In a Tarot deck, the “Magician” (right) has the power to transform. In the Fifth Court, however, the phrase “reasonable and necessary” is not a “magic word.”

In a construction-contract dispute, even though “no witness explicitly testified that the expenses incurred were reasonable and necessary,” the Court reversed a JNOV and reinstated judgment on the jury’s verdict when the evidence allowed the jury to infer that the costs incurred were reasonable and necessary. That evidence included:

• detailed invoices;
• presented by a witness with extensive relevant experience;
• with a contract-based incentive to not incur excessive expense;
• general consistency with an estimate presented by the other side.

Bosque v. Barbosa, No.05-22-00230-CV (Jan. 30, 2023) (mem. op.). (Congrats to my LPHS colleague Greg Brassfield who tried the underlying case and successfully argued this appeal!)

These events produced a triable fact issue about whether the parties renewed a lease:

• On March 1, Property Manager emails Tenant about lease renewal, noting that “rent will be increasing to $2,275/month” from the current $2,200 monthly amount.
• That same day, Tenant responds that “yes, I would like to renew the lease. I will follow up this weekend with more information.”
• On March 12, Tenant sent a lengthy email about problems with her air conditioning, claimed roughly $4000 dollars in damages as a result, and ended: “I still intend to renew the lease and this settlement offer does not constitute a counter offer or rejection to your lease renewal offer on March 1 ….”
• On March 13, Property Owners’ counsel sent a notice of termination.

The Fifth Court noted: “Under the common law, an acceptance may not change or qualify the material terms of the offer, and an attempt to do so results in a counteroffer rather than an acceptance.” Bismar v. Mitchell, No. 05-21-00104-CV (Jan. 27, 2023) (mem. op.).

Justice Emily Miskel recently published a good article in Headnotes about recent appellate opinions involving issues with virtual trial proceedings. You can read the article on page 16 of the online publication or in this screenshot.

One World Bank v. Miller presents a dispute between Miller, the buyer from a used-car dealership of a 2014 Ferrari 458 Italia (example of one, to the right), and the lender for the dealership, which sued the dealership for alleged misconduct in the sale of 27 exotic cars. As to Miller, the suit was unsuccessful, as he established himself to be a bona fide purchaser for value under UCC Article 9, and thus not subject to the lender’s security interest in the dealer’s inventory. The lender argued on appeal that the Certificate of Title Act applied because of irregularities in the transfer of title to Miller, but the Fifth Court rejected that argument, agreeing with other courts’ precedent that the Legislature had expressed a preference for the UCC controlling over the Title Act in the event of tension between them. No. 05-21-00705-CV (Jan. 20, 2023) (mem. op.)

Maersk v. Mgbeowula presented what Maersk (the shipping company) apparently considered to be a collection matter arising from a freight delivery to Nigeria, and what the defendant contended was a problem created by an agent acting without authority. When Maersk’s Texas-law contract claims encountered rough seas at trial, it sought leave to amend with a claim based on maritime law. The trial court denied that request and the court of appeals affirmed, declining to raise that ship by concluding (among other matters) that there had been no trial by consent of such a claim:

“[T]he evidence admitted at trial was submitted by Maersk in support of its claims for breach of contract and sworn account under Texas law. Because the evidence was relevant to the pleaded claims, we cannot conclude that a claim under maritime law was tried by consent. … This is particularly so in light of Mgbowula’s objection at the start of trial to the use of any exhibit to invoke maritime law. While the evidence offered by Maersk might be relevant to a cause of action under maritime law, this does not change the fact that the requested amendment asserted a new substantive matter that would have reshaped Maersk’s case.”

No. 05-21-00820-CV (Jan. 20, 2023).

A hard-fought forum dispute between two shoe businesses led to an unusual forum dispute in In re ASCIS Am. Corp.

Dueling lawsuits between ASCIS (the plaintiff in a California case) and Shoebacca (the plaintiff in a Dallas case) led to a decision by a Dallas district court to stay proceedings in deference to the California one.

ASCIS then served a subpoena on a Dallas-based attorney who had previously represented Shoebacca. Unsatisfied with the attorney’s responsiveness, ASCIS filed an ancillary proceeding in Dallas to enforce the subpoena. Shoebacca then intervened in that case, raising claims that ASCIS had already been stayed by a Dallas court in favor of their resolution in California.

The Fifth Court sided with ASCIS and granted mandamus relief to require the dismissal of the intervention. No. 05-22-00994-CV (Jan. 20, 2023) (mem. op.).

Tex. Civ. Prac. & Rem. Code § 15.002(a)(3) authorizes venue “[i]n the county of the defendant’s principal office in this state, if the defendant is not a natural person.”

Case law further says that a corporation may have more than one principal office in Texas, and that to qualify as a “principal office” location, the plaintiff must show that “the employees in the county where the lawsuit was filed (1) are ‘decision makers’ for the company, and (2) have ‘substantially equal responsibility and authority’ relative to other company officials within the state and case law.”

Logical enough, but still short on specifics. That’s why the Fifth Court’s recent opinion in Deere & Co. v. Bernal, building on an earlier Fifth Court case about this statute, is a helpful contribution. After a detailed review of the record about the responsibilities of a Dallas-based John Deere manager, the court held:

We see no meaningful distinction from the facts described in Roach that Deere’s system of routing certain parts to certain destinations preempts any higher level day-to-day decision making by the manager of the Dallas regional distribution center. Schick’s affidavit and deposition testimony, described above, identified numerous areas—other than the routing of particular parts—in which the manager of the regional distribution center is the authoritative figure in managing the regional facility and its layers and departments of employees. Schick did not identify a decision maker of higher authority in Texas who made day-to-day decisions in running the company, the employees, and the facility than the manager of the Dallas regional distribution center. 

No. 05-22-00916-CV (Jan. 17, 2023) (mem. op.).

A family-law dispute about the rights to a dog (considered personal property under the relevant Texas law) provides a good example of legal-sufficiency review:

Barlow asserts that because the AKC Canine Partners Certificate of Enrollment, the Certificate of Registry, the microchip registration, the pet profile at Petland and the Bill of Sale for the Canine show her as the “owner,” as a matter of law, she is the sole owner of the Canine. Barlow does not cite any authority directly on point here, and we have found none. We conclude that this documentary evidence is some evidence of ownership, but it is not conclusive and does not automatically preclude ownership by another.

…

Other evidence established the Canine was purchased on June 10, 2019, at Petland. Barlow was working at Petland at that time. With Barlow’s employee discount, the purchase price for the Canine was $1,100. Richardson contributed $500 towards the purchase price. While Barlow claimed Richardson gave her the $500 as a gift, which she later offered to repay, Richardson claimed she made the payment in accordance with the parties’ joint decision to purchase the Canine. The evidence showed that while the parties were in a dating relationship, they each had possession of the Canine at various times and Richardson was primarily involved in taking the Canine to the veterinarian and provided considerable financial support of same. While Barlow characterized this arrangement and Richardson’s possession as dog sitting, Richardson claimed her possession was that of a joint owner and evidence of her ownership interest. While there was conflicting evidence on the ownership of the Canine, the trial court was the final arbiter of the credibility of the witnesses, and its determination regarding ownership of the Canine is supported by the evidence.

Barlow v. Richardson, No. 05-21-00844-CV (Jan. 17, 2023) (mem. op.).

The Fifth Circuit and Texas Supreme Court both recently addressed limitations issues in commercial cases:

• Civelli v. JP Morgan Securities involved an investor’s claim that JP Morgan wrongly transferred certain shares of stock in an oil company. The Fifth Circuit declined to apply the discovery rule, stating: “Any injury incurred from the J.P. Morgan defendants’ alleged negligence in transferring the shares without plaintiffs’ consent arose at the time of the transfer. Because Civelli admits that he knew by February 2014 that they had transferred the funds, the rule of discovery does not apply.” No. 21-20618 (Jan. 11, 2023).
• Marcus & Millichap v. Triex Texas Holdings LLC was a suit against a real-estate broker about the sale of a gas station. The Texas Supreme Court held: “It is undisputed that Triex knew it was injured in December 2012. The question before us is whether the discovery rule defers accrual of Triex’s cause of action until it knew that Marcus & Millichap caused its injury. We hold that it does not.” No. 21-0913 (Jan. 13, 2023) (per curiam).

This affidavit was conclusory about the alleged misrepresentations; thus it did not avoid summary judgment in an insurance-coverage dispute:Orange Cup Drive In LLC v. Mid-Continent Casualty Co., No. 05-21-00448-CV (Jan. 6, 2023) (mem. op.).

A deadline issue, based on the interplay of Tex. R. Civ. P. 202 and the TCPA, was resolved against the timeliness of a TCPA motion in In re Petition of Oak Creek Investments:

Rule 202 ensures that the persons to be deposed have at least 15 days’ notice of the hearing, served “in accordance with Rule 21a.” See id. But the rule does not condition effective service on the inclusion of a hearing date in the petition. We conclude that appellants’ TCPA motion, filed more than 60 days after service of appellees’ Rule 202 petition, was untimely.

No. 05-22-00477-CV (Jan. 6, 2013) (mem. op.).

Now available! My (free) e-book, “Originalism Ascendant,” which builds upon recent media appearances to describe where the Constitution finds itself, for the rest of the 2020s, after the overruling of Roe v. Wade.

Topics include:

• How clear are the guidelines for state laws about abortion activity in another state?
• Will Lochner make a comeback?
• If so, what body of academic thought will provide guidance for the courts?
• What would Alexander Hamilton really think about modern economic regulation?
• Who exactly are “the people’s elected representatives” referred to by the Supreme Court in Dobbs?

The “Hitchhiker’s Guide to the Galaxy” teaches that “42” is the Ultimate Answer.  That may be true for intergalactic hitchhikers, but “683” is the Ultimate Answer for Texas temporary-injunction practice:

Here, the January Injunction states the applicants “are entitled to the relief sought” and an injunction is “necessary to restrain [Bailey and Edamame] from taking actions prejudicial to Applicants’ rights.” It does not, however, specify the facts the trial court relied on to reach those conclusions or provide any reason why the applicants are entitled to the relief sought in their application. The January Injunction does not explain why the four actions being enjoined need to be enjoined or how those actions could prejudice Applicant’s rights. The January Injunction is, therefore, conclusory. Further, the January Injunction does not specifically explain how appellees will suffer irreparable harm without the injunction and why they have no adequate remedy at law. These conclusory statements are insufficient to comply with the requirements of rule 683. 

Bailey v. Ramirez, No. 05-22-00072-CV (Dec. 30, 2022) (mem. op.) (applying, inter alia, Indep. Capital Mgmt., LLC v. Collins, 261 S.W.3d 792, 794–95 (Tex. App.—Dallas 2008, no pet.)).

The Fifth Court reviewed a commercial, “triple net” lease in Gaedeke Holdings II v. Chait & Henderson, concluding: “Under the Lease, the fixed amount Uptown paid in the first calendar year of the Lease term does not have any effect on the computation of Uptown’s “Pro Rata Share of Basic Costs” after the first calendar year, and in years two and beyond, Uptown’s “Pro Rata Share of Basic Costs” is based on Gaedeke’s Basic Costs in 2016, subject only to the 6 percent year-over year limitation on increases to Gaedeke’s controllable Basic Costs in 2016.” No. 05-20-01048-CV (Dec. 29, 2022) (mem. op.). An interesting amicus brief discusses different kinds of commercial leases.

Coming next week! My (free) e-book, “Originalism Ascendant,” which builds on recent media appearances to describe where the Constitution finds itself for the rest of the 2020s after the overruling of Roe v. Wade. A link will be available on this blog.

The Theft Liability Act allows the recovery of fees by a successful defendant; therefore, “a ‘defendant may be a prevailing party when a plaintiff nonsuits without prejudice if the trial court determines, on the defendant’s motion, that the nonsuit was taken to avoid an unfavorable ruling on the merits.” (citation and emphasis omitted).

Absent such a finding, however, when a defendant nonsuits a TTLA claim after the filing of summary-judgment motions on other claims, a trial court’s decision to not award fees is not reversible error.

In the “Department of Subtle Hints,” the Fifth Court noted that findings of fact were requested but not made, but no appellate argument had been made on that procedural point. Centurion American Custom Homes, Inc. v. Crossroads Opportunity Partners LLC, No. 05-21-00025-CV (Dec. 28, 2022) (mem. op.).