I’m on a summer vacation road trip, blog posts will resume upon my return next week! I hope you are having an enjoyable summer with quality air conditioning. I also recommend that you see “Oppenheimer” — with or without seeing “Barbie” — as it offers some powerful insights about civil procedure run amok in Oppenheimer’s security-clearance hearings.

After a well-publicized debacle in New York involving “research” in which ChatGPT invented nonexistent cases, the phenomenon of “hallucinatory” generative AI has arrived in Texas. The Waco Court of Appeals recently faulted a lawyer for providing a brief with three nonexistent cases (and, like the New York counsel, not responding when the problem was pointed out by the appellee). While there is nothing wrong with using ChatGPT to help with legal analysis and writing, uncritical acceptance of purported caselaw found “on the Internet” is always risky.

A good example of when direct-benefits estoppel will not support a motion to compel arbitration appears in Strucsure Home Warranty LLC v. 2RH Bros. Props., LLC, where:

“2RH’s third-party petition indicates that its breach of contract claim against StrucSure is based on StrucSure’s alleged breach to provide the Limited Warranty, not a breach of any terms of the Limited Warranty itself.”

No. 05-22-01214-CV (July 17, 2023) (mem. op.).

The affidavit-counteraffidavit procedure in Tex. Civ. Prac. & Rem. Code § 18.001 streamlines the handling of evidence about whether services are reasonable and necessary. That said, the process can generate controversy, as it did in Ortiz v. Nelaplatla, where the defendant’s counteraffidavits in a personal-injury case only addressed some of the matters in the plaintiff’s affidavits.

The panel majority summarized: “Nelapatla filed counteraffidavits that satisfied the requirements of section 18.001 for the purpose of providing notice to Ortiz of the nature and basic issues in controversy so that Ortiz would have ‘sufficient information to enable [her] to prepare a defense or a response.’ Ortiz did not challenge the counteraffidavits. Under the circumstances presented, we conclude the trial court did not abuse its discretion in sustaining Nelapatla’s objections to admission of Ortiz’s section 18.001 affidavits and Nelapatla’s counteraffidavits as proof of the reasonableness and necessity of Ortiz’s medical services and charges.” (citation omitted).

A dissent expressed concern about the majority’s fidelity to the statutory text and the practical consequences of its opinion. No. 05-22-00531-CV (July 18, 2023) (mem. op.).

A nightclub shooting led to litigation. The trial court granted the defendants’ motion to dismiss and the Fifth Court reversed in Mendoza v. Milkshake, LLC, holding, inter alia:

• As to a dispute about whether the proper parties had been sued: “We reject appellees’ assertion that Mendoza’s claims against them can be dismissed due to the verified denial. Assuming the verified denial conclusively proved appellees were improper parties, it cannot be included in the Rule 91a analysis. The trial court was required to decide the motion based solely on the pleading of the cause of action.”
• Because “[a] motion to dismiss must state specifically the reasons the cause of action has no basis in law or in fact,” the court declined to consider arguments for dismissal made for the first time on appeal.

No. 05-22-01018-CV (July 11, 2023) (mem. op.)

In a case about allegedly defective ceiling work, the defendants complained about double recovery, arguing that the judgment for the plaintiffs let them “receive [both] the
smooth ceiling bargained for and a refund for that work.”

The Fifth Court disagreed. Accepting the legal principle that “[u]nder any of the theories of liability involved, the value of any goods and services provided by [defendants] factors into the measure of damages,” the defendants’ argument had a factual problem: “[T]he evidence at trial supports a finding that [defendants’] work provided no value to the Heflins. That evidence included the testimony of the Heflins and photographs showing the shoddy and incomplete work and additional damage caused by that work.”

Hizar v. Heflin, No. 05-21-0036-CV (July 10, 2023) (mem. op.).

The Fifth Court affirmed a severe sanction in Hizar v. Heflin. An issue was whether this admonition in an order on a motion to compel was a “lesser sanction” as understood byt by the case law about death-penalty sanctions:

“If Defendant fails to produce all responsive documents by Monday, July 12, 2021, Defendant’s pleadings will be struck.”

Aligning with several other appellate districts that have reached similar conclusions, the Court held that this language qualified as an unequivocal warning in the context of a death-penalty sanction. No. 05-21-00936-CV (July 10, 2023).

While the Supreme Court issued several opinions in Mallory v. Norfolk Southern Railway, No. 21–1168 (U.S. June 27, 2023), the part joined by a five-justice majority is straightforward. A condition for registering to do business in Pennsylvania is consent to be sued there, and the Court held that condition did not raise a due-process concern, reaffirming the validity of much older precedent on the point. Justice Jackson’s concurrence helpfully distinguishes the concepts of waiver and “minimum contacts.” No. 21-1168 (U.S. June 27, 2023).

The issue in Myers v. Raoger Corp. d/b/a Cadot Restaurant was whether Khan, a patron of Cadot Restaurant, had too much to drink while he was there. Specifically, the dram shop statute requires proof that “at the time the provision occurred it was apparent to the provider that the individual … was obviously intoxicated to the extent that he presented a clear danger to himself and others ….”

The Fifth Court reversed a summary judgment in favor of the defendant, finding a genuine issue of material fact.

The one clear fact is that Khan had a BAC of .139 at 3:09 AM, a few hours after he left Cadot and was involved in an accident. From there, the opinion described the conflicting testimony of Khan, the arresting officer, the bartender, the restaurant owner, and a toxicology expert, and concluded that the record contained sufficient circumstantial evidence to allow inferences in the plaintiff’s favor under City of Keller.

The Court also noted a legal error in the defendant’s summary-judgment position,in that the statute “does not require evidence that the provider actually witnessed the intoxicated behavior”–only that the behavior have been objectively “visible, evident, and easily observed.” No. 05-21-00988-CV (July 5, 2023) (mem. op.).

In Gregory v. Chohan, reversing the en banc Fifth Court, the Texas Supreme Court reversed an award of mental-anguish damages:

“To guard against arbitrary outcomes and to ensure that damages awards are genuinely compensatory, the plaintiff in a wrongful death case should be required to demonstrate a rational connection, grounded in the evidence, between the injuries suffered and the dollar amount awarded.” 

No. 21-0017 (Tex. June 16, 2023).

Eagle Remodel sued Capital One for honoring several forged checks drawn on its account. The bank sought refuge in the “same wrongdoer rule,” a UCC provision based on the obligation of the bank customer to diligently review statements, and that places the burden on the bank to establish the elements of that defense.

Unfortunately for the bank, while “[t]he record contains evidence that Ruiz [Eagle’s former employee] stole the checks … the record does not show who signed or altered the checks, and it also does not establish the checks were signed or altered by the same wrongdoer.”

Put another way: “The record contains no evidence demonstrating who signed or altered the checks the evidence shows who Eagle Remodel believes stole the checks.” Eagle Remodel LLC v. Capital One Fin. Corp., No. 05-22-00206-CV (July 6, 2023) (mem. op.) (emphasis added).