An arbitration provision was not illusory when:

“[T]he arbitration provisions apply equally to all parties. The arbitration provisions cannot be amended or terminated unilaterally by the LPs—that would require the approval of partners owning the requisite supermajority of capital interests under the partnership agreements. As previously discussed, amendments to partnership agreements may be duly adopted in accordance with the terms of the partnership agreement to which the limited partner initially agreed.”

Caprocq Core Real Estate Fund, LP v. Essa K. Alley Revocable Trust No. 2, No. 05-22-01021-CV (Oct. 25, 2024) (mem. op.).

Hyde v. GACP Fin. Co., LLC reversed a $1.7 million judgment because of a pleading-amendment problem. The Fifth Court found that the trial court erred by allowing GACP to amend its petition during trial, to argue for the first time that it sought damages as an agent on behalf of another entity, rather than its own damages. The Court said:  “Fair notice is not notice to dig deeper to determine the parties’ claims and damages,” and detailed why GACP’s second amended petition did not give adequate notice of the agency relationship it later claimed.

As a fallback, GACP argued that this challenge failed for lack of a special exception or a verified denial. The Court held that appellants were justified in relying on the second amended petition (which didn’t assert agency), and that the appellants had no reason to file a verified denial about capacity when the relevant agency claim wasn’t in the pleading in the first place. The Court concluded that the appellants timely raised the capacity issue as soon as it became apparent at trial. No. 05-23-00873-CV, Oct. 24, 2024 (mem. op.).

Despite adequate service, a default judgment nevertheless failed to withstand a restricted appeal when the pleaded cause of action didn’t match the judgment:

The Agreement as described by Struge conflicts with the terms of the Agreement attached to the petition. Because none of the alleged breaches, taken as true, actually constitute breaches of the Agreement under its plain terms, Struge’s pleadings fail to state a valid breach of contract claim and the petition cannot support a default judgment on the grounds of breach of contract.

Albanian-American Cultural Center, Inc. v. Struge Cultural Center, Inc., No. 05-23-01134-CV (Oct. 15, 2024) (mem. op.) Incidentally, the Albanian-American Cultural Center appears to be a thriving celebration of Albanian culture in the Dallas area, which I was unaware of but am certainly happy to see.

The dispute about the execution of Robert Roberson reached the Texas Supreme Court late last week, producing a stay order until lower courts can evaluate the merits of the Legislature’s last-minute subpoena to Mr. Roberson. A concurrence, joined by three Justices, mused about the separation-of-power questions at issue. Despite the obvious merits of Mr. Roberson’s case, one does wonder what future mischief may be enabled by encouragement of assertive exercise of the Legislature’s subpoena power.

The Fifth Court of Appeals has open staff attorney positions. If you or someone you might recommend for employment is interested is pursuing such an opportunity, please click the link for additional information – Full-Time Central Staff Attorney

Combs v. Crepeau involved a substantial judgment on a fiduciary-duty claim. The Fifth Court found legally insufficient damages evidence, holding as to past damages:

… there is no evidence of the value of the estate absent Michael’s fraud or breaches of fiduciary duty and no evidence from which a reasonable jury could find Diane and Lari’s combined one-half share of the estate was valued at $1,300,000.

That straightforward, high-level holding is supported by a painstaking review of many discrete components of that award. This case, and the damages arguments advanced in it, warrants study by anyone involved in document-intensive litigation about closely-held companies and family finances. No. 05-23-00088-CV (Oct. 7, 2024) (mem. op.).

In Gore v. Trans Union LLC, the Fifth Court addressed whether the Fair Credit Reporting Act preempts Texas statutes about the award of attorney’s fees to a prevailing defendant in a credit-reporting dispute.

The Court rejected this argument, noting that the FCRA does not expressly preempt the attorney’s fees provision in TBCC Section 20.08(c).  The court emphasized that the FCRA’s preemption provisions “have a narrow and targeted scope,” and Sections 1681n(c) and 1681o(b) of the FCRA, which govern attorney’s fees, are not among the provisions intended to preempt state law. No conflict arises: “That TBCC Section 20.08(c) allows attorney’s fees for the prevailing party in the absence of a finding of bad faith or harassment by the opposing party does not create an impossibility for compliance or stand as an obstacle to accomplishing Congress’s purposes in enacting the FCRA.” No. 05-23-00659-CV, Oct. 9, 2024.

In In re Peters, the Texas Supreme Court addressed an assertion of the Fifth Amendment privilege against self-incrimination in the context of civil discovery—an uncommon but critically important Constitutional limit on discovery. The case arose from a tort lawsuit against a defendant who was allegedly driving while intoxicated. Among other holdings, the Court said:

• Ongoing Criminal Proceedings: Active criminal proceedings are not required to claim the privilege. Here, the State was prosecuting Peters on the same facts underlying the civil case, which justified his assertion of the privilege.
• Waiver of Privilege: For a waiver to be valid, it must be “made voluntarily, knowingly and intelligently.” The court found that Peters’ statements to a police officer at the time of the accident did not meet this high standard for waiver, given his confused and disoriented state at the time.
• Potential for Further Incrimination: The court concluded that compelling Peters to disclose the names of the bars he visited could further incriminate him by leading to evidence that he drank more than he claimed. The court emphasized that the amount of evidence already collected against Peters is irrelevant; the witness need only show that an answer to the specific question at hand is likely to be hazardous to him.

No. 23-0611 (Tex. Oct. 4, 2024).

As part of a broader arc of cases in which the Texas Supreme Court has reversed lower-court rulings that it sees as overly technical, that Court reversed the Fifth Court in Verhalen v. Akhtar, concluding:

When a litigant demonstrates good cause to file a late response to a motion for summary judgment, the trial court must allow the filing. Johnston did not raise this argument in her briefing. We hold that when, as here, a litigant shares the response with the opposing party one day after the response deadline, files an affidavit explaining that the late filing was the result of a mere mistake, and no prejudice will result to the opposing party, the denial of that motion is an abuse of discretion.

No. 23-0885 (Tex. Oct. 4, 2024).

If you enjoyed my article in the Cornell Law Review Online earlier this year about the party-presentation principle, hopefully you will also enjoy a new article of mine in the Texas Law Review Online. Examining cases from the 2023-24 Supreme Court term, it considers whether “originalism” and modern economic theory can comfortably coexist.

Last week, the supreme court denied mandamus review, of the Fifteenth Court’s denial of emergency relief, in the Attorney General’s lawsuit against the firearms ban of the State Fair of Texas. A concurring opinion noted some oddities in the Attorney General’s litigation position, including:

1. “The State’s presentation to this Court takes no position on whether the State Fair of Texas, a private entity, has the legal authority to exclude patrons carrying handguns from the Fair.”
2. During the litigation, the Attorney General withdrew a 2016 opinion involving the Fort Worth Zoo that appeared inconsistent with its position in the State Fair case, as to which the opinion noted: “Withdrawing the Opinion is not the same thing as repudiating its analysis or explaining why it was wrong, which the State has not attempted to do in this Court.”

No. 24-0813 (Sept. 26, 2024).