With the market for highly caffeinated sugar water pretty much saturated in the United States, a pair of businessmen formed a partnership known as Best One to market energy drinks in Mexico. They targeted Unique Beverage Co., the maker of Wired Energy Drink, to be the supplier for their Mexican enterprise. But that relationship fell apart after negotiations failed with the Mexican buyer, leading the partners to file suit against Unique and its representatives for breach of contract, tortious interference, and fraud.

The defendants filed a no-evidence motion for summary judgment, challenging every element of Best One’s causes of action. The plaintiffs responded by describing and attaching 90 pages of emails, then stating that they demonstrated “genuine issues as to material facts and the motions for summary judgment should be denied.” The district granted summary judgment for the defendants, and the court of appeals affirmed. Because Best One’s response failed to address the challenged elements of its claims, and furthermore failed to direct the trial court to “any page number, quote, affidavit or e-mail” within the attached exhibits, the plaintiffs failed to meet their burden of demonstrating that the evidence actually responded to the defendants’ no-evidence motion.

Levine v. Unique Beverage Co., LLC, No. 05-11-01467-CV

To hold a professional liable for negligent misrepresentation, the plaintiff has to prove that the defendant provided the information “to a known party for a known purpose.” McCamish, Martin, Brown & Loeffler v. FE. Appling Interests, 991 S.W.2d 787, 794 (Tex, 1999). The “known party” requirement is satisfied where the professional is “aware of the nonclient and intends that the nonclient rely on the information.” Id. In this case, attorney William Ravkind allegedly filled out a “Verification of Deposit” form stating that he was the depository of two trust accounts belonging to his client. (Ravkind claimed his signature was forged.) Bank of Texas claimed that information was false, and that it relied upon it deciding to make a $2 million loan to the client, who later defaulted. But Ravkind had not provided the verification form to Bank of Texas. Instead, the form was addressed to an individual at Bright Mortgage, and it was apparently packaged and presented to Bank of Texas by yet another mortgage company. The trial court granted Ravkind’s no-evidence motion for summary judgment, and the court of appeals affirmed, holding that the bank could not demonstrate Ravkind made a representation to it by proof that it was the practice of the lending industry to receive and rely on documents submitted to other financial institutions in connection with the loan.

Bank of Texas, N.A. v. Ravkind, No. 05-11-01123-CV

Duffy McKenzie sued Christopher Utz and several of Utz’s companies, seeking to recover unpaid wages. The defendants did not answer, and McKenzie obtained a default judgment against them for approximately $34,000. Thirty days later, the defendants filed a motion for new trial, seeking to set aside the judgment under the familiar Craddock standards. McKenzie opposed the motion, eliciting testimony at the hearing that Utz had simply put the lawsuit in his drawer because did not want to deal with it. The trial court denied the motion for new trial, and the court of appeals affirmed. Although the court noted the defendants’ evidence that they had not answered because they thought the parties were trying to settle the lawsuit, the conflict between that evidence and the testimony during the hearing was sufficient basis for the trial court to have found that the failure to appear was intentional or the result of conscious indifference. When the evidence conflicts, the court held, the trial court was not required to accept the movant’s version of events. The court of appeals also ruled against the defendants on a motion for sanctions, holding that various alleged misstatements in McKenzie’s appellate brief were insufficient to support any sanctions.

Utz v. McKenzie, No. 05-11-01647-CV

Creation Construction sued Charlie Patel and EZN News Nibbles Necessities for breach of contract after they failed to pay for the construction of a convenience store in NorthPark Mall. After a bench trial, the court entered judgment in favor of Creation for approximately $42,000 in damages and $71,000 in attorney fees. On appeal, Patel argued that he could not be personally liable on the construction contract because he has signed it in his capacity as an agent of EZN. Unfortunately, the contract did not actually say what capacity Patel was signing in, nor had he raised that claim before the trial court. Accordingly, the court of appeals affirmed the trial court’s finding of liability against Patel. However, the court also reversed on Creation’s cross-appeal, which argued that the trial court had erred by failing to award prejudgment interest, and the case was remanded for consideration of the interest to be added on to the judgment.

Patel v. Creative Construction, Inc., No. 05-11-00759-CV

In 2003, insurance broker Brett Woods signed an “Employment, Confidentiality, and Non-Compete Agreement” with U.S. Risk Insurance Group, Inc. USRIG is a holding company that owns companies engaged in the insurance business, including U.S. Risk, Inc. But USRIG does not conduct any insurance business on its own behalf, and the non-compete agreement was solely between Woods and USRIG. Woods resigned in 2009 and went to work for a competitor, which prompted USRIG to file suit for breach of the non-compete. Woods prevailed on cross-motions for summary judgment, and the court of appeals affirmed.

The court first held that the only summary judgment evidence in the record supported Woods’ claim that he had resigned for “good reason,” which only triggered a non-solicitation requirement rather than the full non-compete. The court went on to hold that the non-compete was overbroad in any event, as it prevented Woods from competing with USRIG in any aspect of its business, regardless of whether Woods had worked in that business while employed with the company. Finally, the court of appeals held that Woods could not be liable for soliciting any of USRIG’s customers, since it didn’t actually have any. The court declined to construe the contract to include the subsidiary that was actually engaged in the insurance business, nor would it recognize the subsidiary as a third-party beneficiary (despite a clause providing that the contract inured to the benefit of USRIG’s “subsidiaries, affiliates, successors, and assigns”). On the latter point, the court expressly noted that even if the sub were a third-party beneficiary, it still could not receive greater rights than were bargained for between the original parties to the contract, and the contract only prevented Woods from competing  with the holding company, not its subsidiaries.

U.S. Risk Insurance Group, Inc. v. Woods, No. 05-11-00558-CV

The court of appeals has reversed the grant of a temporary injunction that prohibited the lender from foreclosing on a pair of properties that secured a $10,000,000 promissory note. After multiple previous foreclosures, a bankruptcy filing, and the voluntary dismissal of the bankruptcy case, the borrower sued to enjoin further foreclosures, claiming that the parties had entered into a binding agreement that limited the lender’s ability to foreclose. The court of appeals rejected that argument, concluding that the testimony of the borrower’s witness at the injunction hearing only demonstrated an agreement to engage in further negotiations following dismissal of the bankruptcy, not any concrete and enforceable contractual terms. The court of appeals also rejected the borrower’s contention that the foreclosures would be wrongful because they would result in less than fair market value being received. That argument, the court held, was only applicable to a deficiency claim after foreclosure, not as grounds to prevent foreclosure itself.  The court of appeals therefore dissolved the temporary injunction and remanded the case to the trial court.

Branch Banking & Trust Co. v. TCI Luna Ventures, LLC, No. 05-12-000653-CV

UPDATE: The court has issued a revised opinion in the case, in which it clarifies the standard of review. The outcome remains the same.

In January 2010, Rodney Meisel found an uncashed paycheck from his former employer, dated May 2009.  After calling the former employer’s bank to confirm that the check hadn’t been previously cashed, Mr. Meisel deposited it in his account at U.S. Bank and informed the ex-employer that he had done so.  But four days later, the employer designated the check for return, based on a computer program that indicated it had been previously paid. The next day, the employer told its bank that the check was still good, but the check was still returned to U.S. Bank. Although U.S. Bank was informed that the check wasn’t counterfeit, it still closed Meisel’s accounts and reported to a credit agency that the closure was due to “transactions involving items or checks belonging to another party.” Meisel sued for defamation based on that communication. The trial court granted summary judgment for U.S. Bank, and the court of appeals affirmed based on the defense of truth.

On appeal, the court noted that a true statement is not actionable as libel. Starting from that premise, the court noted that there were two versions of the check in the summary judgment record. Version 1 was a “LEGAL COPY” of Meisel’s check, apparently a type of substitute check provided for under federal law, that he deposited in 2009. The second copy was the one deposited in 2010, which was the original, non-substitute version of the same check. The court of appeals rejected Meisel’s contention that he still “owned” the original check even though he had deposited the substitute version of the same check eight months earlier. Copies may be admissible the same way as originals, but they are not owned in the same way.

Meisel v. U.S. Bank, N.A., No. 05-11-01336-CV

Today was a good day to be petitioning for review from the Dallas Court of Appeals. The Texas Supreme Court granted six petitions for review today, and the first four on the list all came from the Fifth Court of Appeals. Here are brief summaries of the four cases.

Georgia Pacific Corp. v. Bostic, 320 S.W.3d 588, is a wrongful death/asbestos case in which the court of  which the court of appeals reversed an $11.6 million plaintiff’s verdict. The court held that there was legally insufficient evidence that Georgia Pacific’s product was a “substantial factor” in causing the decedent’s mesothelioma, where the man had been exposed to multiple sources of asbestos and  the plaintiffs’ own expert could not say that he would not have developed the disease without that exposure. The petition for review challenges that rulling, arguing that an asbestos plaintiff need not establish that the exposure to the defendant’s product was the exposure that precipitated the illness.

Kia Motors Corp. v. Ruiz, 348 S.W.3d 465, is a products liability case in which the court of appeals affirmed a plaintiff’s judgment based on negligent design of a vehicle. The court rejected Kia’s contention that it should have a presumption of no liability because the car’s design complied with federal crashworthiness standards. The petition for review challenges that holding, as well as the evidence supporting the alleged defect.

Bioderm Skin Care, LLC v. Sok, 345 S.W.3d 189, concluded that laser hair removal for cosmetic purposes was not a healthcare service under Chapter 74 of the Civil Practice & Remedies Code, and that the plaintiff therefore did not need to produce an expert report within 120 days after the filing of her petition. Naturally, the petition for review asserts that laser hair removal is indeed the type of health care claim that requires an expert report.

Finally, in Martin K. Eby Construction Co. v. LAN/STV, 350 S.W.3d 675, the court of appeals affirmed a jury verdict awarding damages in favor of a general contractor and against its subcontractor, overruling both sides’ complaints about the judgment. The court rejected the general contractor’s claim that its own negligence and the negligence of DART should not have reduced its recovery against the defendant, while also sustaining the sufficiency of the evidence and denying the sub’s attempt to use the economic loss doctrine to bar the general contractor’s recovery. The petition for review focuses on the economic loss issue.

Surprisingly, both Georgia Pacific and Bioderm were granted on motion for rehearing after the petitions were originally denied last October.  Oral argument dates have not been set for any of the four cases.

Almost nine years ago, the 68th District Court granted judgment notwithstanding the verdict against plaintiff Basic Capital Management and several related entities, wiping out a jury verdict in their favor for tens of millions of dollars in lost profits. The underlying dispute involved the failure of Dynex to fund an alleged $160 million loan commitment for Basic’s “Single-Asset, Bankruptcy Remote Entities” to make real estate investments. In 2008, the Dallas Court of Appeals affirmed that ruling, holding that the SABRE entities were not intended, third-party beneficiaries of the loan agreement, and that the lost profits from the contemplated real estate transactions were not foreseeable. In 2011, the Texas Supreme Court reversed that decision and remanded the case for consideration of Dynex’s argument that the damages were not supported by legally sufficient evidence. Now, in 2013, the court of appeals has held that, with one exception, there was legally sufficient evidence to support the jury’s original award of damages. The court went through a detailed analysis of the testimony of Basic’s damages expert, concluding that his testimony was sufficient to sustain the jury’s award of damages for the lost real estate investments Basic had envisioned. However, the court of appeals sustained the trial court’s grant of JNOV as to one item of damages — $252,577 awarded by the jury for “lost opportunity” on an investment that Basic had actually completed.

The saga of Basic v. Dynex is not over yet. In addition to the possibility of further appeal to the Supreme Court, the court of appeals also remanded to the district court for further consideration of Basic’s claim for attorney fees, as well as pre- and post-judgment interest. We’ll keep you posted if the case results in any further opinions on appeal.

Basic Capital Mgmt., Inc. v. Dynex Commercial, Inc., No. 05-04-01358-CV

HCBeck was hired to build a hall for a church. It subcontracted the foundation work to another company, B&R Development. After the building was completed, the hall began to have foundation problems, which cost HCBeck $68,976 to repair. HCBeck sued B&R for negligence and breach of contract, and obtained a no-answer default judgment. The company proved up the amount of its damages with an affidavit and supporting documentation, but the trial court did not hold an evidentiary hearing. On restricted appeal, the court of appeals reversed and remanded, holding that an evidentiary hearing was necessary because the damages sought by HCBeck were unliquidated. HCBeck’s affidavit was also inadequate to prove the claimed damages because the supporting documents totaled approximately $87,000, not the $68,976 that HCBeck sought for the default judgment. However, the court of appeals denied B&R’s request for a new trial on the merits because the company had never filed a motion for new trial in the district court. Accordingly, the remand was limited to the issue of HCBeck’s damages.

B&R Development , Inc. v. HCBeck, Ltd., No. 05-11-01150-CV

Back in December, the Dallas Court of Appeals became one of the first courts to issue a ruling on the merits under our new anti-SLAPP statute, the Texas Citizens Participation Act. As we noted previously, the TCPA permits defamation defendants to file a motion to dismiss, which then puts the plaintiff to the burden of producing prima facie evidence in support of their claim. The statute may also permit an interlocutory appeal if the trial court denies the motion to dismiss (although maybe not so much under the Fort Worth Court of Appeals’ reading of the statute). But to invoke the right to an interlocutory appeal, the defendant still has to follow the deadlines established by the TCPA, which requires the notice of appeal to be filed within 60 days after the motion to dismiss is denied, whether by order of the trial court or by operation of law.

Defendant Ravinder Jain timely filed his motion to dismiss, and the trial court heard the motion on February 2, 2012. But the court did not issue a ruling on the motion within 30 days, at which time the TCPA deems the motion to be denied by operation of law. On May 17, the trial court issued an order expressly denying the motion to dismiss, and Jain filed his notice of appeal only a few days after that order. However, the court of appeals held that the notice of appeal needed to be filed within 60 days of the date that the motion was originally denied by operation of law (i.e., early March), making Rain’s late-May notice of appeal untimely. The court therefore dismissed the interlocutory appeal for lack of jurisdiction.

Jain v. Cambridge Petroleum Group, Inc., No. 05-12-0677-CV

After defaulting on his home equity loan, the borrower filed suit to stop the servicer from foreclosing on his home. The borrower argued that (1) the note had been cancelled through the addition of a “VOID” on the last page, (2) that the photocopy of the note produced by the servicer was not authentic, and (3) that the servicer had not shown how it acquired the note, and therefore had not proven it was authorized to enforce it. The court of appeals affirmed summary judgment in favor of the servicer, rejecting all three of the homeowner’s claims. The “VOID” stamp did not show any intent to cancel the note, the court held, because it only appeared over an unused endorsement line on the last page, and there was no other indication of cancellation. The servicer also did not need to produce the original of the promissory note because it was seeking a judicial foreclosure, not making demand for payment of the note, and the borrower had admitted he had defaulted under the note. Finally, the servicer was not required to establish a complete record of the transactions by which it had acquired the note, as its ownership was validly established by the allonge that transferred the note from the original lender to the servicer.

Chance v. CitiMortgage, Inc., No. 05-12-00306-CV

We don’t usually cover family law cases here at 600 Commerce, but this one involves the validity of an award of attorney fees as a sanction against the plaintiff. Steven Shilling and Karrie Gough divorced in 2005. The divorce decree included an agreed permanent injunction prohibiting the Ms. Gough from “disclosing” information about her ex-husband’s medical history. Several years later, Mr. Shilling sued his ex-wife for allegedly violating the injunction. After a bench trial, the trial court ruled that Gough had not violated the injunction by discussing Shilling’s medical history with her friend and new husband because they already knew about Shilling’s medical history — hence, Gough had not “disclosed” it to them. The trial court then awarded Ms. Gough $96,000 in attorney fees under both section 9.014 of the Family Code and as sanctions against Shilling for bringing a frivolous and bad faith lawsuit.

After rejecting section 9.014 as the basis for an award of fees — concluding that section only authorizes attorney fees in a suit for enforcement of the division of property, not enforcement of an injunction against speech — the court of appeals turned to the issue of attorney fees as a sanction. Gough’s answer had requested an award of attorney fees and stated that Shilling’s suit was “frivolous and brought for the purposes of harassment only.” The pleading was otherwise silent on the basis for any award of fees, no motion for sanctions was ever filed, and the trial court never issued any order for Shilling to show cause why he should not be sanctioned. Under those circumstances, the court of appeals held that the trial court abused its discretion by awarding fees to Gough under Chapter 10 of the Civil Practice & Remedies Code, which requires either a motion for sanctions or an order to show cause that describes the sanctionable conduct. The court likewise ruled that the attorney fees could not be sustained as a sanction under Rule 13 for filing a case that was “groundless and brought in bad faith,” because it was not self-evident that Ms. Gough’s discussions with her friend and new husband had not “disclosed” new information about Shilling’s medical history. Accordingly, the court of appeals reversed and rendered the attorney fees award.

Shilling v. Gough, No. 05-11-00292-CV

Kaufman County obtained a temporary injunction against the operators of a local firing range, preventing them from continuing to operate the gun range because it was too close to nearby businesses and residences.  The range owners filed an interlocutory appeal, and the parties thereafter agreed to stay the trial court proceedings while the appeal was pending. But an interlocutory appeal of a temporary injunction is not supposed to delay the trial on the merits, as the issue on appeal is whether the court abused its discretion in ordering temporary relief before the case can proceed to full trial, not to obtain a ruling on the merits from the appellate courts. Invoking the rule that the fastest way to cure the hardship of a temporary injunction is to try the case on the merits, the court of appeals dismissed the appeal, admonishing the parties and the trial court to proceed “expeditiously” to trial.

Morgan Security Consultants, LLC v. Kaufman County, No. 05-12-00721-CV

The court of appeals has affirmed a summary judgment ruling in favor of the owner of Las Colinas Country Club, in a case arising out of the death of a man who was diving for golf balls in the water hazard at the 18th green. The worker’s widow claimed that the country club was liable under the theory that it was engaged in a joint enterprise with the company it had contracted to recover lost golf balls, which had also employed the decedent. The country club obtained summary judgment on the basis that there was no evidence of a “community of pecuniary interest,” as required by the joint enterprise doctrine. The court of appeals agreed, holding that it was insufficient for the plaintiff to show that the country club paid the ball retrieval company 12 cents for each ball recovered. Joint enterprise theory does not rest on the fact that the defendants each had a common business interest in the enterprise.  Instead, it requires a common interest that is “shared without special or distinguishing characteristics” in the relevant common purpose. Although each party to the ball retrieval contract benefited from it, that fact alone was not capable of establishing that the defendants had a community of pecuniary interest.

Logan v. Irving Club Acquisition Corp., No. 05-11-01314-CV

On the eve of trial, the district court granted a motion to withdraw filed by the attorneys for L’Arte de la Mode, Inc., but denied the company’s request for a continuance because it was the client’s fault they had not been paying their bills. The case was called to trial, but nobody appeared for L’Arte. The trial court therefore granted a default judgment for Neiman Marcus, awarding it more than $150,000 in compensatory damages and twice that amount for exemplary damages, all attributable to Neiman’s claim for money had and received.  L’Arte retained substitute counsel, but the trial court denied the company’s motion for new trial. The court of appeals reversed, holding that L’Arte had established all of the elements for a new trial.

The court of appeals analyzed the case under the venerable standards of Craddock v. Sunshine Bus Lines, Inc., 133 S.W.2d 124 (Tex. 1939), which requires the movant to establish that (1) the failure to appear was not intentional or the result of conscious indifference, but was the result of an accident or mistake, (2) the movant has a meritorious defense, and (3) granting the motion will occasion no delay or otherwise injure the plaintiff. L’Arte established the first element through the affidavit of its in-house counsel, who stated that L’Arte had not received either the attorneys’ motion to withdraw or the order granting the withdrawal. L’Arte also established that it had a meritorious defense through its contention that Wells Fargo actually holds Neiman’s money, thanks to its factoring arrangement with L’Arte. Finally, the court of appeals held that L’Arte had satisfactorily assured that a new trial would not injure Neiman Marcus by agreeing to pay its attorney fees incurred in obtaining the default judgment, despite Neiman’s objection that the promise was hollow in light of L’Arte’s inability to pay its own attorneys and its failure to post a bond to supersede the existing judgment. The court of appeals therefore reversed the default and remanded to the district court for a trial on the merits.

L’Arte de la Mode, Inc. v. Neiman Marcus Group, No. 05-11-01440-CV

The court of appeals continues to explore the limits of permissive interlocutory appeals. In this instance, the court was faced with an agreed-upon appeal from an order granting a motion to quash the deposition of the appellant’s former attorney, who allegedly had information showing that a mediated settlement agreement should be vacated. The trial court granted the opposing party’s motion to quash, and the parties agreed to present that ruling to the court of appeals under section 51.014(d) of the Civil Practice & Remedies Code. But the court of appeals rejected that effort, holding that the appeal did not present a “controlling issue of law,” as required by the statute. The trial court’s ruling on a motion to quash did not determine whether other sources of evidence regarding the mediation would be admissible at trial, and the parties could not use an agreed appeal to resolve that evidentiary issue before it was presented at the time of trial. The court therefore dismissed the appeal.

Gunter v. Empire Pipeline Corp., No. 05-12-00249-CV

Denise and Greg Brown sued their homeowner’s association for failing to maintain portions of the property. The HOA counterclaimed, alleging that the Browns had made a number of unauthorized alterations to their home. The Browns then joined American Western, the HOA’s insurer, asserting numerous causes of action against the insurance company. The insurer moved for summary judgment, arguing that the Browns were not named insureds under the policy and that the HOA’s counterclaim was not a covered “occurrence” under the policy in any event. The trial court granted the motion, and the court of appeals affirmed. Under the terms of the insurance policy, American Western was only liable for damage that arose from “an accident,” and it did not apply to property damage to the insured’s own leased property. Thus, even if the Browns were named insureds under the policy — an issue the court of appeals did not reach — the insurer was still not obligated to defend them from the HOA’s counterclaim.

Brown v. American Western Home Ins. Co., No. 05-11-00561-CV

Way back in 1989, a latex products manufacturer named Ansell Healthcare Products registered a federal trademark for the phrase “Condom Sense,” which it used in advertising its Lifestyle condoms. A few years later, Ansell sought federal registration of Condom Sense as a service mark for a proposed chain of retail stores. But Ansell’s own retail stores never materialized, and it ended up licensing the mark to Condom Sense, Inc. (“CSI”), which had already opened up its own Condom Sense store in Dallas.

In 1997, CSI sold its original store on Greenville Avenue, including the right to use the Condom Sense name. That sale led to a series of competing claims over use of the name at multiple locations, including some inconclusive preliminary litigation. In 2005, Ansell — which had never used the mark itself, and which had been unaware of all the drama over its use in Texas — assigned CSI all of its interest in the federal service mark.  CSI then registered the mark in Texas, along with three related service marks that also used the Condom Sense name. CSI ended up suing the operators of the other Condom Sense stores, alleging trademark infringement under the federal Lanham Act, the Texas Trademark Act, and Texas common law. After a bench trial, the trial court ruled in favor of the competitors and cancelled registrations of both the federal and state service marks.  CSI and its owners appealed.

According to the court of appeals, CSI’s competitors were not entitled to cancellation of the state service mark even though the trial court found that CSI registered the mark fraudulently, i.e., while knowing that competitors were also using the Condom Sense mark.  Under section 16.28 of the Business & Commerce Code, the party asking the court to cancel the registration must be someone who was “injured” by the false or fraudulent procurement of the service mark registration, but the other Condom Sense owners had failed to submit any evidence that they were injured by it.  But the court of appeals sustained the trial court’s cancellation of the federal service mark, giving credit to testimony that Ansell’s licensing agreement with CSI had not been renewed past its original expiration date in 1999, and that the mark had therefore lapsed because Ansell had abandoned it. Finally, the court of appeals affirmed the trial court’s ruling in favor of the competitors’ laches and unclean hands defenses, holding that the evidence supported the lower court’s rulings that five years had been too long for CSI to sit on its rights before bringing suit, and that it had acted improperly in selling any rights to the Condom Sense name (in the 1997 sale of the original store) at a time when it was merely a licensee of Ansell’s mark.

Condom Sense, Inc. v. Alshalabi, No. 05-10-01024-CV

In 2011, the Texas Legislature enacted the Texas Citizens Participation Act, a type of statute that is known nationally as an anti-SLAPP (“Strategic Lawsuit Against Public Participation”) act. As with other anti-SLAPP laws, the TCPA gives litigants the right to file a motion to dismiss if the claim involves their “exercise of the right of free speech, right to participation, or right of association.” Tex. Civ. Prac. & Rem. Code § 27.003(a). The filing of such a motion stays discovery in the case (except on a showing of good cause) and puts the burden on the claimant to establish a prima facie case for each element of the claim.  Id. §§ 27.003(a) & 27.005(c). The motion has to be heard within 30 days of filing, and the court must rule on the motion within an additional 30 days or the motion is deemed to be denied by operation of law. §§ 27.004, 27.005, 27.008(a). If the motion is overruled by operation of law, the TCPA grants the movant the right to an interlocutory appeal. Id. § 27.008(a). In short, the TCPA is a powerful tool for the defendant in a defamation case, requiring the plaintiff to prove early in the case that it already has evidence supporting each element of the defamation claim, and potentially taking the case out of the hands of the trial court altogether.

(Strangely, the statute does not expressly grant the movant the right to appeal if the trial court timely denies the motion to dismiss. See Lipsky v. Range Prod. Co., 2012 WL 3600014 (Tex. App.-Fort Worth Aug. 23, 2012, pet. filed). It is unclear whether anything will be done to fix that apparent oversight in the coming legislative session, or whether the Supreme Court will find authorization for such an appeal implicit in the statute.)

The Dallas Court of Appeals has now become one of the first appellate courts to weigh in on the substance of the TCPA. In Avila v. Larrea, an attorney sued Univision and one of its reporters after they broadcast a story suggesting he had engaged in misconduct against some of his clients. The defendants filed a motion to dismiss pursuant to the TCPA and the trial court conducted a hearing. But instead of ruling on the motion itself, the trial court found good cause to permit 90 days of discovery and continued the hearing until that discovery was completed. After 30 days, however, the defendants filed their interlocutory appeal, arguing that the appeal was authorized because the motion was automatically denied after 30 days. The court of appeals agreed, then went on to hold that the plaintiff had failed to produce sufficient evidence that the alleged statements were false, or that the broadcaster had failed to exercise due care to prevent other people from making defamatory statements in the broadcast.  The court of appeals therefore rendered judgment in favor of the defendants and remanded to the trial court to consider an award of damages and costs against the plaintiff.

Avila v. Larrea, No. 05-11-01637-CV

Few defendants are willing to take the risk of not answering a lawsuit when service of process has been defective.  After all, moving to quash service in Texas only gets you additional time to file an answer (see TRCP 122), and there is always the chance that a default judgment will be sustained if the attack on service is unsuccessful.  But whether by  luck or design, Bailey’s Furniture, Inc. has reversed the trial court’s entry of default judgment by challenging the plaintiff’s attempted service of process.  According to the process server’s affidavit, he had attempted to serve “Defendant Charles Bailey” on five occasions.  But while the petition identified Charles Bailey as the registered agent of Bailey’s Furniture, nothing in the process server’s affidavit indicated that he was being served in that capacity, and he was not in fact the defendant named in the lawsuit.  Because proper service had not been made prior to entry of the default judgment, the trial court never obtained personal jurisdiction over Bailey’s, rendering the judgment void.  The court of appeals therefore reversed and remanded the case to the district court for further proceedings.

Bailey’s Furniture, Inc. v. Graham-Rutledge & Co., No. 05-11-00710-CV

The court of appeals has affirmed a judgment in excess of $350,000 for breach of a commercial lease agreement. VSC, LLC entered into the lease as the tenant, while its manager Gary White was the guarantor. Both parties were sued by the landlord, Mike Harrison, after a sublessor stopped paying rent to Harrison. On appeal, VSC and White challenged the trial judge’s findings against their affirmative defenses, including repudiation, modification, ratification, and waiver. The court of appeals held that there was adequate evidence supporting the trial court’s rejection of each of those defenses. The court further held that White could not challenge his status as a guarantor of the lease agreement because he had failed to file a verified denial after he was sued in the capacity of a guarantor. Even without that defect, however, the court still found ample evidence to support the conclusion that White’s personal guaranty applied to the lease agreement.

White v. Harrison, No. 05-10-01611-CV

Dr. Wallace Sarver was hired by Primary Health Physicians, P.A. to serve as a doctor at its clinic in Frisco.  The parties’ written employment agreement included a covenant not to compete, which prohibited Dr. Sarver from practicing medicine within ten miles of the clinic for a period of two years after his termination of employment.  Sarver resigned from the clinic, and shortly thereafter assumed the practice of another physician in Allen — less than 10 miles away from PHP’s clinic.  Dr. Allen sued filed suit for a declaratory judgment on the non-compete.  PHP’s counterclaims included a request for a temporary injunction, which the district court denied.

On interlocutory appeal, the court of appeals affirmed the trial court’s ruling.  The court rejected PHP’s argument that the Covenants Not to Compete Act preempted any requirement to show irreparable harm in order to enjoin Dr. Sarver from violating his non-compete agreement.  In making that ruling, the court dismissed contrary statements in three previous opinions as dicta: McNeilus Cos. Inc. v. Sams, 971 S.W.2d 507 (Tex. App.-Dallas 1997, no pet.); Hilb, Rogal & Hamilton Co. of Tex. v. Wurzman, 861 S.W.2d 30 (Tex. App.-Dallas 1993, no writ); Recon Exploration, Inc. v. Hodges, 798 S.W.2d 848 (Tex. App.-Dallas 1990, no writ).

The court of appeals also rejected PHP’s claim that the trial court had abused its discretion by failing to find irreparable harm.  Although PHP had established that Dr. Sarver had been popular with patients and that patients had continued to ask for him, there was little evidence that any of those patients had left PHP’s clinic and gone to Dr. Sarver’s new practice.  The court of appeals also relied on evidence that the two clinics practiced different types of medicine, with PHP’s facility focused on “episodic” illnesses and injuries, while Dr. Sarver’s new practice was devoted to a more traditional family practice.  Two of PHP’s witnesses also confirmed that the patient volume and profitability of its clinic were about the same as they had been before Dr. Sarver left.  That evidence supported the trial court’s finding of no irreparable harm, and the temporary injunction was therefore affirmed.

Primary Health Physicians, P.A. v. Sarver, No. 05-12-00351-CV

Regency Gas Services owns a natural gas processing facility in the Hugoton Basin. One of the byproducts of natural gas is crude helium.  In 1996, Regency entered into a 12-year contract with Keyes Helium Co., which owned a helium processing facility in Oklahoma.  Under the agreement, Keyes agreed to purchase all of the crude helium produced by Regency’s facility.  But in 2003, Regency found out that one of its biggest customers was unlikely to renew its contracts, which would deprive Regency of the volumes of natural gas needed to make helium production possible.  As a result, Regency decided to shut down its plant and move its processing to a nearby facility owned by another company.  Keyes sued for breach of contract, contending that Regency had not acted in good faith when it decided to eliminate its production of crude helium.  The jury returned a verdict in favor of Regency.

On appeal, Keyes claimed jury charge error in the trial court’s definition of “good faith” under the UCC.  Keyes contended that the trial court should have limited its instruction to the one found in the U.C.C., which simply states that good faith means “honesty in fact and the observance of reasonable commercial standards standards in the trade.”  The trial court had expanded on that definition by adding the phrase “including whether Regency had a legitimate business reason for eliminating its output under the Contract, as opposed to a desire to avoid the contract.”  The court of appeals rejected that argument, concluding that the additional language could not have caused the rendition of an improper verdict because Keyes had failed to submit any evidence that Regency’s decision to shut down its plant had been made in bad faith.  The court of appeals also affirmed the trial court’s grant of a directed verdict against Keyes on its claim that the UCC prevented Regency from reducing its output below the estimates stated in the contract, ruling that section 2-306(1) of the UCC did not such reductions if they were made in good faith.

Keyes Helium Co. v. Regency Gas Services, LP, No. 05-10-00929-CV

It was a landmark decision when the Texas Supreme Court decided that trial courts had to explain their reasoning for granting a new trial, and that the failure to do so was reviewable by mandamus.  In re Columbia Med. Ctr., 290 S.W.3d 204 (Tex. 2009).  Four years later, the correction of such omissions has become a more or less routine part of the job for Texas appellate courts.  In this case, the trial court ordered a new trial on the real party in interest’s attorney fees “in light of a verdict in its favor.”  Because there was no further explanation in the order granting the new trial, the court of appeals issued a short memorandum opinion ordering the trial court to more fully explain its reasoning.  However, the court also denied the relator’s request that the court of appeals enter judgment on the jury verdict, thereby preserving the decision on a new trial for the district court.

In re Whaley, No. 05-12-01518-CV

Being an appellant is hard when you don’t have a reporter’s record.  In this instance, the defendant filed an interlocutory appeal of a temporary injunction order, claiming that the plaintiff and intervenors had no standing to assert their claims and that the trial court had made a host of other errors.  But the court of appeals could find no request for a reporter’s record.  Only a partial transcript of the temporary injunction was included in the record, and there was no notice of issues relied upon in the clerk’s record.  In the absence of a complete reporter’s record, the court of appeals had to presume that the missing portions of the transcript supported the trial court’s ruling.  Accordingly, the temporary injunction was affirmed.

Dao v. Silva, No. 5-12-00331-CV

Attorney Robert Collins was sued by his client, Chris Green, for professional negligence and breach of fiduciary duty.  Green claimed that Collins had failed to serve the defendant in the underlying lawsuit, thereby allowing that case to be dismissed for want of prosecution.  As a result, Green’s claims became time-barred.  Collins filed an answer to Green’s lawsuit, but failed to appear at trial. Green testified in support of his claim, and the trial court granted a default judgment for $31,500.  The trial court subsequently denied Collins’ motion for new trial, and Collins appealed.

On appeal, Collins argued that the judgment had to be reversed because Green had failed to prove that he could have collected on any judgment in the underlying lawsuit.  But while that complaint may have been accurate, the court of appeals saw no need to reach it because Collins had failed to brief anything about Green’s breach of fiduciary duty claim.  That meant that he had failed to attack all independent grounds supporting the judgment, resulting in affirmance of the case.

Collins v. Green, No. 05-11-00893-CV

The court of appeals has issued an opinion reversing an award of sactions in a case arising out of the purchase of a $1.5 million painting.  According to the plaintiff, the defendant art gallery had sold him an N.C. Wyeth painting titled The Sheriff (you can see it here), based in part on the representation that it had been used on the cover of the Saturday Evening Post in 1908.  The buyer subsequently found out that was not true, and sued the gallery for a number of claims, including violations of the Deceptive Trade Practices Act.  The gallery moved for summary judgment, and the plaintiff nonsuited his case.  That led the gallery to move for sanctions, alleging that the suit had been brought in bad faith.

The trial court held a hearing on the sanctions motion, but the plaintiff’s attorney missed it due to a mix-up by his office. The court went ahead with the hearing anyway and awarded sanctions of approximately $83,000.  When the attorney discovered what had happened, he filed a motion for reconsideration and motion to vacate, which the court granted, reducing the sanctions award to $7,500.  But while the first sanctions order had explained the basis for the award in detail, the second order stated only that it was for “violation of TEX. CIV. PRAC. & REM. CODE § 10.001 (1), (3) relating to the plaintiff’s claims brought against the defendant pursuant to the Deceptive Trade Practices Act.”  The court of appeals held that finding was insufficiently specific to sustain the sanctions, especially in light of the nearly $75,000 difference between the two orders.  The court of appeals therefore reversed the judgment and remanded to the trial court for additional consideration — but with a footnote noting the panel’s “grave reservation to condone an award of sanctions against an attorney for filing a suit with multiple claims and asking for more in damages than the statutory limit of a single claim.”

Although it was not mentioned in the court’s opinion, the plaintiff had actually refiled his case in federal court shortly after he nonsuited it in state court.  You can find some of the background of the dispute, including a statement from the gallery’s attorney, here.  According to PACER, that version of the lawsuit is still being litigated.

Sell v. Peters Fine Art, Ltd., No. 05-11-00469-CV

The court of appeals has issued a lengthy opinion in an employment non-disclosure case, partially affirming a jury verdict in favor of the former employer.  In this instance, both the plaintiff and the corporate defendant were in the business of providing in-home pediatric nursing services.  After the defendant company hired away three of the plaintiff’s employees, eleven of the plaintiff’s most profitable accounts moved over to the new company.  The court of appeals started by noting that the defendants did not challenge the jury’s finding that they had entered into a conspiracy to damage the plaintiff.  That led the court to conclude that each of the defendants was jointly and severally liable for the other defendants’ breaches of their non-disclosure agreements, which were themselves established by sufficient evidence at trial.  The court of appeals upheld the jury’s award of $250,000 in lost profits attributable to the eleven patients lost by the plaintiff, but reversed and rendered amounts that had been awarded for profits that would have been earned after the plaintiff went bankrupt and sold off its business.  According to the court, there was no evidence that he plaintiff would have had the right to continue receiving profits from customers after the business was sold, so there was no evidentiary basis for the recovery of those post-sale profits.  Finally, the court of appeals affirmed the trial court’s grant of JNOV against the plaintiff on its claim for attorney fees, holding that fees were not recoverable because the plaintiff had not offered any proof of presentment to the defendants.

Helping Hands Home Care, Inc. v. Home Health of Tarrant County, Inc., No. 05-08-01657-CV

The court of appeals has issued an opinion that serves as a useful primer on the statute of frauds.  The appellant, Michael Kalmus, sue to recover for unpaid commissions after his employment was terminated.  The appellee, Financial Necessities Network, defended the case with the statute of frauds, claiming that the oral agreement alleged by Kalmyus was essentially an agreement for lifetime employment that could not be enforced in the absence of a signed writing.  The court of appeals reversed and remanded, holding that the evidence showed the agreement was terminable at will, and therefore could have been concluded within a year’s time.  In the course of announcing that decision, the opinion collects and recites much of the black-letter law regarding the statute of frauds, making it a useful source of future citations on the topic.

Kalmus v. Oliver, No. 05-11-00486-CV

Maybe things would have gone better for King Lear if the court of appeals had been around to mandamus Goneril and Regan.  In this case, Francis Hutchins’ will divided the estate among her three daughters and appointed one of them, Susan Jones, as the executrix of the estate.  But before the will was filed with the probate court, another one of the daughters, Karen Coyle, took possession of some of the property, including a Chrysler 300 and some jewelry.  Susan filed a “Motion for Turnover Order,” citing both section 37 of the Probate Code and section 31.002 of the Civil Practice & Remedies Code, seeking to force Karen to return the property to the estate.  The trial court denied the motion, leaving Susan to seek mandamus relief from the Dallas Court of Appeals.

Karen argued that section 31.002 was inapplicable because it only governs post-judgment turnover orders, and there was no judgment resolving the disputed issue of who should get to keep the property.  But while the parties’ arguments below had focused on that question, the court of appeals relied on the Probate Code to determine that the property should be returned pending administration of the estate, and that the trial court had abused  its discretion by denying the turnover motion solely on the basis of section 31.002.  The court further held that Susan had no adequate remedy at law because she was entitled to possession of the property even in the absence of an appealable judgment.  Accordingly, the court of appeals conditionally granted Susan’s petition for writ of mandamus.

In re Estate of Francis J. Hutchins, No. 05-12-01098-CV; see also In re Estate of Francis J. Hutchins, No. 05-12-01163 (dismissing concurrent appeal for lack of jurisdiction because there was no appealable judgment).

In an opinion affirming a breach-of-contract case between two subcontractors, the court of appeals reiterated an important appellate principle: unchallenged findings of fact is binding against the appellant.  In this case, Bulldog Ironworks failed to challenge the trial court’s finding that the prevailing party, Top Flight, was never notified by Bulldog or the general contractor that it needed to complete its portion of the project before Bulldog completed the task with its own employees.  Without such notice, the court of appeals concluded that Bulldog had prevented Top Flight from performing, thereby breaching Bulldog’s own contractual obligations.

Bulldog Ironworks, LLC v. Top Flight Steel, Inc., No. 05-10-01360-CV

There will be two new justices taking the bench at the Dallas Court of Appeals starting in January, and last night’s election determined who they will be.  In Place 2, David Evans — former judge of Dallas County’s 193rd District Court — won his election to replace the retiring Justice Joe Morris.  In Place 9, former prosecutor David Lewis will replace Justice Martin Richter, whom he defeated in the May primary election.  Congratulations to both of the incoming justices, as well as to Justices Jim Moseley, Douglas Lang, and Bob Fillmore for being re-elected to their own seats.

A developer in Wylie purchased two adjoining tracts of land.  In 2004, he decided to sell  one of the properties to Capital One.  However, the city decided that both properties would have to be developed as one site, with a single access site on the Capitol One property.  The parties therefore entered into a cross-easement agreement, requiring Capital One to pave the internal drives that would link the access site to both of the properties.  However, Capital One finished its construction and obtained a certificate of occupancy without ever constructing the new approach.  The developer ended up building the driveway himself, and sued Capital One to pay for its cost.  After a bench trial, the trial court awarded the developer awarding approximately $22,000 in damages and another $100,000 for attorney fees.

The court of appeals reversed.   According to the appellate court, the cross-easement agreement required the parties to “keep and maintain” the driveway, but not to actually construct it.  The court also rejected the developer’s argument that Capital One had breached the agreement by failing to comply with a government regulation by not constructing the driveway, because there was no evidence the city had ever ordered Capital One to construct it.  The court also rejected the developer’s quantum meruit argument for failing to attack all grounds asserted in the bank’s summary judgment motion, and remanded to the district court for a determination of the bank’s attorney fees as the prevailing party under their contract.

Capital One, N.A. v. Haddock, No. 05-10-01028-CV

Fannie Mae might sound like somebody’s sweet old grandma, but this grandma knows how to get defaulting borrowers out of the property.  In this instance, the borrower’s mortgage provided that if the house went into foreclosure, he would have to either surrender possession immediately or he would become a tenant at sufferance.  The borrower defaulted, the property was sold at foreclosure, and the buyer sold the property to the Federal National Mortgage Association.  Fannie Mae sent notices to vacate by certified and first class mail, then filed a forcible detainer proceeding.  Both the justice court and the county court at law (in a de novo appeal) ruled in favor of Fannie Mae, and the court of appeals affirmed.  The court held that the tenant at sufferance provision in the mortgage was legally sufficient to establish a landlord-tenant relationship between Fannie Mae and the borrower.  The court of appeals also rejected the borrower’s claim that Fannie Mae had failed to prove it had given him notice of the eviction, holding that delivery of the notice was adequately established by testimony that the copy sent by first class mail had not been returned by the postal service.  Finally, the court of appeals rejected the borrower’s claim that the forcible detainer proceeding should have been abated in favor of a separate lawsuit he had filed in district court to contest title to the property.  Because forcible detainer only determines immediate possession of the property, a separate title contest does not deprive the court of jurisdiction to decide who gets possession of the property in the meantime.

Farkas v. Federal National Mortgage Ass’n a/k/a Fannie Mae, No. 05-11-01416-CV

The Dallas Court of Appeals’ recent series of shareholder oppression cases is making its way to the Texas Supreme Court.  Today’s list of petitions granted included Ritchie v. Rupe, in which the Dallas Court of Appeals held that held a minority shareholder who had sought to leave the company was entitled to “fair market value” for her shares, including “discounts for lack of marketability and for the [s]tock’s minority position.“  That holding was quite different than the subsequent opinion in Cardiac Perfusion Services, Inc. v. Hughes, in which the court of appeals held that the minority shareholder was entitled to a “fair value” buyout, with no discounts, because the shareholder was being forced out of the company.

You can find links to the parties’ briefs in the Ritchie case here.  Oral argument is set for February 26.  In the meantime, the motion for rehearing at the court of appeals is still pending in the Cardiac Perfusion case.

While the blog has been quiet for a while, the justices at the original 600 Commerce have been clearing out a lot of summary dismissals lately (not to mention handling their usual docket of criminal and family law cases, which we generally don’t blog about here).  Three of those short dismissal opinions today turn on issues that may be of some interest.

In Earth Energy Utility Corp. v. Environmentally Engineered Equipment, Inc., No. 05-10-01610-CV, the court of appeals had previously granted leave for the appellant’s attorneys to withdraw.  The court instructed the appellant corporation that it needed to provide notice of the identity of substitute counsel, and even granted an additional 45 days to do so.  Four months later, the appellant still had not obtained successor counsel, and so the court dismissed the appeal.  The lesson: Corporations still can’t represent themselves pro se.

In Bryant v. US Bank, N.A., No. 05-11-00121-CV, the court of appeals dismissed the appeal due to the appellant’s lack of standing.  The appellant had certainly had standing to defend the case when US Bank sued her in a forcible detainer proceeding, but the trial court subsequently dismissed the bank’s case for want of prosecution.  For some reason, the defendant sought appellate review of the DWOP.  Because her rights were not prejudiced when the trial court dismissed the bank’s case against her, the court of appeals determined that she lacked standing to appeal.

Finally, in Olanya v. U.S. Bank, N.A., No. 05-11-00878, the bank had actually been awarded judgment for possession in another forcible detainer case.  But the defendant did not supercede the judgment pending appeal, and the bank took possession of the property.  Since the entire point of a forcible detainer claim is to obtain immediate possession of the property, and that had already occurred, the issue of immediate possession had been rendered moot.  Accordingly, the court dismissed the appeal.

It has been a slow couple weeks here at 600 Commerce, as the court of appeals has been taking it easy with commercial cases recently.  We’ll be back as soon as the court issues any new ones.  In the meantime, feel free to drop by our sister blog, 600 Camp, to see what kind of “persuasive authority” the Fifth Circuit has been issuing .

The Texas Supreme Court has granted the petition for review in an inverse-condemnation case from the Dallas Court of Appeals.  In El Dorado Land Co., L.P. v. City of McKinney, the court of appeals affirmed the trial court’s determination that the plaintiff had failed to plead a compensable interest in a deed restriction for a piece of real property.  El Dorado had sold the property to the city on the condition that it only be used for a community park, but ten years later the city built a library on it instead.  According to the court of appeals, El Dorado could not sue for condemnation because it did not have a vested interest in the property at the time of the taking, despite a contractual option to repurchase the property if the city ever breached the deed restriction.  That was so, the court of appeals held, because “a claim for inverse condemnation under article I, section 17 of the Texas Constitution has traditionally involved interests in real property and not the alleged taking of property interests created under contract.”  The Supreme Court will now have the opportunity to determine whether a contractual option to purchase is a sufficient interest in property to support a takings claim.  The case is set for oral argument on January 9, 2012.

You can find the parties’ briefs here.

As a few people have already discovered, @600Commerce is now on Twitter.  With a little luck, it should be set up to send out an automatic tweet every time a new post goes up here on the blog.  If you would like to follow that feed, you can subscribe through the new link in the right hand column, or just drop on by the Twitter website at the link in this post.

The court of appeals has issued a short memorandum opinion in a restricted appeal following the trial court’s entry of a default judgment.  Tejas Asset Holdings filed suit against a predecessor company of JPMorgan Chase, seeking a declaration that Chase’s deed of trust lien was invalid because it allegedly did not have Tejas’ original promissory note.  Tejas attempted to serve Chase’s registered agent by certified mail, but neither the citation nor the proof of service were actually included in the clerk’s record, and the certified mail receipt was not sufficient to demonstrate service had actually occurred.  Since the record did not show that any proper return of service was on file with the clerk at least ten days before the default judgment was entered, the court reversed the default and remanded the case for further proceedings.

JPMorgan Chase Bank, N.A. v. Tejas Asset Holdings, L.L.C., No. 05-11-00962

Amid a flurry of post-summer break opinions today, the Texas Supreme Court issued one decision in a case from the Dallas Court of Appeals.  In U-Haul International, Inc. v. Waldrip, the court of appeals had reversed and rendered an $11.7 million award of exemplary damages, but left intact $21 million in compensatory damages.  The case arose out of an accident in which a truck with a damaged transmission and an inoperable parking brake rolled over the plaintiff as he was exiting the vehicle.  In its decision today, the Supreme Court reversed the trial court’s judgment even further, rendering judgment for the defendants on the plaintiff’s claims for gross negligence and remanding the negligence claims for a new trial.  The key error cited by the Supreme Court was the trial court’s admission of evidence concerning U-Haul’s safety practices in Canada, little of which had to do with faulty parking brakes or transmissions.  The Supreme Court held that the erroneous admission of that evidence probably caused the rendition of an improper judgment because, among other reasons, plaintiff’s counsel had advocated for its inclusion over the defendants’ objections.  Thus, the case was remanded to the trial court for a new trial on negligence. Justice Lehrmann dissented.

U-Haul International, Inc. v. Waldrip, No. 10-0781

Minority shareholder oppression continues to be a hot topic with the Dallas Court of Appeals, which is helping to fill out an otherwise sparse body of Texas case law. This time, the court has reversed and rendered a take-nothing judgment in an appeal of a $66 million judgment for shareholder oppression and breach of implied contract.  We will have the details in a subsequent post, but you can read the decision for yourself in the link below.

ARGO Data Resource Corp. v. Shagrithaya, No. 05-10-00690-CV

The loan agreement for the Regal Parc apartments in Irving was generally non-recourse to the borrower, but it also included a carve-out that made the loan fully recourse if the borrower breached its obligation to remain a single-purpose entity.  After the lender foreclosed on the property, it sued the borrowers for an $11.6 million deficiency, alleging they had violated the agreement by commingling funds with their related entities and committing waste by failing to maintain the property.  The trial court accepted the borrowers’ explanations of why they had not commingled Regal Parc funds with those of other entities, meaning that the loan remained non-recourse.  But the trial court also entered judgment against the owners for approximately $1 million due to waste and improper retention of post-default rents.  The court of appeals affirmed, holding that the trial court’s finding was adequately supported by the testimony of the borrowers’ witnesses.  The court of appeals also rejected the lender’s claim that the borrowers should have been responsible for an additional million dollars worth of waste that occurred before they assumed the loan, because the loan agreement only made the borrowers responsible for waste that occurred “henceforth” — i.e., from the date they assumed the loan.  Finally, the court found sufficient evidence to support the award of damages for waste and retained rents.

Wells Fargo Bank, N.A. v. HB Regal Parc, LLC, No. 05-10-01428-CV

The owners of a tract of land in Collin County formed a limited partnership with an investor and his company to develop the property, then sold the land to the LP.  As part of the sale, the LP issued a $9 million promissory note to the seller, plus another $1.5 million promissory note to a mortgage company, secured by a deed of trust on the property.  Subsequent loans by the mortgage company to the LP upped the debt by another $6.5 million, also secured by deeds of trust and with priority over the note issued to the sellers.  Since it all ended up in litigation, you will not be surprised to learn that the development collapsed.  The sellers sued the limited partnership, their fellow investor, and the mortgage company for fraud, breach of fiduciary duty, and related claims.  The mortgage company initiated foreclosure proceedings, which were stayed by the grant of a temporary injunction.  Before long, everybody filed motions for summary judgment, and the trial court granted them all.

The court of appeals affirmed.  With respect to the seller’s fraud claims, there was no evidence of misrepresentation in the original loan documents because those documents were not in the record on appeal.  Nor was there any evidence the seller relied on any misrepresentations in the subsequent loan agreements because, citing health concerns, she had not presented herself for deposition and she had not included any affidavit in response to the mortgage company’s no-evidence motion.  The court rejected the seller’s argument that the mere fact of having signed the agreement established that the seller had relied on the alleged misrepresentations.

Hall v. Douglas, No. 05-10-01102-CV

The members of a limited partnership entered into a partnership agreement providing that they would each relinquish their partnership interest if they departed involuntarily.  The agreement also provided that while no payment was required, the remaining partners could still decide to make a payment to the involuntarily departing partner.  In late 2008, two of the three partners decided to terminate Arvid Leick.  The remaining partners initially offered to pay him in excess of $300,000, but Leick insisted on almost twice that amount.  The partnership and the remaining partners then filed suit seeking a declaratory judgment that Leick had been involuntarily terminated and that they therefore did not owe him anything at all.  Leick counterclaimed.  The jury found that Leick’s termination had been involuntary, but that he still should have been paid what the remaining partners had originally offered.  The trial court reduced the award to $125,000, but still entered judgment in favor of Leick.

On appeal, the partnership claimed that the trial court had erred by improperly instructing the jury that the remaining partners had an obligation to treat the involuntarily terminated partner fairly and reasonably.  The court of appeals reversed and entered a take-nothing judgment against Leick, holding that this instruction was contrary to the plain language of the partnership agreement, which left it up to the remaining partners whether an involuntarily departure would lead to any payment at all.  Although the Texas Revised Partnership Act does require partners to be fair and reasonable to one another, that could not serve as the basis for the jury instruction because Leick was no longer a partner after the day he was terminated.  The court of appeals likewise sustained the trial court’s directed verdict against Leick on his claim for breach of fiduciary duty, since that claim also focused on the other partners’ treatment of him after he was terminated, and there was no fiduciary duty for the parties to remain partners with one another.  Finally, the court vacated the trial court’s award of attorney fees to Leick, but noted that he still might still be able to recover fees on remand under the Declaratory Judgments Act, even though he was no longer the prevailing party.

LG Insurance Management Services, LP v. Leick, No. 05-10-01646-CV

Memorandum opinions don’t usually run as long as 12 pages, but that’s how much space it took to sort out a dispute between a property owner and the contractor he hired to do some paving work on the property.  The contractor seemingly abandoned the unfinished project — which was supposed to have taken 7-10 days — after two months, and left behind his rented bulldozer.  The property owner eventually terminated the parties’ contract, but refused to hand over the bulldozer.  The bulldozer subsequently disappeared from the property, with the landowner claiming it had been stolen (a claim the trial court deemed “not credible”).

The trial court found the property owner liable for conversion of the bulldozer, and the court of appeals affirmed.  The court held that the trial testimony adequately supported the findings that (1) the lessor was the proper owner of the vehicle, (2) the landowner had exercised dominion and control over it, (3) the property owner had not acted in good faith in refusing to return the bulldozer, and (4) the alleged superseding cause of the bulldozer’s mysterious disappearance was irrelevant because the alleged theft occurred after the landowner had refused to return it to the rightful owner.  The court of appeals also held that even though the trial court erred by allowing two undisclosed witnesses to testify at trial, that error was harmless because their testimony was cumulative of what other witnesses had also testified.  Finally, the court reversed the trial court’s refusal to grant judgment in favor of the property owner on his breach of contract claim, holding that the evidence supported the breach of contract claim as a matter of law.  Accordingly, the court of appeals remanded the case to the trial court for a determination of the landowner’s damages and the possible recovery of attorney fees.

Miller v. Carter., No. 05-11-00193-CV

A pro se defendant has managed to reverse a summary judgment granted against him by the trial court.  In a very short memorandum opinion, the court of appeals held that the plaintiff’s traditional motion summary judgment failed to identify the specific grounds for the motion, including the causes of action and their elements.  The court therefore remanded the case for further proceedings.

Eoff v. Ahern Rentals, Inc., No. 05-11-00621-CV

In a memorandum opinion, the court of appeals has affirmed summary judgment in favor of PNC Bank on four personal guarantys of a promissory note.  Each of the guaranty agreements contained provisions waiving the defense of offset against a deficiency claim, preventing the guarantors from asserting that the bank had sold the foreclosed property for less than fair market value.  The court of appeals rejected the guarantors’ argument that parties could not waive the statutory offset rights contained in Chapter 51 of the Texas Property Code, citing the court’s own recent opinions in Interstate 35/Chisam Road, L.P. v. Moayedi and King v. Park Cities Bank.  The court also rejected the guarantors’ contention that the language of their own guaranty agreements was not specific enough to waive their right to offset the deficiency.

Toor v. PNC Bank, N.A., No. 05-11-00012-CV

Being on the wrong end of a $125 million arbitration award might cause anyone to investigate whether any of the arbitrators had any evident partiality in favor of the other side.  Unfortunately for the sellers of an electric power plant in Cleburne, the proper time for that investigation was when the arbitrator made his allegedly inadequate disclosures, not after the panel had already announced its award.

The buyer of the power plant, Ponderosa Pine Energy, invoked arbitration in order to resolve a dispute over the sellers’ alleged breaches of representations and warranties in the purchase agreement.  As the pick for its party-appointed (but neutral) arbitrator, Ponderosa selected a Washington , D.C. attorney named Samuel Stern.  Stern subsequently disclosed that he had been appointed as an arbitrator on several other occasions by Ponderosa’s law firm, Nixon Peabody.  Stern also disclosed that he sat on the advisory board of a company that had pitched its legal outsourcing services to Nixon Peabody.  But Stern only listed those contacts as being with the law firm of Nixon Peabody — he did not disclose that they were all with the two attorneys who were representing Ponderosa in the arbitration.  The sellers subsequently demanded to know whether Stern had ties to any of the financial institutions that owned Ponderosa, but failed to follow up on any of the items Stern had actually disclosed.

The arbitration panel — chaired by former Dallas Court of Appeals and Texas Supreme Court Justice James Baker — eventually split 2-1 in favor of Ponderosa’s demand for $125 million.  Ponderosa filed suit to confirm the award, while the sellers moved to have it set aside.  After post-arbitration discovery, the trial court ruled that Stern showed “evident partiality” by failing to disclose (1) the identities of the Nixon Peabody attorneys he had dealt with, (2) the full extent of his role with the legal outsourcing firm, and (3) that the claimant in one of the arbitration cases on which he had been selected by Nixon Peabody was owned by Ponderosa’s original owner.  The court of appeals reversed, holding that the sellers had waived those challenges.  While Stern’s disclosures had not identified all of the facts that the sellers might have wanted to know about those matters, there was enough information to put them on notice that the relationships and dealings existed.  By electing not to investigate the details and to wait until after the arbitration award had already been issued, the sellers waived their ability to challenge Stern’s impartiality at all.   As a result, the court of appeals reinstated Ponderosa’s arbitration award.

Ponderosa Pine Energy, LLC v. Tenaska Energy, Inc., No. 05-10-00516-CV

Delcom Group, LP thought that it was the winning bidder for a project to install “Digital Classroom integration solutions with technology components including installation and service at multiple school facilities” in the Dallas Independent School District.  But when DISD dumped Delcom and went with the second-place bidder instead, Delcom sued both the school district and the competing bidder.  The trial court granted a temporary restraining order to prevent DISD and the competitor from using Delcom’s trade secrets, but ultimately denied a temporary injunction and granted the school district’s plea to the jurisdiction.  On interlocutory appeal from that ruling, the court of appeals affirmed.  Despite a chain of documents that Delcom pointed to as forming the contract, the court held that the contractor could not sue DISD for breach because the parties had never settled on the essential terms of a contract.  Among other problems, Delcom had actually submitted two different bids, one for $79 million and the other for $62 million — and DISD had never stated which bid it intended to accept.  Because the parties had not agreed on the essential terms of a contract, there could be no waiver of governmental immunity under section 271.152 of the Local Government Code.  The court likewise rejected Delcom’s takings claim, because there could be no taking when Delcom had given its alleged trade secrets to the school district voluntarily.  Finally, the panel affirmed the trial court’s denial of the temporary injunction, holding that Delcom had not established any imminent and irreparable injury through use of its trade secrets, nor had it shown it could not be compensated with money damages if any actual misappropriation were to occur.

Delcom Group, LP v. Dallas Independent School District, No. 05-11-01259-CV

In a memorandum opinion, the court has reaffirmed the venerable rule that an appellant must challenge all grounds asserted in a motion for summary judgment if the trial court has not specified on which grounds the motion was granted.  In this instance, the bank moved for summary judgment, attacking the elements of the plaintiffs’ causes of action and seeking to prove its affirmative defenses.  The plaintiffs disputed the estoppel, ratification, and waiver defenses, but failed to address the separate defense of quasi-estoppel.  On appeal, they likewise failed to challenge the quasi-estoppel defense.  As a result of that failure, the court of appeals automatically sustained the trial court’s grant of summary judgment, without any need to reach the merits of the quasi-estoppel defense.

Walker v. Town North Bank, N.A., No. 05-10-01174-CV

The court of appeals has reversed summary judgment for the defendant in a bill of review case.  After 23 years of marriage, the appellant had filed for divorce from her husband.  Their divorce papers purported to waive the parties’ right to investigate assets and financial information.  But the wife later found out that her husband had substantially more assets than she had been led to believe, which in turn led her to seek a bill of review to overturn the couple’s property division, claiming extrinsic fraud in the judgmenmt.  The trial court granted summary judgment in favor of the husband.  The court of appeals disagreed, holding that whether the husband’s alleged misrepresentations of his financial position and attempts to intimidate his wife into foregoing further investigation  presented a fact question for the jury on whether the settlement was procured by extrinsic fraud.  The court also rejected the husband’s estoppel defense, as there was a fact question whether the wife’s prior testimony that the settlement was fair and equitable was based on mistake, fraud, or duress.  Having reversed the summary judgment, the court of appeals remanded the case to the trial court for further proceedings.

In re Stroud, No. 05-00982-CV

A pro se litigant has managed to obtain mandamus relief from the court of appeals.  The litigation started after Mr. Florance filed a $129 lien against the property of the Colin County Clerk.  The trial court invalidated the lien, and the court of appeals rejected both Florance’s appeal and a subsequent bill of review.  But the trial court had also declared Florance to be a vexatious litigant, a ruling that came well after the court lost its plenary power.  The court of appeals footnoted that problem in one of its previous opinions, and Florance took the opportunity to challenge the vexatious litigant finding by filing for a writ of mandamus.  Although the court of appeals initially denied any relief, the panel changed its mind after Florance filed a motion for en banc rehearing.   The panel held that the vexatious litigant order was not an exercise of the trial court’s continuing power to enforce its prior judgment, and that it was otherwise void because it was signed after the expiration of plenary power.  Because mandamus is the appropriate mechanism to require a trial court to vacate a void order, the court of appeals conditionally granted the writ.

In re Florance, No. 05-12-00713-CV (mandamus)

In re a Purported Lien or Claim Against Collin County Clerk Brenda Taylor, 219 S.W.3d 620 (Tex. App.-Dallas 2007, pet. denied) (first appeal)

Florance v. State, 352 S.W.3d 867 (Tex. App.-Dallas 2011, pet. denied) (appeal from bill of review)

Florance v. State, No. 05-08-00984-CR (memorandum opinion affirming conviction and 6-month sentence for failure to release fraudulent lien)

Florance v. Buchmeyer, 500 F.Supp.2d 618 (N.D. Tex. 2007) (dismissing lawsuit against state judge, federal judge, district attorney and assistant district attorneys, district attorney’s investigator, county clerk, unknown clerks, city prosecutor, assistant attorney general, Collin County, the State of Texas, and the federal government)

In a defamation case, the court of appeals has affirmed summary judgment in favor of the defendants.  The case was brought by a group of Dallas police officers who claimed they had been defamed by a former cop, D Magazine, and the magazine’s writer following the publication of a story alleging the issuance of fraudulent misdemeanor citations.  In the process of overruling the plaintiffs’ complaint that the trial court had abused its discretion by failing to grant a further continuance of the summary judgment hearing, the court of appeals endorsed the San Antonio court’s formulation of “a qualified First Amendment privilege against compelled disclosure of confidential information possessed by a journalist.” The court also rejected the plaintiff’s objections to the writer’s affidavit, holding that his testimony of relying on anonymous sources was sufficient to establish a good faith basis for publishing the allegedly defamatory claims, which the plaintiffs had failed to rebut.  Finally, the court of appeals held that the defendants had submitted adequate evidence to prove their lack of actual malice against the plaintiffs, and that the plaintiff had failed to raise a fact issue to contradict that evidence.

Nelson v. Pagan, No. 05-09-01380-CV

The court of appeals has issued an opinion affirming an insurer’s obligation to cover the costs of defense.  In an underlying lawsuit, two homeowners sued their builder for negligent construction of the home.  The builder had been insured by several companies over the years, including Great American and Audobon.  Great American initially agreed with the other insurers that it would  cover one-third of the defense costs, but it pulled out of that deal when it was revealed that the damage to the house had occurred before its policy went into effect.  Audobon then sued Great American.  The trial court granted summary judgment in favor of Audobon, and the court of appeals affirmed.

On appeal, Great American argued that it had no duty to defend the underlying case because discovery had established that the homwoners’ claim did not arise during its policy period.  The court of appeals rejected that argument because the duty to defend is invoked by the plaintiff’s pleading, not the underlying facts.  In this case, the homeowners’ petition alleged only that the injury had occurred at some unspecified date in the past, which could have included the period when Great American’s policy was in effect.  Thus, under the “eight corners” of the pleading and the insurance policy, Great American was obligated to cover the costs of defending the claim.

Great American Lloyd’s Ins. Co. v. Audobon Ins. Co., No. 05-11-00021-CV

A Kaufman County couple has failed in their effort to reverse a summary judgment granted in favor of their homeowners association.  The association had filed its MSJ on December 17, then faxed a notice on December 20 stating that a hearing had been set for January 6.  Because that only provided 17 days notice instead of the required 24 days (including an extra three days due to service by fax), the homeowners objected.  The association then reset the hearing for January 13, and the trial court permitted the couple to file their response on January 12, thereby giving the homeowners 24 days from the original date of notice to file their response.  The court of appeals held that was adequate notice, particularly because the the homeowners had requested an (unspecified) continuance of the January 6 hearing date.  Since the trial court had granted a total of 24 days for the homeowners to respond, the court of appeals held there was no merit to their complaint of inadequate notice of the summary judgment hearing.  The court of appeals also rejected the homeowners’ breach of contract claim, holding that there was no evidence the property’s deed restrictions required the association to maintain a dam located partially on the plaintiffs’ property.

McGowan v. Meadowwood Park Ranch Estates Homeowners Association, No. 05-11-00695-CV

In a short opinion, the court has granted mandamus to a manufacturer of medical devices after the trial court had ordered the manufacturer to produce three emails from its privilege log.  The opinion does not go into much detail about the documents, but quickly concludes that they were privileged because they consisted of communications among employees and the company’s in-house counsel made for the purpose of facilitating the rendition of legal services to the company.  Accordingly, the court concluded that it was an abuse of discretion to compel their production.

In re Blackstone Medical, Inc., d/b/a Orthofix Spinal Implants, No. 05-12-00763

The court today issued an opinion in a products liability indemnification case arising out of a helicopter crash in North Carolina.  The company that operated the helicopter sued the manufacturer of a defective gearbox after the operator settled with the estate of the deceased pilot for $2.5 million.  The gearbox maker had agreed to indemnify the operator for all losses, claims, and expenses arising out of any defective work.  The jury found that the negligence of both parties had been a proximate cause of the accident, but the trial court set aside that finding with respect to the gearbox manufacturer and rendered a take-nothing judgment on the operator’s indemnification claim.  The court of appeals affirmed, holding that there was sufficient evidence that the operator’s negligence caused the helicopter  to crash.  The court then accepted the manufacturer’s argument that the express negligence doctrine barred the operator’s indemnity claim because the indemnity agreement failed to state that it would require the manufacturer to indemnify against the operator’s own negligence.  Even though the manufacturer’s own negligence had been found to be a proximate cause of the crash, the operator could not recover against the manufacturer because the parties did not contract for proportionate indemnity.

American Eurocopter Corp. v. CJ Systems Aviation Group, No. 05-10-00342-CV

The court of appeals has issued a memorandum opinion reinstating an arbitration award.  The case turned on the application of a “dollar-for-dollar credit” provided for in the parties’ written agreement.  The arbitration panel concluded that the credit only applied to certain cases brought by the defendant’s law firm, resulting in an award of $551,000 in damages on the defendant’s counterclaim.  After the plaintiff/counter-defendant filed suit to challenge the arbitration award, the trial court apparently accepted a different interpretation of the contract and lowered the amount of the award.  The court of appeals reversed and reinstated the arbitration award, holding that there was no “evident material miscalculation of figures” and that the award was supported by the parties’ evidence.

Petroff v. Shrager, Spivey & Sachs, No. 05-10-00159.