, 2022) (mem. op.).

Out-of-state business dealings with effects in Texas present a continuing challenge in special-appearance proceedings. One set of such dealings resulted in reversal of the grant of a special appearance in Halperin v. Moreno:

“[T]his case involves more than the ‘the presence of property in a state.’ The deed of trust and the HELOC were between a Texas borrower (Moreno) and a lender and trustee (Waguespack) with—according to the documentation—a Texas-based mailing address. The HELOC set Texas as the place where the loan contract would be performed. The HELOC was secured by a house located in Texas, and the deed of trust is governed by Texas law. It is undisputed that the HELOC was assigned to MOR KM, which maintains its principal office and place of business in Texas. The HELOC note and the loan documentation evince a clear, specific intent by Waguespack to  purposefully direct conduct towards Texas for the benefit of her brother, a Texas resident.”

No. 05-21-00390-CV (March 9, 2022) (mem op.). See also MBM Family Trust No. 1. v. GE Oil & Gas, No. 05-20-01103-CV, 2021 WL 4236874 (Tex. App.—Dallas Sept. 17, 2021, no pet.) (mem. op.) (reaching similar conclusion about related transaction).

After a split decision from the Fifth Court declined to send a personal-injury case to arbitration, the Texas Supreme Court ruled otherwise in Baby Dolls v. Sotero: “The Family’s argument, and the court of appeals’ holding, that Hernandez and the Club never had a meeting of the minds on the contract blinks the reality that they operated under it for almost two years, week after week, before Hernandez’s tragic death. We hold that the parties formed the agreement reflected in the contract they signed.” No. 20-0782 (Tex. March 18, 2022).

In the context of service of process, and reinforcing its recent holding about the distinction between individuals and entities in Prado v. Nichols, No. 05-20-01092-CV (Feb. 25, 2022) (mem. op.), the Fifth Court rejected a judgment based on the return of service in Mesa SW Management v. BBVA USA:

“Appellee used an entity to receive the process and a natural person to serve the process; [Tex. R. Civ. P.] 105 does not allow this. Rule 105 requires one person perform both actions. Because the process was delivered to an entity but a natural person executed and returned the same, we conclude appellee failed to strictly comply with rule 105.” No. 05-20-01091-CV (Feb. 24, 2022) (mem. op.) (emphasis added).

A good reminder about a basic point of mandamus practice appears in In re Aspen Heights Constr., LLC.: “A court cannot grant mandamus relief unless the error was raised in the trial court.” No. 05-22-00093-CV (March 3, 2022) (mem. op.) (quoting In re Rowes, No. 05-14-00606-CV, 2014 WL 2452723, at *1 (Tex. App.—Dallas May 30, 2014, orig. proceeding) (mem. op.)).

The Fifth Court’s recent ERCOT opinion found that matter appropriate for en banc review when, between its original panel opinion and the present proceedings, the Texas Supreme Court had ruled on immunity issues in a way that undermined a key assumption of the panel opinion about ERCOT’s immunity. (“In the most recent of these three opinions, the supreme court stated: ‘Though we have contemplated it, we have yet to extend sovereign immunity to a purely private entity—one neither created nor chartered by the government—even when that entity performs some governmental functions.'”).

At least nominally, that analysis puts the case in the “just right” category of my Goldilocks article about intermediate-court en banc review, although the importance of the subject matter may make it a “big splash” case as well.

The ERCOT dissent suggests another, fragrance-based approach to decisions about en banc review: “To be clearly erroneous, a decision must strike us as more than just maybe or probably wrong, it must . . . strike us as wrong with the force of a five-week old, unrefrigerated dead fish.”  (citing Parts & Elec. Motors, Inc. v. Sterling Elec., Inc., 866 F.2d 228, 233 (7th Cir. 1988).

Fans of newspaper comic strips know The Phantom as “the man who cannot die.” Equally resilient is the Texas Supreme Court’s Malooly opinion that requires an appellant to address all bases for affirmance. In re Pepperstone Group Ltd. (a mandamus proceeding, so not technically a Malooly case) involved a situation in which an issue had been raised but not in the proper way to trigger Malooly:

“Although Das’s trial-court reply brief contained an objection that Pepperstone’s response was late under the local rules, he asked only that the trial court not consider Pepperstone’s response in ruling on the motion to compel. Das did not contend that his timeliness objection was an independent ‘ground’ for granting his motion to compel. Accordingly, we reject Das’s argument.”

No. 05-21-00767-CV (Feb. 28, 2022) (mem. op.).