Swearingen sued her former employer, Gillar Home Health Care, for not accommodating her pregnancy-related disability. At trial, “liability turned on whether Swearingen sent Evelyn Zapalac, the supervisor who fired her, a doctor’s note to corroborate a medical-related absence or if Swearingen instead simply failed to report for work.” The trial court allowed the defense to read Zapalac’s deposition testimony rather than calling her live. The Fifth Circuit reversed and remanded. Swearingen v. Gillar Home Health Care LP, No. 17-20600 (Jan. 11, 2019) (unpublished).

While Zapalac lived 95.5 miles from the courthouse – 4.5 miles short of the 100-mile radius that makes a witness “unavailable” under Fed. R. Civ. P. 32 – the Court observed: “The Rule does not use a modifier such as ‘about’ or ‘approximately’ or ‘around.'” The Court further noted that this rule’s requirements have been “summarized . . . as prohibiting deposition testimony unless ”live testimony from the deponent is impossible or highly impracticable.'” And this error was harmful because “the only person who testified to knowing Zapalac did not receive the doctor’s note was Zapalac herself,” making “the harm . . . especially acute because liability inged on competing credibility determinations.”  Note that a different result would obtain in state court under Tex. R. Evid. 801(e)(1) which defines as a non-hearsay statement: “A Deponent’s Statement. In a civil case, the statement was made in a deposition taken in the same proceeding. ‘Same proceeding’ is defined in Rule of Civil Procedure 203.6(b). The deponent’s unavailability as a witness is not a requirement for admissibility.”

Turnover in the Fifth Court at the start of 2019 created optimism about motions for rehearing. For panels where two Justices changed, that optimism may be misplaced in light of Tex. R. App. P. 49.3: “A motion for rehearing may be granted by a majority of the justices who participated in the decision of the case. Otherwise, it must be denied.” E.g., Apex Fin. Corp. v. Loan Care, No. 05-17-00855-CV (Jan. 11, 2019).

Two recent opinions set the current guideposts for whether an issue is tried by consent. On the one hand, a recent post described the Fifth Court’s reasoning in Avelar v. Nunez, No. 05-17-00631-CV (Nov. 20, 2018) (mem. op.), which found no consent to a particular damages element from a cross that related to earlier-pleaded damages theories. On the other, there is BB&T Co. v. Seideman, which observed:

“In this case, the Bank’s claims against L&S and the guarantors were based on the loan  documents. The Note, the statute of frauds notice, and the guaranties were  admitted into evidence without objection. Holmes, Brian, Robert, and Seideman testified about the statute of frauds notice and the lack of a written agreement modifying the terms of the Note or the guaranties. Both parties argued to the trial court about the effect of the statute of frauds and the contractual waivers on L&S’s and the guarantors’ affirmative defenses and responded to the trial court’s questions on both issues. L&S and the guarantors did not object to the evidence, the arguments, or the trial court’s questions on the ground they related to an issue not pleaded by the Bank. We therefore conclude the issue of whether the statute of frauds or the contractual waivers precluded L&S and the guarantors from relying on any of the pleaded affirmative defenses was tried by consent.”

No. 05-17-00381-CV (June 21, 2018) (mem. op.)

A new discussion of St. John Missionary Baptist Church v. Flakes, 547 S.W.3d 311, 313–18 (Tex. App.—Dallas 2018, pet. pending) (en banc), appeared in EMF Swiss Avenue LLC v. Peak’s Addition HOA: “[T]he HOA contends that EMF’s appellate issue doesn’t match the HOA’s summary judgment ground because EMF focuses on whether the Board abused its discretion, but the HOA’s summary judgment ground focused on whether the City and Board interpreted the City’s ordinances correctly. We . . . disagree with the HOA. In this case, abuse of discretion and ordinance interpretation are two sides of the same coin. The HOA’s summary judgment ground asserted that the Board abused its discretion because it misinterpreted the ordinances and thus affirmed the permit. . . . On appeal, EMF’s issue asserts that the trial court erred because the City and the Board didn’t abuse their discretion in issuing and affirming the permit, and its appellate argument presents its own ordinance interpretation.” No. 05-17-01112-CV (Dec. 28, 2018) (mem. op.)

I was on a CLE panel at the Belo today about the Texas anti-SLAPP statute with my partner Josh Sandler and Hon. Gena Slaughter of Dallas’s 191st District Court; here is a copy of our PowerPoint presentation.

“In sum, the record in this case reveals a long-standing and cordial business relationship in which Reaves considered Talley ‘a trusted advisor and friend.’ However, the ‘mere fact that one party to a relationship subjectively trusts the other does not indicate the existence of a fiduciary relationship.'” That conclusion was reinforced because the borrower signed a forbearance agreement in which she acknowledged that the relationship in question “is solely that of debtor and creditor,” among other matters. PlainsCapitalBank v. Reaves, No. 05-17-01184-CV (Dec. 17, 2018) (mem. op.) (citations omitted).

Stover v. ADM Milling Co. involved several issues about corporate veil-piercing arising from a failed real estate deal. Two points in particular are worth noting:

• Standing. “Individuals found liable when the corporate veil is pierced do not have standing to appeal the findings of liability against a corporation if the corporation does not appeal. . . .  The individual shareholders are only injured when the corporate veil is pierced and whether the corporate veil is pierced is the only issue about which they have standing to complain with respect to the findings against the corporation.”
• Legal standard. While TBOC § 21.223 does not define the key phrase “primarily for the direct benefit” – “courts have concluded that evidence showing that funds derived from the corporation’s fraudulent conduct were ‘pocketed by or diverted to’ the individual defendant is sufficient to demonstrate the requirement of a direct personal benefit. On the other hand, evidence showing that the fraudulently procured funds were used for the corporation’s financial obligations refutes the notion that the fraud was perpetrated primarily for the direct personal benefit of an individual.” (citations omitted).

No. 05-17-00778-CV (Dec. 28, 2018) (mem. op.)

Together with LPCH colleagues John Adams and Paulette Miniter, I’ve written three articles about the effect of the 2018 judicial elections in three areas:

• Removal. “Removal to Federal Court After the November 2018 Elections:
  More Incentive, But Less Receptiveness?”
• Standards of Review. The Return of Factual Sufficiency Review?
• Roles of judge and jury. Three Sentences to Study: Potential New Court of Appeals Perspectives

On January 3, the Fifth Court issued its first opinion signed by one of the newly-elected “Slate of Eight” Justices. Signed by Chief Justice Burns, it is a short memorandum opinion acknowledging the appellant’s request to dismiss the appeal, in substantially the same form that the Court has ordinarily used for such matters.

The ongoing geyser of TCPA opinions continues with Dickens v. Webster, a tortious interference case arising from a dispute among attorneys about a contingent fee agreement. It offers three points of broad interest:

• The TCPA does not require that a statement be made to the public;
• For the “commercial speech” exemption to apply, the communications at issue must relate to the defendant’s services – not the plaintiff’s; and
• On page 15 of the opinion, a “road map” for establishing a prima facie case of tortious interference; here, the alleged substitution of one contract for another, accompanied by emails supporting the plaintiff’s version of events.

No. 05-17-00423-CV (Dec. 31, 2018) (mem. op)

An important Dallas case about appropriate proof of damages under the TCPA was recently reversed by the Texas Supreme Court in S&S Emergency Training Solutions v. Elliott. That Court held: “Elliott’s pre-resignation letter and the affidavits of Vecchio and Cellio support, at minimum, rational inferences that (1) EMTS’s paramedic classes were profitable before Elliott’s disclosures of confidential information; (2) the disclosures were a cause of ACI’s terminating the consortium agreement; and (3) termination of the consortium agreement caused EMTS to lose the ability to conduct the profitable paramedic training classes. Thus, EMTS provided prima facie evidence that Elliott’s disclosures caused EMTS to lose profits. That evidence was sufficient to preclude dismissal of EMTS’s suit.” No. 17-0628 (Tex. Dec. 21, 2018) (citations omitted).

Wyde sued Francesconi for unpaid legal bills; among other defenses, she argued that Wyde did not mitigate his damages by withdrawing when payment problems first became evident. The Fifth Court, noting Wyde’s testimony that “when we take on a client, we’re loathe to make it a purely financial relationship,” and “we stuck it out . . . we aren’t just lawyers who say pay us or to hell with you,” found that he had no duty to mitigate. It reasoned: “[R]equiring or encouraging attorneys to file a motion to withdraw as soon as a client fails to pay conflicts with the aspirational goals of the Texas Lawyer’s Creed.” Wyde v. Franesconi, No. 05-17-01333-CV (Dec. 19, 2018).

In Jordan v. Klingbeil, “the trial court’s October 23 Order indicates the trial [judge] intended for its September 22 Order to constitute a final and appealable judgment that disposed of all claims.” Unfortunately for the appeal, however, the Fifth Court noted (1) “factual recitations or reasons preceding the decretal portion of a judgment form no part of the judgment itself,” and (2) “the October 23 Order cannot constitute a final judgment because it lacks the decretal language typically seen in a judgment” [such as “ordered, adjudged, and decreed,” etc.]. Because of these shortcomings with the October 23 Order, and the September 22 Order’s failure to address all causes of action or include Lehmann finality language, there was no final judgment and thus no appellate jurisdiction. No. 05-17-01228-CV (Dec. 18, 2018) (mem. op.)

Rasul v. Rasul involved an unusually exotic forum non conveniens dispute, comparing the courts of McKinney, Texas to those in Afghanistan and Pakistan. The Fifth Court affirmed dismissal of the dispute. The threshold issue – whether the courts of those two countries are “available forums” – was resolved by a decidedly un-exotic point about the role of stipulations, of broad general interest outside of this context:

A defendant may demonstrate the availability of a forum by stipulating that it would submit to personal jurisdiction there. Appellees offered their consent to jurisdiction in writing in their motion to dismiss and in their reply brief in support of that motion; they repeated the offer at the hearing on the motion to dismiss. “A ‘stipulation’ is an agreement, admission, or concession made in a judicial proceeding by the parties or their attorneys respecting some matter incident thereto.” Appellees’ concession that they would submit to jurisdiction was made by their attorneys during the judicial proceeding surrounding the motion to dismiss. It was an effective stipulation, and therefore was sufficient to establish Afghanistan and Pakistan as available forums.

When styled as a “Rule 11 Agreement,” the case law about this kind of stipulation can be surprisingly confusing; this straightforward treatment of the point helps clarify those cases. No. 05-17-00612-CV (Dec. 17, 2018) (mem. op.)

My LPCH colleague John Adams and I recently published a similar version of this article in the Texas Lawbook:

Newly elected judges on courts of appeals may soon find themselves at odds with the steadfastly conservative Texas Supreme Court. As the intermediate courts of appeals grapple with their role in shaping Texas jurisprudence, a firmly rooted – albeit faded – distinction between factual and legal sufficiency may return to a prominent place in appellate review. Specifically, courts of appeals may be able to limit state Supreme Court review by deciding cases based on factual sufficiency of the evidence.

This distinction between legal and factual sufficiency review is a unique feature of Texas practice. It stems from the Texas Constitution, which says that “[T]he decision of said courts [of appeals] shall be conclusive on all questions of fact brought before them on appeal or error.”

Thus, whether or not evidence is factually sufficient is a question for courts of appeals that the Texas Supreme Court cannot review.

Factual sufficiency is commonly understood to be a higher threshold than legal sufficiency, although in practice it can be difficult to distinguish the two standards. As the legal sufficiency standard has evolved toward an “inclusive” review of evidence (in other words, considering all evidence) – particularly after cases such as City of Keller v. Wilson – that standard has become less distinguishable from factual sufficiency.

Nonetheless, a distinction remains. Generally, under a factual sufficiency standard of review, a court of appeals must consider all evidence but may disregard evidence in support of a verdict if that evidence is against the clear weight and preponderance of other evidence. On the other hand, to determine legal sufficiency, a court must consider all evidence in a light favorable to the verdict – disregarding only evidence a reasonable jury couldn’t consider.

The effect of this distinction is that if a court of appeals determines that evidence is factually insufficient (although legally sufficient), the Texas Supreme Court is stuck with that decision, assuming the court of appeals applied the correct standard.

So the Texas Supreme Court cannot review whether the evidence is factually sufficient, but it can review whether the court of appeals conducted the appropriate analysis. This means the court of appeals must “detail the relevant evidence and clearly state why the evidence is factually insufficient.”

For decades, the distinction between factual and legal sufficiency has had minimal effect. The courts of appeals and the state Supreme Court have generally been in harmony about how to apply the standards of review. But for three decades, justices on the major courts of appeals and Texas Supreme Court were mostly elected from the same party with relatively low turnover.

But now, Texas has a fresh class of justices in many courts of appeals. For example, for the first time in 30 years, the Fifth Court of Appeals will be composed of mostly justices elected from the Democratic Party. Of course, many of these newly elected justices may have different perspectives from legacy state Supreme Court justices.

One way that new friction between the courts of appeals and the Texas Supreme Court may manifest is through a revitalized distinction between factual and legal sufficiency. In particular, courts of appeals may emphasize factual sufficiency to limit the Supreme Court’s review.

The 600Camp blog has a page of my tips about legal writing; several of those tips involve different tests to eliminate unhelpful extra words and passive voice. I recently learned of a new such test called “Anglish” that focuses on the origin of words, and seeks to use only words that entered the language before the Norman Conquest. (An example of the resulting prose, from Wikipedia: “I am of this opinion that our own tung should be written cleane and pure, unmixt and unmangeled with borowing of other tunges; wherein if we take not heed by tiim, ever borowing and never paying, she shall be fain to keep her house as bankrupt.“) I don’t recommend it for legal writing, but it is an interesting exercise that shows the remarkable ability of English to absorb words from other languages.

After a reversal and remand to the Fifth Court on whether the TCPA applied to Adams’s speech (it did), that Court examined in detail whether Starside had made a prima facie case of its claims. In particular: “As to Starside’s defamation claim based on the homepage of Adams’s blog and the statements in the March 18, 2015 email that Starside failed to comply with City ordinances when removing trees from the common area, we conclude Starside pleaded and submitted evidence establishing the ‘when, where, and what was said,’ the defamatory nature of the statements, and that the statements were defamatory per se.'” Adams v. Starside Custom Builders LLC, No. 05-15-01162-CV (Dec. 7, 2018).

The restricted appeal case of Cate v. Posey reminds:

• A difference in addresses noted in the record may not be material if the record also accurately establishes personal service; and
• A CPRC § 18.001 affidavit of reasonableness can be sufficient evidence to support the damages portion of a default judgment, but not if a referenced itemized list is not included in the record.

No. 05-17-01216-CV (Dec. 4, 2018) (mem. op.)

The Merrill Hartman Courtroom has been extensively remodeled for use by the Fifth Court, with space for potential visits by the Texas Supreme Court and Court of Criminal Appeals, and the Fifth Court has been using it for oral arguments throughout 2018. A rededication ceremony for that courtroom, with a reception to follow, will be held Wednesday, December 12, from 11:30 AM to 1:30 PM in the Hartman Courtroom. It is located on the 8th floor of the George Allen Courthouse at 600 Commerce in downtown Dallas.

Complex settlement agreements often require a series of actions to resolve both the parties’ business affairs and ongoing litigation. In Ticer v. Reed Migraine Centers, the parties’ agreement grew so detailed that the Fifth Court found it ambiguous and reversed a summary judgment. One side argued that the parties’ releases were effective on signing; the other side, that the releases were only effective upon the making the required payments. “[U]nable to harmonize the foregoing provisions to give effect to all the provisions in the Agreement,” the Court remanded. No. 05-17-00721-CV (Dec. 4, 2018) (mem. op.)

In this article, my colleague Paulette Miniter and I analyze the potential effect on federal-court removals of the recent changes to the Texas state bench (elections installing Democratic majorities on the largest intermediate appellate courts) and the Fifth Circuit (several new appointments by President Trump.

Under McConnell v. Southside ISD, 858 S.W.2d 337 (Tex. 1993), a party may specially except to a summary judgment motion that is unclear about its grounds. Lemus v. Cookscreek 255 LLC provides a detailed application of McConnell as to eight different claims in a premises liability case, and also reminds: “The excepting party must obtain a ruling on the special exception to preserve the issue for appeal.” No. 05-17-01085-CV (Nov. 30, 2018) (mem. op.)

A union won a lawsuit about DART’s handling of employee grievances; the Fifth Court largely affirmed but reversed an award of damages for harm to reputation. Applying principles from lost-profits cases, the Court observed: “Day provided no factual support for his opinion that an additional twenty percent of DART’s employees would have joined ATU 1338 if it had been more successful in obtaining hearings before the Trial Board, did not identify any DART employees who would have joined ATU 1338 if it had more success in obtaining hearings before the Trial Board, and made no attempt to trace any damages specifically to DART’s or Johnson’s actions relating to the March 3rd grievance.” DART v. Amalgamated Transit Union, No. 05-17-01051-CV (Nov. 27, 2018).

In the course of rejecting the plaintiff’s claim of an attorney-client relationship with the defendant, the Fifth Court noted: ‘[W]e are mindful that three Strasburger billing entries from October 6, 2009, October 14, 2009, and November 2, 2009 referred to TSI as “client” and “clients.” However, the remaining billing entries from October 6, 2009 to December 15, 2009 that TSI submitted in response to Strasburger’s summary judgment refer to “Target Strike,” “Target Strike case,” or the “Target Strike matter.” Such passing references to “client” under the facts of this case do not raise an issue of fact about whether there was an intent to create an attorney-client relationship.’ Target Strike Inc. v. Strasburger & Price LLP, No. 05-18-00434-CV (Nov. 19, 2018).

The Fifth Court reviewed one of “the seemingly endless variations of forum-selection clauses” in Target Strike Inc. v. Strasburger & Price LLP:

“This Contract shall be interpreted, construed, and governed by the laws of the State of Texas. The parties hereby submit to the jurisdiction of courts located in, and venue is hereby stipulated in, Bexar County, Texas.”

On the one hand, “[c]lauses in which parties merely ‘consent’ or ‘submit’ to jurisdiction of a particular forum, without further language indicating the parties’ intent to make jurisdiction exclusive, are permissive.” But on the other, while few cases involve “stipulations” as to venue, the general definition “indicate[s] that when a party stipulates to something,it is an express demand of a specified and essential condition of the contract.” As a result, this clause was mandatory. No. 05-18-00434-CV (Nov. 19, 2018) (mem. op.)

Nunez successfully sued Avelar for personal injuries, arising from a fall while installing a new window in a home owned by Avelar. The Fifth Court affirmed except as to damages for disfigurement, which Nunez had not pleaded for, but which the trial court found had been tried by consent. Specifically, the Court found that this examination did not establish trial by consent:

Q. What parts of your body were in pain?

A. In the arm.

Q. Do you also have a scar from the operation to your arm today?

A. Yes, of course.

Q. Can you show the Court the scarring of the arm?

A. It’s right here (indicating).

The Court: On the inside of the elbow? Can you see?

Defense counsel: I can see it, Your Honor, thank you.

Q. How long did it take for the elbow and the hand, the bones anyway, to heal?

A. More than half a year.

Q. Okay. And were you in pain during that time period?

A. Yes, of course.

The court saw this testimony as also relevant to elements of damage which had been pleaded; thus: “. This is, at best, a doubtful case for applying trial by consent, and trial by consent should not be inferred in doubtful cases.” Avelar v. Nunez, No. 05-17-00631-CV (Nov. 20, 2018) (mem. op.)

As you gather with friends and family this holiday week, remember to be thankful for the rule of law in the State of Texas and the United States!

In Mancilla v. TaxFree Shopping Ltd.,”appellants argue[d] the TUTSA claim was substantially altered by (1) changing the scope of trade secrets allegedly misappropriated from client and customer lists and proprietary information and processes to “specific client contacts” developed while Mancilla was employed by TFS in a fiduciary position and (2) changing the alleged means of appropriation from theft to ‘connecting with contacts on social media through LinkedIn and breach of fiduciary duty.'” The Fifth Court, however, concluded that after “[h]aving reviewed the original and second amended petitions, we cannot agree these are substantive alterations that reformulated the TUTSA claim.” No. 05-18-00136-CV (Nov. 16, 2018) (mem. op.)

Microlaser Therapy Corp. v. White involved a defense summary judgment on limitations, in response to a suit on a guaranty, based upon a payment schedule (right). The Fifth Court found that the first few entries were not only not conclusive evidence of when the claim arose, but no evidence on that point. Accordingly, it reversed and rendered judgment for the plaintiff. No. 05-17-00761-CV (Nov. 16, 2018) (mem. op.)

The plaintiff in a legal malpractice cause sought leave to amend to add a new party, the trial court denied leave, and the Fifth Court affirmed, finding a failure to show good cause: “[A]lthough James stated in that motion that ‘[Eberstein’s] involvement and participation in the fraud has been discovered and confirmed throughout Plaintiff’s utilization of the discovery process during the oral deposition of Ms. Witherite, which only occurred on February 22, 2017,’ James did not cite or describe any evidence to support that assertion, and (2) James did not describe or address how that assertion is consistent with her testimony in her January 25, 2017 deposition that Eberstein met with her and counseled her before mediation in the Lawsuit.” James v. Witherite, No. 05-17-00799-CV (Nov. 9, 2018) (mem. op.)

“Questions of jurisdiction are questions of power,” said Supreme Court Justice Benjamin Curtis. That observation – both simple and profound – provides a useful lens to examine the sweeping changes in the Texas intermediate courts of appeal after the 2018 election. This post considers how three sentences from recent opinions by the Dallas Court of Appeals involve questions of power that may be addressed in new ways by the newly-constituted Texas appellate courts.

THREE SENTENCES

Judge and jury. The 2018 case of AVPM Corp. v. Childers involved a substantial jury verdict against a landlord, arising from a sexual assault on a tenant. The Fifth Court concluded that under the relevant Texas Supreme Court opinion, no evidence supported the verdict as to proximate causation, noting that “appellees presented no evidence at trial of any recent criminal conduct in the area of [the apartment] similar to the incident in question.” The Court agreed with the plaintiffs’ contention that “foreseeability is uniquely a fact issue for the jury and should only be set aside under the most exceptional circumstances,” but reasoned that “the analysis of foreseeability is the same for both duty and proximate cause.” Duty, of course, is generally seen as a question of law for the court rather than a jury issue. The division of power between judge and jury, as reflected in the above sentence, will likely be a topic of discussion in 2019 opinions.

Court and counsel. B.C. v. Steak & Shake, on remand from the Texas Supreme Court in 2017, turned in part on whether the trial court could consider a late-filed summary judgment response in a case about an alleged workplace assault. A 2-1 majority affirmed the trial court’s summary judgment, concluding: “We recognize, as other courts have, the apparent injustice in allowing a no-evidence summary judgment to stand when ‘the record discloses not only that evidence exists to support the challenged element, but that the evidence was before the trial court.’ But both the language of the summary judgment rule, and the impropriety of asking the trial court to take on the nonmovant’s burden of identifying fact issues, dictates the result.”

The dissent would have ruled otherwise, noting that “the movant’s factual summary retold, cited, and provided the nonmovant’s testimony contradicting the motion’s assertion that there was no such evidence and further directly provided the responsive evidence.” This kind of waiver question – close even among three Justices from the same political party – may be seen differently by a new panel. And while on its face such an issue may seem hypertechnical, its resolution goes to the very definition of what issues a court should consider in the exercise of its judicial duties.

Appeals court and trial court. In re: LaFredo arose from a divorce proceeding involving a same-sex couple; one of the parties sought a writ of mandamus on the ground that the marriage had ended before the U.S. Supreme Court’s opinion on the constitutionality of such marriages. The Fifth Court denied the petition in 2018, in part because: “ “The legal question of whether Obergefell is retroactive has not been determined by the Supreme Court of Texas or by the U.S. Supreme Court. The trial court, therefore, did not fail to correctly analyze or apply the law or reach an arbitrary and unreasonable decision when it determined that relator had not established as a matter of law that no legal marriage existed . . . .”

Texas courts have traditionally held that a trial court lacks discretion to apply the law incorrectly. That differs from the federal practice, where the Fifth Circuit has refused to grant a writ of mandamus when a legal issue is either disputed or not settled by controlling authority and is thus not “clear.” This sentence thus suggests a willingness, even by members of an all-Republican court, to narrow this aspect of the test for when mandamus relief is appropriate. It remains to be seen whether the new court of appeals majorities will build on that suggestion – and if they do, whether the Texas Supreme Court will agree. However addressed, this seemingly-technical aspect of mandamus aspect could have a significant effect on the division of power between trial and appellate courts.

CONCLUSION

These three sentences illustrate appellate issues that seem routine and technical. They each implicate, however, basic questions about the nature and extent of judicial power. The approaches to such issues in the years ahead will be fascinating to observe and important to study.

[A version of this article ran in the Texas Lawbook in November 2018.]

AMX brought an arbitration against an architect; the architect moved to dismiss because AMX did not obtain a certificate of merit, and when that motion was unsuccessful sought appellate review. The Fifth Court, noting that this was an issue of first impression, concluded that “the right to interlocutory appeal granted by section 150.002 does not apply to an order rendered by an arbitration panel, and the Texas Arbitration Act (TAA) does not provide a means for judicial review of such an order . . . .” Accordingly, it vacated the trial court’s order of dismissal as void and dismissed the appeal for lack of jurisdiction. SM Architects v. AMX Veteran Specialty Services, 05-17-01064-CV (Nov. 9, 2018).

The eight new Justices bring a wide range of legal experience to the Fifth Court, from the trial bench, criminal law on the prosecution and defense sides, and a variety of civil practices:

1. Chief Justice, Hon. Robert Burns, presently judge of Criminal District Court 1 in Dallas County;
2. Place 2, Dallas attorney Robbie Partida-Kipness, a principal in the Kipness Law Firm;
3. Place 5, Dallas attorney Erin Nowell, a law partner of my former classmate Jeff Simon at Simon Greenstone & Panatier;
4. Place 9, Dallas attorney Bill Pedersen, a solo with a criminal and civil law practice;
5. Place 10, Dallas attorney Amanda Reichek, board-certified in labor and employment law;
6. Place 11, Dallas/Rockwall attorney Cory Carlyle, who has particular expertise in criminal appeals;
7. Place 12, Hon. Ken Molberg, presently judge of the 95th Civil District Court in Dallas County, whose campaign website aptly describes the Fifth Court as “the most important court you’ve never heard of“; and
8. Place 13, Dallas attorney Leslie Lester Osborne, whose background is in civil litigation.

The Fifth Court has not changed gradually; its history since its 1893 founding turns on  a handful of significant changes in jurisdiction and size, most notably its expansion from six to twelve judges in 1981. One of those history-changing moments came yesterday, when voters elected eight new Justices, including a new Chief Justice. All of those new Justices are Democrats, elected to a court that has been all-Republican for many years, and creating a new Democratic majority on that Court. Every best wish to each of these new Justices as they now play their part in the history of the Fifth Court. (The Dallas Morning News provides an excellent, updated reference about these and other election returns that are not widely covered by other media.)

A feature of Texas procedure is a litgant’s right to nonsuit: “The right to nonsuit is absolute, and a plaintiff’s right to a nonsuit exists from the moment a written motion is filed or an oral motion is made in open court, unless the defendant has, prior to that time, sought affirmative relief.” Central Refining LLC v. Calderon, No. 05-17-01372-CV (Nov. 5, 2018) (mem. op.) That case offers a classical illustration of what that principle can mean in practice:

• Appellees filed a no-evidence motion for summary judgment. The motion was set for hearing on August 18, 2017.
• On August 17, 2017, appellant filed a motion to nonsuit its claims without prejudice.
• The trial court did not rule on the motion prior to the hearing. Instead, the trial court granted appellees’ no-evidence motion for summary judgment on August 17, 2017 without a hearing.

The summary judgment order was an error: “Because the case was moot at that time, the trial court could not subsequently render a summary judgment.”

This sequence of events led to a timely appeal, if barely:

• Trial court entered judgment on July 19, 2017;
• Appellant timely filed a motion for new trial on August 18, 2017, making the notice of appeal due by October 17;
• Appellant filed a notice of appeal on November 1, 15 days late but within the TRAP 26.3 “grace period”;
• Appellant filed a TRAP 26.3(b) motion to extend the deadline on November 3.

The Fifth Court reasoned that the filing of the notice fell within a line of cases treating various filings as “implied . . . motion[s] for an extension of time,” and granted leave to file the notice. Jeanes v. Dallas County, No. 05-17-01269-CV (Oct. 31, 2018) (mem. op.)

The plaintiff in Hernandez v. Sun Crane & Hoist noted that the defendant’s Health and Safety Manual identified it as a “controlling employer” for OSHA purposes. That manual has to be read along with the relevant contract, however, which “repeatedly made clear that Capform was responsible for providing all equipment for performing the work; Capform was ‘solely responsible for the acts and omissions of its employees, agents and suppliers and for the acts and omissions of its sub-subcontractors and their employees, agents and suppliers’; and Capform accepted sole responsibility for providing a safe place to work for its employees and for the employees of its sub-subcontractors and suppliers, and for the adequacy and required use of all safety equipment,” leading to affirmance of summary judgment for the defendant. No.   05-17-00719-CV (Nov. 2, 2018) (mem. op.)

The appellant in In re Knies challenged an order about an award of attorneys’ fees in connection with a discovery matter, entered four months after the trial court’s plenary power expired. The Fifth Court found that it had no jurisdiction over this void order, reasoning: “Judicial action taken after the expiration of the court’s jurisdiction is a nullity, and any orders signed outside the court’s plenary jurisdiction are void. We have no jurisdiction to consider the merits of an appeal from a void order.” (citation omitted). (Of course, in reaching that conclusion, the Court necessarily held that the order was void, which is basically the relief appellant was requesting by a different path.) No. 06-18-00919-CV (Oct. 30, 2018) (mem. op).

The intersection between the presuit deposition procedure of Tex. R. Civ. P. 202 and a city’s sovereign immunity resulted in a victory for Rule 202 in City of Dallas v. Dallas Companion Animal Project: “DCAP pleaded sufficient facts to support a claim that employees of the City acted in their individual capacities in initiating, and disclosing information about, a criminal investigation into DCAP’s activities . . . . Accordingly, the fact the City may be immune from DCAP’s claims or any City employee who acted in the course and scope of his employment may be entitled to a dismissal of DCAP’s claims does not deprive the trial court of jurisdiction over DCAP’s rule 202 petition.”  No. 05-18-00453-CV (Oct. 26, 2018). (Procedurally, the opinion reminds in footnote 8 that the best practice is to actually offer the verified Rule 202 petition and any supporting materials into evidence.)

The appellant in CBRE, Inc. v. Turner sought to avoid arbitration based on a long line of Texas authority about “illusory” arbitration clauses, see, e.g., In re: Halliburton Co., 80 S.W.3d 566 (Tex. 2002). This clause, however, “unlike the employment agreements in other cases . . . did not give CBRE the right to modify the employment agreement unilaterally or the right to terminate the arbitration policy without terminating the employment agreement,” and thus was not illusory. No. 05-18-00404-CV (Oct. 22, 2018).

The Fifth Court celebrated its Quasquicentennial Anniversary – yes, that’s a thing, it means “125th” – at Belo yesterday. To the right is a remarkable picture of current and former Justices, as well as Chief Justice Hecht. The materials included this informative history of the court running back to its establishment in 1893.

A motion for new trial about a default judgment based on the three Craddock factors often spends most of its time on the first (mistake or accident) and second (meritorious defense) factors. But Craddock has three factors, and the third factor is both straightforward to satisfy and problematic if overlooked:

“To meet the third element of Craddock, all Thompson had to do was allege in her motion for new trial that granting a new trial would not injure appellee. She could have met this requirement by offering in the motion for new trial to pay appellee’s attorney’s fees and expenses for obtaining the judgment. Had she done so, the burden of showing harm would have shifted to appellee to show injury. In this case, neither the motion to reinstate nor the motion for new trial asserted that granting a new trial would not injure appellee. Nor did the motions offer to pay appellee’s attorney’s fees and expenses for obtaining the judgment.”

Thompson v. Dallas City Attorney’s Office, No. 05-17-00847-CV (Oct. 18, 2018) (mem. op.)

Today’s Appellate CLE presentation about advocacy tips and key SCOTX cases had more sitting Justices in attendance than most appellate courts have members; it was presented by Justices Lang, Lang, Francis, Lang-Miers, Evans, Stoddart, and Boatright, with Justices Myers, Schenck, and Whitehill in attendance (as well as retired Justice Morris, and numerous staff attorneys from the Fifth Court). Here is a copy of the handout; among many items discussed:

• Citation – Who knew? The new Green Book for Texas case citations has eliminated the need to say “Tex. Civ. App.” for older intermediate-court opinions, standardizing all such citations with “Tex. App.”
• Don’t Get Seimed. Seim v. Allstate Texas Lloyds, 551 S.W.3d 161 (Tex. 2018), in clarifying the distinction between objections of “form” and those of “substance” in summary judgment practice, may have affected other lines of authority about specific types of common objections – beyond those expressly discussed in the opinion.

The relator in In re Tunad Enterprises challenged a sanction; the Fifth Court found presentment problems with two key arguments:

• as to whether the required pretrial payment will substantially harm the relator and have a preclusive effect on his ability to continue to prosecute the case – a colorable argument, in the abstract – “Relator did not make this argument in the trial court and presented no evidence of the alleged harm”; and
• as to an issue with the trial court’s subject matter jurisdiction that was pending in a Rule 91 motion, “it is premature to seek a writ of mandamus without the trial court first ruling on the very matters upon which relief is sought.”

No. 05-18-01157-CV (Oct. 15, 2018) (mem. op.)

A common claim in mortgage-foreclosure litigation is that, during negotiations between the servicer/lender and the borrower, the lender abandons the acceleration of the underlying loan obligation. The issue is often litigated because of its effect on limitations –  abandonment means that the foreclosure process can begin anew; otherwise, the limitations clock runs from the initial acceleration. The 2008 financial crisis produced a lengthy series of Fifth Circuit cases on the issue, as well as a large body of state case law, the substantial majority of which found abandonment and thus no limitations bar to foreclosure. Pitts v. Bank of New York is to the contrary, observing:

“But the statements and notices contained no language similar to that in [Boren v. U.S. Nat’l Bank, 807 F.3d 99 (5th Cir. 2015)],  and the cases following Boren stating that if Castle Mortgage did not pay the amount demanded, then the loan would be accelerated. Language stating that the loan would be accelerated is inconsistent with an earlier notice of acceleration and clearly establishes the noteholder’s abandonment of the earlier acceleration because, if the noteholder intended to rely on the earlier notice of acceleration, it would not state that acceleration could occur in the future. Without that language, the monthly statements and delinquency notices in this case lack one of the two bases for the Fifth Circuit’s conclusion in Boren that the notices to the borrower conclusively established the noteholder’s abandonment of an earlier acceleration.”

No. 05-17-00859-CV (Oct. 12, 2018).

Dallas appellate practitioners – or anyone interested in the Fifth Court – should put these great events on their calendar for this month:

• Awesome CLE: “Panel Discussion with the Justices: Recent Cases Every Practitioner Should Know About and Tips for Practicing Before the Fifth District Court of Appeals at Dallas,” featuring Justices Lang, Francis, Lang-Miers, Evans, Stoddart, and Boatright. October 18, 2018, noon, at Belo.
• 125th Anniversary:  Celebration of the 125th Anniversary of the Fifth Court, October 22, 2018, 3:00-5:30, at Belo. Please R.S.V.P. to Angelica Aguilar, angelica.aguilar@5th.txcourts.gov. (1893 was a busy year for court-creation; not only did the Legislature create the Fourth and Fifth Courts, but Congress created the modern version  of the U.S. Court of Appeals for the D.C. Circuit).

In Kiewit Offshore v. Dresser-Rand, the Fifth Circuit affirmed a summary judgment for the plaintiff in a large construction  matter; as the final point addressed, the Court observed: “Dresser-Rand contends, for the first time on appeal, that Kiewit submitted insufficient, conclusory summaries of the work reflected in Invoices DR-04b, 05, and 06, preventing the district court from verifying the total amount of damages Kiewit claimed. Dresser-Rand failed to raise this argument below, and we therefore decline to consider it here.” The Court also noted that “it was undisputed that the invoices accurately reflected actual costs incurred . . . for work performed and accepted . . . .” It is a fair question whether the same result would obtain under Texas state practice, which among other matters distinguishes between “substantive” and “form” objections to summary judgment affidavits – “form” issues requiring objection, but not substantive ones. See Seim v. Allstate Texas Lloyds, No. 17-0488, 2018 WL 3189568, at *3 (Tex. June 29, 2018) (per curiam).

After a Fifth Court panel reversed a plaintiff’s judgment in a premises liability case, the plaintiff’s counsel filed a motion to recuse based on campaign contributions received by two of the Justices on the panel. That motion led to an uncommon en banc opinion by the Fifth Court, which found that the motion was untimely (as it was made after receiving an adverse ruling) and lacked merit:

“Whether favored by judges or not, Texas selects its judges by popular election and requires that they finance this process. It has done so for more than a century. Recognizing this reality, Texas courts have spoken definitively and clearly with respect to the effect of campaign contributions on recusal. The mere receipt of campaign funds, in and of itself, without an indication of communication or coordination of the handling of a case, is not a basis for recusal.”

The Court then referred the plaintiff’s counsel to the State Bar for potential disciplinary action, noting that had he “ended his motion with the complaint regarding the mere receipt of campaign contributions by two justices on the panel deciding the appeal, we would deny the motion without further comment,” but instead “he has taken his disappointment with the outcome of this case to an inappropriate level by attacking the integrity of this Court . . . .” AVPM Corp. v. Childers, No. 05-17-00372-CV (revised Oct. 9, 2018) (en banc).

Relators superseded a judgment and sought mandamus relief against certain trial court proceedings. The Fifth Court dismissed the petition, observing: “Here, relators did not ask the trial court to dissolve the garnishments or stay the hearing on the motion for sanctions and application for turnover order. The trial court’s ‘Writ of Supersedeas’ provided relators with all of the relief they requested below.” In re: Raley, No. 05-18-01119-CV (Oct. 2, 2018) (mem. op.)

Mark your calendars – the 125th Anniversary (!!!) of the Fifth Court will be celebrated soon –

• Monday, October 22, 2018
• 3:00 p.m. – 5:30 p.m.
• The Pavilion Ballroom at the Belo Mansion, downtown Dallas

Please R.S.V.P. to Angelica Aguilar by October 10th, angelica.aguilar@5th.txcourts.gov

The party opposing arbitration in Camp v. Potts pointed to a year-long delay in moving to compel arbitration, during which the underlying matter was set for trial and required travel and expense to be available during that setting. Unfortunately, as to other parts of the framework in Perry Homes v. Cull, 258 S.W.3d 580 (Tex. 2008), “[t]he record . . . contains no evidence the trial preparation would not be useful in arbitrating their claims as well,” and the parties “have not argued, and we see no evidence in the record, that the delay caused any harm caused to their legal position.” Accordingly, the Fifth Court reversed the denial of the motion to compel arbitration. No. 05-18-00149-CV (Oct. 1, 2018) (mem. op.)

The mandamus petition in In re Lafredo, a divorce proceeding involving a same-sex marriage, addressed whether Obergefell v. Hodges should apply retroactively. As to the requirement of a clear abuse of discretion, in addition to noting that “the existence of an informal or common law marriage is a question of fact to be resolved by the fact finder,” the Fifth Court noted: “The  legal question of whether Obergefell is retroactive has not been determined by the Supreme Court of Texas or by the U.S. Supreme Court. The trial court, therefore, did not fail to correctly analyze or apply the law or reach an arbitrary and unreasonable decision when it determined that relator had not established as a matter of law that no legal marriage existed . . . .”  No. 05-18-01034-CV (Sept. 24, 2018) (mem. op.)

In civil practice, petitions for habeas corpus are uncommon but important when they arise – usually because of a contempt finding about compliance with an injunction or other court order. In re Huddleston reminds of an important procedural requirement: “To obtain habeas relief, the relator must provide proof that he is currently being restrained.” In that case, because “[t]e record includes no proof that relator was arrested or that relator remains confined or restrained,” the petition “does not provide the Court with the proof of current restraint required by [Tex. R. App. P.] 52 and should, therefore, be denied.” No. 05-18-01110-CV (Sept. 25, 2018) (mem. op). See generally In re: Daugherty, No. 05-17-001129-CV (June 19, 2018) (mem. op.) (reviewing sufficiency of evidence to support findings of injunction violations).

In re: C.R. involved a father’s challenge to a termination order. No. 05-18-00412-CV (Sept. 21, 2018) (mem. op.) The father challenged the sufficiency of the evidence to support the order under section 161.001 of the relevant Family Code subchapter but did not address the grounds found in section 161.002(b) – the issue addressed by the Fifth Court’s recent en banc opinion in St. John Missionary Baptist Church v. Flakes, 547 S.W.3d 311 (Tex. App.–Dallas 2018, pet. filed).

As luck would have it, the C.R. panel included both Justice Evans, who wrote for the majority in Flakes, and Justice Schenck, who wrote the main dissent. The panel majority (Justice Evans, joined by Justice Lang-Miers) held: “In light of [the father’s] failure to challenge the trial court’s termination under subsections 161.002(b)(1) and (b)(2)(B), either of which fully supports the trial court’s termination order, we need not address the unchallenged findings or the grounds raised in  [the father’s] brief and affirm the trial court’s order.”

Justice Schenck’s concurrence, acknowledging Flakes as controlling, warns: “We affirm the judgment below in this case, which permanently terminates appellant’s parental rights, without regard to its merits and notwithstanding the heightened due process and due course of law concerns that arise from this fundamental liberty interest.”

It’s an election year, which leads to ballot litigation, which leads to mootness problems as election deadlines approach, in cases such as Lee v. Dallas County Democratic Party, No. 05-18-00715-CV (Sept. 20, 2018) (mem. op.)

Election cases thus offer a well-defined guideline for when a case becomes moot; in the context of those cases, “[o]nce the time to practically permit continuing judicial scrutiny (including any attendant appellate review) of the absentee ballot has expired, the case has become moot.”

That well-developed standard can be a guide in other civil cases, especially those involving a decisionmaking process such as a director election. (The deadline in an election case can be earlier depending on the facts depending on the mechanics of ballot preparation, as “an election contest is moot once it becomes ‘too late to invalidate a candidate and print new absentee ballots in time for the beginning of the casting of ballots.'”)

Historical Note: Lee reminds that the development of these principles in Texas began with Sterling v. Ferguson, 53 S.W.2d 753 (Tex. 1932), a dispute about Mariam “Ma” Ferguson’s second election as governor.

In an opinion from last year in a dispute as to whether Dallas or Ellis County was the proper venue, the Fifth Court remanded for additional proceedings. The trial court then ordered transfer to Johnson County and declined to reconsider, citing a lack of jurisdiction after the transfer. The Fifth Court found that its mandate had  not been followed, and that the expiration of the trial court’s plenary power before the filing of the petitioner’s mandamus petition “does not affect this Court’s authority to enforce its judgments.” Accordingly, it required the trial court to vacate its transfer order. In re F.A. Brown’s Construction LLC, No. 05-18-00804-CV (Sept. 18, 2018) (mem. op.)

Findings of fact and conclusions of law are often requested in cases where they are not strictly required. There may be good tactical reasons for such a request, but it will not affect the appellate deadlines unless the findings and conclusions are in fact required. “A request for findings of fact and conclusions of law will extend the time for perfecting an appeal if they are required by the rules of civil procedure or may properly be considered by the appellate court. See Tex. R. App. P. 26.1(4). . . . ). A request for findings of fact and conclusions of law following a summary judgment is not appropriate and does not extend appellate deadlines.” Bosh v. Bosh, No.  See Linwood v. NCNB Tex., 885 S.W.2d 102, 103 (Tex. 1994) (per curiam).

• “[A]lthough [a] motion for traditional summary judgment did not contain [a] section ‘expressly setting forth summary judgment grounds,’ it was sufficiently specific where it clearly pertained to [the] sole cause of action in question and set forth [a] basis on which movant should prevail.”
• “‘Courts have granted summary judgments on causes of action not specifically addressed in a movant’s motion if the movant has conclusively disproven an ultimate fact which is central to all causes of action alleged, or the unaddressed causes of action are derivative of the addressed cause of action.'”

Turner v. Nationstar Mortgage LLC, No. 05-17-01053-CV (Sept. 6, 2018) (mem. op.) (citations omitted for both of the above, which are case parentheticals in the opinion).

In 2018, the Texas Supreme Court and the Fifth Circuit have taken different approaches to an important type of “Casteel” problem, in which a jury question has several legally viable theories, some of which are not supported with adequate evidence.

Federal. After a thorough (and infrequently-seen) summary of how federal law has developed on the “Casteel problem” of commingled liability theories, the Fifth Circuit concluded in Nester v. Textron, Inc., 888 F.3d 151 (5th Cir. 2018): “We will not reverse a verdict simply because the jury might have decided on a ground that was supported by insufficient evidence.” (applying, inter alia, Griffin v. United States, 502 U.S. 46 (1991)).

State. In Benge v. Williams, 548 S.W.3d 466 (Tex. 2018), a medical-malpractice case, the Texas Supreme Court observed: “The jury question in the present case, unlike the one in Casteel, did not include multiple theories, some valid and some invalid. It inquired about a single theory: negligence. But we have twice held that when the question allows a finding of liability based on evidence that cannot support recovery, the same presumption-of-harm rule must be applied.”

(Thanks to Mark Trachtenberg for pointing out this comparison at the recent Advanced Civil Appellate Course!)

A Dallas and a Midland case both dealt with aspects of the same oil-and-gas exploration project. Predictably, after the litigation proceeded for several years, the issue of whether the Midland litigation mooted the Dallas matter reached the Fifth Court, which reviewed (among other matters) the doctrines of waiver (based on allegedly “unequivocal writings and admissions,” and also drawing on election-of-remedies principles, res judicata, and collateral estoppel. The Court found that the Dallas action could proceed; its opinion illustrates in detail the operation of these important doctrines that police the borders between pieces of litigation (although the related issue of judicial estoppel does not appear to have been in play). TRO-X LP v. Eagle Oil & Gas Co., No. 05-17-00052-CV (Aug. 31, 2018).

I commented today about the start of the Kavanaugh hearings on the morning show of Dallas’s Fox affiliate.

Having just now seen Darkest Hour, the Academy Award-winning film about Churchill confronting Britain’s terrible military situation in May of 1940, I was inspired to update the 600Camp blog page about legal writing with an essay written by Churchill as a young man called “The Scaffolding of Rhetoric.” It illustrates five simple ways to put words together to add power to the overall message they convey.

It is a black-letter principle that “strict compliance with the provisions of an option contract is required,” and accordingly, that ” acceptance of an option must be unqualified, unambiguous, and strictly in accordance with the terms of the contract.” In Levu v. Pacifco Partners LTD: “The Lease required all notices to be: (i) mailed by first class, United States Mail, postage prepaid, certified, with return receipt requested, (ii) hand delivered by courier to the intended address and signed for by recipient, or (iii) sent by email followed by a confirmatory letter as more particularly described in (i) or (ii) above. The Lease additionally required all notices to be emailed with a request to the recipient to return a read receipt. The evidence of record supports the trial  court’s unchallenged finding of fact number nine that Levu’s October 15, 2014 letter was sent only by United States certified mail, return receipt requested. Because the October 15, 2014 letter was not emailed to Pacifico as required by the Lease, the letter did not strictly comply with the Lease’s notice provisions for exercising an option to purchase the property, and was ineffectual.” No. 05-16-01167-CV (Aug. 23, 2018) (mem. op.)

In a dispute about a DTPA exemption for transactions involving “more than $100,000,” the following testimony was sufficient to establish that amount. In addition to a business-records proveup of attached records, by affidavit, the witness “testified she directly supervised PMRG property managers, including supervision of the calculation and collection of rent and other amounts due from tenants under their leases in the building; produced or supervised the production of a ‘record of account,’ attached as exhibits to her affidavit, showing rent and other amounts appellants owed to Landlord under the Lease . . . .” And “[m]oreover, [she] testified in her deposition that she and ‘accounting’ reviewed the reconciliations relating to appellants’ bills before they went out. [And she] further testified records of ‘actual invoices or bills’ were in the ‘general ledger,’ which ‘shows every expense that was billed to that property throughout the year.'” Lakepointe Pharmacy v. PM Forney MOB LP, No. 05-16-01413-CV (Aug. 14, 2018) (mem. op.)

Ferreira v. Russell presented a swearing match between the named parties about the quality of certain construction materials. The Fifth Court found no evidence of nondisclosure about the use of “surplus or repurposed” materials, and thus reversed a DTPA recover, when:

• Russell admitted that he did not ask Ferreira to use only new materials and that Ferreira did not specifically say the materials would all be new.
• When Russell was asked whether Ferreira told him he had a warehouse full of new equipment, he replied, “He said he had a warehouse with equipment.”
• As to the specific representation Ferreira made, Russell said he was told that the materials would be suitable for a commercial building and would meet code. Russell further admitted that he simply assumed the material would all be new or first class and that it would not have been used.
• Ferreira testified (without contradiction) that his company was doing the build-out for Russell because Russell could not afford any of the other companies they looked at, and thatFerreira was doing the work “for no profit.”
• According to Ferreira, both he and Russell knew that some of the materials used to build the store would be new, some would be surplus (unused materials left over from other projects), and some would be repurposed (used) so that they could keep the cost within Russell’s budget.

No. 05-16-01235-CV (Aug. 13, 2018) (mem. op.)

The vagaries of practice often test the deadlines imposed by the summary judgment rules. Jackson v. Motel 6 involved a late-filed summary judgment response, which the Fifth Court did not consider in its review of the merits. Several important and practical principles played a part in the analysis:

• A reminder that Seim v. Allstate Texas Lloyds, No. 17-0488, 2018 WL 3189568, at *3 (Tex. June 29, 2018) (per curiam), which clarified that a ruling is required to preserve an objection to the form of summary judgment evidence, applies to other objections raised in the course of summary judgment practice;
• While summary judgment papers are not technically “pleadings” under the Texas Rules, this language in the trial court’s order was sufficient to show an implicit denial of the appellant’s motion for leave to file a late response: “examined the timely pleadings filed in this matter . . . “‘; and
• Proactive steps help the record, avoiding observations such as this by the appellate court: . “Yet, Jackson failed to timely take any steps to seek a continuance of the hearing or response deadline. Instead, as she had done on two prior occasions, she waited until the eve of the hearing to seek relief from the trial court.”

No. 05-17-00487-CV (Aug. 17, 2018) (mem. op.)

Four of my LPCH partners and I were recently named to “Best Lawyers in America” for 2019!

Under the (important, if infrequently-litigated) Uniform Foreign Country Money-Judgment Recognition Act, a judgment creditor successfully domesticated a default judgment rendered by a Mexico City court in a suit on a promissory note. A complex tale about Mexican civil procedure encountered a deferential standard of review, which led to the Fifth Court affirming domestication – “conflicting evidence was presented to the trial court at the evidentiary hearing on the motion for nonrecognition,” and “there was evidence from which the trial court have determined [the judgment debtor] did know about the [Mexican] proceeding in time to defend.” Mariles v. Hector, No. 06-16-00814-CV (Aug. 6, 2018) (mem. op.)

A Tax Code provision about pollution-control exemptions has two subparts. Part 1 says: “A person seeking an exemption under this section shall provide to the chief appraiser a copy of the letter [issued by the TCEQ’s executive director about eligibility].” Part 2 says: “The chief appraiser shall accept a final determination by the executive director  . . . that the facility . . . is used wholly or partly as pollution control property.”

In Panda Sherman Power LLC v. Grayson Central Appraisal District, all parties agreed that if a person obtained a “positive use determination” from the TCEQ, that would bind the chief appraiser. Panda argued that the statute was silent about a “negative use determination,” and thus, making such a determination conclusive would create a “fallacy of the inverse,” among other statutory-interpretation problems.

The Fifth Court disagreed: “[I]f the taxpayer does not provide the chief appraiser with the letter containing a positive use determination, then the taxpayer has not met the requirement in the first sentence of paragraph [1] for entitlement to the tax exemption. The binding effect of the executive director’s negative use determination does not come from the second sentence of paragraph [1] and the application of the fallacy of the inverse.” No. 05-17-00267-CV (Aug. 7, 2018) (mem. op.)

This request for admission – “Admit or deny that Defendant’s negligence was the sole proximate cause of the incident forming the basis of this lawsuit” – did not involve an issue of fact, or the application of law to fact. It was thus improper and did not raise a fact issue to overcome a summary judgment motion. Arana v. Figueroa, No. 05-17-00368-CV (July 30, 2018) (mem. op.)

In a dispute about whether photographs were properly authenticated as summary judgment evidence, the Fifth Court summarized the current state of preservation law after a recent Texas Supreme Court opinion: “To preserve a complaint for appellate review, a party generally must raise the issue in the trial court through a timely request, objection, or motion and the trial court must rule or refuse to rule on the issue. Tex. R. App. P. 33.1(a). The supreme court has specifically noted that, if a summary judgment affidavit suffers from a defect in form, ‘that flaw must be objected to and ruled upon by the trial court for error to be preserved.’ However, if a summary judgment affidavit presents a ‘substantive defect,’ the party may complain about the defect for the first time on appeal and is not subject to the general rules of error preservation. A complete absence of authenticating evidence is a defect in substance. However, a complaint that evidence was not properly authenticated is a defect of form.” Lee v. Global Gaming LSP, No. 05-18-00427-CV (July 31, 2018) (citations omitted, quoting Seim v. Allstate Texas Lloyds, No. 17-0488 (Tex. June 29, 2018).

In a bad week for default judgments, the Fifth Court ruled for the appellant in a restricted appeal when the record showed:

• “The affidavit of [substituted] service filed in this case lacked an accompanying motion,”
• “The return of service in this case does not reference the court in which the case was filed, as is required by [Tex. R. Civ. P.] 107(b)(2),” and
• “[T]he petition and citation were not left with anyone over the age of sixteen nor were they mailed. Moreover, while the return reflects that the petition and citation were taped to the front door of the foregoing Fairview address, it does not show that this address was Campbell’s usual place of business. Nor is this missing information contained in the court’s order or elsewhere in the record.”

Campbel v. Bank of America, No. 05-17-01364-CV (Aug. 2, 2018) (mem. op.)

The trial court dismissed a bill of review proceeding for failing to state a claim and the Fifth Court reversed: “Accepting appellant’s allegations as true, together with any inference reasonably drawn therefrom, we conclude the petition alleges a wrongful act by the judge and the opposing party’s attorney that occurred outside of the adversarial proceeding and affects how the judgment was procured. The alleged wrongful act was unmixed with any fault on the part of appellant. We conclude appellant’s allegations are sufficient to meet the second and third elements of a bill of review in the face of a motion to dismiss pursuant to [Tex. R. Civ. P.] 91a.” For similar reasons, the Court concluded that the petition alleged a sufficiently serious deprivation of the movants’ rights. Thomas v. 462 Thomas Family Properties LP, No. 05-16-01161-CV (Aug. 2, 2018).

In a civil commitment action under the Sexually Violent Predator Act, the appellant argued that the State’s expert was used as an impermissible “conduit” for unflattering factual information (inter alia, “records about appellant’s training and education, employment and medical histories, two prior sexual offenses, prison file, and a copy of the statutorily required MDT (Multi-Disciplinary Team) evaluation”). The Fifth Court rejected the argument, noting that the expert “was explaining the basis for his opinion using the type of information reasonably relied on by experts in his field (citation omitted),” and that “the trial court included a limiting instruction to further restrict the jury’s use of Turner’s opinion.” In re Commitment of Barnes, No. 05-17-00939-CV (July 20, 2018) (mem. op.)

An published opinion about recoverable attorneys’ fees in a declaratory judgment action reviewed the controlling authorities, from the Texas Supreme Court and the Fifth Court, and reminded of these principles-

• “[Counsel]’s argument that her fees were ‘intertwined” was an insufficient basis for the trial court’s award. But neither should the trial court have disallowed all fees ‘simply because the services also further[ed] non-recoverable claims.'”
• “[Counsel] offered some evidence of her recoverable fees through her attorneys’ testimony and supporting documentation . . . . ‘Unsegregated attorney’s fees for the entire case are some evidence of what the segregated amount should be.'”
• Remand is an appropriate appeal remedy “for reconsideration with sufficiently detailed information for a meaningful review of the fees sought.”
• There is dispute among the Texas courts of appeal as to when a timely objection about segregation must be made. Footnote 4 of the opinion summarizes the authority on this point.

Anderton v. Green, No. 05-17-00024-CV (July 23, 2018).

Miskevitch, a store manager, alleged that 7-Eleven terminated her in violation of the Texas Labor Code in retaliation for opposing a discriminatory practice. Specifically, she alleged that in accordance with company policy, she had reported an employee’s complaint of harassment by another manager, and then shook her head in disgust at a meeting about the complaint. The Fifth Court, following precedent from San Antonio, found that because the report was made pursuant to company policy, it was done in support of the company rather than in opposition to it, and was not actionable under this statute. And the evidence showed that her head shake was in reaction to the report of harassment – not actions by the company. The Court denied 7-Eleven’s request for fees, however, observing: “Although [Miskevitch] lacked Texas authority for her position on protected activity, she  attempted to distinguish 7-Eleven’s cases and argued for an extension of federal law.” Miskevitch v. 7-Eleven, No. 05-17-00099-CV (July 25, 2018) (mem. op.)

In a win for our LPCH client, the Fifth Court denied mandamus relief from two discovery orders, relying primarily on the doctrine of laches. Reminding that “[a]lthough mandamus is not an equitable remedy, its issuance is largely controlled by equitable principles,” the Court reviewed several opinions from Dallas (and other intermediate Texas courts), and held that laches barred mandamus relief when “relators waited more than five months to seek mandamus relief” from the relevant discovery order, and offer[ed] no explanation for the delay.”  In re: Southwest Laboratories, No. 05-18-00832-CV (July 24, 2018) (mem. op.)

While applying federal and not Texas law, a useful tidbit about whether a notice of appeal is “jurisdictional” appeared during the last SCOTUS term in Hamer v. Neighborhood Housing Services: “Several Courts of Appeals, including the Court of Appeals in Hamer’s case, have tripped over our statement in Bowles [v. Russell, 551 U. S. 205, 210–213 (2007)], that “the taking of an appeal within the prescribed time is ‘mandatory and jurisdictional.’ The ‘mandatory and jurisdictional’ formulation is a characterization left over from days when we were ‘less than meticulous’ in our use of the term ‘jurisdictional.’ The statement was correct as applied in Bowles because, as the Court there explained, the time prescription at issue in Bowles was imposed by Congress. But ‘mandatory and jurisdictional’ is erroneous and confounding terminology where, as here, the relevant time prescription is absent from the U.S. Code. Because Rule 4(a)(5)(C), not § 2107, limits the length of the extension granted here, the time prescription is not jurisdictional.” No. 16-658 (Nov. 18, 2017) (citations and footnote omitted).

My LPCH colleague John Adams and I recently published “Goldilocks and the Three Outcomes: Civil En Banc Review in the Dallas Court of Appeals, 2001-18” in the Appellate Advocate, the journal of the State Bar Appellate Section. It concludes:

The “not consciously indifferent” element of the three-part Craddock test was satisfied when the defaulted party “provided an uncontroverted explanation for its failure to answer in its motion for new trial and attached supporting declaration. In the supporting declaration, Intras’s representative . . . testified that after learning of the instant lawsuit, he contacted the representative at Core 3, Christopher Bergen, to try to resolve the matter,” as follows:

During those discussions, Christopher Bergen represented to me that Core 3 would continue to work only on trying to resolve our dispute until it appeared that further negotiations were no longer productive, and at that point would give Intras reasonable notice before proceeding with any actions in the lawsuit.

Core 3 did not provide any notice to me or anyone else at Intras that Core 3 intended to proceed with the lawsuit or file any motion for default judgment.

 

The Fifth Court held that this declaration “shows neither intent nor conscious indifference. At worst, it evinces mere negligence; there is nothing to indicate that Intras intentionally chose not to answer the suit.” Intras LLC v. Core 3 Technologies LLC, No. 05-17-00832-CV (July 12, 2018) (mem. op.)

The Stantons obtained a temporary injunction against the removal of a “large elm tree” from along their property line. The Fifth Court reversed, finding that Tex. R. Civ. P. 683 was not satisfied as the order “does not state or explain the probable, imminent, and irreparable harm the Stantons will suffer absent an injunction. The trial court’s temporary injunction order simply recites the conclusory statement that the Stantons have shown that they will suffer an irreparable injury for which they have no other adequate legal remedy.” (citation omitted) The Court also questioned the Stantons’ right to sue about the tree at all, citing century-old Texas law establishing that “ownership is not shared with an adjacent property owner just because a tree grows across a boundary line. Instead, . . . this becomes an ‘invasion’ of the adjacent property owner’s right of possession.” Collins v. Mnuchin, No. 05-17-01363-CV (July 12, 2018) (mem. op.)

A detailed road map for a sustainable award of death-penalty sanctions appears in Hill v. Spracklen – “In their motion to impose death-penalty sanctions, the Spracklens catalogued Hill’s history of misconduct, including his deliberate and continuing violation of multiple court orders and his abusive and defiant behavior at his deposition. In granting the Spracklens’ request for death-penalty sanctions, the trial court [also] considered . . .  the admission of Hill’s counsel that Hill chose not to appear at the hearing. In addition, in the final judgment, the trial court found Hill’s conduct during trial provided additional support and grounds for striking Hill’s pleadings . . . At trial, Hill introduced documents he should have produced during the course of the case, but failed to do so despite having been repeatedly ordered to do so, and presented what appeared to be inconsistent forms of the contract Janet Spracklen supposedly signed.” No. 05-17-00829-CV (July 12, 2018) (mem. op.)

The Taylors argued that their medical malpractice case against UT-Southwestern was timely filed, even though they erroneously filed it against the University of Texas System, relying on the doctrine of “misidentification.” While suing the wrong party does not ordinarily toll limitations, it can “if there are two separate, but related, entities that use a similar trade name and the correct entity had notice of the suit and was not misled of disadvantaged by the mistake.” The Fifth Court concluded that “University of Texas Southwestern Medical Center” and “University of Texas System” were not sufficiently similar to invoke this doctrine; additionally, the Taylors did not establish UTSW’s knowledge of the suit or a lack of prejudice to it. The opinion also addresses, and rejects, the related doctrine of “misnomer.” UT-Southwestern v. Taylor, No. 05-17-01221-CV (July 6, 2018).

In a win for our law firm, the Fifth Court rejected a personal jurisdiction theory based on alleged misrepresentations to a Texas business by a resident of Greece.”‘Even assuming that the phone calls, [e-mails, and video conference] were sufficiently connected to the claim, a proper minimum contacts analysis looks to the defendant’s contacts with the forum state itself, not the defendant’s contacts with persons who reside there.’ In addition, we have held, alleged ‘fraudulent or negligent misrepresentations made through electronic media do not establish specific jurisdiction.’   And as the supreme court concluded with respect to a Canadian entity in Searcy and based on the special appearance record, Theofanopoulos ‘had no control over’ where the executives of MoneyGram ‘happened to be located[,]’ ‘did not desire to create an ongoing relationship with Texas, enjoy the benefits of our laws, or profit from our thriving economy.'” MoneyGram v. Theofanopoulos, No. 05-17-00798-CV (July 6, 2018) (mem. op.) (citations omitted).

The Fifth Court found a sufficient fact issue to reverse a summary judgment in 6200 GP LLC v. Multi Service Corp., in which an affiant’s testimony was found not to be conclusory when:

• his testimony about the relevant assignment was not conclusory, when his affidavit explained his roles in the businesses, his relationship to the transaction, and the business structure relevant to the transaction;
• an objection that the testimony “cite[d] no, let alone contemporaneous facts or document evidencing the alleged transactions or Prime’s intent” was not well-taken, since “[a] person may testify to a sale and assignment without providing any documentary evidence,” and the testimony as in fact supported by the witness’s understanding of “journal entries and [a] tax work sheet.”

No. 05-16-01491-CV (June 28, 2018) (mem.op.)

Courtesy of the Huffington Post, here are seven good trivia questions about the Declaration of Independence to enjoy on your July 4 holiday.

The Fullers won a judgment against the Balthazars for a fraudulent transfer, arising from an earlier state court proceeding. The Fifth Court eliminated two elements of their judgment. First, it limited their recovery to “the value of the assets the Fullers proved were fraudulently transferred,” rather than the entire amount of the previous state-court judgment. Second, it did not allow recovery for a discovery sanction levied in the original case, as the Balthazars were not parties to it, and the sanction did not come within the statutory measure of “the value of the asset transferred . . . or the amount necessary to satisfy the creditor’s claim, whichever is less.” Balthazar & Sons v. Fuller, No. 05-17-00956-CV (June 25, 2018) (mem. op.)

In a dispute about the propriety of an expert’s testimony in a medical malpractice case, the Fifth Court reminded that “the erroneous admission of evidence is harmless if it is merely cumulative,” found that “[the expert’s] testimony was not the only basis on which the jury could find that Rudman was not negligent,” and described three other witnesses who spoke to the relevant issue. As to the disputed opinion, then, ” its admission was harmless.” McPherson v. Rudman, No. 05-16-00719-CV (June 21, 2018) (mem. op.)

Skyline Commercial v. ISC Acquisition addressed several aspects of the interplay between an express contract and the doctrine of quantum meruit, including:

• A statement about the scope of a contract, made in response to a motion to transfer venue, did not conclusive resolve the viability of the quantum meruit claim because a party may not judicially admit a question of law;
• The trial court correctly used the applicable Pattern Jury Charge about quantum meruit (reminding, “a trial court should not embellish well-settled pattern jury charges with addendum”); and
• The jury properly weighed conflicting testimony about whether the defendant knew of the relevant orders – and the plaintiff’s expectation of payment for them.

No. 05-17-00028-CV (June 22, 2018) (mem. op.)

Wal-Mart v. Bishop affirmed judgment on a jury verdict against Wal-Mart arising from an in-store injury; among other issues, the Fifth Court addressed several challenges to closing argument. The discussion is practical and of broad interest to trial lawyers. The specific issues, as stated by Wal-Mart, were whether the trial court erred when it allowed plaintiff’s trial counsel “to make improper jury arguments that discussed theories of liability not submitted to the jury; characterized Walmart in a manner intended to inflame the passion of the jury; misled the jury as to the reason Walmart did not present evidence on the reasonableness and necessity of Bishop’s past medical expenses; and characterized conflicting sworn statements by Gajurel as constituting ‘perjury.'”

The third prong of the Craddock test for setting aside a default judgment – that the defendant “file the motion at a time when granting it will occasion no delay or otherwise work an injury to the plaintiff” – is commonly cited when awarding attorneys’ fees to the plaintiff. The plaintiff in In re: CGI Construction went a step further and also obtained a requirement that the defendant waive its contractual right to arbitrate. The Fifth Court conditionally granted mandamus relief, finding as a matter of law (in light of the strong policy favoring arbitration) that “the trial court may not condition the granting of a new trial and motion to set aside default judgment on waiver of contractual arbitration rights,” and that the plaintiff did not otherwise establish evidence of injury (a lost witness, etc.) if arbitration proceeded. No. 05-18-00320-CV (June 18, 2018) (mem. op.)

The Fifth Court conditionally granted mandamus relief as to the denial of a forum non conveniens motion in In re Ace American, a dispute about the denial of a workers’ compensation claim made by an Arizona resident against an Arizona employer. The claim was reviewed by a Dallas-based adjuster. The Court found that all relevant factors favored Arizona, noting in particular that:

• No authority appeared to support the claim that “the importance of the power to compel witnesses to appear at trial is overemphasized . . . live testimony of physicians, for example, is rare . . . [and] use of video depositions of witnesses obviates the need for witnesses to attend trial,” and
• While part of the alleged tort may have occurred in Texas, the weight of authority did not foreclose that other parts of the alleged tort could have occurred elsewhere – in other words, that there was no singular “place of the alleged wrong” for purposes of the “local interest / localized controversies ” factor.

No. 05-17-01032-CV (June 15, 2018) (mem. op.)

I am speaking this week at the 28th Annual Conference on State and Federal Appeals sponsored by the University of Texas School of Law; my topic is a “Fifth Circuit Update” and this is my PowerPoint.

X Extreme Construction won a $200,000 judgment in Dallas district court against three defendants. One of the defendants then sold his house, after which X Extreme  obtained a receivership over, inter alia, the sales proceeds. After more skirmishing, the Dallas court issued a writ of execution to sell the house; the purchasers filed suit in Denton County to enjoin the sale; and the Dallas court ordered the purchasers to dismiss the Denton case. The resulting standoff led to a petition for writ of mandamus, which the Dallas Court of Appeals conditionally granted in In re Marzwanian, No. 05-18-00485-CV (June 12, 2018) (mem. op.) The Court concluded that the Dallas court lacked jurisdiction over the purchasers, who were not parties to the underlying litigation, and that no statute or common law principle required litigation about the purchasers’ title to occur in the court that appointed the receiver.

A good summary of a basic principle about a jury’s damages award appeared in David Hoppenstein Family, Ltd. v. Zargaran: “The fact-finder has discretion to award damages within the range of evidence presented at trial. See Mays v. Pierce, 203 S.W.3d 564, 578 n. 20 (Tex. App.—Houston [14th Dist.] 2006, pet. denied) (court of appeals described how trial court could have arrived at damage award, but stated appellate court need not recreate the fact-finder’s calculations in order to determine whether amount of actual damages awarded was within range of evidence presented at trial); see also Howell Crude Oil Co. v. Donna Refinery Partners, Ltd., 928 S.W.2d 100, 108 (Tex. App.—Houston [14th Dist.] 1996, writ denied) (concluding damage award was not outside range of evidence presented at trial, even where it was not clear how trier of fact arrived at figure).” No. 05-16-01376-CV (June 8, 2018

The appellant, Hope Hill Investments, asserted laches against the Richardson school district’s tax-collection suit, claiming an unfair seven-year delay in filing the case. The Fifth Court rejected that defense. As to the controlling law, it reminded: “‘[I]n the absence of some element of estoppel or such extraordinary circumstances as would render inequitable the enforcement of petitioners’ right after a delay, laches will not bar a suit short of the period set forth in the limitation statute.’” (emphasis added, citations omitted). Factually: “Hope Hill claims that it made a diligent effort to locate Seeley, the original property owner, but he could not be found due to RISD’s delay in filing suit. Had the District named Seeley as a defendant, Hope Hill contends that it could have asserted a cross-claim against him. However, Hope Hill’s lost ability to seek contribution or indemnity from other parties due to RISD’s delay does not, without more, raise a claim of “estoppel” or “extraordinary circumstances.” Hope Hill Investments v. Richardson ISD, No. 05-16-01519-CV (June 5, 2018) (mem. op.)

A clean illustration of the concept of “less than a scintilla of evidence” appears in Gaytan v. DART. Gaytan won a jury verdict for $45,000 in future medical expenses resulting from an incident on a DART bus. He argued that “the jury’s award of $45,000 in future medical expenses could be supported by multiplying an annual cost of $7,000 for two emergency room visits for six and one half years” Unfortunately for Gaytan: “There was no evidence, however, to show a reasonable probability Gaytan would visit the emergency room in the future, let alone twice yearly, in connection with the injuries he sustained in 2012. The only emergency room visits he made after 2012 were as a result of other accidents.” No. 05-17-00116-CV (June 1, 2018) (mem. op.)

In Bethel v. Quilling Selander – what is now the second (here is the first) opinion to note the distinction between “issues” and “arguments” after the Fifth Court’s March 29 en banc opinion in St. John Missionary Baptist Church v. Flakes – the Court observed: “Courts may not consider issues that were not raised in the courts below, but parties are free to construct new arguments in support of issues properly before the court. Thus, to the extent Bethel’s assertion is an argument as opposed to an issue, we address it.” (emphasis in original, citation omitted). The Court was also willing to consider a defense of attorney immunity in the context of a Rule 91 motion to dismiss, notwithstanding other intermediate Texas authority that takes a narrower focus in that procedural setting. No. 05-17-00850-CV (May 30, 2018) (mem. op.)

“On the morning of April 11, the . . . bus picked up Taylor’s group, the majority of whom were senior citizens, and embarked for the casino. The accident occurred soon after the bus had merged onto the President George Bush Turnpike from State Highway 161. [The driver] and Taylor disagreed over whether to continue on the turnpike, which is a paid tollway. [The driver] crashed the bus while discussing this issue with Taylor. The bus drifted onto the shoulder, struck a crash attenuator, and then veered across the road and struck a concrete barrier, after which it rolled onto its side.” The jury found that the casino was vicariously liable for Taylor’s distraction of the driver under a number of agency theories; under the deferential standard of review for a jury’s verdict, the Fifth Court affirmed. Choctaw Nation v. Sewell, No. 05-16-01011-CV (May 29, 2018) (mem. op.)

A common issue about attorneys’ fees awards in commercial cases involves “allocation” between activity for which fees are recoverable (speaking generally, contract claims), and those for which they are not (again generally, related business tort claims.  A variant of that issue appeared in Anderton v. City of Cedar Hill, in which the City recovered attorneys’ fees in a declaratory judgment dispute with property owners about permissible land use. Unfortunately for the City, the fee award proved to have a weak connection to the four pieces of property at issue in the litigation:

• as to “Lot 4,” while the City argued that its use was a main objective of the litigation, the parties’ pleadings did not in fact make a claim about it, and the landowners voluntarily ceased to occupy it at some point during the litigation;
• as to “Lot 5,” the parties’ claims were mooted by zoning amendments that came after the majority of the fees incurred about it;
• as to “Lot 6,” while “[t]he City appears to have accomplished some, although not all, of its objectives,” “the [property owners] appear to have been largely successful in defending their use of” the lot, if not their construction on it;
• and as to “Lot 7,” the parties largely agreed upon the resolution of their issues.

Accordingly, after examining “the parties’ claims, objectives, and outcomes” about the lots, the Fifth Court concluded that a $166,000 fee award under the declaratory judgment statute was not “equitable or just.” No. 05-17-00138-CV (May 25, 2018).

While 600Commerce does not ordinarily cover the Texas Supreme Court, the opinion in Lujan v. Navistar is of unusually broad interest to civil litigators. Navistar contended that Lujan made inconsistent statements about the ownership of a group of trucks, and that as a result, Lujan’s affidavit testimony on the point should be diregarded as a “sham.” The Texas Supreme Court agreed that this was a viable concept in state court summary judgment practice: “Most Texas courts of appeals have recognized the sham affidavit rule as a legitimate component of a trial judge’s authority under Rule 166a to grant summary judgment when no genuine issue as to any material fact exists. The rule has long been applied throughout the federal court system under Rule 56, which contains language nearly identical to Rule 166a. We agree with the majority view that a trial court’s authority to distinguish between genuine and non-genuine fact issues includes the authority to apply the sham affidavit rule when confronted with evidence that appears to be a sham designed to avoid summary judgment.” No. 16-0588 (April 27, 2018).b

A majority of the Fifth Court recently held in St. John Missionary Baptist Church v. Flakes that “construing [Tex. R. App. P] 38.9(b) to require us to identify and suggest briefing on issues not raised by an appellant would depart from our duty to be neutral and impartial.” No. 05-16-00671-CV (March 29, 2018) (en banc). As a counterpoint to that bright-line rule, in a different context, a later panel noted in American Realty Trust v. Andrews Kurth: “We cannot consider issues raised for the first time in a reply brief. But the distinction between issues and arguments is not always clear.”  No. 05-16-01433-CV  05-16-01433-CV (May 8, 2018) (mem. op.) (citations omitted, quoting authorities saying that “[Appellant] was not required on appeal or at trial to rely on precisely the same case law or statutory subpart that we now find persuasive” and “We do not consider issues that were not raised in the courts below, but parties are free to construct new arguments in support of issues properly before the Court.”)

An unfortunate domestic situation led to the issue presented in Markl v. Leake – whether a married couple could “use fiduciary law to recoup money [the husband] spent on making repairs to the property of a woman with whom he had a ten-year clandestine relationship.” The Fifth Court reviewed precedent and an academic commentary that observed: “Relationships, not individuals, are the prime concern of fiduciary law,” which focuses on “the degree of dependence and vulnerability that exists within” a particular relationship, as well as “the value of the interaction to the society at large.” From that foundation, the Court concluded: “Whether [the] relationship contained aspects similar to a marriage is unavailing because, in this case, [the husband] was married – to [the wife and co-plaintiff]. Recognizing [the] relationship as fiduciary in character, under the circumstances here, would make light of the very notion of the concepts of trust and confidence.” No. 05-17-00174-CV (May 14, 2018) (mem. op.)

At trial, the judge “stated the parties did not have a contract and it was taking the quantum meruit claim under advisement ‘to make a determination as to damages.'” But the judgment awarded damages for breach of contract, and the judge then entered findings of fact and conclusions of law that “the parties operated under an express contract.” Problem? No: “[W]ritten orders or judgments control over conflicting oral pronounements. . . . [T]he trial court’s written findings supersede any oral statements.” Kaur-Gardner v. Keane Landscaping, No. 05-17-00230-CV (May 14, 2018) (mem. op.)

The explosion of economic growth and suburban sprawl into once-rural Collin County has produced a complex map of cities and their extra-territorial jurisdiction. The subtleties of that map engulfed the Custer Storage Center (right), who became involved in a dispute between the County and the City of McKinney (oddly enough, the county seat) about what construction permits were  required. Held: “The City lacks authority to require a landowner developing property in its ETJ to obtain City building permits, inspections and approvals, and pay related fees. However, the City possesses authority—to the exclusion of the County—to regulate all subdivision plats and related permits for property in the City’s ETJ.” Collin County v. City of McKinney, No. 05-17-00546-CV (May 10, 2018). (Texas pioneer Collin McKinney (left), for whom both the city and county are named, would no doubt have had conflicting loyalties for this dispute.)

From publishing 600Camp about the Fifth Circuit, I have learned that as a result of the Erie doctrine, a substantial body of federal precedent addresses state-law issues, especially the contract and tort issues that commonly arise in homeowner wrongful foreclosure cases. Conversely, Texas courts have created a body of state authority about federal-law issues. Neither system’s intermediate court opinions bind the other, leading occasionally to a case like Osadon v. C&N Renovation Inc., in which the Dallas Court of Appeals declined to follow a Fifth Circuit opinion on a point of bankruptcy law, concluding (along with several other courts outside the Circuit) that the text of the relevant Code section dictated a different result. No. 05-17-00453-CV (May 9, 2018) (mem. op.)

The trial court found an oral contract to sell Xena, an “elite-pedigreed female Labrador retriever,” finding that the plaintiff established the partial-performance exception to the statute of frauds. .” The appellant challenged that conclusion, arguing that “his own partial performance is not ‘unequivocally referable’ to the contract to sell Xena . . . his leaving Xena with the [other side] in July 2013 is equally consistent with his prior conduct of leaving a dog with [them] for training.” The Fifth Court disagreed, observing: “[I]t is not [Appellant’s] partial performance that is at issue; instead, it is [Appellees’] performance, which was established by their testimony and their documentary evidence . . . Partial performance takes a contract out of the statute of frauds when the party seeking enforcement of the contract partially performed.” McCain v. Promise House, No. 05-16-00598-CV (May 7, 2018) (mem. op.)

Rhymes sued Maria Hernandez for injuries arising from a car accident. Hernandez ultimately defaulted. During the course of the proceedings, “Rhymes’ attorney was also communicating with [United Automobile Insurance Services, a claims-handling service] about the accident and attempting to settle his personal injury claim . . . . UAIS made several unsuccessful attempts to contact [the insured parties] about the matter before the default judgment was signed.” As to notice, “[t]he evidence established that [Hernandez] never gave notice of suit to or requested a defense from UAIS or Old American [Insurance Company].”

Rhymes then sued to collect on Hernandez’s policy. The Fifth Court reversed a summary judgment in his favor and rendered judgment for the defendants, finding that notice was a condition precedent to coverage under the policy, and rejecting two arguments made by Rhymes about the practicalities of the situation:

• “Rhymes also argues that the notice of suit provision was actually satisfied here because his attorney sent appellants copies of the petition in the underlying suit and confirmation of service on Maria. . . . Notice given by a third party does not trigger the insurer’s duty to defend and does not estop the insurer from asserting the insured’s breach as a bar to liability.”
• And as to prejudice, while the defendants’ “claim file relating to the accident showed that appellants viewed coverage as ‘clear’ and liability as ‘accepted,'” the default judgment established prejudice as a matter of law, as it “not only deprived appellants of the opportunity to litigate the claim’s merits but also imposed ‘a new burden of proof on new issues’ in order to set the default judgment aside.”

United Automobile Insurance Services v. Rhymes, 05-16-01125-CV (May 4, 2018) (mem. op.)

After a detour to Austin on an important but infrequent procedural issue, the Fifth Court turned to the merits of Pak v. Ad Villarai LLC; holding as follows on the issue of whether Pak was properly removed from his management positions:

The evidence showed written notice was given three days after the action removing Pak as member and co-manager. The notice was given to both Pak and Harrison. Both had full knowledge, yet the testimony at trial showed neither objected. In his reply brief, Pak complains the consent was taken while the two sides were in litigation against each other, so there “was no way the Trial Court should have reasoned Chan Pak would have consented from being removed” from Villas-Manager by appellees. Pak does not provide any legal authority to support his position, nor can we agree that (1) the statute does not apply if the parties are in litigation or (2) the trial court was required to guess at Pak’s reasons for failing to object. Nothing on the face of the statute requires either. Under section 101.359 of the business organizations code, Pak and Harrison’s consent to Pak’s removal as co-manager was established by their failure to object.

No. 05-14-01312-CV (May 5, 2018) (mem. op.)

Assuming arguendo – a considerable assumption given recent opinions on the point – that “manifest disregard of the law” is a viable challenge to an arbitration award, it did not apply even to a threshold issue such as standing when: “The parties agree that the arbitrator heard evidence and argument offered by both parties on the question of Sricom’s capacity to recover on its counterclaim. This evidence included Sricom’s certificate of authority to do business in Texas, the parties’ contract, and evidence of the parties’ alleged breaches and when those breaches occurred. The arbitrator’s acceptance of Sricom’s arguments and evidence instead of C Tekk’s, even if erroneous, was not manifest disregard of the law.” C Tekk Solutions, Inc. v. Sricom, Inc., No. 05-17-00845-CV (May 1, 2018) (mem. op.)

A clean example of mootness appears in Tru Exploration LLC v. Energy Exploration I LLC: “The dispute on appeal centers on whether arbitration is required. Arbitration having been conducted and an award having been issued, the controversy no longer exists and the appeal is moot.” No. 05-15-00217-CV (April 27, 2018) (mem. op.) (applying Trulock v. City of Duncanville, 277 S.W.3d 920, 923 (Tex. App.–Dallas 2009, no pet.).

In the context of affirming a grant of summary judgment for the defendants in a dispute about a commercial real estate development, the Fifth Court observed: “The elements of a joint venture are (1) an express or implied agreement to engage in a joit venture, (2) a community of interest in the venture, (3) an agreement to share profits and losses from the enterprise, and (4) a mutual right of control or management of the enterprise. First United Pentecostal Church of Beaumont v. Parker, 514 S.W.3d 214, 225 (Tex. 2017). Joint venturere owe fiduciary duties to each other. Kirby v. Cruce, 688 S.W.2d 161, 165 (Tex. App.–Dallas 1985, writ ref’d n.r.e.).” Tin Star Development LLC v. 360 Residential LLC, No. 05-17-00040-CV (April 17, 2018) (mem. op.)

At a recent energy law seminar for the University of Texas, My colleagues Michael Hurst, Jonathan Childers, and Jervonne Newsome presented this excellent paper on the important and recurring topic of maintaining attorney-client privilege in communications involving in-house counsel – a constant challenge given the many hats worn by legal counsel in the modern business environment.

Tex. R. Evid. 503(d)(2), a long-lived but rarely-cited exception to the attorney-client privilege, applies “[i]f the communication is relevant to an issue between parties claiming through the same deceased client.” In In re: Rittenmeyer, the Fifth Court declined to grant mandamus relief as against an order to produce documents pursuant to this exemption, finding that – like the handful of other cases that have allowed such discovery – the case “involves a dispute between a decedent’s estate and a party who claims to be a beneficiary under the estate either through a subsequent will or because the probated will does not reflect the decedent’s intentions.”  No. 05-17-01378-CV (April 18, 2017) (mem. op.)

After rejecting the novel, but problematic, argument that a corporation chartered outside Texas could not invoke the Texas longarm statute, the Fifth Court found personal jurisdiction over a Louisiana car dealer that sold retail installment contracts to a Dallas-based financial business. The Court proceeded in three distinct steps, in a framework that helps impose order on recent changes in personal jurisdiction law. First, it evaluated minimum contacts for constitutional due process requirements (considering (1) only the defendant’s contacts with the forum, (2) acts that are “purposeful” rather than fortuitous, and (3) whether the defendant sought some benefit, advantage, or profit by “availing” itself of Texas); second, it examined the “relationship among the defendant, the forum[,] and the litigation” to determine whether specific jurisdiction was appropriate; and third, it reviewed whether fair play and substantial justice was satisfied. Winnsboro Auto Ventures LLC v. Santander Consumer USA, No. 05-17-00895-CV (April 19, 2018).

In a thorough review of sovereign immunity principles, the Fifth Court granted a mandamus petition and found that ERCOT was protected from claims that it misrepresented information about future demand for electric power in Texas. ERCOT v. Panda Power Generation, No. 05-17-00872-CV (April 16, 2018) (applying, inter alia,Brown & Gay v. Olivares, 461 S.W.3dd 117 (Tex. 2015)). Notably, in its discussion of mandamus standards, after noting that a trial court lacks discretion to misapply the law, the Court observed: “This principle applies even when the law is unsettled.” (citing In re: J.B. Hunt Transport, Inc., 492 S.W.3d 287, 294 (Tex 2016) (orig. proceeding).

This is an example of an admission of fact, not a legal conclusion: “That the Commercial Truck suffered engine failure in Dallas, Texas and Plaintiff retained Defendants’ [sic] to rebuild the engine and perform additional repairs.” Garcha v. Chatha, No. 05-17-00084-CV (Apr. 12, 2018) (mem. op.)

The Judah family owned three lots in DeSoto, near a busy highway and a church. Over the years, as the property changed hands and the church grew, access problems developed between the property and the highway. During a 2007 expansion of a parking lot, as part of acquiring a road previous owned by the city, the church:

“. . . signed a new amended plat for the property that showed  he abandoned roadway and specifically outlined utility easements. The Owners Certificate attached to the plat described the easements being granted to the public utilities in detail. On the front of the plat was a notation stating, ‘NOTE: A Blanket Ingress/Egress Easement is granted across Lot 1A, Block 4 of this plat [the church’s property] to 168 Church Street [one of the Judah lots].”

In subsequent litigation about access to that lot, The Fifth Court found that this language was insufficient to establish an express easement or an easement by estoppel, and affirmed summary judgment for the church. Sandoval v. Community Missionary Baptist Church,  05-17-00456-CV (April 13, 2018) (mem. op.)

Stephens slipped and fell outside a Wal-Mart. He sued, Wal-Mart sought summary judgment based on his admissions about the cause of his fall, and Stephens then asked for a continuance to conduct more discovery. The Fifth Court affirmed judgment for Wal-Mart, observing that Stephens’s continuance motion (1) “does not identify any evidence he is seeking to discovery that would make his case an exception to th[e] rule” that a premises owner is not liable for injury caused by natural accumulation of precipitation, and (2) “fails to explain why he did not seek to take any depositions in the two months” between the designation of Wal-Mart’s knowledgeable employees and the summary judgment hearing, other than an “unsubstantiated reference to his counsel’s ‘litigation schedule.'” Stephens v. Wal-Mart Stores, No. 05-17-00434-CV (Apr. 11, 2018) (mem. op.)

In several situations, Texas procedure gives pleadings evidentiary effect instead of treating them only as a means of notice; a basic one is illustrated by the FED dispute in Trans Am SFE II LLC v. Young: “To prove its case, Trans Am needed to show (1) a trustee’s deed or substitute trustee’s deed from the foreclosure sale demonstrating it purchased the property at the foreclosure sale, (2) that appellees would become tenants at sufferance following the foreclosure sale if they did not vacate, and (3) notice to vacate informing appellees of their tenant at sufferance position and the need to vacate the property. Each of these elements was alleged in Trans Am’s petition thereby conferring jurisdiction on the justice court and the county court at law to hear the case.” (citations omitted). Accordingly, the plaintiff did not have to substantiate these allegations with evidence unless the defendant first brought forward evidence to contradict them. No. 05-17-00394-CV (Apr. 6, 2018) (mem. op.)

As to the need to object to summary judgment evidentiary rulings – not the evidence itself – the current state of the law in Dallas is as follows: “Prior panel decisions of this Court suggest that when a party fails to object to the trial court’s ruling that sustains an objection to his summary judgment evidence, he has not preserved the right to complain on appeal about the trial court’s ruling. See Brooks v. Sherry Lane Nat’l Bank, 788 S.W.2d 874, 878 (Tex. App.—Dallas 1990, no writ). We are aware that this holding has come under criticism recently. See Miller v. Great Lakes Mgmt. Serv., Inc., No. 02-16-00087-CV, 2017 WL 1018592, at *2 n.4 (Tex. App.—Fort Worth Mar. 16, 2017, no pet.) (mem. op.). Absent a decision from a higher court or this Court sitting en banc that is on point, this Court is bound by the prior holdings of other panels of this Court.” Du Bois v. Martin Luther King Jr. Family Clinic, No. 05-16-01460-CV (April 5, 2018) (mem. op.)

Masa Custom Homes LLC v. Shahin arose from the untimely death of Dallas district judge Phyllis Lister Brown; before her passing, she had heard the evidence in a bench trial, indicated her rulings by mail, and held a hearing on the appropriate form of judgment. But because she died before entering judgment, another judge signed the final judgment in the matter. The Fifth Court found that judgment void: :All courts that have addressed the issue directly have held the rules of civil procedure do not authorize a judge to render judgment following a bench trial unless he personally heard the evidence on which the judgment is based.” No. 05-16-00978-CV (April 2, 2018) (applying, inter alia, Ad Villarai  LLC v. Chan Pak, 519 S.W.3d 132 (Tex. 2017)).

A series of adverse discovery rulings can be frustrating. But seeking recusal based on such rulings is likely a step too far: “Pettigrew contends that the trial court’s orders with respect to Bell’s deposition show that the trial court was advocating for Bell and was biased in favor of Bell and against him. Pettigrew cites no authority to support his contention that these types of discovery rulings constitute bias by the trial judge. Judicial rulings alone almost never constitute a valid basis for a bias or partiality motion.” Pettigrew v. Cedar Springs Alexandre’s Bar, No. 05-16-00269-CV (April 2, 2018) (mem. op.) (applying Hansen v. JP Morgan Chase Bankm 346 S.W.3d 769, 776 (Tex. App.–Dallas 2011, no pet.)

In a rare en banc decision, a majority of Fifth Court justices held in St. John Missionary Baptist Church v. Flakes that “construing [Tex. R. App. P] 38.9(b) to require us to identify and suggest briefing on issues not raised by an appellant would depart from our duty to be neutral and impartial.” Thus, in the case before it: “Because appellants fail to challenge all grounds upon which the trial court could have granted appellees’ amended motion to dismiss and plea to the jurisdiction, we have no discretion to do anything other than to accept the validity of the unchallenged ground.” Two dissents countered that “where the parties have in fact preserved the issues below, timely appealed, and identified the issues for a decision on appeal, a brief that fails to adequately cite to authority or the record, or that omits an argument that is deemed to be included in the trial court’s disposition of the issue, should not be fatal to the appeal. Instead, that deficiency simply amounts to ‘a failure to properly present the case on the briefs’ and affords the court a number of efficient options under the rules.” No. 05-16-00671-CV (March 29, 2018).

The majority opinion was written by Justice Evans, joined by Chief Justice Wright and Justices Francis, Lang, Lang-Miers, Brown, Stoddart, and Whitehill. The dissenters were Justices Schenck, Bridges, Fillmore, Myers, and Boatright (who also wrote a separate, individual dissent). The division of opinion in this case offers a rare insight on how the viewpoints of the Justices compare on a waiver issue; a general topic frequently addressed by the Fifth Court in a variety of different settings.

A significant challenge in professional liability cases involving litigation is proving the “case in a case” – what the outcome should have been in the relevant lawsuit, absent the alleged malpractice. In Haddock v. Gruber, the Fifth Court addressed the collateral estoppel effect of an earlier judgment in a complex series of cases, concluding that it precluded the proof of the necessary “case in a case.” The opinion addresses both the elements of collateral estoppel in this context and several policy-based attacks on the use of the doctrine in this setting. No. 05-16-1113-CV (March 22, 2018) (mem. op.)

In a dispute about alleged undue influence on a Texas-based testator, in the context of evaluating the totality of the defendants’ contacts with Texas, the Fifth Court identified several Texas contacts that will not ordinarily establish personal jurisdiction:

• Written communications in Texas, and personal visits to Texas, when no evidence “establishes what was said in any particular disputed conversation”;
• Simply being named in estate planning documents in a contingent position, when “none of those contingency appointments ever occurred” so the party “did not accept any benefits or obligations or take any action in any of these capacities”; and
• For alter ego, simply the “[f]ailure to observe corporate formalities” or the owner’s “taking a draw” from the company.

Karaa v. Aramoonie, No. 05-17-00571-CV (March 19, 2018).

The case of Starwood Management v. Swaim returned to the Fifth Court, after a reversal and remand by the Texas Supreme Court. The previous Fifth Court opinion affirmed a defense summary judgment, finding that the affidavits of the plaintiffs’ causation experts in a legal malpractice were conclusory. The Texas Supreme Court held otherwise. Against that backdrop, on remand, the Fifth Court found that the affidavits were not “speculative” (a concept arguably distinct from being “conclusory”) and was relevant, and reversed the summary judgment that had resulted from these rulings and the one addressed by the supreme court. No. 05-14-01218-CV (March 20, 2018) (mem. op.)

The Fifth Court reversed and rendered default judgment for the plaintiff in a case about an allegedly stolen 2007 Bentley. As for liability, the opinion recites a useful set of deemed admissions for such a case, that could readily be adapted to other conversion-type claims. As for damages, while the plaintiff’s affidavit was found to be conclusory: “[E]videnc of the price paid may be offered as proof of the property’s fair market value. The undisputed evidence established that Swarovski paid Enger $75,500 for the Bentley on September 21, 2013, only three months before Enger took the car. [And i]n deemed admissions, Enger admitted he accepted Swarovski’s $75,500 check as full payment for the Bentley and deposited the check into his account. Thus, the undisputed evidence established that Swarovski’s damages resulting from the theft totaled $79,249.70, which includes the cost of the [car’s] rims and insurance payments.” Swarovski v. Enger, No. 05-17-00398-CV (March 16, 2018) (mem. op.)

Confusion over which entity named “Whoa” received a property conveyance led to an argument that capacity had not properly been pleaded as a defense under Tex. R. Civ. P. 93. The Fifth Circuit disagreed with the appellants’ position: “[T]he case before us does not involve a party’s contention that its opponent is not a proper party or that a claim filed by its opponent belongs to another. . . .  Further, the record does not show [Appellees] challenged Whoa’s ‘authority’ respecting its claim.” Whoa USA, Inc. v. Regan Properties, LLC, No. 05-16-01283-CV (March 12, 2018) (mem. op.)

The parties’ arbitration clause said that, after a three-arbitrator panel was selected, the arbitrators “shall hold a hearing and make an award within sixty (60) days of the filing for arbitration.” The panel issued a “Partial Final Award” within sixty days and a complete award later; the trial court found the final award was untimely and declined to confirm it. The Fifth Court found that the agreement only required “an award,” not a final award, and that the arbitration panel had the last word on the issue because the parties had incorporated AAA ruled, which give “[t]he arbitrator . . . the power to rule on his or her own jurisdiction . . . ” Signature Pharmaceuticals LLC v. Ranbaxy, Inc., No. 05-17-00412-CV (March 12, 2018) (mem. op.)

The plaintiffs in Sky Group LLC v. Vega Street I, LLC sued for conversion, and showed in their motion for summary judgment that they “contracted with Sky Group for property management services and, in the course of those services, Sky Group acquired possession of funds, documents, and keys belonging to [them]. After [they] terminated the contract, they demanded the return of the property, but the property was not returned.” Unfortunately, however, “[t]he mere failure by the defendant to deliver the property after a demand is generally not sufficient to prove an affirmative refusal. To be liable for conversion, a person must intend to assert some right in the property.” (citations omitted). The Fifth Court thus reversed summary judgment on this claim, along with several other related business tort claims. No. 05-17-00161-CV (March 5, 2018) (mem. op.)

After a hearing on your special appearance, the judge says “Denied.” Can you appeal? No: “An oral rendition is not sufficient. The appellate timetable runs from the date an appealable written judgment or order is signed. See TEX. R. APP. P. 26.1; Farmer v. Ben E. Keith Co., 907 S.W.2d 495, 496 (Tex. 1995).” Effel v. Rosberg, No. 05-17-01332-CV (March 6, 2018) (mem. op.)

The primary results are in, and the November ballot for the eight open slots on the Fifth Court will be as follows. (The Texas Lawbook recently analyzed the election and the unusually large number of contested seats).

Chief Justice: Doug Lang (R) v. Robert Burns (D)

Place 2: David Evans (R) v. Robbie Partida-Kipness (D)

Place 5: Craig Stoddart (R) v. Erin Nowell (D)

Place 9: Jason Boatright (R) v. Bill Pedersen (D)

Place 10: Molly Francis (R) v. Amanda Reichek (D)

Place 11:John Browning (R) v. Cory Carlyle (D)

Place 12: Winner of runoff between Jim Pikl and William “Randy” Johnson (R) v. Ken Molberg (D)

Place 13: Elizabeth Lang-Miers (R) v. Leslie Lester Osborne (D)

As a counterpoint to its recent discovery-limiting opinion in In re: Hanover Lloyds, the Fifth Court recently addressed three dimensions of discovery requests in a suit against the NCAA about head injuries, concluding:

• Requests about other types of head injuries were overly broad, especially given the NCAA’s commitment to search for documents about “concussive and sub-concussive blows to the head” without limiting its search to those precise terms;
• The 50-year scope of discovery was reasonable in light of the types of injuries alleged and the issues about the NCAA’s awareness of them;
• Information about other sports was also discoverbale, as the issue was the NCAA’s awareness about the type of head injury in question – “. . . the injury, not the sport, is the proper inquiry.”

In re: NCAA, No. 05-17-00951-CV (March 1, 2018).

Continuing to provide practical guidance about discovery requests (see In re: Sting Soccer Group, 2017), and applying the recent Texas Supreme Court cases about discovery of information about other claims, in the context of a dispute over one claim (see In re: Nat’l Lloyds I, 449 S.W.3d 486 (Tex. 2014), and In re: Nat’l Lloyds II, 507 S.W.3d 219 (Tex. 2016)), the Fifth Court addressed these discovery requests in an insurance claim dispute:

(1) the last twenty-five Haag Engineering reports on a storm damage claim in Texas for one of its insureds that Hanover Lloyds Insurance Company had received before August 31, 2015 (the date of its decision letter in this case) plus the decision letters in those claims. . . .

(2) the last twenty-five Haag Engineering reports on a storm damage claim in Texas for one of its insureds that Hanover Lloyds Insurance Company had received after August 31, 2015 (the date of its decision letter in this case) plus the decision letters in those claims.

It granted mandamus relief against an order to respond to them, reasoning: “[A]ccording to Indoor Sports, it is seeking the information to develop and prove the relationship between Hanover and HAAG, Hanover’s reliance on HAAG’s training, investigation and reports, and the unreasonableness of the investigation and decision made by Hanover in light of the HAAG report and lack of contradictory evidence. Although there is a remote possibility the requested discovery could lead to the discovery of relevant evidence, we fail to see how Hanover’s use of HAAG engineering reports on claims of unrelated third parties is probative of Hanover’s conduct with respect to its handling of this claim.” In re: Hanover Lloyds, No. 05-17-00608-CV (March 2, 2018) (mem. op.)

Archimedes famously said about the lever: “Give me a place to stand and I shall move the world!” Similarly, in review of a mandamus petition about enforcement of a foreign selection clause, the respondent only needs one place to stand: “The trial court denied the motion to dismiss and denied relators’ motion for reconsideration without stating on which grounds it denied the motions. In their petition for writ of mandamus, relators address only six of the seven grounds raised by the real party in interest below. When an appellant fails to attack one of the possible grounds on which a judgment was granted, the judgment must be affirmed.In re Baker, No. 05-17-01320-CV (Feb. 28, 2018) (mem. op.)

A defendant can rely on factual allegations to establish the proper forum, when the defendant will later strive to negate the merits of those same allegations. That idea was vividly illustrated in Buck’s Cabaret v. Lantrip, in which an entertainer at a Dallas club sued for her injuries in a car accident after leaving the premises, alleging that the club served her excessive alcohol. The Fifth Court reversed the denial of the club’s motion to compel arbitration under a provision in its agreement with the dancer that reached “ANY CONTROVERSY, DISPUTE, OR CLAIM … ARISING OUT OF THIS LEASE OR OUT OF ENTERTAINER PERFORMING AND/OR WORKING AT THE CLUB AT ANY TIME.” The Court noted:

The factual allegations giving rise to Lantrip’s claims are that Buck’s (1) sold her alcoholic beverages after it was apparent she was obviously intoxicated, and (2) required her to consume alcoholic beverages, a breach of Buck’s duty to use ordinary care in providing a reasonably safe workplace. Although Lantrip urges that she was a patron because Buck’s sold her alcoholic beverages, the fact that she purchased drinks is not necessarily inconsistent with her working under the terms of the Lease at the time. Indeed, Buck’s could not require Lantrip to purchase drinks if she was merely a patron.

The club will certainly dispute those allegations at the arbitration hearing, but for purposes of determining the forum, they proved dispositive.No. 05-17-00647-CV (Feb. 23, 2018) (mem. op.)

In a family-law holding of broader applicability to injunctions generally, Barnes v. Barnes affirmed a contempt holding related to a failure to pay a substantial amount of child support. The petitioner contended, inter alia, that the divorce decree’s requirement “that he pay . . . ‘50% of the after tax (regular payroll taxes for single deduction) proceeds’ of various compensation, performance awards, and stock sales makes the decree fatally ambiguous,” due to dispute about the appropriate tax treatment for those matters. The Fifth Court disagreed, noting that he “offer[ed] no justification for his failure to pay at least the amount he conceded he owes . . . or his failure to deliver the deferred compensation related documents. We conclude the divorce decree is sufficiently clear to inform David of his obligation to provide documentation and payment to Jennifer. The fact that the experts disagreed on which tax rate to apply, does not excuse David’s complete lack of compliance with the decree’s mandate regarding deferred compensation.” No. 05-16-00241-CV (Feb. 23, 2018) (mem. op.)

At trial, Claymore Holdings won its fraud claim against Credit Suisse, establishing the loss of a $250 million investment as a result of a flawed appraisal. The Fifth Court affirmed, focusing on two bedrock principles of modern businesss litigation.

1. “Specific provisions concerning an issue are controlling over general provisions.” Legally and factually, Claymore showed that Credit Suisse’s disclaimers of reliance did not foreclose liability for the specific issues about the appraisal raised by Claymore.
2.  “[T]he trial court was not limited to the jury’s award of damages on Claymore’s fraudulent inducement claim in determining appropriate equitable relief on the claims for which the parties waived their right to jury trial.” On the facts of this case, “[h]aving obtained favorable findings from the jury on the fraud claim and from the trial court on the contract claim, Claymore could elect rescission as its remedy.”

Credit Suisse AG v. Claymore Holdings LLC, No. 05-15-01463-CV (Feb. 20, 2018) (mem. op.)

Enterprise Fleet Management obtained a judgment against Brazos Rock, and then sued several other parties in Dallas County for fraudulent transfers related to payment of that judgment. In the meantime, a receiver was appointed in Parker County to manage Brazos Rock’s assets. The Dallas defendants lost their plea to the jurisdiction and sought a writ of mandamus to compel transfer to Parker County, where they lived. The Fifth Court rejected their argument, finding no showing of interference with Parker County’s jurisdiction (and thus, an injury that cannot be addressed by direct appeal). “These are two separate suits seeking diffferent relief from different parties. . . . A judgment on the  claims asserted in Dallas County will not interfere with the Parker County court’s ability to manage the receivership or render a judgment in the Parker County suit. Enterprise’s collection efforts may ultimately be impacted by the Parker County suit, but that does not deprive the Dallas County court of jurisdiction over Enterprise’s claims.” In re Ameri-Fab LLC, No. 05-17-01458-CV (Feb. 7, 2018) (mem. op.)

A restricted appeal examines “the face of the record” for error in a default judgment case. That review often focuses on procedural matters – mistakes in the return of service, inadequate pleading to invoke the long-arm statute, etc. – but can also focus on substance, as occurred in Haynes v. Gay. The appellants, members of the relevant LLC, successfully showed that the debt sued upon arose before the LLC forfeited its charter, and thus could not have been individually liable upon that debt. No. 05-17-00136-CV (Feb. 8, 2018). h

In the case of In re Elavacity, the Fifth Court stayed trial court proceedings after the grant of a TRO (thus ensuring the matter did not become moot, given the short time frame associated with a TRO), and then granted mandamus relief. It identified three defects with the order that made it void:

1. “[I]t does not include an explanation of why it was issued without notice to relators”;
2. “[I]tt does not define the injury it is designed to prevent, does not explain why such injury would be irreparable, and is not specific in its terms”; and
3. “[T]he order enjoins relators from taking certain actions related to Pruvit’s ‘trade secrets, confidential and/or proprietary information,’ and Pruvit’s existing promoters. However, the order does not describe what constitutes a trade secret, confidential information, and/or proprietary information or who is an ‘existing promoter.’”

No. 05-18-00135-CV (Feb. 16, 2017) (mem. op.)

The 2018 results are available from the Committee for a Qualified Judiciary for Dallas-area judicial races.

Pappas testified about his 50% interest in a car wash business, using an undisputed sale price for the business, undisputed evidence about the face amount of a relevant note, and corrobrating his calculation with a recent property appraisal that was admitted without objection. This foundation was sufficient to satisfy “the presumption that an owner is familiar with his property and its value,” which requires that “the owner must provide the factual basis on which his opinion rests, although this burden is not particularly onerous in light of the resources available today.”  Wash Technologies v. Pappas, No. 05-16-00633-CV (Feb. 6, 2018) (applying Natural Gas Pipeline Co. v. Justiss, 397 S.W.3d 150, 157 (Tex. 2012)).

In a labor dispute: “Williams argues that the record is replete with evidence that contradicts the Flex Entities’ version of the events, including his driver logs that show during the time he was purportedly nonresponsive, he was in a remote area out of range for his cell phone, on break, or asleep in his truck,and he did in fact accept and deliver loads on the days referenced in the emails.”  The argument was unavailing: “The jury, as the fact finder, was in the best position to judge the credibility of the witnesses and the weight to be given their testimony, including the validity of the logs Williams created. In this case, the jury found the testimony of the Flex Entities’ witnesses and the internal emails documenting issues with Williams, which began a full month before Williams complained about his pay, to be more credible than the testimony of Williams and his account of why he did not respond to dispatch.” Williams v. FlexFrac Transport LLC, No. 05-16-01032-CV (Feb. 5, 2018) (mem. op.)

At least outside the Rule 91a context: “Texas follows a fair-notice pleading standard; the opposing party must be able to ascertain the nature and basic issues of the controversy and what testimony will be relevant from the pleading. Horizon/CMS Healthcare Corp. v. Auld, 34 S.W.3d 887, 896 (Tex. 2000); COC Servs., Ltd. v. CompUSA, Inc., 150 S.W.3d 654, 677 (Tex. App.—Dallas 2004, pet. denied). The purpose of fair-notice pleading is to provide a defendant with sufficient information to prepare a defense. Horizon/CMS Healthcare Corp., 34 S.W.3d at 897.” Cerna v. Smith, No. 05-17-00178-CV (Feb. 2, 2018) (mem. op.)

Appellant alleged that she established a “loss of ownership resulting from a legal proceeding” within the meaning of a real estate listing agreement, which would excuse the obligation to pay a broker’s commission. Unfortunately, while the relevant “divorce proceeding created a cloud on the [p]roperty’s title, and, as a result, the title company couldnot issue a title policy as required by the sales agreement,” that did not create the requisite “loss” – “By definition . . . a cloud on title does not equate to a loss of ownership. . . . [A] cloud is something with the potential to affect ownership if and when it is established as valid.” Ruder v. Jordan, No. 05-16-00742-CV (Feb. 2, 2018) (mem. op.)

The Fifth Court’s website reports: “On January 30, 2018, the Fifth Court of Appeals held inaugural oral arguments in the historic Dallas County Merrill Hartman Courtroom located on the 8th Floor of the George Allen Sr. Courts Building [right]. Thanks to a joint effort between the Dallas County Commissioners, the Dallas District Courts, and the Fifth Court of Appeals, the Merrill Hartman Courtroom’s judicial bench was redesigned to accommodate the 13 appellate court justices in en banc settings as well as 3 member panels. The Fifth Court of Appeals also serves as the disaster recovery site for the nine member Texas Supreme Court. Both appellate courts, and district courts will utilize the courtroom. Upon final completion of renovations, a re-dedication ceremony is planned on a date to be determined in April 2018.”

In The Art of War, Sun-Tzu famously described nine types of ground where battles could occur. In Medina v. Michelin North America, the Fifth Court reminded that summary judgment can only occur on the specified grounds, especially for a no-evidence motion:

“Michelin’s only basis for no-evidence summary judgment motion on these claims was the lack or absence of expert testimony should the trial court grant its motion to exclude [plaintiff’s expert’s] testimony. The no-evidence motion itself specifically requested the trial court not consider the no-evidence summary judgment motion on these claims until it considered and ruled on its motion to exclude. In granting summary judgment on these claims after denying Michelin’s motion to exclude, however, the trial court necessarily concluded [that the expert’s] testimony constituted no evidence. Because Michelin did not move for summary judgment on this ground, the trial court erred in granting summary judgment on the Medinas’ defective design, defective manufacturing, and negligence claims once it denied Michelin’s motion to exclude this testimony.”

No. 05-16-00794-CV (Jan. 29, 2018) (mem. op.) I presented the oral argument in this case for the appellants.

Litigation about this year’s primary election led to a mandamus petition about the ballot in a judicial race, in which the Fifth Court “conditionally granted relator’s petition for writ of mandamus by written opinion and ordered the trial court to vacate the temporary restraining order. We determined that the proceeding in the district court was moot as to the primary election ballot at the time it was heard, and the resulting order was void.” The opposing party then filed a “cross-petition” about the same ballot, as to which the Court similarly held: ” That relief is unavailable because overseas and military ballots have already been printed and mailed for the March primary.” In re Williams, No. 05-18-00068-CV (Jan. 26, 2018) (mem. op.) While turning on an issue unique to election law, the opinion also illustrates how equitable defenses such as laches can affect the resolution of mandamus petitions.