In this simple breach of contract case, the defendant agreed to pay the plaintiff approximately $8,000 through installment payments of $75 per month.  After paying $2,500, the defendant stopped making the monthly payments and the plaintiff brought this lawsuit.  After a trial, a jury awarded the plaintiff the remaining balance on the contract–just over $5,500.

The Dallas Court of Appeals affirmed the jury’s findings, but remitted the damages award to $1,200 because there was no acceleration provision in the contract and the evidence only established that the defendant had failed to make a total of sixteen payments.  The Court reasoned that absent an acceleration clause or a repudiation, the defendant was only entitled to recover the past due payments under the installment agreement, not the entire remaining balance. Consequently, the Court ordered a remittitur.

Eoff v. Central Mut. Ins. Co.

By local ordinance, the City of Plano permits the owner of a billboard that pre-existed the city’s current territorial limits to repair the sign if it becomes “dilapidated and deteriorated.” The owners of one such sign near Highway 75 sued the city after their request to repair the sign after the sign and all but one of its five supporting beams were blown over in a storm. The city refused, arguing that the sign was “destroyed,” not dilapidated and deteriorated. The Court of Appeals disagreed, noting that the ordinance did not contain the word “destroyed,” and that its definition of “dilapidated and deteriorated” included broken support members. The Court ruled against the sign owners on their temporary regulatory taking claim, however, citing recent Texas Supreme Court authority that the pendency of a civil-enforcement procedure, by itself, does not give rise to a taking.

CPM Trust v. City of Plano, No. 05-14-00104-CV

In this products liability case, a distributor of latex gloves sought statutory indemnity from the manufacturer of those gloves.  The Court of Appeals found that the manufacturer was liable under Section 82.002 of the Texas Civil Practice and Remedies Code to the distributor for litigation costs expended in defending two products liability lawsuits related to the gloves brought by healthcare workers because those expenses were “related to” the manufacturer’s gloves, even though other manufacturer’s gloves were at issue in the lawsuit.

United Med. Supply Co. v. Ansell Healthcare Prods., Inc.

The plaintiffs defaulted on their mortgage and were then removed from the house via a forcible detainer action filed in Collin County.  They appealed, arguing that the trial court erred by admitting as a business record several notices of eviction sent to them in the mail.  The plaintiffs’ primary argument was that the witness who laid the foundation through an affidavit was not qualified.  The Dallas Court of Appeals disagreed, noting that “Rule 803(6) does not . . . require a witness laying the predicate for introduction of a business record to be the creator of the document or even an employee of the company keeping the record.” All that is required is that he/she have personal knowledge of the facts contained within the business record.

Singha v. FNMA

Last summer, the Dallas Court of Appeals rendered judgment in favor of television reporter Brett Shipp on a motion to dismiss under the Texas Citizens Participation Act. The plaintiff in that case, Dr. Richard Malouf, is back in the Court of Appeals with another pair of defamation cases involving the TCPA. This time, Malouf and his wife sued AOL, Inc. and its reporter for publishing an allegedly defamatory story concerning a backyard water park being built while Malouf was “charged” with millions of dollars in Medicaid fraud. Malouf claimed that was defamatory because he had never been “charged” with fraud in any criminal proceeding.

Because the statements related to matters of public concern — namely, allegations of defrauding taxpayers and the provision of dental services to the public — the TCPA shifted the burden to the Maloufs to establish a prima facie case for each element of the defamation claim by clear and specific evidence. The Court of Appeals held that they had failed to do so. Because the defendants were acting as members of the media, the Maloufs had to prove that the statements were actually false. The Court of Appeals held that the words “charged” and “stolen’ did not improperly suggest criminal charges or activity when Malouf had been sued under civil law for the alleged conduct several times. Therefore, a person of ordinary intelligence would not perceive the article’s claims to be more damaging to Malouf’s reputation merely because the article omitted to distinguish between civil and criminal proceedings. The Court of Appeals reversed and rendered in favor of AOL, affirmed dismissal as to the reporter, and remanded to the trial court for determination of AOL’s attorney fees and expenses.

AOL, Inc. v. Malouf, No. 05-13-01637-CV

The Texas Citizens’ Participation Act continues to be a powerful tool in certain types of commercial cases. In this instance, the publisher of Petroleum News Bakken managed to obtain and affirm a judgment of dismissal and attorney fees in a business disparagement and tortious interference case. The dispute arose out of a newspaper article that stated no records could be found for wells that Breitling Oil & Gas claimed to have drilled in North Dakota. The publisher moved to dismiss under the TCPA, which shifted the burden to the burden to the plaintiff to come forward with prima facie evidence of each element of its claims. Breitling responded with a notice of nonsuit, but that didn’t stop the trial court from moving forward with the hearing and awarding the defendant $88,444.58 in attorney fees and expenses. The Court of Appeals affirmed, holding that the nonsuit did not moot the pending motion to dismiss because the defendant had already made a “pending claim for affirmative relief” through its request for attorney fees and sanctions. The Court also rejected Breitling’s argument that the attorney fees should have been tried to a jury, noting that the record did not show that Breitling ever objected to the trial court making findings on the reasonableness of the fees awarded.

Breitling Oil & Gas Corp. v. Petroleum Newspapers of Alaska, LLC, No. 05-14-00299-CV

In this complex fraud case involving the purchase of a dry cleaning business, the Court of Appeal upheld the trial court’s granting of a directed verdict in the defendant’s favor because, among other things, the plaintiff did not identify a fraudulent statement.  The plaintiff alleged that, in the course of purchasing a dry cleaning business, the defendant purportedly asserted that the price offered to the plaintiff was “fair, reasonable, and supported by a valid appraisal.”  However, the court found that there was no evidence that the defendant made any such statement.  Indeed, the plaintiff testified that she did not negotiate the price of the business and was simply told that the price of $1.6 million was a take-it-or-leave-it number.

Kwik Indus., Inc. v. Rock Prairie Holdings, Ltd.

In this action for negligent appraisal, the Court of Appeals found that the two-year statute of limitations for negligence actions had not been tolled by the discovery rule because the homebuyer knew, before closing, of information indicating the value of the property was much less than what he had offered to pay for it.  Specifically, the appraiser had indicated that the house was worth $295,000 (or $10,000 less than what the plaintiff had offered to pay for it).  More importantly, Zillow.com showed that the property was $100,000 less than what the buyer had offered.  Despite these two indications that should cause a reasonable person to investigate further, the plaintiff did not bring suit until three years later, when he had hired another appraiser to provide an estimate of the property’s value and found out that the property was, in fact, worth much less than he had paid.

Bruning v. Hollowell

The Court of Appeals has affirmed summary judgment for Albert G. Hill, Jr. in one part of the long-running legal battle initiated by his son, Albert G. Hill III. The trial court ordered the receiver for Hill 3 Investments, LLC to wind up the company and distribute its assets to Hill Jr. and Hill III. Among other items, the Court of Appeals rejected Hill III’s argument that his accountant’s declaration had demonstrated a fact dispute over the receiver’s calculation of the company’s capital accounts. No fact issue existed, the Court of Appeals held, because the accountant only noted that he could not verify the receiver’s calculation with the records available to him. That statement gave rise to “no more than a surmise or suspicion that the accounting might be different if additional documents were reviewed.”

Full disclosure: Our firm formerly represented Hill Jr., including in the case that originally resulted in the appointment of the receiver for Hill 3 Investments. We were not involved in the case at issue here, however.

Hill v. Hill, No. 05-13-00732-CV

Two years ago, the Dallas Court of Appeals ruled that PlainsCapital Bank was not entitled to judgment against a borrower because it based its deficiency claim on the price it obtained when the property was sold a year after foreclosure, rather than the fair market value of the property at the time it was foreclosed. Last summer, the Texas Supreme Court granted the bank’s petition for review and set the case for oral argument. This morning, the Supreme Court held that the Court of Appeals was correct in ruling that § 51.003 of the Texas Property Code controlled PlainsCapital’s deficiency claim. However, the Court also ruled that “fair market value” under the deficiency statute does not mean the price that a willing buyer would pay to a willing seller at the time of foreclosure. Because § 51.003(b)(5) permits the trier of fact to consider the forward-looking factor of discounts that may be applied to a future sales price, it was proper for the trial court to base its fair market value finding on the price the bank actually received in its post-foreclosure sale. The Supreme Court remanded to the Court of Appeals for consideration of additional issues.

Justice Boyd (joined by Justice Guzman) dissented, arguing that the majority had improperly cast aside the historical definition of fair market value, and that evidence of any future discounts in the sale price of the property was only relevant to consideration of the fair market value at the time of the foreclosure.

TLDR: To determine FMV at the time of foreclosure, you can look to values received in the future.

PlainsCapital Bank v. Martin (majority)

PlainsCapital Bank v. Martin (dissent)

In a case involving a dispute among members of the Obowu Union DFW, the plaintiff sued the other members for defamation after he was suspended.  The Union filed a plea in intervention but the plaintiff never filed an answer and the Union moved for default judgment, which the trial court granted.  The case went to trial and a jury returned a verdict in the plaintiff’s favor on his defamation claim for over $200,000.

The defendants appealed the defamation verdict, which the Court of Appeals affirmed, and the plaintiff also appealed the default judgment.  The Court affirmed the default judgment, rejecting the plaintiff’s argument that the trial court should have granted him a new trial because the intervenors failed to serve a copy of the motion for default judgment on him.  Specifically, the Court noted that “after a defendant has been served with citation and the petition, the plaintiff has no legal duty to notify the defendant before taking a default judgment . . . .”

Iroh v. Igwe

Just under two years ago, the Court of Appeals reversed summary judgment for Compass Bank because its custodian of records affidavit did not explain how the witness would have personal knowledge to prove up the promissory note. On remand, the trial court granted the bank’s amended motion for summary judgment, and this time that judgment was affirmed. Among other things, the defendants sought to establish a fact issue by pointing to a discrepancy in the amount of damages owed to the bank in the original summary judgment affidavit versus the affidavit in the amended motion. The Court of Appeals disposed of that issue by pointing out that it had already held the original affidavit to be “no evidence,” so the purported conflict was not really a conflict at all. The Court also held that the bank was not required to file the original promissory note, despite a Collin County local rule to that effect, because the local rule conflicted with the Texas Rules of Evidence governing the admissibility of a duplicate. Finally, although the lending instrument contained an illegal homestead warranty provision, the Court held that provision was severable from the remainder of the contract.

Vince Poscente Int’l, Inc. v. Compass Bank, No. 05-14-00165-CV

Less than a month ago, the Court of Appeals held that a Motion for New Bench Trial Is Not Mandamus-able. Now the Court has reiterated that holding where a district judge granted a new new trial after the case had originally been tried to an assigned judge. The Court relied in part on Justice O’Neill’s dissent in In re Columbia Medical Center, which argued that in the situation of a short bench trial, the benefits of a prompt retrial outweigh the detriments of prolonging the case with interlocutory review.

If motions for new bench trial are becoming a thing, we’ll keep an eye on the Supreme Court to see whether it wants to weigh in.

In re Dixon, No. 05-15-00242

A trio of worked-up horse breeders managed to Facebook-rant their way into a colorful defamation lawsuit, which the Dallas Court of Appeals has now permitted to proceed as to one of the two counterclaim defendants. Appellants Jane McCurley Backes and Tracy Johns sued Appellee Karen Misko for tortious interference.  Misko counterclaimed against Johns for libel and against Backes for conspiracy to libel. The opinion quotes extensively from the women’s online postings, the pettiness of which will be no surprise to anyone familiar with the Internet. Misko eventually unfriended Backes and Johns, the latter of whom then posted a thinly-disguised query whether anyone had ever known someone with Munchausen Syndrome by Proxy. Misko’s daughter had long been a victim of health issues, and other posters saw Johns’ post as an attack on Misko. That post served as the basis for Misko’s libel claim. The trial court denied Johns and Backes’ motions to dismiss under the Texas Citizens Participation Act.

The Court of Appeals held that Johns and Backes both met their initial burden of demonstrating that the claims against them were based on their rights to free speech and association, respectively. That shifted the burden to Misko to come forward with clear and specific evidence establishing a prima facie case of each element of her claims. The Court of Appeals held that Misko had indeed met that burden with respect to her libel claim against Johns, but not as to the conspiracy claim against Backes. Because Misko had not come forward with clear and specific evidence of a meeting of the minds between Backes and Johns, the Court rendered judgment dismissing the civil conspiracy claim and remanded the case to the trial court for consideration of an award of attorney fees and costs.

Backes v. Misko, No 05-14-0566-CV

The defendant in this private jet interior decoration case pleaded a series of affirmative defenses.  After the defendant’s counsel objected to requests for production asking for documents related to these affirmative defenses and then instructed its corporate representative not to answer depositions questions about them, the trial court struck the affirmative defenses in their entirety as a sanction.  The defendant later lost at trial and appealed the trial court’s sanction.

The Court of Appeals reversed, holding that striking the defendant’s affirmative defenses amounted to a “death penalty” sanction that went too far.  Because the trial court had not adequately considered other remedies (such as assessing deposition costs or awarding attorneys’ fees), the sanction was unwarranted.  The Court explained that “case determinative sanctions may be imposed in the first instance only in exceptional cases when they are clearly justified and it is fully apparent that no lesser sanctions would promote compliance with the rules.”

Associated Air Ctr. LP v. Tary Network Ltd.

In this insurance coverage case, the Court of Appeals construed the “business risk exclusion” to preclude coverage for water damage to a townhome complex that the insured was building.  A business risk exclusion is a typical provision in commercial general liability insurance policies that is used to exclude coverage for “certain risks relating to the repair or replacement of the insured’s faulty work or products or defects in the insured’s work or product itself.”  The reason behind including such exclusion is simple:  the insured should be able to control the quality of the goods and services it supplies.  In this case, the Court found that the exclusion precluded coverage because the evidence established that property damage at issue occurred during the construction of the townhome complex.

Dallas Nat’l Ins. Co. v. Calitex Corp.

If a court orders a party to be subjected to weekly drug testing, the testee can’t sue the testor over how it is fulfilling its court-appointed duties thanks to the doctrine of derived judicial immunity.

B.W.D. v. Turnage, No. 05-13-01733-CV

In this case involving a plaintiff’s purchase of a condominium allegedly containing “harmful indoor mold,” the plaintiff insisted that the trial court erred by (among other things) granting the defendants’ no-evidence motions for summary judgment without permitting adequate time for discovery.  The Court of Appeals held that adequate time for discovery had, indeed, passed since the plaintiff had announced ready for trial several times prior to the defendants’ motions were filed In addition, the plaintiff had previously agreed not to seek additional discovery and did not explain what additional discovery was necessary.  Thus, the Court concluded that the plaintiff had failed to show that the trial court abused its discretion when it determined that there had been adequate time for discovery.

Manautou v. Ebby Haiilday Real Estate, Inc.

The Dallas Court of Appeals has reversed an order appointing a receiver to wind up the affairs of a business equally owned by two siblings who could not agree on selling the cattle ranch they operated. The opinion serves as a useful primer on the statutory criteria for appointment of a receiver. In this instance, the Court of Appeals held that a receiver could not be justified because there was no evidence that the company was under threat of an irreparable injury if the property was not sold.

Spiritas v. Davidoff, No. 05-14-00068-CV

In this partnership dispute, two individual limited partners sued their fellow individual partner (who also signed the limited partnership agreement on behalf of the general partner entity) for, among other things, breach of contract and breach of fiduciary duty.  The jury returned a verdict in favor of the two limited partners, but the trial court granted a JNOV, dismissing those claims for lack of standing.  The Court of Appeals affirmed because “a limited partner does not have standing to sue for injuries to the partnership that merely diminish the value of that partner’s interest” and the plaintiffs’ claims were based solely on their fellow partner’s duties as a partner.

Hodges v. Rajpal

Ehring Enterprises and RD Management were both distributors of a French manufacturer’s skin-care products. Ehring’s exclusive distribution territory was the eastern U.S., while RD distributed product exclusively in the western U.S. After both distributors’ contracts had expired, RD sued Ehring for breach of contract due to sales it had made in RD’s territory. The trial court accepted RD’s argument that it was a third-party beneficiary of the agreement between Ehring and the French manufacturer. The Court of Appeals affirmed that ruling, noting that the sales RD complained of had begun while Ehring was still contractually obligated to stay out of RD’s sales territory.

Ehring Enters., Inc. v. RD Mgmt. Corp., No. 05-13-00711-CV

In this fraud and aiding and abetting breach of fiduciary duty case, the court addressed  the defendant’s no evidence motion for summary judgment.  The court held that the plaintiff had not properly responded to the no evidence motion because it merely stated the elements of the aiding and abetting claim in its response brief, without specifically “pointing out” any evidence to support the contention that the defendant “knowingly assisted” in the breach of fiduciary duty.  Although the plaintiff attached a “large amount of evidence” to its response, the court noted that the plaintiff’s response required specific references to the evidence that would support each element of the claim.

MaximusAlliance Partners, LLC v. Faber

Homeowners Nader and Fariba Daryapayma purchased a $1.5 million house and financed $735,000 of the purchase price with two loans secured by liens on the home.  Shortly thereafter, the Daryapaymas applied for and obtained a home equity loan from Countrywide for $937,500, the purpose of which was to pay off their current mortgage (i.e. the existing $735k loans).   Countrywide funded the home equity loan and the Daryapaymas used the proceeds  to pay off the first two loans.

A few years later, the Daryapaymas defaulted on the home equity loan.  Bank of New York Mellon (BONY), as the assignee of the loan, foreclosed on the Daryapaymas property and then filed a petition for forcible detainer.  The Daryapaymas counterclaimed, contending that the home equity loan violated the Texas Constitution, which limits the amount of home equity loans, when combined with existing mortgages, to 80% of a home’s fair market value.  The Daryapaymas argued that because the $937k home equity loan combined with their outstanding $735k mortgages exceeded 80% of the home’s value, the foreclosure was unenforceable.  The trial court agreed and granted the Daryapaymas summary judgment.

The Dallas Court of Appeals reversed, holding that because the loan documents reflected that the $937k home equity loan was made, in large part, to pay off the existing mortgages, the trial court erred in including the balance of those loans in its calculation of the total amount of indebtedness.

Bank of New York Mellon v. Daryapayama

Since In re Columbia Medical Center, 290 S.W.3d 204 (Tex. 2009), trial courts have been required to specify their reasons for granting a new trial, and the failure to do so has been subject to appellate review by way of mandamus. In a very short opinion arising out of a divorce case, the Dallas Court of Appeals has recognized a notable exception to that rule. When the trial has been to the court instead of a jury, the concerns about transparency in setting aside a jury verdict are not present. Thus, a trial court does not abuse its discretion in granting a new trial without explanation following a bench trial.

In re Foster, No. 05-15-00179-CV

In one of the last opinions of 2014, the Dallas Court of Appeals denied mandamus relief to VERP Investment LLC, which was seeking to overturn a trial court order requiring it to turn over a computer hard drive to a third-party forensic examiner. The Court denied mandamus because VERP had not included transcripts of the trial court’s hearings or a statement that no evidence was taken at them. That left the Court of Appeals unable to determine whether the trial court had abused its discretion in granting the motion to compel. But VERP persisted, filing a second petition that cured the original’s omissions, and that mandamus petition has now been conditionally granted.

On the merits, the Court of Appeals first noted that an order requiring direct access to an electronic device is burdensome because it is intrusive. Due to that intrusiveness, the party seeking direct access must establish via evidence that the opponent is in default of its discovery obligations. In this instance, however, the movant failed to come forward with any evidence, and “[m]ere skepticism or bare allegations” are not enough to warrant direct access to electronic devices. Therefore, the trial court abused its discretion, and the Court of Appeals directed it to vacate the order granting the motion to compel.

In re VERP Investment LLC (VERP II), No. 05-15-00023-CV

BB&T sought to collect a judgment against Brittania Construction by seeking to garnish funds held by an individual named Richard Heath.  BB&T claimed that Mr. Heath owed Brittania $178,000 that it was entitled to collect.

As it turns out, Mr. Heath also had a $185,000 unsecured obligation to a Trust that he had agreed to pay using the same funds BB&T sought to garnish.  The Trust sought to intervene to protect its interest in those funds, but the trial court granted the other parties’ motion to strike its intervention.  The Trust appealed.

On appeal, the Dallas Court of Appeals affirmed, holding that although Mr. Heath may owe the Trust money, the Trust could not “show ownership of or an equitable interest in the money held by Heath such that Trust was entitled to intervene in the garnishment action.”

Gregory B. Baten Trust v. Branch Banking & Trust Co.

In this suit to collect on a promissory note, the Court of Appeals found that the six-year statute of limitations to sue on a “negotiable instrument” did not apply because the note at issue was not, in fact, negotiable.  According to the Court, because the note represented a revolving line-of-credit, permitting the borrower to prepay all or any portion of the amount due without incurring any prepayment penalty, the note did not contain an unconditional promise to pay a sum certain for a fixed amount and was therefore non-negotiable.  Thus, the Court found that the six-year statute of limitations for negotiable instruments did not apply and affirmed the trial court’s decision.

Bank of Am., N.A. v. Alta Logistics, Inc.

In this negligent hiring case, the plaintiff bought a truck that she later discovered had been stolen.  The Court of Appeals upheld the trial courts grant of summary judgment in favor of defendants because the economic loss rule barred recovery of economic damages based on a claim of negligent hiring.  Instead, such a claim requires proof of physical injury from the negligent hiring, which the plaintiff could not establish.

Clark v. PFPP L.P.

In a dispute over an $1,800 monthly rental payment, the Court of Appeals affirmed a judgment in favor of the landlord and rejected several arguments by the tenant that the trial court had erred.  One such argument was the tenant’s contention that because the landlord had altered the memo line of several checks he had sent her, his obligation to pay rent was discharged.  Apparently, the landlord changed the memo line to reflect the month for which she applied the tenant’s payment.

Because the landlord had not acted with fraudulent intent, and because the notation did not change anything material about the check, the Court held that the affirmative defense of discharge did not apply.

Cunningham v. Anglin

Sign Effects Sign Company (the redundancy is sic) obtained a $22,000 default judgment in Ohia against SignWarehouse.com. Six years later, SESC sought to domesticate that judgment in Texas. SignWarehouse argued that the Ohio judgment was invalid because the company was not subject to personal jurisdiction in that state. The trial court and the Dallas Court of Appeals agreed. Relying on Michiana Easy Livin’ Country, Inc. v. Holten, 168 S.W.3d 777 (Tex. 2005), the Court of Appeals held that simply shipping purchased good to another state was insufficient to establish minimum contacts for specific personal jurisdiction, particularly where the parties’ contract specified that venue for any dispute was to be in Grayson County.

Sign Effects Sign Co., LLC v. SignWarehouse.com, No. 05-12-01301-CV

The buyer of a used Inifiniti M45 brought the car to Crest Infiniti and approved nearly $6,000 in maintenance and repair work. But after the repairs were completed, the owner failed to pay for the work or pick up the car. Unsurprisingly, he had also failed to keep up on his payments to the used vehicle company that had financed his purchase, and the seller sent a repo company over to Crest’s lot to recover the car. Crest sued for tortious interference and conversion but lost a bench trial. The Court of Appeals reversed, holding that the undisputed evidence established Crest had a possessory mechanic’s lien on the vehicle, that the mechanic’s lien took priority over the seller’s security interest as a matter of law, and that the seller had converted the car when the repo driver removed it from Crest’s lot without permission. The Court therefore remanded the case to the trial court to enter judgment in favor of Crest and to consider an award of attorney fees to it as the prevailing party under section 70.008 of the Property Code.

Crest Infiniti II, LP v. Texas RV Outlet, No. 05-13-01285-CV

Connie Sigel used a website to book an apartment in Paris (the one in France) for a seven-night vacation. During that stay, an intruder with keys to both the apartment and its safe stole most of Sigel’s possessions. Sigel sued the booking agency on multiple contract and tort claims. The trial court denied My Vacation Europe’s special appearance, but the Dallas Court of Appeals reversed and rendered. The Court held that Sigel’s act of accessing MVE’s website and renting an apartment while she was located in Dallas did not constitute a purposeful availment of Texas by MVE, and there was no evidence that MVE specifically targeted Texas residents for its services. The Court of Appeals also held that there could be no specific jurisdiction in Texas because the claims all arose from a burglary that occurred in France, meaning that the relationship between Texas and the operative facts of the litigation was too tenuous to support jurisdiction.

My Vacation Europe, Inc. v. Sigel, No. 05-14-00435-CV

Update: Threepeat. The dream is alive.

A Highland Park property dispute has resulted in a 30-page memorandum opinion affirming the trial court’s summary judgment ruling that the defendants have title to a strip of land adjacent to their home, but also reversing an attorney fee award of $40,670 against the plaintiff, Armstrong DLO Properties. ADLO filed suit, seeking to establish that (among very many other things) a 1949 warranty deed in the defendants’ chain of title was invalid, which would make the frontage of ADLO’s lot approximately 155 feet wide.

During the summary judgment hearing, the trial court revealed that it had sua sponte discovered that ADLO’s owner had successfully sued the estate of his father seeking reformation to the deed, establishing that the frontage was only 140 feet wide. The court orally stated that it would take judicial notice of that judgment, describing it as an issue of “estoppel.” The court subsequently granted summary judgment for the defendants without identifying the grounds for its ruling. The Court of Appeals rejected ADLO’s claim that the district court had improperly relied on matters outside the record in granting the summary judgment, as there was nothing in the written summary judgment order indicating that the court had actually granted summary judgment on the basis of the prior judgment. Because the grounds otherwise presented in the defendants’ motion were sufficient to justify summary judgment, the Court affirmed it. However, the Court reversed as to the award of attorney fees, holding that fees were not recoverable under the Declaratory Judgments Act because the issue was title to the property, not the location of the boundary between properties. See Tex. Civ. Prac. & Rem. Code § 37.004(c).

Armstrong DLO Props., LLC v. Furniss, No. 05-13-01581-CV

Update: The pressure is now on a for a three-peat next week.

In this bill of review concerning an eviction for unpaid rent, the Court of Appeals found, among other things, that the trial court did not abuse its discretion by not holding a hearing on a motion for new trial.  The Court explained that “a trial court is required to conduct a hearing on a motion for new trial only when the motion presents a question of fact upon which evidence must be heard.”

Carson v. El Capitan Apartments

In this legal malpractice claim, the plaintiff argued that his expert opinion as to proximate causation were sufficient to establish that element of his claim.  But the Court of Appeals found that the plaintiff’s expert opinion had been excluded by the trial court as unreliable and the plaintiff did not assign error to that ruling in his appellate brief.

Kuzmin v. Schiller

The Dallas Court of Appeals has affirmed summary judgment in favor of former state and federal district court judge Joe Kendall and the law firm of Provost & Umphrey. The lawsuit alleged that the plaintiffs had provided Kendall with confidential information for a possible qui tam lawsuit related to the procurement practices of the Dallas and Houston Independent School Districts, and that Kendall and Provost had improperly used that information in filing a successful qui tam lawsuit on behalf of two other clients. Kendall and Provost sought and obtained summary judgment, arguing that no confidential information has been shared, that no duty of loyalty was owed or breached, that there was no evidence of an attorney-client relationship, and that there was no evidence of damages. Among other things, the Court of Appeals held that there was no evidence Kendall had intended to undertake a legal representation of the plaintiffs by meeting with one of them to discuss the “possibility” of a qui tam lawsuit, and that there was no evidence Kendall had actually disclosed any of the plaintiffs’ confidential information in connection with the lawsuit that was actually filed.

Gillis v. Provost & Umphrey Law Firm, LLP, No. 05-13-00892-CV

Marco Calvillo sued the owner of the Kliff Klub — first review on Yelp: “Drinks are very strong”; second review on Yelp: “The drinks are EXTREMELY strong” — for dram shop liability after a patron of the club collided with Calvillo’s truck at 3:30 am, driving the wrong way on I-30. Testing at the hospital more than two hours after the club’s closing time showed the driver still had a .177 BAC. The county court at law granted summary judgment for the club owner, and the Court of Appeals affirmed. The patron’s deposition testimony was that she had never bought a drink at the club that night, but was instead consuming drinks bought for her daughter by various men at the club. Because the driver’s consumption was “twice removed from the provision of alcohol to the men who purchased it and gave it” to the daughter, Calvillo has no evidence that the driver was “served” alcohol within the scope of the Dram Shop Act.

Calvillo v. Frazier, No. 05-14-00013-CV

Update: Woo hoo!  We’re betting it was the on-the-nose Yelp reviews that put it over the top with the judges.

Dr. Erwin Cruz sued his former business partners, claiming, among other things, that he was a limited partner in an entity called Plano AMI, L.P.  Before trial, the trial court granted Dr. Cruz’s motion for partial summary judgment establishing his ownership interest as a limited partner, based in large part upon the fact that Plano AMI’s tax returns listed Dr. Cruz as a limited partner.

On appeal, the Dallas Court of Appeals reversed that decision, finding that the partnership agreement was ambiguous and that because Plano AMI had later amended its tax returns to list Dr. Cruz as a general partner, Cruz had failed to establish as a matter of law that he was a limited partner.

Plano AMI, L.P. v. Cruz

Mandamus, it turns out, will not issue to correct a trial court’s refusal to rule on a motion to dismiss when the movant has not bothered to set a hearing or given notice that the motion would be heard at the pretrial conference. Disappointingly, the Court of Appeals did not reach the novel question of whether Chapter 74 of the Civil Practice & Remedies Code requires a plaintiff to file an expert report when suing a retired physician who owned the cattle that the plaintiff collided with in his vehicle.

In re Archer, No. 05-15-00020-CV

With less than two weeks to go in office, Governor Perry is continuing to fill vacancies across the state. Yesterday, that included appointments to the Second and Third Courts of Appeals, plus the appointment of David Schenck to serve as a Justice of the Fifth Court of Appeals through the 2016 election cycle. Schenck will replace Justice Michael O’Neill, who has served on the Court since first being elected in 1998. Welcome to Justice Schenck, and best wishes to Justice O’Neill in his retirement.

After Kevin White defrauded investors in a foreign currency trading scheme, a federal court appointed Kelly Crawford as receiver over the estates and assets of White and his companies.  One such entity was a fund operating as a limited partnership called the Revelation Forex Fund.  Crawford determined that investors in Revelation had claims against Forex, the company with which Revelation had maintained foreign currency trading accounts.  Consequently, the investors assigned their claims to Crawford and he then filed suit against Forex in Colin County District Court.

Forex sought to dismiss the lawsuit based on an arbitration provision in its contract with Revelation.  When the trial court denied its motion, Forex appealed.  The Dallas Court of Appeals affirmed based on the crucial distinction that Crawford’s claims were brought as an assignee of the investors’ claims, not in his role as trustee.  Because only Revelation (and not the individual investors) had agreed to arbitrate claims against Forex, venue in Colin County was proper.

Forex Capital Markets, LLC v. Crawford

In this insurance coverage lawsuit, the Court of Appeals held that the insurer had no duty to defend the appellant in the lawsuit brought against them for conversion under  when the appellant sold their home’s former (foreclosed-upon) owner’s personal property at a garage sale.  According to the Court, the removal and purported sale of the personal property was “intentional and deliberate,” and thus failed to qualify as an “occurrence” covered by the policy.

Drew v. Texas Farm Bureau Mut. Ins. Co.

A short opinion denying mandamus in an electronic discovery dispute serves as a reminder of the importance of a hearing transcript in the appellate courts. In this case, VERP Investment lost a motion to compel, but the mandamus record did not include a transcript from either the hearing on the motion or VERP’s subsequent motion for reconsideration. Likewise, the record did not include a statement that no testimony was taken at the hearings, as permitted by TRAP 52.7(a)(2). Those failures left the Court of Appeals unable to determine whether or not VERP’s opponent had made the required evidentiary showing to obtain the electronic discovery. Therefore, VERP could not demonstrate that the trial court had abused its discretion in granting the motion to compel.

In re VERP Investment, LLC, No. 05-14-01403-CV

The Court of Appeals has reversed a trial court’s judgment awarding approximately $46,000 in attorney fees in a denial of coverage dispute. The case was brought by a homebuyer who sued his builders for a number of defects.  The buyer obtained a judgment against the builders in arbitration. The builders had tendered the buyer’s claim to their insurer, Oklahoma Surety Co., but OSC denied coverage for both the defense of the case and ultimate liability. After arbitration, the builders assigned their coverage claim to the buyer, who then sued OSC for the builders’ defense costs and for indemnification under the policy. The trial court ruled that OSC had a duty to the defend the case, but had no duty to indemnify for damages. The Court of Appeals disagreed, holding that an exclusion for property damage to “your work” applied under the “eight corners” rule, thereby barring both coverage and the duty to defend.

Oklahoma Surety Co. v. Novielo, No. 05-13-01546-CV

In this memorandum opinion on an attempt to satisfy a judgment, the Court of Appeals held that the judgment creditor could obtain the income paid to appellant, an attorney, by his law firm pursuant to a turnover order issued by the trial court.  Although the appellant argued that this income was “exempt” under the relevant statute because he essentially acted as an independent contractor, the Court rejected this argument given that the appellant failed to offer any evidence concerning right of control.

Karlseng v. Wells Fargo, N.A.

The Dallas Court of Appeals has affirmed a trial court’s award of $3.1 million in attorney fees following the settlement of a shareholder derivative suit against J.C. Penney. The settlement required J.C. Penney to stop guaranteeing the unvested incentive equity awards of certain officers, which the plaintiffs’ evidence showed to be worth $62 million over the four years covered by the settlement. The settlement agreement permitted the plaintiffs to apply for a fee award to “compensate Plaintiff’s Counsel for the results achieved in the Action and the risks of undertaking the prosecution of the Action on a contingent basis.” Although plaintiffs’ evidence showed that the lodestar fee for the case would have been $558,123.50, the Court held that the specific language of the parties’ agreement justified a departure from the lodestar. The Court further held that the $3.1 million award was reasonable because it represented 5% of the monetary value of the settlement, citing a number of shareholder derivative cases that also approved fee awards based on a percentage of the settlement value.

J.C. Penney Co., Inc. v. Ozenne, No. 05-13-01601-CV

In this car accident case, the defendant moved for summary judgment on statute of limitations grounds.  While the plaintiff claimed that a typo in the original petition precluded the process server from locating the defendant before the limitations period expired, the Court of Appeals found that the plaintiff had no explanation for the delay in serving the defendant because the defendant’s correct address, telephone number, driver’s license number, and license plane number were available in the police report describing the accident that is the basis for the lawsuit.

Quezada v. Fulton

In this breach of contract claim, the defendant answered the petition with a general denial, but then failed to show up at trial.  During the subsequent “prove-up” hearing, the plaintiff offered as its only evidence the contract between the parties.  Based on this evidence alone, the trial court entered judgment and awarded the plaintiff $55,000 in damages.  On appeal, the Court held that the award of damages was improper because the plaintiff did not offer proof of each element of her claim, including damages.

Correa v. Salas

The Relator in this mandamus action sought to avoid his obligation to respond to post-judgment discovery requests.  He argued that the trial court abused its discretion in ordering him to respond because he did not receive notice of the trial date and therefore the judgment against him was void.

The Dallas Court of Appeals denied his mandamus petition because procedurally the Relator did not follow the correct steps to challenge the validity of the underlying judgment.  The Court noted that if indeed the Relator did not have notice of the trial setting, the judgment may be voidable.  But the proper procedural path to challenging the judgment was for Relator to file a bill of review in the trial court to set aside the judgment (as it had become final and was no longer appealable).  Then, if the Relator wanted to avoid enforcement of the judgment pending a decision on the bill of review, he could petition the trial court to enjoin its enforcement.

In this case, the Court noted that until it was set aside, the judgment was valid and therefore the trial court did not abuse its discretion in allowing the plaintiff’s post-judgment discovery.  Moreover, because Relator could seek to set aside the judgment and enjoin its enforcement in the trial court, mandamus relief was not appropriate.

In re Lowery

For the last six years or so, the sublessor of a property in Irving has been seeking compensation for loss of the leasehold after it was sold to the state in lieu of condemnation for a highway project. In 2011, the Court of Appeals affirmed the dismissal of the lessor’s claim against the state on jurisdictional grounds. The lessor then sued the former owner of the property, claiming breach of the lease agreement by accepting the state’s offer instead of pursuing the matter in a special commissioners’ hearing. In 2013, the Court reversed summary judgment for the owner and remanded to the trial court, holding that the lessor was not collaterally estopped by its loss of the case against the state. But the third time is not the charm, as the Court of Appeals today affirmed summary judgment in favor of the former owner, holding that the lease only requires payment to the lessor in the event of a “condemnation proceeding,” and the private sale in lieu of condemnation was not such a proceeding.

Continental Foods, Inc. v. Rossmore Enters., No. 05-14-00244-CV

Previously: Inverse Condemnation Action Is No Bar to Recovery for Breach of Contract (March 5, 2013)

In 2013, the Dallas Court of Appeals held that “viatical settlements” — basically, interests in life insurance policies purchased and then resold by Life Partners, Inc. — were securities subject to the Texas Securities Act. Given that the opinion expressly rejected a contrary holding from the Waco Court of Appeals, we predicted that this would be a good candidate for review by the Texas Supreme Court. And in fact, that court granted the petition for review today, consolidating the case for oral argument with another Life Partners case out of the Austin Court of Appeals. The argument has been set for January 15, and we will keep you posted when an opinion is issued.

Previously: Viatical Settlements Are Securities (Aug. 29, 2013)

Several months before the decedent died, he had his attorney prepare an amendment to a trust he had created that would have increased the distributions to his two children.  The attorney drafted the amendment, but the decedent never signed it.  Acting in their capacity as personal representatives for their father’s estate, the children sued the attorney for negligence.  The attorney moved for summary judgment, which the trial court granted based on its finding that the attorney owed no duty to them.

The children appealed, and the Dallas Court of Appeals affirmed, holding that “an attorney owes a duty of care only to his or her client, not to third parties who may have been damaged by the attorney’s negligent representation of the client.”

Donaldson v. Mincey

The Court of Appeals has dissolved a temporary injunction that would have prevented a court in Bastrop County from continuing to oversee a homeowner’s insurance appraisal process. James and Patricia Barrentines’ home in Bastrop was damaged by one the wildfires that plagued that area in 2011. Their insurer, Safeco, demanded an appraisal of the loss, and both parties appointed their own appraisers pursuant to the policy. When the two party-appointed appraisers were unable to agree on an umpire, Safeco went to court in Bastrop County to have one appointed. The court-appointed umpire issued an appraisal favorable to the homeowners, but the Bastrop County court then appointed a different umpire. The Barrentines then refiled in Dallas and obtained a temporary injunction forbidding any reappraisal. The Dallas Court of Appeals reversed that ruling, holding that it disturbed — rather than preserved — the status quo by interfering with the Bastrop County court’s authority to conduct the appraisal under the insurance contract.

Safeco Lloyds Ins. Co. v. Barrentine, No. 05-13-01011

In this memorandum opinion, the Court of Appeals affirmed the trial court’s dismissal of the plaintiff’s breach of contract claim.  According to the Court, the plaintiff failed to present evidence that the defendant breached the contract at issue and thus affirmed the trial court’s decision to grant defendant’s no evidence motion for summary judgment.

Alonso v. Alliance AFT

In this restricted appeal, the plaintiff carried out service on the defendant, a bank with a registered agent in New York, solely though service of process upon the Texas Secretary of State.  On appeal, the Court agreed with the defendant that such service was improper because the plaintiff failed to strictly comply with CPRC 17.028, which permits service upon a financial institution by service to “the president or a branch manager at any office located in the state.”

Bank of N.Y. Mellon v. Redbud 115 Land Tr.

Chandler Management sued First Specialty Insurance after the insurer denied coverage of a claim for wind and hail damage at a Dallas apartment complex managed by Chandler. The insurer moved to dismiss based on a forum selection clause in the policy that provided for exclusive jurisdiction in New York. The Dallas Court of Appeals affirmed the trial court’s dismissal order, without prejudice to refiling in New York. The Court found no error in the trial court’s decision to dismiss the claims against two additional defendants because they had expressly agreed to the insurer’s motion and because the claims against them were also based on the insurance contract. The insurer also established that the policy was procured through a licensed agent, which allowed First Specialty to issue surplus lines insurance in Texas (and therefore allowed it to enforce the contract against its insured). The Court shrugged off a number of claimed failures of the policy under the Insurance Code, holding that noncompliance with those provisions did not affect enforcement of the contract because nothing showed that they were “material and intentional” violations. Finally, the Court rejected Chandler’s arguments that the forum selection clause was overreaching and against public policy.

Chandler Mgmt. Corp. v. First Specialty Ins. Corp., No. 05-13-01044-CV

In this breach of contract suit, the parties disputed the meaning of “sale” in a real estate brokerage contract.  The City of Dallas purchased a portion of the Premises for a public drainage project, but it was disputed whether the City would have taken steps to exercise its power of eminent domain if it had not purchased the Premises.  The Court concluded that the language of the contract was clear in its definition of “Sale,” and that the City did not compel the transfer of the land.  Thus, the broker was entitled to the fee under the contract.

TFO Realty, LLC v. Smith

In a dispute between former business partners, the plaintiff sued the defendant for breach of contract, alleging that the defendant first agreed to reimburse him for certain expenses totaling $75,000, and then, second, when he refused to pay, promised the plaintiff that he would give him a check for $75,000 instead.  The jury found that the defendant breached both contracts and awarded the plaintiff $75,000 for each breach (for a total of $150,000).  Because that amounted to a double recovery, the Dallas Court of Appeals reversed and limited the plaintiff to one recovery of $75,000 for breach of contract.

Kim v. Pak

Legacy Hillcrest Investments is seeking to develop a pair of lots just west of the SMU law School and north of of a single family district. After a series of proposals and counterproposals, Legacy sought a permit for to build a three-story parking garage. The community development staff approved the application, but the Board of Adjustment denied it. That led Legacy to file for a writ of mandamus, which the district court granted. The Dallas Court of Appeals reversed. The city’s zoning ordinance provided that only surface parking lots could be located “adjacent to” a single-family district. The Court held that the ordinance prohibited a parking garage because Legacy’s lots were across the street from the single-family district, making them “adjacent” to one another under the plain meaning of the term.

Bd. of Adjustment v. Legacy Hillcrest Invests., LP, No. 05-13-01128-CV

A memorandum opinion provides a short lesson in the nature of equitable remedies. Monterey Mushrooms sued Majestic Realty Co. and McLane Foodservice after one of Monterey’s employees slipped and fell on ice located on their property, causing Monterey to pay the worker through its ERISA injury benefits plan. Monterey sued the defendants for equitable subrogation, unjust enrichment, and money had and received. The Dallas Court of Appeals affirmed no-evidence summary judgment for the defendants. Although Monterey had evidence supporting an equitable right of subrogation, that subrogation claim only put it in the shoes of its injured worker, and there was no evidence that he would have a claim against the defendants. The Court distinguished between haveing a right of subrogation and having the ability to recover under that right. Monterey’s unjust enrichment claim failed because there was no evidence that the defendants received any benefit from Monterey’s payment of its injured worker’s benefits. Nor was there a claim for money had and received because there was no evidence teh defendants received any money or benefits belonging to Monterey.

Monterey Mushrooms, Inc. v. Majestic Realty Co., No. 05-13-01015-CV

Sky Capital, a single-asset entity, ordered a private jet from Bombardier for a (presumably) wealthy Russian man named Iouri Chliaifchtein.  Unhappy with the jet Bombardier delivered, Sky Capital sued Bombardier for, among other things, breach of the delivery contract.  The case went to trial and the jury returned a defense verdict in favor of Bombardier.

Sky Capital appealed, arguing that the evidence was legally and factually insufficient to support the jury’s verdict because Bombardier clearly breached part of the delivery contract.  On appeal, the Court noted that the jury was instructed that to find a breach, it must be material.  Although, as the Court recognized, materiality instructions are generally presented in the context of when a party is excused from performing under a contract based on the other party’s breach, Sky Capital did not challenge the instruction itself.  Consequently, the Court upheld the verdict on the basis that although Bombardier did breach the delivery contract, the evidence was sufficient to support the jury’s finding that it was not material.

Attorney Baltasar Cruz sued for libel against the operators of the Burnt Orange Report, which published a statement that Cruz had been “thrown out three times, finally by the police, of an Elizabeth Edwards book signing event in Dallas several years ago.” The defendants moved to dismiss on anti-SLAPP grounds. The trial court granted the motion and awarded the defendants their attorney fees. The Court of Appeals affirmed the dismissal of the case, but reversed on the award of attorney fees.

Cruz raised a remarkable 121 issues for appellate review, taking up 25 pages of non-word count briefing. The Court of Appeals did not find that lack of conciseness persuasive — see Tex. R. App. P. 38.1(f) — nor did it care for the absence of headings, divisions, or groupings in the brief’s 69 pages of argument. The Court also noted that the brief lacked legal authority and failed to identify the evidentiary objections Cruz was seeking to vindicate on appeal. As a result, the Court deemed many of Cruz’s “multifarious” issues to be waived. On the merits of the anti-SLAPP motion, the Court quickly disposed of Cruz’s claim that the statement was not a “matter of public concern” because he was a candidate for judicial office at the time the blog post was published and a candidate’s character is relevant to his qualification for public office. Cruz also could not establish that the statement was published with malice just because the defendants had not been present at the book signing incident, while the defendants averred they had relied on several sources for their account.

However, the Court of Appeals vacated an award of $158,521.50 in attorney fees to one group of defendants because they had not actually “incurred” those fees. Since their attorneys had taken the case pro bono, the clients were not personally responsible for payment of the claimed fees. However, the Court sustained a separate fee award of $31,783.75 to another defendant, holding that there was evidence showing that party was personally liable for those fees.

Cruz v. Van Sickle, No. 05-13000191-CV

After Ricky Holland suffered injuries from taking medication, he convinced a law firm to bring a lawsuit on his behalf against the drug manufacturer.  That lawsuit went nowhere, and actually led to the law firm suing the Hollands for fraudulently inducing them to take his case. The Hollands countersued, bringing a claim for intentional infliction of emotional distress based on the lawsuit the law firm filed against them.

The trial court dismissed the Hollands’ IIED claim because it was inapplicable in light of the other claims they had pleaded.  On appeal, the Court of Appeals reversed the trial court because plaintiffs are permitted to plead claims in the alternative.  The Court also refused to consider the law firm’s additional argument that the claim fails because it was based on statements made in its lawsuit and thus protected by an absolute privilege.

Following up on an opinion issued last month that ruled an interlocutory appeal from the denial of a special appearance was frivolous, the Court of Appeals has now awarded the appellee sanctions of $9,650 in attorney fees and $191.25 in expenses as damages from the frivolous appeal. The Court shaved off $2,325 from the appellee’s fee application because some of her attorney’s billing entries either did not relate to the appeal or consisted of block billing that contained a mix of appellate and non-appellate activities.

Estate of Ardyce Deuel-Nash, Deceased (II), No 05-14-00128-CV

An overly-complicated series of transactions led to a dispute over who had valid title to a residential property at 2701 Wickham Court in Plano. The case turned on which of two competing deeds — one filed by the corporation of Quang Dangtran and the second filed by another company that took its deed from his ex-wife, Tuyet Anh Le — was effective. The Court of Appeals affirmed in part and reversed in part. The Court agreed with the trial court’s summary judgment ruling that Dangtran’s deed was not properly acknowledged because it failed to identify the state where the corporate entity was incorporated (see Tex. Civ. Prac. & Rem. Code 121.008(b)(4)). However, the Court also held that there was a genuine issue of material fact whether the second claimant took the deed from Le with notice of her ex-husband’s claim, which would negate her transferee’s status as a bona fide purchaser. Because Dangtran was in unequivocal possession of the property at the time of the second transaction, and because Dangtran was not a member of Le’s family at that time, summary judgment could not be sustained on the second claimant’s bona fide purchaser defense.

Whoa USA, Inc. v. Regan Props., LLC, No.05-13-01412-CV

In 2000, the union representing DART’s employees sued DART, alleging that it was improperly denying its employees’ grievances and requests for appeals.  As a result, the parties entered into a settlement agreement providing that DART was required to modify the employee grievance procedures in its employment manual.

Years later, in 2010, a dispute arose between DART and a former employee (who had been terminated) over DART’s grievance procedures.  The union ultimately sued DART, alleging that it had breached the prior settlement agreement.  DART filed a plea to the jurisdiction, asserting sovereign immunity, which the trial court denied.  On appeal, the Court of Appeals affirmed the trial court’s decision, noting that when “a governmental entity agrees to settle a lawsuit in which it has waived governmental immunity, it cannot claim immunity from suit for breach of the settlement agreement.”  Because DART had waived immunity in the 2000 lawsuit and the union was claiming it had breached that agreement, DART could not claim immunity from the suit.

Dallas Area Rapid Transit v. Amalgamated Transit Union Local No. 1338

In this malicious prosecution case, the Court of Appeals reversed the jury’s award of actual and punitive damages because the evidence introduced at trial was legally insufficient to support the jury’s verdict.  Among other things, the Court found that the defendant did not “initiate the prosecution” by bringing a formal charge to initiate the prosecution.  Instead, the defendant simply provided a “Voluntary Statement” that the law enforcement officer used to formally charge the plaintiff.  Thus, the Court found that the plaintiff could not establish the legal requirement that the defendant “initiated or procured” the underlying criminal prosecution.

Lermon v. Minyard Food Stores, Inc.

The Court of Appeals has granted mandamus relief to direct a Collin County trial court to vacate its order granting a new trial for the plaintiff in a product liability suit. The district court granted the motion based on both factual sufficiency and juror misconduct grounds. The Court of Appeals held that the new trial order could not be sustained on the basis of juror misconduct because the lower court had not conducted an evidentiary hearing — affidavits attached to the motion alone were not sufficient under Rule 327. The Court also concluded that the jury’s verdict for the defense was not contrary to the great weight and preponderance of the evidence, as conflicting testimony from the parties’ design experts adequately supported the jury’s decision that the medical implant at issue was not defective.

In re Zimmer, Inc., No. 05-14-00940-CV

In a prior action, the plaintiff (through counsel) negotiated a settlement through the defendant’s attorney and the attorney then sent the plaintiff a final settlement agreement, which the plaintiff signed.  The defendant, however, refused to sign the agreement and later filed bankruptcy.  The plaintiff then sued the defendant’s attorney for fraud, arguing that the attorney had misrepresented that her client would settle based on the agreed upon terms.

The trial court granted the attorney’s motion for summary judgment, holding that the plaintiff could not establish the justifiable reliance element of his fraud claim.  The Court of Appeals affirmed because the attorney made no express representation that her client had approved or would sign the settlement agreement, and reliance on representations made in business transactions are  not justified when the representation takes place in an adversarial context such as litigation.

Weilbacher v. Craft

In this breach of contract case decided under New York law, the Court of Appeals found (among many other things) that the fact that the contract required the parties to close the underlying distressed debt trade “as soon as practicable” did not mean that “time was of the essence.”  Thus, the Court held that the defendants failure to close the trade within 60 days did not constitute a breach.

Highland Credit Opportunities CDO, L.P. v. UBS AG

In this complex fraud case arising out of the misappropriation of millions of dollars in loan proceeds, one issue before the Court of Appeals was whether the trial court erred in denying the plaintiff’s request for a spoliation instruction.  The plaintiff had moved to compel certain communications from one of the defendants, but that defendant had replaced its servers and did not back up the data.  Because there was no evidence that the defendant had acted with intent to conceal the discoverable evidence or acted negligently to irreparably deprive the plaintiff of “any meaningful ability to present its claims,” the Court of Appeals affirmed the trial court’s decision not to give a spoliation instruction to the jury.

Flagstar Bank, FSB v. Walker

Although medical malpractice usually isn’t this blog’s cup of tea, it is sometimes interesting to see just how broadly the courts will apply the expert report requirement for health care liability claims contained in Chapter 74 of the Civil Practice & Remedies Code. In this case, we learn that a case against a hospital will not be dismissed for failure to file an expert report when the claim is for a slip-and-fall injury. The Court of Appeals distinguished between claims that have an indirect relationship with health care (which require an expert report) and those that are “completely untethered” from health care. Slipping and falling on a wet floor in a hallway, the Court holds, has nothing to do with health care, and so the trial court correctly denied the hospital’s motion to dismiss.

Methodist Hosps. of Dallas v. Searcy, No. 05-14-00375-CV

In this restricted appeal of a default judgment, the Court found (among other things) insufficient evidence to support damages on a suit for breach of contract and on a sworn account.  The Court based its holding on the fact that there was contradictory information among the petition, the documents attached to the petition, and the business records filed.  In particular, the Court noted that there was no evidence of any amount owed by the defendant to the plaintiff.

Diaz v. Multi Service Tech. Solutions Corp.

Under the Texas Tax Code, property taxes are a personal obligation of the person who owns the property on January 1 of each tax year. In this case, the owner purchased her home on February 25 and paid that year’s taxes after closing. She then sought to make the former owner’s lender responsible for the payment of the property taxes because the former owner had been delinquent under the loan. The Court of Appeals rejected that attempt holding that a lienholder is not an owner subject to the property tax obligation. The Court also rejected the buyer’s attempt to make the bank liable to her under a contract theory, noting that her sale agreement was with the seller, and that she had no contract with the bank. Accordingly, the trial court’s summary judgment order was affirmed.

Blume v. Wells Fargo Bank, N.A., No. 05-13-01429-CV

An investor sought to have its shares in a hedge fund redeemed, but the hedge fund made a complex maneuver under Bermuda laws that resulted in the investor receiving less than it anticipated from the redemption.  The investor sued the hedge fund, asserting numerous claims, including a negligence claim.  The trial court granted summary judgment, and the investor appealed.  Addressing the investor’s negligence claim, the Court of Appeals affirmed the trial court’s decision, holding that the hedge fund manager did not owe a duty to the investor.

Mary E. Bivins Found. v. Highland Capital Mgmt., LP

A special appearance in a probate case has led to the exceedingly rare grant of a motion for sanctions for the filing of a frivolous appeal. In this instance, the appellant managed to make a general appearance in the case before filing the special appearance — a fact that the appellant had failed to even address in response to the appellee’s briefing in the probate court. On top of that, the appellant had failed to preserve his argument on appeal that the special appearance was somehow severable from the motion to show cause in which he entered his general appearance, nor had the appellant objected (and thereby preserved error) when the probate judge overruled the special appearance without holding a separate hearing on it. Although the appellee had not submitted any evidence of her damages to support the award of sanctions, the Court of Appeals granted her leave to file such evidence within ten days of the opinion.

Estate of Ardyce Deuel-Nash, Deceased, No. 05-14-00128-CV

In this breach of contract action, the Court of Appeals held that Texas’ four-year statute of limitations barred the defendant’s counterclaim.  The breach of contract counterclaim was based on the plaintiff’s failure to provide account documents within 10 days of the date of the agreement, which was June 28, 2007.  Because the defendant made no legal argument to toll the date of the agreement, the Court held that all of the defendant’s claims under the agreement at issue were barred as a matter of law.

Santander Consumer USA, Inc. v. Palisades Collection, LLC

A fire at a hotel in Duncanville left the property owner unable to continue paying on the $3.4 million promissory note. The lender foreclosed and the property was sold for $500,000, leaving a substantial balance on the defendants’ personal guaranty obligations. The bank prevailed on summary judgment, a result that was not helped by the failure of defendants’ counsel to respond to the motion or appear at the hearing. The Court of Appeals affirmed.

The guarantors challenged the trial court’s denial of their motion for new trial. The Court of Appeals analyzed the case as a post-answer default, applying the Craddock factors of whether (1) the failure to answer or appear was a mistake or accident, (2) the defendant had a meritorious defense, and (3) the motion was filed at a time when granting a new trial would not delay or otherwise injure the plaintiff. In this instance, the motion for new trial failed to establish item (3), as the attorney’s affidavit did not address that factor, Neither the motion nor the affidavit  stated that the defendants were ready, willing, or able to go to trial immediately or offer to reimburse the plaintiff for its expenses. The Court also rejected the defendants’ claim of newly-discovered evidence, given that the affidavits failed to establish the proffered evidence (testimony from friends of the defendants) was actually newly discovered or could not have been discovered earlier through the exercise of due diligence.

Kahrobaie v. Wilshire State Bank, No. 05-13-01459-CV

A chiropractor provided treatment to a patient injured in a car accident and, in return, the patient assigned her right to any proceeds from a settlement, judgment, or verdict.  The patient settled her claim with the other driver’s insurance company, but, instead of sending the payment directly to the chiropractor, the insurance company paid the patient.  The chiropractor then sued the insurance company directly, seeking the amount it had paid to the patient.   The trial court granted summary judgment in favor of the insurance company and the chiropractor appealed.

The Court of Appeals affirmed, rejecting the chiropractor’s argument that it was an “account debtor” under the UCC because there had been no finding of liability.  Rather, the parties had settled and therefore there had been no determination of liability, so the chiropractor was not an account debtor.

Pain Control Institute, Inc. v. GEICO Gen. Ins. Co.

Victor Enterprise, Inc. filed and won a forcible detainer action to collect rent from his tenant, Clifford Holland, for August 2009.  While that action was appealed by Holland, VEI filed another forcible detainer to collect rent for December 2009, which he also won, but the county court signed an order suspending execution of the writ of possession.  VEI then filed a third forcible detainer action to collect rent for January 2010, which he also won, but the county court enjoined VEI from “initiating, prosecuting, or executing any litigation, action or writ that seeks possession of or eviction of the defendant form his residence.”   In the meantime, Holland sought (and obtained) a temporary restraining order in county court requiring VEI to cease prosecuting actions against Holland and to prohibit any sheriff or constable from executing any writ against Holland.  On appeal, the Court granted VEI’s request for mandamus, noting that “the county court lacks jurisdiction to interfere with the enforcement of the justice court’s unappealed judgments.” It also found that, given the history of this case, “the writ will issue instanter.”

In re Victor Enters., Inc.

In what appears to be only the third opinion in the state reviewing a motion to dismiss under Texas Rule of Civil Procedure 91a, the Dallas Court of Appeals has affirmed a trial court’s order that granted in part and denied in part a motion to dismiss on the pleadings. Similar to Federal Rule of Civil Procedure 12(b)(6), Rule 91a allows a party to move to dismiss a cause of action “on the grounds that it has no basis in law or fact,” based solely on the claimant’s pleadings. In this case, the plaintiffs sued the City of Dallas after emergency services failed to respond to a 911 call reporting their son’s drug overdose. The plaintiffs attempted to plead their way around governmental immunity by claiming the City had negligently used or misused the 911 system’s telephone and computer systems. The Court affirmed dismissal of negligence claims that the City had failed to properly respond to the 911 call, but also affirmed the denial of the motion as to claims that the equipment itself had failed or malfunctioned.

City of Dallas v. Sanchez, No. 05-13-01651-CV

Three roommates signed a residential lease for a house in Plano, but a month into the lease one of the parties moved out and stopped paying rent.  Her two former roommates sued her for breach of contract.  The Court of Appeals upheld the trial court’s determination that the plaintiffs had established an implied contract to lease the house jointly based on the acts and conduct of the three roommates.

Pettigrew v. Reeves

Graham Mortgage sued Holmes on a personal guaranty he had signed.  The trial court granted Graham’s motion for summary judgment, and Holmes appealed.  Among other things, he argued that the trial court had erred by refusing to deem his requests for admission admitted because Graham never responded to them. Graham argued that it had no obligation to respond to the requests for admission because they were served by email and the rules (at the time) did not allow service by email.  The Court of Appeals agreed, holding that even though Graham had received the requests for admission, its internal procedures were not structured to receive discovery requests by email, and “attorneys should be able to structure their internal procedures around their opponents’ compliance with the rules of civil procedure in such matters as service of documents.”

Holmes v. Grahma Mortgage Corp.

When a judgment judgment for breach of contract is entered that includes an award of attorney fees, the defendant is generally not required to supersede that fee award in order to suspend judgment. Instead, the defendant only has to supersede post-judgment interest on the award for the expected duration of the appeal. In this case, Highland Capital Management was awarded $2.8 million in attorney fees, but the defendant only bonded out $287,000. Highland moved to increase the supersedeas bond, arguing that the attorney fees were actually compensatory damages because the parties’ contract contained a clause requiring the defendant to pay Highland’s fees in the event of a breach. The Court of Appeals rejected that argument, essentially concluding that an award of attorney fees under the contract was no different than an award of attorney fees under Chapter 38 of the Civil Practice & Remedies Code (which Highland had also sought in its pleadings and at trial).

Highland Capital Mgmt., L.P. v. Daugherty, No. 05-14-01215-CV

The day before trial, the attorney for the defendant in a car wreck case stipulated to her client’s liability. The next day, the plaintiff moved for sanctions under Rules 13 and 215, based on the allegedly late stipulation. After securing a $44,591 jury verdict, the plaintiff re-urged the sanctions issue, which the trial court granted in the form of a $5,000 award of attorney fees. The Court of Appeals affirmed the jury verdict, but reversed and rendered on the sanctions. The Court held that the sanctions could not be justified for discovery abuse under Rule 215 because that rule requires a party who is aware of possible discovery abuse to obtain a ruling prior to trial. As to Rule 13, that rule requires particularized findings of good cause, which were not included in the trial court’s judgment here.

Hernandez v. Hernandez, No. 05-13-01219-CV

In this breach of contract claim, the trial court granted summary judgment on the grounds that the plaintiff had not satisfied the conditions precedent contained in the agreement.  The employment agreement at issue was to hire the plaintiff as President and CEO of the Dallas Housing Authority, but the agreement contained a condition that provided the agreement remained “nonbinding unless signed by the Chairman of the Board of Commissioners of the [DHA] and approved by the Board of Commissioners.”  The Court of Appeals rejected the plaintiff’s argument that a factual issue precluded summary judgment because the Board of Commissions told him, prior to executing the agreement, that they had already approved it.  The Court of Appeals, however, rejected this argument, and affirmed the trial court’s holding because “if the conditions stated in the letter agreement were satisfied before the agreement was presented to [the plaintiff], there would be no need to include such language in the agreement.”

Killingsworth v. Housing Authority

The Plaintiff hired Classic Superoof to build a metal roof for her house, which it did. The appearance of the roof, however, was marred by markings and scuff marks.  As a result, Plaintiff complained to (and ultimately sued) Classic.  At first, Classic thought the problem stemmed from the metal itself and therefore contacted the metal company, who then, in turn, contacted U.S. Steel, the provider of the metals used to make the roof.  Looking to investigate the issue, U.S. Steel sent its own metallurgical engineer to the Plaintiff’s home to inspect the roof.  The engineer performed an inspection and (perhaps not surprisingly) concluded that the coating on the roof was damaged during installation (thus absolving U.S. Steel of any responsibility and pinning the blame on Classic).

At trial, the Plaintiff used the U.S. Steel report and won a judgment against Classic.  On appeal, Classic argued, among other things, that the trial court erred by admitting the report because it was hearsay–specifically, because it was prepared in anticipation of litigation, it fell outside the business records exceptions. The Court of Appeals rejected that argument, noting that the engineer was not contacted by the Plaintiff, there was no lawsuit on file at the time, and that the engineer testified that his job was simply to investigate the cause of the concern.

Classic Superoof v. Bean

G.C. Buildings hired RGS Contractors to build an apartment complex in Oklahoma, funded by a $7 million loan insured by the Department of Housing and Urban Development. The contract provided that the date of final completion was the date that the HUD’s representative signed its final “Trip Report,” which turned out not to be signed until 161 days after the completion of work date called for in the contract. The construction contract contained a liquidated damages clause providing for a daily deduction from the contract price for each day past the construction deadline, but G.C. did not make any such deductions, instead paying the contractor in full. More than two years later, G.C. sued RGS in an attempt to recover either actual or liquidated damages. After a bench trial, the trial court ruled in favor of the contractor, finding that G.C. had not established a proper measure of damages for breach of contract.

G.C. argued that the interest payments it made during the period of the construction delays constituted its damages, but the Court of Appeals rejected that claim because G.C. was obligated to make those payments regardless of when or whether the construction on the apartment complex was completed. As to liquidated damages, the Court held that such damages could not be recovered because G.C. had not followed the procedures of the contract to determine whether a flat $2,101.68 charge or the actual cost of interest, taxes, and other fees should have been deducted from its payments to the contractor. Thus, the trial court’s findings were supported by legally and factually sufficient evidence, and the judgment was affirmed.

G.C. Buildings, Inc. v. RGS Contractors, Inc., No. 05-13-00151-CV

In this petition for for writ of mandamus, the Court of Appeals denied the relator’s petition to vacate the trial court’s order denying leave to file a fourth amended answer and counterclaim.  The Court found that although amendments of a “formal, procedural nature” typically will not result in surprise or prejudice, in this instance the proposed amendment “would have reshaped the case in a way that would require the Court to reopen discovery.”

In re City of Dallas

The grantor to a trust apparently changed his mind and sought to undo the trust.  After litigation on several fronts spanning several decades, the grantor filed a declaratory action seeking a declaration that he is the owner of an oil and gas lease called the Westbrook Lease, which was previously property of the trust he created.  The trustee opposed the grantor’s efforts, arguing that the trust was still intact and that the trust still owned the rights to the Westbrook Lease.

The main issue in the case was the effect of several judgments, dating as far back as 1980.  Specifically, the grantor moved for summary judgment, claiming that res judicata applied in his favor based on one of the prior orders.  The trial court agreed and granted summary judgment.  The Court of Appeals, however, reversed because the judgment upon which the trial court relied had been reversed on appeal.

Schmidt v. Ward

An investor in an office building sued the building’s architect and engineering consulting firm for fraud, negligent misrepresentation, aiding and abetting, and conspiracy. The investor did not file a certificate of merit with the original petition, so the defendants moved to dismiss. The claims against the engineering firm were dismissed without prejudice, and the plaintiff refiled with a new complaint that included a certificate of merit. After consolidating the old and new cases, the trial court granted a motion to dismiss as to all claims against the engineering firm, but only as to the negligent misrepresentation claim for the architects. An interlocutory appeal ensured, and the Court of Appeals ended up siding with the plaintiff. As to the plaintiff’s claim against the engineering firm, the Court held that dismissal without prejudice did not prevent the plaintiff from refiling a new lawsuit — the one under appeal — that included a certificate of merit. As to the claims against the architecture firm, no certificate of merit was required because the plaintiff’s case was based on the allegation that the firm knew of defects in the building due to its occupancy in the building, not in connection with any professional services that the firm had provided. Accordingly, no certificate of merit was necessary, and all of the plaintiff’s claims against the architecture firm were also remanded for further proceedings.

TIC N. Central Dallas 3, LLC v. Envirobusiness, Inc., No. 05-13-01021-CV

In this habeas corpus proceeding, Charles Miller challenged the trial court’s decision to incarcerate him for contempt.  Mr. Miller had failed to produce certain documents required by court order, leading to the contempt finding and his confinement.  Specifically, the trial court found Miller guilty of constructive contempt, which is contemptuous conduct outside the presence of the court.  Miller argued that he was not given proper notice of the contempt charge, and the Court of Appeals agreed, because in cases involving conduct outside the presence of the court, “due process requires that the alleged contemnor receive full and unambiguous notification of the accusation of any contempt and a reasonable opportunity to defend the charges or explain the conduct.”  Because Miller was not afforded that opportunity, the Court granted him habeas corpus relief.

In re Miller

In this breach of contract case, the majority opinion found that the appelle’s no-evidence summary judgment motion was legally insufficient to support the trial court’s summary judgment because it “fails to challenge or even mention a single element of any of [the] claims as to which there is no evidence.”

The dissent, however, disagreed, noting that “a party may challenge a specific element in a breach-of-contract case by filing a no-evidence motion asserting there is no evidence of breach of contract.”  In the dissent’s view, appelle’s motion makes this assertion.

Coleman v. Prospere

Coleman v. Prospere (dissent)

In the wake of the Texas Supreme Court’s decision vacating a $125 million arbitration award that had been reinstated by the Dallas Court of Appeals, the latter court has rejected another claim that an arbitration award should be vacated on grounds of evident partiality. A group of homeowners sought to recover against Meritage Homes after discovering that their houses were smaller than had been represented. At the start of the final hearing, the arbitrator disclosed his participation in “one or two” arbitrations with the claimants’ attorneys since the case had begun, but Meritage had no objection to proceeding with the hearing. That changed after the arbitrator found in favor of the homeowners and awarded damages and attorney fees.

In seeking to set aside the arbitration award, Meritage claimed that the arbitrator had failed to disclose that he had really held three arbitrations with the claimants’ attorneys, plus one additional mediation. The trial court confirmed the award over Meritage’s objections, and the Court of Appeals affirmed. Although the Court noted that the arbitrator’s disclosure was “vague, at best” as to the number of arbitrations he had conducted with the homeowners’ attorneys, the comment was still “clear as to substance” — namely, that he had arbitrated cases with the attorneys while the case was pending. Because the arbitrator had disclosed that substance, and because Meritage had failed to follow up on the disclosure until after it had already lost the arbitration, the failure to disclose one more arbitration and one mediation would not yield a reasonable impression of the arbitrator’s partiality to an objective observer.

Meritage Homes of Texas LLC v. Ruan, No 05-13-00831-CV

In case you missed it, or if you just hate reading Twitter in real time, Law360 has kindly posted a transcript (twitscript?) of Wednesday afternoon’s discussion on the Texas Supreme Court’s recent term. Please don’t expect too much analysis in 140 characters or less, but it’s a nice way to check in on some big developments you might have missed by not obsessively checking the opinions at 9:05 am every Friday. Thanks very much to Law360 for the invitation to participate. Now back to our regularly-scheduled programming.

At noon on Wednesday, @600Commerce will be participating in a #Law360Chat on Twitter with @Law360 and some excellent attorneys to discuss the 2013-14 Supreme Court of Texas term. Regular Twitter followers will get our comments in their feed, of course, but you can follow the whole event via the hashtag above. Drop on by for plenty of very short takes on some of the more important cases of the term.

In this memorandum opinion, the Court directed the trial court to vacate its order disqualifying defense counsel.  Although the plaintiff argued that the counsel for defendant should be disqualified because he was a potential witness, the Court of Appeals found no evidence establishing what was “essential” about his testimony or how the plaintiff would be prejudice if he were not permitted to testify.

In re VSDH Vaquero Venture, Ltd.

In this decision, the Court of Appeals found that the plaintiffs’ claims were barred by the doctrine of res judicata because those claims should have been litigated in a prior lawsuit brought by one of the plaintiff against the same defendants.  Although one of the plaintiffs in the second suit was not a party to the initial litigation, the Court nevertheless applied res judicata to both plaintiffs because the “new” plaintiff was a one person professional association populated entirely by the previous plaintiff.  Thus, the parties were in privity with one another, and res judicata barred the claim.

Hill v. Tx-An Anesthesia Mgmt. P.A.

In this memorandum opinion, the court found insufficient the sheriff’s affidavit of service, because the affidavit merely stated that the recipient “was served.”  According to the Court, “[b]ecause the return does not state the manner of service, it does not strictly comply with [TRCP] 107, which requires the officer’s return state ‘the manner of delivery of service.'”

U.S. Bank v. Pinkerton Consulting & Investigations

During the course of this case, the defendant made numerous changes to his deposition testimony post hoc.  Ultimately, it was discovered that the defendant’s counsel had drafted the changes and told their client to adopt them.  The trial court judge, outraged at this behavior, forced the defendant to disclose emails reflecting that conduct (on the theory that they fell under the crime/fraud exception to attorney-client privilege).  Not surprisingly, the plaintiff had a field day attacking the defendant’s credibility at trial, leading to a multi-million dollar verdict in its favor, including substantial punitive damages.

After trial the plaintiff moved for sanctions based on the plaintiff’s conduct, which the trial court awarded.  On appeal, the Court of Appeals reversed, because the motion for sanctions should have been brought before trial and because, even under the trial court’s inherent power to sanction, the Court concluded that allowing the plaintiff’s counsel to use emails between the defendant and his counsel for cross examination was “enough to make the point” and further sanctions were excessive.

Cherry Petersen Landry Albert LLP v. Cruz

For the second time this month, the Court of Appeals has decided that Oncor Electric Delivery Company was not responsible for causing a fire that damaged a plaintiff’s property. In this instance, Schepp’s Dairy alleged that Oncor’s negligence led to a fire starting with a transformer at Schepp’s facility. At trial, three different electrical engineering experts variously testified that the fire was caused on either Schepp’s side or Oncor’s side of the transformer. The jury specifically rejected the conclusions of two of those experts, leaving only one expert for Schepp’s. In a highly fact-specific opinion, the Court of Appeals held that the last expert’s opinion was unreliable. Among other problems, the witness had failed to exclude other possible causes of the fire, and he had only testified as to Oncor’s negligent maintenance of the transformer without opining as to what was the direct cause of the fire. Without that testimony, Schepp’s had no evidence of causation, and the judgment against Schepp’s was therefore reversed.

Oncor Elec. Deliv. Co. LLC v. So. Foods Gp. LLC, No. 05-12-01223-CV

In a case of first impression, the Court of Appeals ruled that if a court determines that a mechanic’s lienholder has a perfected statutory mechanic’s lien and is entitled to recover damages for unpaid labor and materials, the court must issue a judgment of foreclosure and order the sale of the property.

In the specific case in front of the Court, the lienholder sought to foreclose on its lien, but the trial court refused to order a foreclosure, noting that the language of the statute (Texas Property Code 53.154) provides that mechanic’s liens “may be foreclosed only on judgment of a court of competent jurisdiction.”  The Court of Appeals, reversing the trial court’s decision, noted that the use of the passive voice implied a meaning that mechanic’s liens may be enforced by the lienholder, thus giving the lienholder–not the court–the discretion.

Crawford Servs., Inc. v. Skillman Int’l Firm LLC

Last December, the Court of Appeals issued an interim opinion vacating a trial court order that almost quadrupled the supersedeas amount to be paid by TierOne Converged Networks during the appeal of a judgment evicting it and its equipment from the water towers of Lavon Water Supply Corp. Now, the Court has reversed and rendered judgment in favor of TierOne on the merits of the forcible detainer case. The Court agreed with TierOne that it had validly exercised its contractual option to renew the lease of the property for an additional five-year term. Because the lease did not require notice of any renewal, TierOne’s continued occupation of the property and payment of the monthly rent following the expiration of the initial term was sufficient to constitute an election to renew.

TierOne Converged Networks v. Lavon Water Supply Corp., No. 05-13-00370-CV

In this fraud case, the Court of Appeals rejected the plaintiff’s argument that its fraud claim should survive summary judgment because the defendant failed to disclose information that it “should have known”  According to the Court, a fraud claim based on a failure to disclose theory requires that the defendant actually knew the information because “[t]here is . . . no duty if a defendant fails to disclose material facts it ‘should have known.'”

Dontos v. Banco Popular

A former Halliburton employee who had worked at the company designing and manufacturing wellbore plugs left and formed his own company that designed and manufactured wellbore plugs.  Halliburton sued the former employee and his company.  Ultimately, a jury found in Halliburton’s favor, awarding it damages, and the trial court entered an injunction barring the former employee from using Halliburton’s trade secrets for eighteen months.

Not satisfied, Halliburton appealed, seeking a permanent injunction.  The Court of Appeals sided with Halliburton, holding that the trial court erred by refusing to enter a permanent injunction because the former employee failed to show that anything less than a perpetual injunction would protect Halliburton’s rights and “remove the competitive advantage obtained through the misappropriation.”  Halliburton Energy Servs., Inc. v. Axis Tech. LLC, 444 S.W.3d 251 (Tex. App.-Dallas 2014, no pet.)

One year ago, the Dallas Court of Appeals held that a homeowner’s negligence claims against the company that installed the home’s plumbing were barred by the economic loss doctrine. Today, the Texas Supreme Court has reversed that ruling in a per curiam opinion. Although the plumber’s liability to the homebuilder was contractual, the negligent performance of a contract that injures a non-party’s person or property is sufficient to state a claim for negligence. The Supreme Court reiterated that the economic loss rule does not permit a party to avoid tort liability to the rest of the world simply by entering into a contract with another person.

Chapman Custom Homes, Inc. v. Dallas Plumbing Co., No. 13-0776

In an opinion that never mentions the name “Ross Perot Jr.” (a.k.a. Hillwood Investment Properties III), the Court of Appeals has affirmed summary judgment in favor of Mark Cuban (a.k.a. Radical Mavericks Management LLC) in a case alleging that Cuban spent too darned much money on payroll for the Mavs. Or, more technically speaking, that the Mavs were spending more money than they were taking in, rendering the team insolvent and requiring the appointment of a receiver. Sports fans and legal observers may recall this case as the one in which Cuban filed a particularly amusing pleading shortly after the Mavs won the 2011 NBA title. In any event, the Court of Appeals affirmed the trial court’s ruling that Hillwood had no evidence of insolvency, holding that its expert had failed to consider “third-party contributions to the Mavericks” (a.k.a. Cuban’s personal footing of the bills). The Court also affirmed the trial court’s decision to seal certain business records under Rule 76a, holding that the lower court had not abused its discretion in determining that the financial and collective bargaining documents were sufficiently sensitive to justify their sealing.

Hillwood Investment Props. III, Ltd. v. Radical Mavericks Mgmt., LLC, No. 05-11-01470-CV

In this legal malpractice case, the Court rejected the plaintiff’s expert opinion as based on invalid assumptions.  The expert opined that the value of sale of an interest in certain oil and gas wells would have been $960,000 greater in April 2008, when the interest should have sold but for a law firm’s malpractice.  Among other faulty assumptions, the Court noted that the expert wrongly assumed that (1) the later sale, in September 2008, was a simple asset sale, when, in fact, it involved a partial settlement of a lawsuit; (2) the projections of actual drilling costs, as opposed to actual results, were the proper measure of costs; and (3) that wells would have been drilled at a certain specified rate.

Thompson & Knight v. Patriot Exploration LLC

An architectural firm subcontracted with Pavecon Commercial Concrete to pour the foundation for a wedding facility in Carrollton. The architect failed to pay the last of Pavecon’s invoices, prompting Pavecon to sue the architect and the owner of the facility. The defendants counterclaimed for breach of contract and negligence, alleging that the concrete services had been performed improperly. Pavecon moved for summary judgment on the counterclaims. The trial court granted the motion and the Court of Appeals affirmed, holding that the architect had failed to submit admissible evidence of any specific pecuniary loss and that the negligence claims were barred by the economic loss doctrine. Justice Moseley dissented in part, arguing that the trial court should not have sustained Pavecon’s objection that the defendants’ summary judgment affidavit was conclusory in averring their damages.

Trebuchet Siege Corp. v. Pavecon Commercial Concrete Ltd., No. 05-12-00945-CV

Trebuchet Siege Corp. v. Pavecon Commercial Concrete Ltd. (dissent)

In this wrongful foreclosure action, plaintiffs sued the law firm handling the foreclosure, alleging, among other things, fraud.  The trial court granted the law firm’s motion for summary judgment based on the attorney immunity doctrine, which generally provides that “an attorney’s conduct, even if frivolous or without merit, is not actionable as long as the conduct was part of the discharge of the lawyer’s duties in representing his or her client.”

The Court of Appeals reversed the trial court’s decision, however, because the attorney immunity doctrine does not extend to allegations of fraud.

Santiago v. Mackie Wolf Zientz & Mann PC

An April 2009 wildfire that damaged nearly 400 acres in Palo Pinto County led to a lawsuit in which a developer’s insurance company ultimately sought to pin the blame on Oncor Electric Company.  The insurance company’s theory of the fire was that an Oncor worker lit a cigarette and tossed it in some brush, igniting the blaze.  To support this theory, the insurance company found several expert fire reconstructionists who conducted tests and re-enactments and determined that the most likely cause of the fire was “the careless disposal of a cigarette” by the Oncor worker.

The trial court excluded the experts’ opinions, pointing to the fact that they did not have any “real experience” with wildfires and did not demonstrate a proper foundation to reach their conclusions.  On appeal, noting the deferential standard of review for the admission/exclusion of expert testimony, the Court of Appeals affirmed.

Club Vista Dev. II, Inc. v. Oncor Elec. Deliv. Co., LLC

In this lawsuit against guarantors on promissory notes, the Court addressed, among other issues, the standard for adequate summary judgment affidavits.  The appellants argued that the two affidavits supporting appellee’s motion for summary judgment demonstrated that the witness lacked personal knowledge.  The majority opinion, however, found that the affidavits properly reflected the witness’ personal knowledge because the witness asserted that (1) he had personal knowledge of the matters in the affidavit; (2) his job responsibilities included “servicing and collection of indebtedness” owed by appellant; (3) he was the custodian of records familiar with appellee way of maintaining its books and records (which he had reviewed); and (4) appellee’s business records support the statements in the affidavit.

Bagwell v. Ridge at Alta Vista Investments I, LLC

The dissenting opinion pointed out that these affidavits were defective because appellee was not the original lender on the loans, and nothing in the affidavits demonstrated that he had any personal knowledge of the events occurring before the loans were acquired in January 2010.

Bagwell v. Ridge at Alta Vista Investments I, LLC (dissent)

In this commercial paper case, Jason Kang signed several checks made out to various businesses and drawn on the bank account of his business, Ever Construction.  Unfortunately, the checks ended up the hands of wrongdoer Kwan Sup Choi, who was not the named payee on the checks but took and cashed them at Lee’s Check Cashing.  When Kang found out that his intended payees did not receive their money, Lee’s Check Cashing was forced to bear the loss and pay them.

Lee’s, however, blamed Kang for the forgery and sued him and Ever Construction under theories of negligence and fraud.  After a bench trial, the trial court awarded judgment in favor of Lee’s, and Kang and Ever Construction appealed.  The Court of Appeals reversed, holding, among other things, that Kang and Ever Construction had no duty to ensure that the checks it wrote were only presented to third parties for payment by persons who were authorized to cash them.

Ever Constr. Corp. v. Su

Hurricane Ike damaged property owned by Optimum Deerbrook LLC. Optimum’s lender, ViewPoint Bank, was a loss payee on Optimum’s property insurance policy with Allied Property & Casualty. Allied paid the claim, issuing checks jointly to Optimum and ViewPoint, but Optimum endorsed and deposited the checks in its own account. As a result, ViewPoint never received any of the insurance funds. ViewPoint sued Allied for breach of the insurance contract and a claim under article 3 of the UCC. The trial court granted summary judgment for the insurer, but the Court of Appeals reversed. Citing the Texas Supreme Court’s recent decision in McAllen Hospitals, LP v. State Farm, the Court held that the insurer had not fulfilled its payment obligation by delivering the checks only to the insured, and that delivery to both payees is required because neither of them, acting alone, could enforce or negotiate the instrument. The Court also held that summary judgment should have been granted in favor of the bank on its UCC claim because the drawer of a check is not discharged from its obligation when the check is issued to nonalternative copayees and is paid without one of their necessary endorsements. However, the Court held that the bank’s attorney fees affidavit was not sufficiently detailed to support summary judgment and remanded the case for further consideration of an award of attorney fees.

ViewPoint Bank v. Allied Prop. & Cas. Ins. Co., No. 05-12-01370-CV

In this interlocutory appeal of a motion to compel arbitration, the Court held that the broad arbitration provision at issue (“[a]ny dispute, claim or controversy arising out of or relating to [the agreement] or breach, termination, enforcement, interpretation or validity thereof” must be arbitrated) required the trial court to grant the defendants’ motion to compel arbitration.  Moreover, because the provision itself stated that “the determination of the scope or applicability of this Agreement to arbitrate” must be determined by an arbitrator, the Court found that the responsibility for establishing whether the provision even applies rests with the arbitration proceeding.

Seven Hills Commercial LLC v. Mirabal Custom Homes, Inc.

A pathologist and his former employer sued each other over a covenant not to compete provision in the pathologist’s employment contract.  Among numerous issues before the Court of Appeals was whether the geographic scope of the non-compete provision was unreasonable.  The agreement provided that the pathologist was restricted from being employed by a practice that operates within 50 miles of Dallas County.

The pathologist argued that the scope of his non-compete was overly broad because he only worked in Dallas and Collin counties and because it was actually unlimited in scope since he was restricted from working for any practice that operates in Dallas, even if he worked far from the Dallas area.

The Court rejected those arguments and held that the geographic scope of his non-compete was not unreasonable, noting that the pathologist was also part of his former employer’s management team, causing him to be responsible for pathology practices across the Dallas area.  Consequently, the Court reasoned that “even if [the pathologist] were working in New York, for example, his management knowledge of and experience with appellants’ Dallas-area operations would be valuable to his new employer.”

Ameripath v. Hebert

In this products liability case, the plaintiffs alleged that Goodyear was grossly negligent with respect to its tire manufacturing practices at its North Carolina plant and that the design of the tire was defective because it failed to include a nylon cap ply.  Ostensibly to help prove their case, the plaintiffs sought to tour and videotape parts of Goodyear’s plant in North Carolina.  The trial court obliged, ordering Goodyear to allow plaintiffs’ counsel, expert witness, and a videographer to enter the facility and document the manufacturing process.

Goodyear resisted by filing a writ of mandamus challenging the trial court’s order permitting the tour.  The Court of Appeals sided with Goodyear, reasoning that the main reason the plaintiffs wanted to tour the facility was to create demonstrative evidence (namely, a video to show the jury), not to discover new information.  Because that is not a valid purpose to seek entry onto another party’s property, the Court granted Goodyear’s mandamus petition.

In re the Goodyear Tire & Rubber Company

In this landlord-tenant dispute, the tenants sued the landlord for wrongfully withholding their security deposit in violation of Section 92 of the Texas Property Code.  The trial court granted the tenants’ motion for summary judgment, and the landlord appealed.  The Court of Appeals reversed, finding that there was a disputed issue of material fact as to whether the tenants provided the landlord with a valid forwarding address where the landlord could provide the written notice required by the statute.

Franzin v. Sauty

In this lawsuit related to an asset purchase agreement, the Court addressed which party is entitled to the $5.7 million in escrow money when the sale failed to close.  Examining the complex terms of the APA, the Court found that the contract terms at issue were ambiguous and thus summary judgment was inappropriate.

KSWO Television Co. v. KFDA Operating Co. LLC

In this breach of contract action, the Court of Appeals held that nonresident limited partners who were passive investors in a Texas limited partnership were not subject to personal jurisdiction simply because the limited partnership was formed under Texas law.

Nacho Remodeling v. Calsherm Partners

In this case, the appellee was sued for, among other things, aiding and abetting an alleged misappropriation of trade secrets.  The Court of Appeals held that, even if the appellant could establish the underlying tort of trade secret misappropriation, the claim would still fail.  According to the Court, a cause of action for aiding and abetting exists for a “specific and narrow purpose:  to deter antisocial or dangerous behavior.”  Examples of this type of behavior included “drag racing or similar conduct posing a high degree of risk to others.”  The Court found that misappropriation of trade secrets does not qualify as sufficiently antisocial or “deviant” to support an aiding and abetting cause of action.

West Fork Advisors v. Sungard Consulting

Plaintiff sued defendant for breach of a lease agreement and unpaid rent. Shortly before the hearing on the plaintiff’s motion, the defendant’s counsel filed a motion for leave to file a late response.  The trial court denied the defendant’s motion and granted the plaintiff’s MSJ.  The Court of Appeals affirmed the trial court’s decision, noting that the defendant did not attach any evidence to its motion and also failed to address all of the relevant factors in its argument.

Dawn M. Brown v. Melissa 121 Partners, Ltd.

In this breach of lease case, the appellant argued that the appellee’s damages expert opinion was unreliable and erroneous because it relied on a hypothetical market rent study.  During trial, appellant objected to the relevance of the of the market rent study, but the trial court did not rule on the objection.  The expert then testified in detail about each component of her calculation without objection from appellant about her methodology.  The Court of Appeals, however, found that because the appellant had “failed to object to the expert’s testimony on the basis of improper methodology before or during trial and obtain a ruling form the court,” appellant waived any error.

Transcontinental Realty v. Wicks

In this garnishment action, the Court of Appeals permitted the appellant, as lessor, to recover past due rent under a commercial lease against a sub-lessee.  Among many other issues, the Court rejected the appellee’s argument that the sub-lease was invalid because it was obtained without the landlord’s consent, as required by the lease.  On this point, the court held that “this limitation is for the benefit of the landlord” and that sub-lessee “cannot take advantage of their own wrongs.”

Tenet Health Sys. Hosps. Dallas Inc. v. N. Tex. Hosp. Physicians Gp. P.A.

The appellant (brother to appellee) claimed the probate court lacked personal jurisdiction over him.  Appellee asserted that the appellant’s individual assistance to the parties’ quadriplegic mother in a probate matter in 2008 (the appellant’s only contact with Texas) required the court to exercise jurisdiction over her brother.  The Court held, however, that at the time he assisted his mother in the prior lawsuit, the appellant was not serving as trustee of the Trust at issue in the present lawsuit, and thus his contact with the state was in a separate, individual capacity.

Stauffer v. Nicholson

In this mortgage foreclosure-related lawsuit, the appellants challenged the trial court’s decision to grant summary judgment on a no-evidence basis.  The Court of Appeals, however, affirmed the trial court’s decision because the appellees did not present any evidence to overcome each of the appellees’ no-evidence grounds.  The Court rejected the appellant’s argument “[b]ecause they have not challenged on appeal all possible grounds upon which summary judgment could have been granted.”

Puricelli v. Saxon Mortgage Services`

The only issue before the Court in this case was whether the trial court erred in denying the defendant’s motion to compel arbitration.  The plaintiffs signed up to be Independent Representatives (apparently, a type of sales rep) for the defendants.  As part of the online application process, plaintiffs clicked a box confirming that they agreed to the defendant’s terms and conditions.  Those terms and conditions contained a provision providing that any dispute between the parties would be resolved by binding arbitration.

It turns out that the Court recently upheld the exact same arbitration provision in a case against the same defendants.  Consequently, without much substantive analysis, the Court referenced its prior opinion and reversed the trial court, holding that there was a valid agreement to arbitrate between the parties.

Momentis U.S. Corp. v. Perissos Holdings Inc.

A builder sued the prospective buyers of a townhome for breach of contract and fraud after they backed out of the sale before closing. The Court of Appeals affirmed a jury verdict for the buyers. The seller’s first issue on appeal was simply that “the evidence demonstrates [buyers] committed fraud against [seller],” a complaint that was too broad and generic to preserve any specific error. The Court also affirmed an award of $9,675 in attorney fees to the buyers under a prevailing-party clause of the contract, holding that the seller’s briefing about that award failed to discuss the evidence concerning the fees and did not explain how the cited case law should be applied to the jury’s finding.

Davenport Meadows LP v. Dobrushkin, No. 05-12-01471-CV

The company operating the Golf Club at Castle Hills agreed to grant lifetime memberships to a number of golfers, who filed suit in order to vindicate those contracts after the course was foreclosed on and sold to defendant CAPX Realty. Although the plaintiffs continued to golf for free for the next four years, that was not enough to raise a genuine issue of material fact on the golfers’ theory that CAPX had ratified their contracts. Ratification is a theory by which a principal can affirm a contract entered into by an agent.  But CAPX was not a party to the contract, and nobody was acting as CAPX’s agent in entering into the contract. Therefore, CAPX could not ratify the lifetime memberships, and summary judgment was appropriately granted.

Averett v. CAPX Realty LLC, No. 05-13-00885-CV

The Court of Appeals has issued a lengthy opinion affirming the denial of a special appearance. The appeal arises out of an apparently contentious case involving claims and counterclaims for breach of contract, fraud, and defamation. Defendant Sebastian Lombardo — an Italian citizen who lives in Belgium and works in France — challenged personal jurisdiction by invoking the fiduciary shield doctrine, which protects officers of corporations from being personally haled into court in Texas due to their contacts as representatives of the corporation. Unfortunately for Lombardo, his argument in the trial court had presented that issue as a matter of general personal jurisdiction, and the trial court had found him to be subject to specific personal jurisdiction. Having failed to present the fiduciary shield doctrine as a bar to the exercise of specific personal jurisdiction, the issue was also waived on appeal. The opinion goes on to affirm the legal and factual sufficiency of the evidence supporting the trial court’s findings of jurisdictional facts, as well as its application of the law to those facts, and therefore affirmed denial of the special appearance.

Lombardo v. Bhattacharyya, No. 05-13-01583-CV

The issue in this case was whether the trial court erred in awarding attorneys’ fees to the defendant when the plaintiff dropped its claim under the Texas Theft Liability Act (“TTLA”)  a few days after the defendant filed a motion for summary judgment.

Under the TTLA, the prevailing party is entitled to recover attorneys’ fees.  In this case, the plaintiff brought a TTLA claim against the defendant.  When the defendant moved for summary judgment, the plaintiff must have realized that it was going to lose.  Consequently, the plaintiff amended its complaint and removed the TTLA claim, effectively nonsuiting it.  Thus, the plaintiff claimed that the defendant was not a prevailing party and therefore not entitled to attorneys’ fees.

The Court of Appeals affirmed the trial court’s decision to award attorneys’ fees, holding that a party is still a prevailing party if the nonsuit was taken to avoid an unfavorable ruling on the merits.  This result was further cemented by the fact that at the hearing on attorneys’ fees, plaintiff’s attorney acknowledged that by filing its nonsuit the plaintiff “basically, said ‘Uncle.'”

BBP Sub I LLP v. Di Tucci

In this challenge to an arbitration award, the Court of Appeals rejected the losing party’s attempt to vacate the arbitration award on grounds of “manifest disregard” for the law or “gross mistake” by the arbitrators because the appellant failed to submit a record of the arbitration proceedings.  According to the Court, “without a record of the arbitration proceedings showing the evidence or the law that was presented to the arbitrators, we cannot conclude the arbitrators manifestly disregarded the law or committed a gross mistake.”

Beech Street Corp. v. Baylor Health Care Sys.

The developer of a condominium project in Fort Worth sued the general contractor it had hired to construct a rooftop pool and deck. Inevitably, the general filed third party claims and cross-claims against various other participants, including engineers and subcontractors, seemingly all of whom filed claims, cross-claims, and counterclaims against everyone else. Two of the defendants moved to dismiss some of third party claims on the basis that the claimants had not complied with the certificate of merit requirement for suits against licensed architects, engineers, and surveyors.  See Tex. Civ. Prac. & Rem. Code § 152.002. Applying recent authority from the Texas Supreme Court, the Court of Appeals held that a certificate of merit is only required to initiate suit, not for defendants or third-party defendants who assert claims for relief within a lawsuit. However, the Court also ordered the dismissal of the plaintiffs’ fifth amended petition as to one of the two defendants on the basis that they had failed to attach a certificate of merit to the amended petition before the deadline.

Hydrotech Engineering, Inc. v. OMP Dev., LLC, No. 05-13-00713-CV

Mr. and Mrs. Carpenter hired the law firm of Shaw & Lemon to represent them in a lawsuit against Holmes Builders.  The Carpenters agreed to pay Shaw & Lemon 40% of any recovery.  Shaw & Lemon, in turn, hired attorney Daniel Hagood to assist with the case.  In exchange for Mr. Hagood’s assistance, Shaw & Lemon agreed orally to pay him 25% of their 40% contingency fee.

Ultimately, the Carpenters obtained a judgment against Holmes for more than $2 million.  Rather than pay the judgment, however, Holmes filed for bankruptcy protection.  By this time, Mr. Shaw and Mr. Lemon had experienced a falling out and had parted ways (and sued each other).  Mr. Lemon, on his own, was then retained by the bankruptcy trustee to recover assets for Holmes’ bankruptcy estate, for which he would receive 34% of any assets recovered.  Significantly, as part of this arrangement, Mr. Lemon, on behalf of himself and his firm, waived any right to payment from the Carpenters.

It turns out that Mr. Lemon was fairly successful at recovering assets for the estate, as he recovered over $1 million.  As a result, the Carpenters received nearly $600,000 for their claim.  Once the Carpenters were paid, Mr. Hagood sought his cut of their recovery based on the agreement he had with Lemon and Shaw.

In this opinion, the Court of Appeals addressed several issues, one of which was whether Hagood had a valid breach of contract claim against Lemon.  Lemon argued that since neither he nor his now-defunct firm received any payment from the Carpenters, Hagood had no claim.  The Court rejected that argument, noting that “one who prevents or makes impossible the performance of a condition precedent upon which his liability under a contract is made to depend cannot avail himself of its nonperformance.”  Here, the Court noted that Lemon’s waiver of his firm’s right to recover from the Carpenters made impossible the performance of the condition precedent to Lemon’s liability under the agreement with Hagood, because “[a] duty to cooperate is implied in every contract in which cooperation is necessary for performance of the contract.”

Lemon v. Hagood

Providence Bank sued for a deficiency judgment after the bank foreclosed on one of the borrower’s properties. The parties agreed to settle that claim, and so the bank filed a notice of nonsuit by mail. But on the same day the bank mailed in the nonsuit, the borrower filed brand new counterclaims against the bank on other properties. So the question became whether the bank’s nonsuit terminated the entire case before the filing of the counterclaims. The Court of Appeals answered that question in the negative.  Although TCRP 5 deems a document to be filed on the date it is mailed, that rule only applies to documents that have to be filed by a particular deadline. By contrast, a nonsuit under Rule 162 can be filed at any time before the close of the plaintiff’s evidence. Accordingly, the nonsuit was not deemed filed at the time of mailing, and by the time it arrived at the courthouse for filing, the borrower’s counterclaims were already part of the lawsuit and could move forward as part of the case.

FP Asset Group, LP v. Providence Bank, No. 05-12-01728-CV

This breach of contract case addressed a loan guarantor’s contractual duty to defend the lender in a fraud lawsuit.  The Court was asked to interpret a duty to defend provision that conditioned the duty on the “occurrence” of fraud, when the pending lawsuit at issue had to this point only raised “allegations” of fraud.  According to the Court, the duty to defend is a contractual duty depending on the precise terms of the contract.  Thus, the Court refused to rewrite the section at issue to replace the word “occurrence” with “allegation.”  Because the pending fraud claim only involved fraud “allegations” at this point, the defendant owed no duty to defend.

Myers v. Hall Columbus Lender LLC

Len Rao filed suit against his former employer, David Weekley Homes. Weekley moved to abate the lawsuit and initiated an arbitration proceeding with the AAA. The trial court denied the motion to compel arbitration, and the Court of Appeals — after first granting an emergency motion to stay the proceedings — ultimately affirmed the denial of arbitration. After the case moved back to the trial court, however, Rao added new claims against the AAA, which responded with a plea to the jurisdiction based on the doctrine of arbitral immunity. The trial court granted the plea, and the Court of Appeals affirmed. Arbitral immunity, the Court held, extends not only to arbitrators themselves, but also to the association that administers their proceedings.

Rao v. Am. Arbitration Ass’n., No. 05-13-00462-CV

In this age discrimination employment claim, the Court of Appeals reversed the trial court’s grant of summary judgment for the defendant.  According to the Court, there was conflicting evidence about the defendant’s reason for firing the plaintiff.  Although the defendant claimed that the downturn in the economy forced them to fire the plaintiff, the plaintiff argued that, at the time of his termination, he was working on projects that would have required another year to complete.  This conflict created a sufficient fact issue for the plaintiff to survive summary judgment.

Stillwell v. Halff Assocs., Inc.

Among several issues on appeal in this dispute between a commercial landlord and tenant, the Court of Appeals considered whether the defendant could recover attorneys’ fees pursuant to the declaratory judgments act.  After the plaintiff sued the defendant for breach of contract for failing to construct ramps in compliance with the ADA, the defendant responded by requesting a declaratory judgment that he had no duty to pay for the ramps.  Because the defendant’s counsel admitted at trial that the issues raised in his declaratory judgment action would be resolved by the plaintiff’s breach of contract lawsuit, the court rejected the defendant’s attempt to recover attorneys’ fees, noting the rule that “a party cannot use the declaratory judgments act merely as a vehicle to obtain otherwise impermissible attorney’s fees.”

Cellular Sales of Knoxville, Inc. v. McGonagle

Addressing a motion to compel arbitration, the Court of Appeals found that a provision in the defendant’s employee handbook did not require arbitration because that provision stated, in part, that “[b]inding arbitration requires the employee and [defendant] to commit to resolution of all eligible issues and be bound by the decision of the arbitrator.”  According to the Court, this language established that the parties had not already agreed to arbitrate, but rather that they must still make the decision if a dispute arises in the future.

Texas Health Resources v. Kruse

In this dispute between neighbors over a poorly placed fence, the victorious neighbors appealed the trial court’s decision denying them their court costs.  The case had already been up to the Court of Appeals once before, where the Court reversed the trial court and remanded the case “for entry of judgment consistent with our opinion and for consideration of the [successful neighbors’] request for attorney’s fees.”  On remand, the trial court refused to award court costs because the mandate from the Court of Appeals only referenced attorneys’ fees and made no mention of court costs.

The Court of Appeals again reversed the trial court, holding that the prevailing neighbors were entitled to recover their trial court costs pursuant to Rule 131 of the rules of civil procedure.  Although court costs were not specifically mentioned in the Court’s previous mandate, “the trial court retains its constitutional jurisdiction to perform duties collateral to and consistent with” that mandate.

Blaylock v. Holland

In a follow-up from an opinion issued a few months ago, the Court of Appeals has affirmed summary judgment in favor of the financiers of a development project in Fort Worth. For essentially the same reason that the buyer could not recover against the architect who had referred the deal in the first place — namely, that the paperwork for the sale fully disclosed the fact that the property was partially situated on a 100-year floodplain. Because the architect’s summary judgment motion had conclusively negated any possibility that he was personally responsible for any fraudulent misrepresentations, the buyer could not recover for fraud against the finance he was allegedly representing in the transaction.

Collective Asset Partners, LLC v. Pana, No. 05-13-00552-CV

The Texas Supreme Court today affirmed the Dallas Court of Appeals’ judgment in a wrongful death/asbestos case, which had vacated an $11.6 million plaintiff’s verdict. The majority opinion disagreed with the Court of Appeals’ holding that the plaintiff had to prove that the decedent would not have contracted mesothelioma but for his exposure to the defendant’s own product. Nevertheless, applying the “substantial factor” test for causation, the majority held that the plaintiff had still failed to provide legally sufficient evidence that the defendant’s product had caused the victim’s illness.

Bostic v. Georgia-Pacific Corp. (majority)

Bostic v. Georgia-Pacific Corp. (Guzman concurrence)

Bostic v. Georgia-Pacific Corp. (Lehrmann dissent)

Last month, we noted an opinion that teased, but did not answer, an interesting question: Does Chapter 74 of the Civil Practice & Remedies Code require a plaintiff to produce an expert report for a breach of contract claim arising out of the provision of medical services? The Court of Appeals has now issued an amended opinion in that same case that addresses that very issue. While still holding that the defendant/counterclaimant had failed to preserve error by failing to make a proffer of the excluded evidence — namely, that his mother had been placed in a straitjacket despite the assisted-living facility’s contract stating that it was a “restraint-free community” — the revised opinion adds a new section on the expert report issue. The Court now concludes that even if the evidentiary issue had not been waived, the trial court still properly excluded that evidence because it was still a healthcare liability counterclaim that required the defendant to produce a Chapter 74 expert report. Since the defendant failed to do so, the trial court did not abuse its discretion in excluding evidence of the resident being placed in restraints.

Ferguson v. Plaza Health Servs. at Edgemere (amended opinion), No. 05-12-01399-CV

In this restricted appeal, the defendant argued that the trial court erred in entering a default judgment against it in the absence of evidence establishing mental anguish damages.  Because the trial court received testimony of the plaintiffs physical injuries form a slip and fall, and no testimony on mental anguish, and because there was no way to distinguish between the award of mental anguish damages and those awarded for past physical pain, the judge’s award of $20,000 constitutes error on the face of the record.

Center Operating Co. v. Duncan

In this forcible detainer action, the trial court dismissed American Homes 4 Rent’s (AH4R) attempt to evict the defendant because AH4R could not prove that it had title to the property at issue.  Specifically, the trial court based its dismissal on the defendant’s argument that she had filed bankruptcy the day before AH4R bought the property and thus its purchase was void because it had violated the automatic stay.  The Court of Appeals reversed the trial court’s dismissal, because to prevail in a forcible detainer action, “a plaintiff is not required to prove title, but is only required to show sufficient evidence of ownership to demonstrate a superior right to immediate possession.”

American Homes 4 Rent Props. One LLC v. Ibarra

In this breach of settlement action, the plaintiff won almost $10,000 in damages, but the trial court awarded him zero dollars in attorneys’ fees.  On appeal, the Court found that attorneys’ fees were proper under section 38.001(8), so the trial court had no discretion to deny them.  The Court noted that one of the factors in determining the reasonableness of attorneys’ fees is the amount of damages awarded, and remanded the determination to the trial court.

Garcia v. Solorio

Hidden within this seemingly straightforward post-foreclosure forcible detainer action is an interesting evidentiary issue.  After purchasing the Martins’ home at a foreclosure sale, Fannie Mae sought to have them evicted by filing a forcible detainer action in County Court at Law.  The trial court ruled in favor of Fannie Mae, and the Martins appealed, arguing, among other things, that Fannie Mae did not introduce evidence to establish that it owned the property.

That issue turned on whether the substitute trustee’s deed (which showed that Fannie Mae owned the property) was admitted into evidence.  Apparently, when Fannie offered the substitute trustee’s deed into evidence, the Martins’ attorney objected to the second page of the document on the basis of hearsay and the trial court sustained his objection.  Later, however, Fannie’s attorney discussed and summarized the relevant provisions of the deed and made arguments about the deed as if it had been admitted into evidence.  Notably, the Martins’ attorney never objected to these statements, leading the Court of Appeals to conclude that the substitute trustee’s deed was, “for all practical purposes,” admitted into evidence.  Accordingly, the Court affirmed the trial court’s ruling.

Martin v. Fed. Nat’l Mtg. Ass’n

We depart from our usual fare of commercial litigation to spotlight a candidate for inclusion in future family law textbooks (or at least study materials for the Texas Bar Exam). To establish a common law or “informal” marriage, the claimant has to prove (1) the couple agreed to be married, (2) after that agreement they lived together in Texas as husband and wife, and (3) they represented to others that they were married. After Joseph Marek died intestate, Deborah Anderson intervened in the probate of his estate, claiming she and Marek had an informal marriage. The probate court sided with Anderson. Marek’s sister appealed, challenging the sufficiency of the evidence that the couple had an agreement to be married and represented to others that they were married.

The Court of Appeals conducted a detailed review of the evidence and affirmed the trial court’s judgment. The proof that Marek and Anderson had held themselves out as married was conflicting, but the trial court was entitled to resolve that conflicting evidence in favor of Anderson. The seemingly closer issue was whether Marek and Aderson actually had an agreement to be married. Anderson testified that agreement came when she returned to Marek’s house (colorfully, from an illegal gambling parlor) after a period of separation. Anderson testified that Marek asked her “Are you here for good, Babe?” and she responded “Yes.” The Court held that this testimony alone was not specific enough to establish anything more than an agreement to cohabitate. Nevertheless, it was still circumstantial evidence that, combined with all the evidence that the couple had actually lived their lives as husband and wife (including six years of “Married, Filing Jointly” tax returns), served to establish an agreement to be married. Thus, it appears that evidence of a couple acting as if they are married, and representing themselves to be married, can also establish the required element of an actual agreement to be married.

In re Estate of Marek, No. 05-13-01008-CV

After a dispute arose between the owner of an apartment complex and the contractor hired to renovate it, the owner sent the contractor checks totaling more than $8,000 with a letter stating that it was “full and final payment” for all amounts owed. The contractor cashed the check, but subsequently filed a lien and sought to recover an additional $14,000 in unpaid invoices. The trial court granted judgment for the defendant, and the Court of Appeals affirmed. Although the contractor’s owner testified that he had not “knowingly and affirmatively” agree to an accord and satisfaction, the trial judge was entitled to disregard that evidence as not believable. Luckily, however, the apartment owner conceded that the $14,000 awarded on its own counterclaim was erroneous, and so the Court of Appeals vacated and rendered that portion of the judgment, with a remand for further consideration of the attendant attorney fees.

Contemporary Contractors v. Centerpoint Apt. Ltd., No. 05-13-00614-CV