On cross-motions for summary judgment, the trial court granted summary judgment for the appellant on count one and for apellee on counts two and four, but said nothing about counts three and five other than invoking a Mother Hubbard clause in the order, which reads: “All relief requested and not expressly granted herein is hereby denied.”   With its order, the trial court granted appellee permanent injunctive relief, exonerated appellee’s bond, and taxed costs against appellant.

On appeal, the Court avoided the substantive issues and only addressed its own jurisdiction.  Following Lehmann v. Har-Con Corp., 39 S.W.3d 191 (Tex. 2001), the Court held that the trial court’s order was not “final” because it neglected to address claims three and five, and because the Mother Hubbard clause and the permanent injunction did not suffice to render those claims final.

Auroura Loan Services v. Aurora Loan Services, LLC

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

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

The court affirmed a summary judgment reviving a default judgment entered against Bartz in 1989. Randall brought this action to revive it in 2010, providing affidavit evidence purportedly showing that she procured a writ of execution to be served on Bartz at his last known address in 1999, thereby extending the time to revive and enforce the judgment until 2011. The court granted Randall’s motion for summary judgment, reviving the default judgment.

On appeal, Bartz argued that Randall failed to show that her revival action was timely. The court noted that Randall had the burden to show that a writ was prepared and issued by the court clerk and delivered to the proper officer for execution within the 10-year statutory time period. The evidence showed that Randall had a writ issued just inside of 10 years after the judgment and that the judgment thus became dormant in 2009, ten years after the writ issued. Randall’s action to revive the judgment was then filed less than two years after the judgment became dormant, so the action was timely. Finally, when the writ was returned due to a bad address Bartz supplied, Randall had no obligation under the statute extending the life of the judgment to ensure actual service.

Bartz v. Randall, No. 05-11-00836-CV

The court affirmed the dismissal of an action for lack of subject matter jurisdiction based upon the ecclesiastical abstention doctrine. Jennison, a former Episcopal Priest, sued Prasifka, an Episcopal Church parishioner, for slander, tortious interference with a contractual relationship, and wrongful discharge, stemming from complaints she made to a church official in response to a request by the church in connection with internal church disciplinary proceedings against Jennison. The proceedings resulted in his discharge from the priesthood. Prasifka filed, and the court granted, a motion to dismiss because the action involved church matters outside of the court’s jurisdiction.

On appeal, the court noted that the ecclesiastical abstention doctrine removes most issues related to a church’s ministerial employment decisions from the jurisdiction of the civil courts. In this case, Prasifka’s defamatory statements were made entirely in connection with church disciplinary proceedings. These statements and Jennison’s claims were inextricably intertwined with the church’s investigation and thus closely related to internal matters of church governance and discipline. Further, a causation determination would require an analysis of the church’s disciplinary decision-making process. Thus, the ecclesiastical abstention doctrine applied and the district court lacked jurisdiction.

Jennison v. Prasifka,   05-11-01253-CV

Just before trial, Victor Enterprises Incorporated (“VEI”) moved for recusal.  The trial judge, however, denied the motion as untimely.  The case proceeded to trial, and the judge entered a final judgment in favor of Defendant, Clifford Holland.  The Court of Appeals reversed the recusal decision and voided the judgment.  Turning to the text of TRCP 18a, the Court unequivocally found that “in the event a recusal motion is filed, a trial judge must promptly enter one of two orders which are permitted:  recusal or referral.”  Because the trial judge denied the motion as untimely, she did not follow either of the two permitted courses.  Thus, she did not comply with Rule 18a and abused her discretion.

Victor Enterprises v. Clifford Holland, No. 05-10-01592-CV

FedEx sued Smith Protective Services for breaching the parties’ services agreement after thieves cut holes in the fences on its property and looted several of its trucks. The trial court found that Smith had, indeed, breached the parties’ agreement. It found that the thieves had cut two holes in the shipping terminal’s perimeter fence over a period of two days (with a third cut several days later), through which the thieves entered and “off-loaded” valuable cargo by hand. FedEx investigated, finding that, while the contract purportedly required it, none of the guards present during the heist knew that one of their duties was to conduct patrols. FedEx also opined that the thieves knew about this failure and took advantage of it.

On appeal, Smith challenged the conclusion that the parties’ contract required its guards to patrol the premises. The court of appeals, however, pointed to express language in the contract along with testimony by several FedEx employees to refute this claim, and, accordingly, upheld the trial court’s findings of fact and conclusions of law.

Smith Protective Services v FedEx, No. 05-11-00715-CV

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

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

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

In this divorce proceeding, the parties negotiated and signed (but did not file with the Court) a Final Divorce Decree.  Over the next year, the parties continued to negotiate the Final Decree even though they had already finalized and signed a prior version.  These additional negotiations broke down and the parties could not arrive at a new agreement, so one party filed the previously signed version with the court, which the judge accepted.

When the trial court refused to set aside the Final Decree, this appeal followed, with the party challenging the Final Decree arguing that the agreement did not meet Rule 11’s requirements because it was not filed before it was signed by the trial judge.  The Court of Appeals disagreed, holding that “[a]lthough rule 11 requires the writing to be filed as part of the record, the rules does not state when the writing must be filed.”  According to the Court, Rule 11 only requires the agreement to be filed before it is sought to be enforced.

Markarian v Markarian, No. 05-11-01076-CV

The court affirmed a judgment in a forcible detainer action awarding possession of a property purchased at a foreclosure sale to the buyer. The owners of a property defaulted on their promissory note, and the property was sold to FHLMC in foreclosure. FHLMC notified the former owners to vacate twice, the first in three and the second in ninety days, and eventually filed a petition for forcible detainer. After the former owners failed to object to FHLMC’s evidence or present any evidence of their own, FHLMC was awarded judgment. The former owners appealed arguing that the petition insufficiently identified the property and that the notice to vacate was insufficient. The court rejected both arguments, holding that the petition was sufficiently identified the property by including the address of the property and that the evidence of the notices to vacate was sufficient to support the judgment.

Caro v. FHLMC, No. 05-11-01023-CV

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

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

In this shareholder challenge to the pending merger of MetroPCS, Deutsche Telekom and T-Mobile, the plaintiffs sought a TRO enjoining the defendants’ use of several “deal protection devices,” including “Poison-Pill Lock-Up” and “Force-the-Vote” provisions.  The trial court granted the TRO, agreeing with the plaintiffs that these deal protection devices irreparably harmed shareholders by, among other things, warding off other potential acquirers.  Defendants petitioned for a writ of mandamus to vacate the TRO because the trial court failed to address their motion to dismiss or stay the action based on the forum-selection clause in MetroPCS’s bylaws, which mandated Delaware as the proper forum.  The Court of Appeals found that because the motion to dismiss or stay was filed before the request for a TRO, the trial court abused its discretion by granting injunctive relief without first ruling on the forum-selection clause issue.  Citing the Texas Supreme Court’s holding in In re AutoNation, the Court of Appeals found that “subjecting  a party to trial in a forum other than that agreed upon and requiring an appeal to vindicate the rights granted in a forum-selection clause” warrants mandamus.  Accordingly, the Court vacated the TRO and stayed the case until the motion to dismiss could be decided.

In re MetroPCS, No. 05-12-01577-CV

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

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

In this Memorandum Opinion, the Court of Appeals addressed whether it may exercise jurisdiction over an order granting an interlocutory summary judgment order for permanent injunctive relief, but which did not dispose of the defendant’s counterclaims. The Court refused to exercise jurisdiction, holding that “[a] summary judgment that fails to dispose of all claims, even if it grants a permanent injunction, is interlocutory and unappealable.”  Notably, however, the court pointed out that the appellant could have tried to challenge the injunction as actually being an appealable temporary injunction, but the appellant had not attempted to use that procedure.

Young v. Golfing Green Homeowners Ass’n, Inc., No. 05-12-00651

This appeal arises from a jury verdict in favor of three brothers who were hit by a tractor-trailer while they were changing a flat tire on the side of the freeway. Among other things, the jury awarded damages for lost wages and loss of earning capacity.

On appeal, the central issue was whether federal law preempts the ability of undocumented workers, like the plaintiffs, to recover lost wages. The defendants argued that the federal Immigration Reform and Control Act preempts the lost wages jury award because the U.S. Supreme Court has determined that the “IRCA has preempted the field of regulation of employment of illegal aliens.” Arizona v. United States, 132 S.Ct. 2492 (2012). The court, however, rejected this argument, holding instead that “Congress’s power to regulate immigration cannot imply that every state law that might impact or touch on an undocumented alien is necessarily preempted.” It further held that nothing in the IRCA indicates that Congress intended this statute to supersede state law on this issue.

Grocers Supply, Inc. v. Cabello, No. 05-10-00843-CV

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

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

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

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

The court dismissed an appeal from post-judgment orders following foreclosure proceedings for lack of jurisdiction. After trial, the trial court entered one order denying Knoles’s efforts to avoid a writ of execution and prohibiting him from challenging the writ going forward and a second order sanctioning Knoles’s counsel for actions related to the writ. In a letter brief to the court of appeals, Knoles argued that the orders were appealable final judgments because they adjudicated a new set of facts and followed a conventional trial on the merits. The court rejected this argument, holding that the orders were issued to aid in the enforcement of the underlying unappealed judgment and that Knoles has no standing to appeal the order imposing sanctions against his counsel. Thus, the court had no jurisdiction over the appeal.

Knoles v. Wells Fargo Bank, N.A., 05-12-00473-CV

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

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

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

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

The court affirmed a judgment in favor of AT&T against an attorney for breaches of a 2008 and a 2009 agreement for Yellow Pages advertising. Thornton entered into the agreements with AT&T but only made partial payments on the 2008 contract and none on the 2009 one. The trial court entered judgment in favor of AT&T after a half-day bench trial. On appeal, Thornton challenged the legal sufficiency of the evidence of a valid contract, breach, and any award based on quantum meruit. The court held that AT&T’s evidence at trial, including four contract documents with Thornton’s signature and evidence that Thornton began making partial payments according to the 2008 contract, was sufficient to support the finding of a contract. Further, the evidence showing that AT&T  produced advertisements of Thornton’s law practice as stated in the contracts, and the Thornton no making payments according to those contracts was sufficient to show support the finding of breach and damages. Thus, the judgment was upheld.

Thornton v. AT&T Advertising, No. 05-11-00767-CV

The plaintiffs were involved in a minor car accident in a parking lot. Benning parked the vehicle and began to exit it as planned, but was then assaulted with a pistol by the other driver. The assailant fled the scene and was not apprehended, but was later involved in a convenient store robbery. Benning sued Home State and Safeco for failure to pay benefits. The insurers filed a motion for partial summary judgment on all claims relating to injuries arising from the events after the collision, which was denied, and the parties filed an agreed motion for interlocutory appeal.

On appeal, the court noted that the insurance policy awards benefits for damages arising out of the use of an uninsured motor vehicle. Benning argued that the assault would not have occurred but for the vehicle collision. But the court held that the assault involved the vehicle only incidentally, as Benning would have parked and exited the vehicle in the same way whether or not the collision occurred. And despite carjacking-related cases from other jurisdictions permitting recovery, there was no evidence that the assailant meant to steal the car. Thus, the court reversed the summary judgment denial.

Home State County Mutual Insurance Company and Safeco v. Benning, No. 05-12-00246-CV

Hood worked for ISC as both an employee and an independent contractor “registered representative” working to bring in new clients on commission. Hood regularly downloaded ISC client information onto personal storage. ISC fired Hood, who solicited 800 of ISC clients at his new place of business. Many of those clients Hood brought to ISC and was entitled to solicit; other he did not. ISC sued and sought a temporary injunction. Both side submitted a list of client files taken from Hood’s hard drive, but disagreed about which clients were not Hood’s and thus ISC proprietary information. The court accepted Hood’s list, ordering him to destroy or return all of the files he designated as belonging to ISC, or preserve them and refrain from accessing them. ISC appealed the denial of a temporary injunction based on ISC’s list.

On appeal, the court first held that Hood’s download of client lists, prohibited by ISC for registered representatives, could constitute a violation of the Penal Code’s offense for accessing a computer without the consent of the owner. The court next held that some of the data Hood retained contained sensitive information about the clients that exposed ISC to FINRA violations, and that this information was unnecessary to Hood’s solicitations. Thus, the injunction should have extended to both information about clients that Hood did not bring to ISC and the social security numbers and account information of all ISC clients.

ISC Group, Inc. v. Hood, No. 05-12-00568-CV

The court reversed the trial court’s judgment against Wells Fargo for wrongful foreclosure and breach of contract. When Robinson defaulted on his home equity note, Wells Fargo accelerated the note and filed an application for expedited foreclosure. The court authorized the foreclosure on a certain date, but Wells Fargo proceeded one month late. Robinson sued, contending Well Fargo was not authorized to foreclose on the property because it had not complied with the specific date in the court’s order. The trial court agreed and awarded damages for the difference between the value of the property at foreclosure and the unpaid balance of the note.

On appeal, Wells Fargo challenged the causal connection between the alleged breaches and Robinson’s damages, arguing that the later date of the sale did not cause prejudice or harm. The court agreed that Wells Fargo violated the deed of trust by conducting the foreclosure sale on a different date, but noted that the correct remedy would be to set aside the sale and resulting deed. Because the property at issue was not sold for an inadequate price and Robinson was not otherwise harmed by the delay in the foreclosure sale, there was no injury.

Wells Fargo Bank, N.A. as Trustee v. Robinson, No. 05-11-00700-CV

Texas Pallet Operations, LP rented commercial property form Ostrovitz & Gwinn, LLC  (“O&G”).  As required by the lease, Texas Pallet obtained property insurance from First Specialty Insurance Company.  In 2006, a fire damaged the property and O&G sought payment from First Specialty for the loss.  But First Specialty refused because, it argued, O&G was not a party to the insurance contract.  O&G sued, and the trial court dismissed the case on summary judgment.

On appeal, O&G’s primary argument was that dismissal was unwarranted because it had standing to enforce the insurance contract as a third-party beneficiary.  Specifically, O&G contended that the “Loss Payable Provisions” of the policy identified O&G by name as a “Loss Payee,” thus solidifying its status as a third-party beneficiary.  The Court disagreed.  Assessing the policy’s express language, the Court found that “the policy does not clearly and fully demonstrate an intention by [Texas Pallate] and First Specialty to contract for the direct benefit of [O&G].”  It then proceeded to rejected the other issues raised by O&G and affirm the trial court’s decision.

Ostrovitz and Gwinn, LLC v. First Specialty Insurance Co., No. 05-11-00143-CV

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

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

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

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

RTKL, an architecture firm, worked for Woodmont Investment Co., a real estate developer.    In a prior case, Woodmont sued RTKL, seeking a declaratory judgment that it did not owe RKTL its remaining fees because the services agreement between the parties was invalid. That case settled for $700,000, with $140,000 to be paid to RTKL up front and the rest to be paid to it in monthly installments of $10,000.  As the parties negotiated the settlement, it was determined that the entity paying the settlement would be Woodmont TCI Group XIII, LP (“XIII”), another Woodmont-related entity that developed one of the properties for which  RTKL provided services.  Several months after the settlement agreement was signed, however, XIII filed for bankruptcy.

When RTKL realized the XIII had no cash to pay the settlement it sued TCI (XIII’s parent) for fraud and breach of the settlement agreement.  TCI moved for summary judgment on the breach of contract claim, which the trial court granted, and the jury found in TCI’s favor on the fraud claim.  RTKL appealed the denial of summary judgment.   The Court of Appeals examined the language of the release entered into as part of the settlement and found that TCI, as XIII’s parent, fell within its terms.  It then found that the release included the claim related to the settlement agreement.  Accordingly, the court affirmed the trial court’s summary judgment decision.

RTKL Associates v. Transcontinental Realty Investors, Inc., No. 05-11-00786-CV

The court affirmed summary judgment in a mortgage foreclosure case against Givens, the mortgagor. Givens defaulted on a Note and Deed of Trust. The lender, MidFirst, noticed Givens of the default through its servicer, Midland. Midland eventually noticed the Note’s acceleration and foreclosure sale through its legal counsel, BD, and filed this notice with the Dallas County Clerk. Givens was provided with a reinstatement opportunity but did not tender the required funds by the deadline, and the property was sold in foreclosure. Givens sued Midland, MidFirst, and BD asserting various claims. The court granted summary judgment for the defendants on each claim.

On appeal, Givens first argued that because the Deed of Trust provides that either the lender or trustee shall give notice of the foreclosure sale, notice from BD was inadequate. The court rejected this argument because the evidence conclusively established that BD acted as legal counsel for Midland, who in turn acted as mortgage servicer for MidFirst, and such notice is adequate under Texas law. The court next rejected Givens’s argument that the recording of notice of the foreclosure sale was inadequate, holding that a party need not record such notice in the permanent deed records, but may do so with the county clerk. Finally, the court held that Givens’s was given adequate opportunity to reinstate the loan.

Givens v. Midland Mortgage Co, et al., 05-11-00524-CV

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

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

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

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

In 2008, CNC hired Sunshine Jespersen to work as a leasing agent and provide on-site management services to Sweetwater Ranch Apartments.  Apparently seeking a shorter commute, Sunshine took advantage of a rent discount provided as an employment perk and moved into the Sweetwater Ranch Apartments.  But the job turned out to be arduous, requiring long work weeks and excessive overtime.  And, shortly after starting, Sunshine discovered she was pregnant with twins.  The parties dispute what happened next.  According to Sunshine, her doctor told her she needed to work less, so she asked for a reduction in hours.  When her boss demurred, she either quit (according to CNC) or asked for three weeks of medical leave (says Sunshine).  Sunshine then sought to come back, but CNC apparently had already filled her position.  While the facts surrounding the termination/resignation/rehiring are muddy, what is clear is that CNC/Sweetwater tried to raise her rent because she was no longer entitled to the employee rent discount.  Sunshine did not like this and tried to move out, but as she was trying to move out CNC/Sweetwater changed the locks, posted a notice of abandonment, and charged Sunshine for cleaning and repairing the apartment.

Sunshine sued.  She claimed pregnancy and disability discrimination, and that CNC/Sweetwater breached the lease by locking her out.  The trial court, however, rejected her motion for summary judgment and granted CNC/Sweetwater’s corresponding motion.  On appeal, the Court found that Sunshine had produced no direct evidence of pregnancy discrimination.  It also found that she produced no indirect evidence of discrimination because she could not show that she was replaced by someone outside the protected class since one of her replacements was, in fact, pregnant.  The court also upheld the trial court’s decision on the breach of the lease, finding that, under the lease’s terms, she had abandoned the apartment because she had previously moved out most of her belongings.

Sunshine Jespersen v. Sweetwater Ranch Apartments

The court affirmed the trial court’s judgment in this commercial real estate lawsuit. Jarvis provided a loan through its loan servicer, NAC, to CAS for the purchase of an apartment complex. The loan documentation identified NAC as the “servicer” and the lender as Jarvis “c/o” NAC. CAS made monthly loan payments directly to NAC, who then disbursed them to Jarvis. CAS later sold the property to K&E through Stewart Title. Stewart Title paid the loan payoff amount directly to NAC for payment to Jarvis, as NAC had done for two other loan payoff transactions to Jarvis in the past. But in this case, NAC did not provide the funds to Jarvis and instead purported to continue making CAS’s monthly payments without notifying Jarvis of the sale. When NAC stopped making those payments, evidently due to insolvency, Jarvis learned of the property sale and sought to foreclose on the property.

K&E filed a declaratory action asserting that the loan was paid off and seeking to prevent foreclosure. Jarvis filed a third-party petition against CAS, Stewart Title asserting negligence and breach of contract claims against Stewart Title for making the loan payment to NAC instead of directly to Jarvis. Jarvis also sought a declaration that the loan was not discharged and sought to quiet title. At trial, Jarvis moved to exclude evidence of the other loans serviced by NAC in which NAC received the payoff amount and disbursed it to Jarvis, which was denied. Based on this evidence, the trial court found that Jarvis and NAC established a procedure where NAC received payoff funds and disbursed them to Jarvis and that NAC had actual and apparent authority to accept the payoff amount here. It entered judgment for K&E, declaring that the loan was fully paid, enjoining Jarvis from attempting to foreclose on the party, and awarding K&E attorney’s fees. The court also granted K&E and Stewart Title summary judgment on Jarvis’s negligence and breach of contract claims and severed out Jarvis’s claims against CAS.

On appeal, Jarvis argued that the trial court erred by denying its motion to exclude because the loan documents dictated the relationship between the parties, and thus the parol evidence rule precluded the evidence of Jarvis and NAC’s other course of dealings. The court held that the loan documents indicated that NAC had authority to act for Jarvis, but the scope of that authority was unclear. Thus, parol evidence showing the scope of NAC’s authority to accept loan payoff amounts and not contradicting the terms of the documents was not barred. Additionally, the evidence was sufficient to show that NAC had implied actual authority to accept the loan payoff. This holding also disposed of Jarvis’s claims against Stewart Title, whose transfer of funds to NAC constituted payment to Jarvis rather than a breach of any duty to Jarvis, and Jarvis’s declaratory action because its lien and deed of trust on the property was discharged. Finally, K&E’s attorney’s fees recovery was warranted because the UDJA permits a declaratory action brought to invalidate a real estate note, as well as any lien securing the note.

Jarvis v. K&E RE One, LLC, et al., 05-11-00341-CV

The court affirmed the dismissal of a condemnation case in which the defendant failed to appear at trial. The City petitioned for condemnation and special commissioners made an award to McKinney for the taking. McKinney filed an objection, but when the case was called for trial McKinney’s attorney withdrew and another person, Boles, attempted to file a motion for continuance on behalf of McKinney, who was absent. Boles stated that he had “power of attorney” to represent McKinney, though he was not, in fact, a licensed attorney. The court refused to consider the motion and dismissed the case due to McKinney’s absence. On pro se appeal, the court held that the trial court did not abuse its discretion because McKinney presented no evidence that he was not negligent for failing to find representation to replace his original attorney, and the could determine that such a failure was his own fault.

W.A. McKinney v. City of Cedar Hill, No. 05-12-00368-CV

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

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

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

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

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

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

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

Van Peterson entered into a contract with ADT to provide commercial alarm services to his jewelry store. Allegedly, an unidentified man wearing an ADT uniform and driving an ADT van came to the jewelry store and sold Van Peterson a device for its alarm system, but instead of installing the device, the man disabled the alarm. Van Peterson’s store was burgled soon after. Van Peterson brought various tort, fraud and DTPA claims against ADT. ADT filed a traditional motion for summary judgment on the tort claims, arguing that Van Peterson waived liability for these claims in the contract, and a no-evidence motion on the other claims. The trial court eventually denied the motions but permitted an interlocutory appeal under former section 51.014(d) of the Texas Civil Practice and Remedies Code.

On appeal, the court first held that ADT could not raise issues first advanced in its reply in support of its no-evidence motion for summary judgment. The court reversed the trial court’s denial of summary judgment on the tort claims because the parties’ contract included a limitation-of-liability provision as to those claims. Such waivers are not invalidated by the DTPA, which only limits waivers of DTPA claims. Finally, the court held that ADT could not challenge on appeal Van Peterson’s subrogated insurer’s pursuit of a DTPA claim because only Van Peterson was a party to the litigation and any opinion as to the insurer would be advisory.

ADT Security Services, Inc. v. Van Peterson Fine Jewelers, No. 05-11-01468-CV

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

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

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

In this Memorandum Opinion, the appellant, a director of a bankrupt company, was found liable for the amount the bankruptcy court required his company to distribute to a creditor.  Strangely, this personal liability was based on Chapter 171 of the Tax Code, which provides that if a corporation forfeits its “corporate privileges” for failure to pay its franchise taxes, each director or officer of the corporation is liable for any debt of the corporation.  While the appellant argued that this provision only applied to tax liabilities, the Court of Appeals affirmed the trial court’s decision and held that “[n]othing in the wording of this statute suggests that personal liability of officers and directors is limited to the tax liability.”

Yigal Bosch v. Cirro Group, Inc., No. 05-11-01625-CV

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

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

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

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

Green Mountain Oil and Gas Corporation sought to “flip” its oil leases by assigning them to EOG Resources at a higher price than it had paid for them.  After it had signed the assignment, however, EOG discovered that the lease assignments created an additional overriding royalty that reduced the mineral estate amount.  Because the leases included a draft–and because each draft provided that if the draft was not paid within 20 banking days, the bank was to return it to the payee and all further obligations of the parties would terminate–EOG decided to decline payment of each of the drafts and terminate the contract.   Green Mountain sued, seeking enforcement of the assignment.  The Court of Appeals, however, found that, under the terms of the draft, “EOG had an absolute right not to pay the draft.”  Accordingly, it did not breach the contract when it declined the draft regardless of whether EOG’s agent had established good title.

Green Meadow Oil & Gas Corp. v. EOG Resources, Inc., No. 05-11-00291-CV

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

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

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

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

The court dismissed an agreed interlocutory appeal from the trial court’s denial of competing motions for summary judgment related to a home foreclosure for want of jurisdiction. The Guzmans obtained a home mortgage on which the Bank eventually foreclosed. The Guzmans sued for wrongful foreclosure and breach of contract and argued that the Bank lacked standing to foreclose on the property or enforce the original note. Both sides moved for summary judgment, and the trial court denied the competing motions on the basis that the parties failed to satisfy their burdens for summary judgment. In agreement on the facts and the relevant legal issues, the parties filed a joint motion to appeal from interlocutory order under section 51.014(d) of the Civil Practice and Remedies Code contending that the “issues raised in [the] dispositive motions involve controlling questions of law as to which there is a substantial ground for difference of opinion, and obtaining a ruling on those issues of law from the appeals court will materially advance the outcome of this case.”

In its jurisdictional analysis, however, the court of appeals emphasized the fact that the trial court did not substantively rule on the controlling legal issues presented in the agreed interlocutory appeal. Instead, it submitted the issues to the appellate court for an advisory opinion – contrary to the purpose of section 51.014(d) – and thus the court had no jurisdiction over the appeal under that section.

Bank of New York Mellon v. Guzman, 05-12-00417-CV

In this Memorandum Opinion, the Court of Appeals addressed who has the authority to determine whether arbitration should be compelled: a court or an arbitrator.  The Court noted that, while, as a general matter, the courts decide whether the parties have agreed to arbitrate an particular issue, “the parties may agree to submit the substantive issue of arbitrability to arbitration.”  In this case, the relevant arbitration provision included the following clause: “Whether such Dispute will be subject to arbitration will likewise be determined in such arbitration as will the determination as to whether all procedural conditions precedent to arbitration have been satisfied.”  According to the Court, this provision presents “clear an unmistakable evidence of the parties’ intent to delegate arbitrability to the arbitrator.”  The Court, however, expressed no opinion on whether the plaintiffs’ claims actually should be submitted to arbitration because that, of course, was an issue for the arbitrator to decide.

Continuum Health Services, LLC v. Sheila Cross, No. 05-11-01520-CV

The court affirmed a summary judgment in favor of the bank in a foreclosure case dealing with the waiver statutory offset rights contained in Chapter 51 of the Texas Property Code. A builder entered construction loan agreement secured by four properties and signed a personal guaranty of the loan, eventually defaulting. The bank foreclosed on and sold the properties and sued the builder for the deficiency. The builder invoked Chapter 51, asking the court to determine the fair market value of the properties for the deficiency calculation rather than the foreclosure sale price. Town North moved for summary judgment arguing that the guaranty included a waiver of his right to claim any deductions or offsets from the amount guaranteed including any right to seek a reduction in the deficiency under section 51.003, which the trial court granted and then entered a judgment on the deficiency.

On appeal, the court cited its opinion in Interstate 35/Chisam Road, L.P. v. Moayedi, No. 05-11-00209-CV, 2012 WL 3125148 (Tex. App.—Dallas Aug. 2, 2012, no pet.) holding that the rights provided by section 51.003 are subject to waiver. It also cited King v. Park Cities Bank, No. 05-11- 00593-CV, 2012 WL 3144881, at *3 (Tex. App.—Dallas Aug. 3, 2012, no pet. h.) to reject the builder’s argument that language in the guaranty waiving “any defenses given to guarantors at law or in equity other than actual payment and performance of the indebtedness” did not encompass a waiver of section 51.003’s right of offset despite the guaranty’s later reference to a “claim of setoff.” Thus, the court held that the builder waived his rights under section 51.003.

Smith v. Town North Bank, 05-11-00520-CV

The court affirmed a judgment in a construction contract dispute between two subcontractors. The general contractor of a shopping center project, Mycon, subcontracted with Bulldog to fabricate the steel and erect the steel-reinforced concrete panels around the center’s trash dumpsters. Bulldog subcontracted Top Flight to erect the panels. Top flight testified that Mycon directed the concrete pouring to take place well outside of the range that Top Flight had instructed. Top Flight then requested a $7,500 change order from Bulldog for the extra erection cost, which Mycon refused. Under pressure from Mycon, Bulldog eventually installed the panels themselves, without notifying Top Flight, and then invoiced and eventually sued Top Flight for the cost of installation. Top Flight counterclaimed for the 10% retainage amount left on the contract. Finding that Bulldog did not notify Top Flight to complete installation of the panels breached the subcontract by preventing Top Flight’s performance, the trial court rendered judgment for Top Flight for its retainage, interest, and attorney’s fees.

On appeal, Bulldog did not challenge the trial court’s finding that Top Flight was never notified to complete the installation of the dumpster panels despite the extra cost, and without allowing Top Flight an opportunity to perform, Bulldog undertook to install the dumpster panels using its own employees. The court held the fact that Bulldog prevented Top Flight from performing under the contract, which supported the conclusion that Top Flight did not breach the contract and that Bulldog did.

Bulldog Ironworks, LLC v. Top Flight Steel, Inc., 05-10-01360-CV

Richardson Hospital Authority (“RHA”) hired Plaintiff, Placidus Duru, as a nursing assistant.  But when Duru was indicted for sexually abusing a patient, the hospital terminated him.  Four years later, when the prosecution dismissed the criminal case against Duru, he turned around and sued RHA for malicious prosecution, business disparagement, breach of contract and unjust enrichment.  RHA moved to dismiss these claims for lack of subject matter jurisdiction, but the trial court denied their motion for all claims except malicious prosecution.  The Court of Appeals reversed the trial court’s decision to dismiss the business disparagement, breach of contract and unjust enrichment claims (the malicious prosecution claim’s dismissal was not appealed), finding that the Texas Tort Claims Act did not waive the sovereign immunity enjoyed by RHA, a public institution, because Duru’s pleadings “affirmatively negate jurisdiction.”

Richardson Hospital Authority v. Placidus Duru, No. 05-12-00165-CV

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

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

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

Carment Llerena, a former bookkeeper and secretary for Defendant North Texas Trucking, sued her former employer for negligence and fraud related to her termination.  The jury found North Texas liable and rendered judgment in Llerena’s favor, and the trial court overruled North Texas’s motion for judgment notwithstanding the verdict.  On appeal, however, the Court of Appeals reversed the trial court’s decision and found that Llerena should instead take nothing from North Texas on both claims.

The Court’s opinion turned on two issues.  First, the Court rejected Llerena’s fraud claim. While Llerena argued that she was fraudulently induced to accept a job with defendant based on North Texas’ representation that it had workers’ compensation insurance, the Court found that she had presented no evidence of “what she would have received had North Texas provided workers’ compensation insurance.”  Second, the Court rejected Llerena’s contention that her former employer caused her to work in unsafe conditions that led to her carpal tunnel syndrome, finding instead that she presented “no evidence that any modification of her work environment or work requirements would have prevented or lessened her injury.”

North Texas Trucking v. Carmen Llerna, NO. 05-10-01061-CV

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

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

The court issued a memorandum opinion clarifying the appellate timetable after the filing of a foreign judgment in a Texas court. Appellee received a judgment in a New York court and filed it in the Texas trial court on September 29, 2011. Appellant filed a notice of appeal on June 20, 2012. The court questioned whether the notice of appeal was untimely. In her jurisdictional brief, appellant argued that the deadlines for post-judgment motions set forth in Tex. R. Civ. P. 329b run from the date the judgment was signed in the New York court, and thus contended that she never had an opportunity to contest the foreign judgment because the deadlines to do so had expired before appellee filed the foreign judgment in the Texas court.

The court held that Rule 329b applies only to Texas judgments. Under Tex. R. App. P. 26.1(a)(1), the ninety day deadline for the appellant to filed her notice of appeal ran from the date that the appellee filed the foreign judgment in the Texas court. Thus, she had filed her notice of appeal more than five months past the deadline, and the court dismissed the appeal for want of jurisdiction.

Watel v. Dunmann Realty, LLC, No. 05-12-00938-CV

The court affirmed a judgment in favor of a hauling company on its breach of contract claim against subcontractors on a city construction project. The parties disputed whether a contract was formed to haul dirt and concrete debris from the project for $40 an hour or for $40 a load, and both presented competing evidence and witnesses that testified to their contended contractual rate. After a bench trial, the trial court found that Mejia offered to use his trucks and drivers to haul dirt and concrete debris from the project on behalf of appellants for $40 an hour, that Mejia communicated that offer to De Los Santos, and that De Los Santos accepted the offer. It then rendered judgment in favor of Mejia for $11,794 plus attorney’s fees.

On appeal, Appellants challenged the legal sufficiency of the evidence supporting the trial court’s judgment, and the central challenge was to the evidence supporting the finding that the parties formed a contract at the hourly rate. Appellants also argued that the conflict in the evidence about whether they would pay $40 a load or $40 an hour made the contract ambiguous. The court held that the dispute did not present an issue of contract ambiguity but instead an issue of fact about the actual terms of the contract. Because the evidence was sufficient to support both $40 a load and $40 an hour, the resolution of the conflict turned on the credibility and demeanor of the witnesses – a finding that an appellate court will not disturb.

De Los Santos v. Mejia, No. 05-10-01662-CV

As AutoGas Systems saw that its future prospects looked bleak, one of its executives, John Cullen (its president and COO), circulated to certain employees a severance plan, which included incentives for employees to remain with the company as it wound up its affairs.  Dana Kelman was one of the employees who received the severance plan.  When his time with AutoGas ended, he sued to obtain the funds he was due under the agreement.  The only problem was that AutoGas’s CEO and Chairman, G. Randolph Nicholson, denied that Cullen ever had authority to enter into those severance agreements on behalf of the company.  Kelman moved for summary judgement, insisting that he conclusively established that Cullen’s authority to enter into the severance plan stemmed from his position as president and member of the board.  The trial court agreed and awarded Kelman $93,000 in damages.

The Court of Appeals reversed and remanded.  It found that, although a senior executive like Cullen had authority to bind the company on routine matters arising in the ordinary course of business, the parties advanced conflicting evidence on whether the purported severance agreement qualified as a “routine matter.”   The Court went further, however, and rejected as a matter of law that “a severance agreement developed in anticipation of the winding up of the corporation’s business and resulting in payments substantially higher than the employee’s annual salary of $70,000 is a routine matter.”  The Court also rejected Kelman’s claim that Cullen had apparent authority to bind the company to the severance plan because the parties has presented conflicting evidence of that authority.

AutoGas Acquisitions Corp. v. Kelman, No. 05-11-00692-CV

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

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

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

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

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

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

The court reversed a judgment awarding an law firm lost profits in an action against a litigation services company. Elrod, a litigation law firm, hired A-Legal to perform support services related to E-Discovery. Two days later, Elrod pulled the job when A-Legal doubled the price it previously quoted. Both parties sued each other for breach of contract. Elrod claimed damages from lost revenue and lost business opportunities due to the time its attorney’s and staff lost dealing with A-Legal’s breach. Elrod presented evidence of lost revenue, which it valued at $20,000, but the only specific evidence relating to a worker’s time lost dealing with the breach came from one attorney, Nassar. Nassar testified that her hourly rate is $325 and that she spent about eighty hours in total “dealing with the situation.” Elrod made no attempt to establish what expenses would have been attributable to Nassar’s billable hours or whether the firm lost any specific business or billing during that time. The trial court entered a judgment awarding $20,000 lost profits plus attorney’s fees.

On appeal, the court noted that the only calculation that can be made from Elrod’s evidence is potential gross revenue brought in by Nassar, not net profits, because Elrod presented no evidence to show any expenses related to that revenue or that she actually billed less time because of the breach than she would have otherwise. Thus, the evidence was legally insufficient to show lost profits, the only measure of damages presented, and the court reversed and rendered a take nothing judgment.

A-Delta Overnight Legal Reproduction Services Corp. v. David W. Elrod, PLLC, No. 05-11-00708-CV

While Bruce Adams was carrying out his duties as a senior “troubleshooter” for defendant Oncor, he fell 25 feet from a utility pole and broke his back.  Adams spent weeks in the hospital and underwent several surgeries.  While Adams recovered, he received his full salary under Oncor’s salary continuation policy, but, when it appeared that Adams would no longer be able to return to work as a troubleshooter, Oncor sent him its standard letter informing him, among other things, that if he could not return to perform the “essential job duties of [his] occupation” within several months he would be terminated.  Although Oncor worked with Adams to find a position as a dispatcher, this new position did not work out.  Adams sued, alleging that Oncor violated section 451.001 of the Texas Labor Code by wrongfully terminating his employment in retaliation for his filing a workers’ compensation claim.

The Court granted Oncor’s motion for summary judgment, finding that Adams had presented no evidence demonstrating that his termination was the result of his filing a workers’ compensation claim.  Instead, the Court held that Oncor had terminated Adams “based on the uniform application of a reasonable absence control policy.”

Adams v. Oncor Electric Delivery Co., LLC, NO05-11-00618

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

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

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

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

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

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

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

The Texas Supreme Court will be down to eight justices again at the end of this month, as Justice Dale Wainwright announced his resignation from the court last week.  Justice Wainwright served on the court for almost a decade.  He authored a number of important opinions during that time, including Texas Department of Parks and Wildlife v. Miranda and Severance v. Patterson.  I had the honor of serving as his law clerk during the 2009-10 term, where I was able to see the strength of his convictions and his passion for the law first-hand.  We wish him well in his future endeavors.

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

You can find the parties’ briefs here.

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

The court affirmed the trial court’s summary judgment dismissing a plaintiff’s claims against his former employer for breach of the employment contract. Twin Lakes Golf Course hired Holloway to move from Illinois and serve as its head pro for three years. After further negotiations in July 2008, Twin Lakes and Holloway orally agreed to an employment term lasting one year with an agreement to extend for another three years based on his performance. Holloway started working on August 5, 2008, and soon after Twin Lakes presented a written contract, dated July 23, containing the terms of the agreement. Holloway signed the document but Twin Lakes never did. Holloway was fired eight weeks later and he sued for breach of contract and fraudulent inducement. The trial court granted summary judgment in favor of Twin Lakes.

On appeal, the court determined that the agreement was not enforceable because, as an agreement that could not be performed within one year, it fell within the statute of frauds. The court noted that the contract was negotiated in July 2008 and the document that Holloway signed was dated July 23. Thus, the agreement was made in July 2008 and performance was to end in August 2009 – over one year. Additionally, Holloway’s employment was to last from August 5, 2008 to August 5, 2009 – one year and one day. The court also held that Holloway’s affidavit testimony stating that the agreement could be performed within one year was conclusory. Finally, his partial performance did not remove the agreement from the statute of frauds because he was compensated. Thus, the agreement was unenforceable and Holloway’s claims failed as a matter of law.

Holloway v. Dekkers and Twin Lakes Golf Course, Inc., 05-10-01132-CV

Having won a default judgment over Art and Frame Direct/Timeless Industries Georgia (“A&F Direct”), Dallas Market sought to execute that judgment by filing a post-judgment writ of garnishment against Wachovia, A&F Direct’s bank.  Wachovia sought to comply, identifying an account they believed to be held by A&F Direct as well as three other accounts held by Art & Frame (a separate entity).  Dallas Market claimed entitlement to the funds in the Art &  Frame account based on a “Zero Balance Agreement,” which allowed Wachovia to transfer funds from one of the Art & Frame accounts to the A&F Direct account.   The trial court eventually granted Dallas Market’s summary judgment motion, permitting them to obtain the funds held in the Art & Frame account, even though Art & Frame was not the judgment debtor.

On appeal, the Court delved into the factual record to determine the nature of the relationship between the two accounts.    Among other things, the Court examined the scope of the Zero Balance Agreement, as well as testimony about how transfers under the agreement actually worked in practice.  Ultimately, however, the Court concluded that Dallas Market could not establish that A&F Direct was the true owner of the funds based on the Zero Balance Agreement or any other facts.  In sum, the Court concluded that Dallas Market did not meet its burden on summary judgment, and proceeded to reverse and remand the trial court’s decision.

Art and Frame Direct v. Dallas Market, No. 05-01471-CV

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

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

In February 2008, Booklab sued Konica over the faulty printer it had purchased from Konica.  Sixteen months after the suit began, Konica filed a “no evidence” summary judgment motion on Booklab’s damages claim.  Booklab objected, contending that the motion was improper because it had not had enough time for discovery.  The trial court granted Konica’s motion and Booklab appealed.

The main issue on appeal was whether Booklab’s time for discovery had been adequate.  Booklab argued that its case was “complex”–thus requiring an extended discovery period.  It also asserted that the trial court’s established discovery period had not expired by the time Konica had filed its motion.  The court of appeals rejected both of these arguments.  Because determining whether adequate time for discovery is so fact specific, it held that “the rules do not require that the discovery period applicable to the case have ended before a no-evidence summary judgment may be granted.”  It also rejected Booklab’s claim that the case was complex, finding that Booklab’s damages claim required only that it prove a loss of business opportunities with its own clients.  It noted that Booklab could not explain why discovery of Konica’s employees and executives was necessary to its claim.

Booklab Inc. v. Konica Minolta Business Solutions, Inc., No. 05-10-00095

For further analysis of ARGO and the related shareholder oppression cases recently issued by the Dallas Court of Appeals, please see our “hot topic” section on shareholder oppression.

Another installment in the court’s recent spate of shareholder oppression opinions finds the court reversing a judgment in favor of the minority shareholder. Martin and Shagrithaya started a software company named ARGO in 1980 with $1000. Martin and Shagrithaya retained 53% and 47% interests in ARGO respectively and were the sole board members, but Martin had the right to appoint a tiebreaker. There was no express agreement as to employment or compensation, which was determined on a year to year basis. For 25 years, they received equal compensation. By 2008, ARGO was valued at $152 million.

In the early 2000s, tensions arose as Martin became unhappy with what he saw as Shagrithaya’s refusal to take on executive responsibilities. In 2006, Martin unilaterally cut Shagrithaya’s annual compensation from $1 million to $300,000. Soon after, Martin and ARGO’s management began to isolate Shagrithaya. Around this time, the IRS performed an audit of ARGO and found assess it over $7 million in retained earnings tax. ARGO contested this assessment and won. Shagrithaya was not informed of the assessment or contest.

After an independent appraisal of ARGO, Martin offered Shagrithaya $66 million for his shares, representing their values less a 35% minority holder discount. Shagrithaya refused, arguing that there should be no discount because ARGO is not a third-party. Shagrithaya demanded an audit of ARGO and proposed an alternative plan to restore his previous salary, explore a sale of ARGO, and issue an $85 million dividend. ARGO allowed the audit, which uncovered that Martin had misappropriated ARGO funds to his personal use. Martin reimbursed ARGO the amount appropriated plus some amount more. In a final board meeting in December 2008, Martin appointed ARGO president Engebos as the third board member. They voted in favor of Martin’s plans regarding compensation, executive positions, and a$25 million dividend.

After losing the vote on all three issues, Shagrithaya resigned and filed a suit for shareholder oppression and other torts. At trial, Shagrithaya advanced the theory that Martin schemed to withhold compensation and dividends to ARGO so that ARGO could purchase Shagrithaya’s shares at a minority discount and force Shagrithaya out of the company. The jury found in Shagrithaya’s favor, and the trial court entered a judgment awarding Shagrithaya back compensation and ordering ARGO to issue an $85 million dividend.

On appeal, Martin and ARGO challenged the legal and factual sufficiency of the evidence supporting the jury’s finding of suppression. The court reviewed eleven of Martin and AGRO’s actions that the jury found to be oppressive to determine whether they (1) substantially defeated Shagrithaya’s objectively reasonable expectations central to his decision to join the venture or (2) constituted “burdensome, harsh, or wrongful conduct; a lack of probity and fair dealing in the company’s affairs to the prejudice of [Shagrithaya]; or a visible departure from the standards of fair dealing and a violation of fair play.”

ACTS 1 and 7: Martin reduced Shagrithaya’s annual compensation by 70 percent and forced him to report to ARGO’s president, Engebos, without the approval of the Board of Directors or shareholders. The court held that it was not reasonable for Shagrithaya to expect to maintain a level of compensation equal to Martin’s indefinitely without an employment contract. Additionally, the absence of board approval was later corrected at the December 2008 board meeting and the board retroactively cured the discrepancy in Shagrithaya’s actual past compensation. Though Shagrithaya voted against the reduction, the court noted that the inability to control board decisions is inherent in the position of a minority shareholder, citing Patton v. Nicholas. Finally, it did not prejudice Shagrithaya’s rights as a board member because these issues were purely employment matters.

ACT 2: ARGO maintained Martin’s compensation at $1 million without board approval. Shagrithaya argued that this constituted a de facto dividend to Martin, but the court found no evidence of such. And again, the boards retroactively approved and cured this action.

ACTS 3-4: Martin schemed to buy out Shagrithaya retaining earnings and refusing to pay dividends. The court held that these actions alone did not constitute oppression. The dividend were equally suppressed for Martin, and some dividends were issued and shared accordingly with Shagrithaya. Further, there was no evidence that these actions reduced Shagrithaya’s share value. The court noted that Shagrithaya had no specific expectation of dividends, and shareholders have not general expectation of dividends.

ACTS 5 and 11: Martin did not disclose the IRS assessment or ARGO’s engagement of a law firm to challenge it. The court held that because the assessment was reversed, there was no harm to Shagrithaya’s interests, and the legal representation benefited ARGO by securing the reversal.

ACT 6: Martin offered Shagrithaya $66 million for his shares at a minority discount and forced him to accept by withholding dividends. The court held that because Shagrithaya was never forced to relinquish ownership – his intent to sell was voluntary – the fair market value of his minority shares, including the discount, was the proper valuation. Using the shares’ enterprise value in the sale would only be required if ARGO or Martin were forced to purchase them. Further, the mere purchase offer, without other financial pressure, was not oppressive.

ACTS 8-10: Martin’s misappropriation of ARGO assets for his personal use. Martin’s repayment remedied any harm to Shagrithaya prior to trial.

The jury also found for Shagrithaya on his claims for fraud, breach of implied agreement, and breach of fiduciary duty. The fraud claim related to Martin’s failure to disclose his buyout scheme. The court held that his failure to disclose did not harm Shagrithaya because Shagrithaya could not force a dividend and possible sale of shares at that time were to speculative. Shagrithaya’s alleged Martin breached an implied agreement to continue their practice of equal compensation. The court held that this practice was not sufficient to establish an agreement, and in any case the terms of any agreement were too indefinite. Finally, Martin’s retaining of earnings, misuse of funds, and sale of ARGO’s assets did not cause Shagrithaya harm even if it breached his fiduciary duties.

ARGO Data Resource Corporation and Max Martin v. Balkrishna Shagrithaya, 05-10-00690-CV

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

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

In 2005, Parkwood Creek Owner’s Association sued Aharon Chen for Chen’s failure to complete the repair work Parkwood had hired him to complete, as well as for Chen’s failure to repair the defective work that he did complete.  This suit settled in March 2008, with the parties entering into a Rule 11 Agreement whereby Chen agreed to make specified monthly payments to Parkwood and to remedy some of his previous shoddy work.  Several months later, Parkwood moved to enforced the Rule 11 Agreement, claiming that Chen had failed both to deliver the stipulated materials and to deliver them at the specified time.  After an bench trial, the court found for Parkwood and entered judgment against Chen for $30,000 (the agreed-to liquidated damages amount) and for $7,500 in attorney’s fees.

On appeal, Chen argued, among other things, that he substantially performed the contract and that Parkwood itself committed a prior material breach by not giving Chen a list of materials.  The Court of Appeals rejected Chen’s arguments, holding that the evidence was sufficient to establish a breach of the Rule 11 Agreement.  The Court found that  Chen did not, in fact, provide the right materials, and that he refused to show up to inspections.  It further found that Chen had met with Parkwood representatives and determined the precise materials needed for repair.  The Court thus sustained the trial court’s decision and upheld the liquidated damages provision.

Aharon Chen v. Parkwood Creek Owner’s Association, Inc., No. 05-10-015511

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

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

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

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

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

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

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

R.J. Suarez Enterprises owned a sandwich shop, which was operated out of a leased location owned by PNYX.  After notifying PNYX that it would not renew the lease, Suarez vacated the premises, but claimed that it was entitled to take the walk-in cooler, walk-in freezer, sandwich unit, beverage cooler, and ice machine. PNYX disagreed. Suarez sued for conversion, and won.  The trial court, however, awarded no damages because Suarez failed to present evidence of the property’s fair market value.

The Court of Appeals sustained the decision, finding that “even when there is evidence supporting a finding of conversion, there must be evidence of fair market value of the converted property to support a damages award.”  Suarez, it held, did not present any evidence of the property’s fair market value, and instead only offered as damages evidence of the property’s replacement cost.  This was insufficient, as replacement value and fair market value are not interchangeable.

R.J. Suarez Enterprises, Inc. v. PNYX LP, et al., No. 05-11-00934

James Owen did not have a winning case.  In fact, the lawsuit he filed on behalf of Rhonda Krisle against Rusty Wallis Volkswagen asserted the precise claim (under the Texas Finance Code) that the Court of Appeals had rejected several years earlier.  What’s more, Owen knew about this earlier case because he had been counsel for the losing appellant.  Despite this, Owen still brought suit.  After motion practice, which ended in a non-suit of all claims by Krisle, Rusty Wallis moved for sanctions.  Not surprisingly, the trial court sanctioned Owen to the tune of $20,000.

Owen appealed.  The Court of Appeals, however, was equally unimpressed was Owen’s reasons why he should not be sanctioned, which included the claim that the decisions by the Court of Appeals do not have binding precedential value unless they are explicitly approved by the Texas Supreme Court.   Among other things, the Court found that, based on the explicit precedent rejecting Krisle’s claim, as well as Owen’s clear awareness of this precedent, the trial court did not abuse its discretion in sanctioning Owen.  After rejecting the rest of Owen’s arguments against sanctions, the Court then concluded that Owen’s appeal was “objectively frivolous” and cited him for an additional $7,500.

Owen v. Rusty Wallis Volkswagen, No. 05-10-01021

The court affirmed a take-nothing summary judgment on fraud and promissory estoppel claims arising out of the purchase of land. Mavex purchased property, which was subject to subject to a easement, for the construction of a condominium complex. The parties to the easement amended it to allow for the condominium and the use of an adjacent parking deck subject to approval of the construction plans. Metzler, one of the easement holders, later refused to approve the condominium plans due to a dispute over the correct allocation of parking spaces for the exclusive use of the condominium tower as Mavex’s plans specified. Mavex sued Metzler and its predecessors-in-interest. Mavex alleged that before and after they entered into the purchase agreement for the property, the defendants assured Mavex that the plans were acceptable and that they relied on this approval of the condominium plans. The trial court granted summary judgment against Mavex.

On appeal, the court held that Mavex presented no evidence to support their promissory estoppel and fraud claims because Mavex’s affidavit evidence merely provided conclusory allegations that the appellees made assurances Mavex relied on, but did not identify with any specificity when the statements were made nor what actions appellants took in reliance on them. The court further held that, at any rate, the alleged statements were insufficient to support Mavex’s claims, and affirmed the summary judgment.

Mavex Management Corporation v. Hines Dallas Hotel Limited Partnership, et al, 05-09-01281-CV

In this certificate of merit case, the court affirmed the trial court’s denial of the defendant-architect’s motion to dismiss. After walking into a very clean glass wall in the lobby of a condominium complex, Zion sued the owners of the building and added claims against the architect, MSM, for negligently designing the wall. He included with his petition a certificate of merit, which was an affidavit authored by architect James R. Drebelbis, as required by § 150.002 of the Texas Civil Practice and Remedies Code. MSM filed a motion to dismiss, arguing the affidavit did not meet the requirements of § 150.002. The trial court denied MSM’s motion to dismiss.

On appeal, the court first held that a certificate of merit need not demonstrate the affiant’s practice in the same sub-specialty as the defendant. Drebelbis’s affidavit, which stated he was knowledgeable in the area of architecture, was therefore sufficient. Next, the court held that the certificate of merit need not state the applicable standard of care to satisfy the statute’s requirement that it allege a negligent action, error, or omission. Finally, the court held that the affidavit included a sufficient factual basis for Zion’s claims, as opposed to merely conclusory opinions, to meet the requirements of § 150.002. Thus, the affidavit was sufficient and the court affirmed the trial court’s order.

Morrison Seifert Murphy, Inc. v. Buck Zion, 05-11-00621-CV

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

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

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

Willie Addison hurt his back at work and, after complaining about it, was fired.  He sued his employer alleging retaliatory discharge under the Texas Workers’ Compensation Act.  Addison’s employer, however, was not a subscriber to the states’ worker’s compensation program.

Undeterred, Addison charged that his employer should nevertheless be held liable for retaliatory discharge because the employee handbook indicates the company maintains a workers compensation plan (though it is not governed by the Act).  The court rejected Addison’s claim, finding that “only subscribing employers can be subject to section 451.001 claims.”

Addison v. Diversified Healthcare, No 05-11-01455

Appellants leased property in Heath, Texas.  Under the lease, they were granted the option to buy, which they claim they exercised (even though no closing ever occurred and no title ever passed).  Appellees, the landlords, sought to evict the Appellants for violations of the local HOA rules and for failure to pay rent.

The issue the Court of Appeals decided was a narrow one:  whether, because Appellants exercised the option to purchase the property, there was no longer a landlord-tenant relationship between the parties so that a forcible entry and detainer suit was improper.  The Court found that, even if Appellants exercised the option, they do not have title–equitable or otherwise–and thus rejected Appellants’ argument that a forcible detainer action was improper.

Lugo v. Ross, No. 05-11-00517-CV

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

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

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

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

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

This landlord-tenant dispute involved Tenet Health Systems and Live Oak, a group of doctors, as tenants.  Live Oak entered into a lease with Tenet for a five year period, expiring on June 30, 2006.  Live Oak claimed that, before the lease expired, Tenent successfully encouraged them to relocate to a new space in Frisco, Texas, with the promise that Tenet would find someone to take over the lease.  However, sometime after Live Oak abandoned the original lease and stopped making payments, Tenet demanded unpaid rent for that lease.

The Court of Appeals first found that the doctors who signed the lease were personally liable for unpaid rent under the lease agreement, because “[t]he objective intent of the parties, as expressed in the unambiguous language of the lease, was that those persons comprising Live Oak . . . would be jointly and severally responsible for Live Oak’s obligations under the lease.”

On a separate issue, Live Oak also argued that they had raised sufficient facts for their defenses of mitigation and estoppel to survive summary judgment because they had submitted an affidavit asserting that (1) Tenet had a willing tenant to take over the lease, but purposefully waited until the term expired before letting this new tenant take over and (2) Tenet had made promises to induce them to move to Frisco.  The Court of Appeals rejected this argument, holding that conclusory statements in an affidavit not based on personal knowledge cannot present sufficient evidence to survive summary judgment.

In dissent, Justice Lang-Miers disputed the holding that the doctors should be individually liable under the lease because the lease’s terms were ambiguous and the landlord could not show that its interpretation of the contract should control.

Live Oak v. Tenent Healthsystem Hospitals Dallas, Inc., No 05-11-00342 (majority)

Live Oak v. Tenent Healthsystem Hospitals Dallas, Inc., No. 05-11-00342 (dissent)

The court reversed the dismissal of a claim against an engineering consultant in an opinion dealing with the “certificate of merit” requirement in section 150.002 of the Texas Civil Practice and Remedies Code. Though there was no written contract between JJW and Strand, JJW originally asserted claims against Strand for breach of contract and negligence arising from a cracked foundation Strand designed. JJW later dropped its negligence claims and asserted only the contract action against Strand in its third amended petition, claiming that it entered an oral or implied contract with Strand to perform a “pre-pour” inspection of the foundation. JJW alleged that Strand breached this contract by failing to measure the depth of the concrete slab. Strand moved to dismiss the action because JJW failed to file a certificate of merit with its petition. JJW responded that the applicable 2005 version of section 150.002 does not apply to a claim for breach of contract. The trial court dismissed the claim.

On appeal, the court first held that it would consider the live pleadings at the time of the trial court’s ruling on the motion to dismiss to determine whether and how section 150.002 applied to the plaintiff’s claims. Examining the third amended petition, the court agreed with the majority of the Texas courts of appeals and held that the 2005 version of section 150.002 requires a certificate for negligence claims only and not for non-negligence claims. In doing so, the court rejected the approach recently taken by an en banc panel of the Austin court of appeals. The court noted, however, that it still must determine whether JJW’s contract claim was truly based on Strand’s alleged contractual obligations to JJW or was merely a negligence claim recast as breach of contract.

To determine the nature of the claim, the court looked to the source of the duty owed and the nature of the remedy sought. The court held that because JJW alleged that Strand had an express or implied contractual obligation to measure the depth of the slab – independent from its duty to exercise a professional degree of care, skill, and competence in performing the pre-pour inspection – the duty arose from the contract. The court also held that the remedy – consequential damages for the diminution in value of the residence and the loss of use and other damages due to necessary repairs – was based in contract because those damages are “consequences of the alleged failure to perform a pre-pour inspection.” Thus, the court concluded that the nature of the claim was, indeed, contractual.

JJW Development, LLC v. Ramer Concrete, Inc. and Strand Systems Engineering, Inc., 05-10-01359-CV

Inwood on the Park Apartments brought a forcible detainer action to get tenant, Stephanie Morris, to vacate her apartment.  According to Inwood, Morris breached her lease by permitting a guest to create “disturbances” in the apartment parking lot, which included disturbances involving public indecency.  After the suit was filed, Morris vacated the apartment, and Inwood filed a notice of nonsuit as to “possession” but reserved its claim for attorney’s fees.

Morris moved to dismiss the claim for attorney’s fees, arguing that Inwood’s nonsuit of its claim for forcible detainer mooted any claim for attorney’s fees.  Rejecting Morris’ argument, the Court of Appeals held that a “dispute over attorney’s fees is a live controversy and may prevent an appeal from being moot.”

Inwood on the Park Apartments v. Morris, No. 05-11-0142

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

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

This lawsuit arose from the sale of a 42,000 acre West Texas ranch. In 2007, JP Morgan, the trustee holding the ranch, entered into a contract with AKB Hendrick Limited Partnership, granting AKB ten months to raise money to purchase the ranch during which JP Morgan would not market, solicit or accept any “back up” offers to purchase the ranch. AKB would deposit $250,000 in escrow, from which fees would be deducted as time passed.  Despite this contract, Hamilton, a member of AKB, subsequently approached Kenneth Musgrave about purchasing the ranch.  Musgrave and Hamilton entered into an agreement whereby AKB permitted Musgrave to seek to purchase the ranch if AKB were paid $1M upon Musgrave’s successful purchase.

AKB then informed JP Morgan that it was terminating their agreement.  Negotiations continued between Musgrave and JP Morgan.  The parties agreed to a sale in April 2008, but in August 2008, before closing, Musgrave terminated the agreement.  AKB sued Musgrave (and various Musgrave entites) for fraud, breach of contract, and several other counts.  The trial court granted summary judgment in favor of Musgrave, and AKB appealed.

On the fraud count, the Court of Appeals found that AKB was not justified in relying on certain representations made by Musgrave because, when the representations were made, the two were involved in a commercial transaction and “the representation took place in an adversarial context.”  The Court also dismissed fraud claims stemming from  Musgrave’s statement that “he could help out with certain fees if those became an issue.”  According to the Court, promises of future performance are only actionable misstatements if the promise was made with no intention to perform, and AKB did not present evidence establishing such intent.  The also Court found that Musgrave did not breach its contract with AKB because Musgrave never successfully purchased the Ranch.

AKB Hendrick v. Musgrave Enterprises, No. 05-11-00251

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

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

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

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

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

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

In a memorandum opinion, the court affirmed the trial court’s judgment in a forcible detainer action. Felix Hornsby executed a promissory note secured by a deed of trust covering the property at issue. After he defaulted on the note, U.S. Bank bought the property at foreclosure sale and conveyed it to the Secretary of Veteran Affairs. The SVA brought this forcible detainer action against Hornsby, and the trial court rendered judgment in favor of the SVA. On appeal, Hornsby argued that the SVA had to show it was entitled to enforce the terms of the deed of trust in order to establish a landlord-tenant relationship between them, but failed to do so. The court held that SVA presented sufficient evidence to show its superior right to possession of the property and that Hornsby’s challenge to the chain of title could not be properly adjudicated in a forcible detainer action.

Hornsby v. Secretary of Veterans Affairs, No. 05-11-01075-CV

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

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

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

In re Stroud, No. 05-00982-CV

In this legal malpractice action, Jean Pierre – a Dallas commercial real estate investor – brought suit against the lawyer who represented him in a failed real estate transaction.  Pierre claimed that the lawyer had failed to advise him of the consequences of his counterparty’s changes to the earnest money provision in the real estate contract at issue.  As a result of the revised earnest money provision, Pierre lost $400,000 because the contract did not permit him to retain the earnest money when the purchaser pulled out of the transaction at the last minute.

Though the jury found in Pierre’s favor, the Court of Appeals overturned the trial court’s judgment because it found that Pierre failed to offer legally sufficient evidence of proximate causation.  In so doing, the Court of Appeals rejected Pierre’s contention that all that he needed to prove to establish causation was that he would not have signed the contract if he had understood the earnest money provision.  The Court, in rejecting Pierre’s claim, concluded that Pierre was required to prove that the counterparty would have agreed to the alternative earnest money provision (that would have refunded the money to Pierre), and that Pierre could not establish such a conclusion.

Pierre v. Steinbach

In 2009, a class of shareholders challenged the stock-for-stock merger between Centex Corp. and Pulte Homes, charging that the board breached its fiduciary duties by failing to obtain an adequate price for the shareholders.  As often happens, the parties quickly settled, and Centex and Pulte agreed to disclose additional information about the merger in the proxy statements.  While the settlement provided class counsel with a hefty cash payment of attorneys’ fees, the shareholder’s reward was simply more information.

Rocker raised several objections to the settlement, but his most salient objections were (1) that the settlement’s release was too broad because it waived all known and unknown claims without granting the shareholders an opportunity to opt-out; and (2) that class counsel could not recover their attorneys’ fee in cash, when the class received only injunctive relief.  The Court credited both of Rocker’s arguments.  Regarding the first, the Court held that “[i]f appellees require a ‘limitless release,’ then due process requires that class members be afforded the option to be excluded from the class.” Regarding the second, it found that “if there is no cash recovery for the class, fees could not be awarded in cash, regardless of the value of the benefit to the class.”    The Court then remanded the case to the trial court for further proceedings.

Rocker v. Centex Corp, No. 05-10-00903

In a memorandum opinion, the court affirmed a trial court’s judgment in a declaratory action regarding the validity of a warranty deed. Knight brought the underlying action to declare the deed, which evidenced the transfer of his ownership in property to Minter, a forgery. The trial court concluded that Knight had indeed signed the deed transferring ownership of the Property to Minter. On appeal, Knight argued that the trial court erred by denying his motion for new trial based on “newly discovered evidence,” including evidence that the notary who witnessed Minter’s warranty deed had been indicted for fraud and entered a plea agreement, as well as the affidavit of a mortgage loan underwriter stating the transaction required a sales contract. The court rejected Knight’s argument because he failed to establish that he lacked actual knowledge of the notary’s criminal history and exercised appropriate diligence before trial in relation to the expert testimony he obtained after trial.

Knight v. Minter, No. 05-11-00829-CV

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

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

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

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

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

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

One day, Appellee Dale Allen came home to see construction workers installing “HardiPlank” siding on his neighbor’s house.  This neighbor, Appellant Michael Jamison, had chosen to use HardiPlank on the exterior of his house because it is virtually indistinguishable from wood, and yet remains  fire resistant, rot resistant, and insect resistant.  HardiPlank does not shrink, it does not swell, and it does not absorb moisture.  It turns out, however, that the one thing HardiPlank is not resistant to is the subdivision’s restrictive covenant, which required that the “exterior walls” of the homes be covered in approved materials only.  And HardiPlank was not an approved material.

Allen, thus, brought suit to ensure that Jamison complied with the neighborhood’s exterior standards.  The only problem:  Allen himself had wrapped HIS house’s gables in HardiPlank.  Jaimson pointed out Allen’s hypocrisy, arguing, under the doctrine of quasi estoppel, that Allen cannot enforce a covenant with which he failed to comply.  The trial court rejected Jamison’s argument, finding that a “gable” is not the same and an “exterior wall,” and ruled in Allen’s favor.  The court of appeals, however, plunged the depths of Webster’s Third New International Dictionary and determined that a “gable” does, in fact, qualify as an exterior wall.  Having so determined, the Court then held that Allen was estopped from suing to require that Jamison comply with the very covenant he refused to abide by.

Jamison v. Allen, No. 05-11-00603-CV

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

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

In this memorandum opinion, the court reaffirmed some basic litigation procedures. The plaintiff was fired by his law firm employer and sued alleging 37 separate claims. The trial court granted summary judgment, and Cruz appealed the first time. The court of appeals affirmed on every claim but two and remanded. The trial court severed those claims and Cruz appealed a second time. On appeal, the court first determined that on remand, the trial court only had jurisdiction to consider issues regarding the two claims included in the scope of the remand as stated in the court of appeals’ mandate. Thus, Cruz’s issues related to claims outside the trial court’s jurisdiction were rejected. Because of the court’s limited jurisdiction, issues that Cruz failed to preserve prior to the first appeal were not reopened by the mandate and the trial court did not err by limiting discovery to the remaining matters over which it had jurisdiction. Finally, the trial court did not err by severing Cruz’s remaining claims and requiring him to replead under Texas Rules of Civil Procedure 41 and 68.

Cruz v. Schell, Beene & Vaughn, L.L.P., et al., 05-01-00565-CV

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

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

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

The court affirmed summary judgment in favor of the defendant on a breach of fiduciary duty claim. Balestri was a lawyer who left his practice to become CFO of an internet company. Balestri’s friend Kiger later contacted Balestri to ask about certain industry contacts that Kiger believed could help him to implement a new business idea. Kiger’s business never materialized. Balestri subsequently invested in a business in the same industry, and Kiger sued for breach of fiduciary duty. Kiger alleged that Balestri acted as his attorney and then revealed his confidential and trade secret information to the new business. The trial court granted both traditional and no evidence summary judgment against Kiger. The court of appeals affirmed, holding that despite Kiger’s contention that an implied attorney-client relationship existed between him and Balestri, no evidence of such a relationship existed in the record. Additionally, even if Kiger believed that such a relationship formed, one party’s subjective beliefs are not evidence of an implied attorney-client relationship.

Kiger v. Balestri, 05-10-01308-CV

This action involved a deficiency claim by a Bank against several loan Guarantors.  The loans at issue were undertaken to finance improvements on properties owned by a partnership in Collin County.   After the partnership defaulted, the Bank exercised its right to sell the properties at non-judicial foreclosure sales, and then brought this action action against the Guarantors.  Because the Guarantors had agreed in the original Guaranty Agreement to waive any defense of offset to the bank’s deficiciency claim, the trial court granted the Bank’s motion for summary judgment and awared the Bank the outstanding amounts due on each of the promissory notes.  On appeal, the Guarantors argued that the right of offset provided for in section 51.003(c) of the property code cannot be contractually waived and, alternatively, that if such waiver were available they did not, in fact, waive the right of offset because the waiver provision did not contain the phrase “right of offset.”  Relying on the reasoning in Moayedi, the Court of Appeals rejected both of the Guarantors’ arguments, finding that nothing  in the property code prevents a guarantor from waiving his right to an offset in a guaranty agreement.  Additionally, the Court found that the waiver language need not include the precise terms “right of offset” to constitute an effective waiver.  Thus, the court upheld the trial court’s summary judgment decision.

King, et al. v. Park Cities Bank, No. 05-11-00593-CV

The court reversed a summary judgment in favor of a guarantor on his Property Code Chapter 51 offset defense against a creditor. Moayedi guaranteed a loan made by I-35 to Villages. I-35 sued Moayedi based upon his guaranty to recover the balance remaining on Villages’s promissory note after a Property Code section 51.003 foreclosure sale. Moayedi contended that he was entitled to offset the deficiency by the difference between the fair market value and the sale price pursuant to section 51.003(c). I-35 replied that Moayedi waived “any defense” in the guaranty, including the right of offset. After considering competing summary judgment motions, the trial court granted Moayedi’s and held that the right of offset pursuant to section 51.003(c) could not be waived by the general terms in the guaranty agreement.

The court of appeals reversed. First, it engaged in a thorough analysis of waiver and section 51.003(c)’s offset provision. It held that a section 51.003(c) offset is indeed a “defense” as the term was used in the guaranty. Next, the court analyzed the contract language and held that “any defense” included the section 51.003(c) offset defense. The court then looked at the guaranty as a whole, finding four other provisions supporting such a broad waiver. Finally, the court rejected the argument that a waiver of section 51.003(c) rights violates public policy, citing Texas’s strong policy in favor of freedom of contract and other courts that have held that Chapter 51 rights of offset may be contractually waived. Thus, the court reversed and rendered judgment in favor of I-35.

Interstate 35/Chisam Road, L.P. and Malachi Development Corporation v. Moayedi, No. 05-11-00209-CV

In a memorandum opinion the court reversed as insufficient a summary judgment award to a neighborhood association against a delinquent property owner. Gashaye’s property is subject to a covenant to pay assessments to Candlewood, which Gashaye failed to do. Candlewood sought foreclosure of the lien securing Gashaye’s obligation and attorney’s fees, presenting evidence proving $1545 in unpaid assessments and late fees and $2500 in attorney’s fees. The trial court awarded Candlewood $50. The court reversed, holding that the award of $50 under these circumstances was so contrary to the overwhelming weight of the evidence that it was clearly wrong and unjust. The court noted that attorney’s fees are recoverable on a breach of a homeowner’s association covenant, but remanded for the determination of a proper damages and attorney’s fees award.

Candlewood Creek Neighborhood Association, Inc.v. Gashaye, No. 05-11-00380-CV

In Farmers Insurance Exchange v. Greene, Appellee-Greene maintained a homeowner’s insurance policy with Famers Insurance Exchange (“FIE”).  Among other things, the Policy contained a vacancy provision which suspended coverage for any damage to the dwelling that occurred 60 days after the dwelling becomes vacant.  As luck would have it, Greene moved out of the covered residence 4 months before a fire destroyed it.  Greene notified FIE of the damage, but FIE denied her claim based on the vacancy provision.  She sued and the trial court granted summary judgment in Greene’s favor, finding that her violaiton of the vacancy clause did not contribute to the loss, and thus did not prevent her from recovering under the Policy.

The Court of Appeals reversed, holding that the vacancy clause was clear and unambiguous in that it suspends coverage sixty days after the residence becomes vacant.  It also noted that “the vacancy clause functions as an exclusion; it excepts a specific condition (vacancy) from coverage.”  Further, the Court found that Section 862.054 of the Insurance Code—which provides that an insured’s breach of a provision or condition in a policy does not constitute a defense to a suit for loss unless the violation contributed to the destruction of the property—was inapplicable.   The vacancy of the home increased the risk of insuring it, and the Court felt that, under such circumstances, “we are loathe to engraft by judicial fiat additional terms requiring FIE to assume liability for a risk the Policy specifically excluded.

In Green v. McKay, the Court of Appeals addressed the causation requirement in a legal malpractice action.  Appellants were charged by the City of Dallas with certain code violations on a property they had sold to a debtor, who had executed a deed of trust in their favor, but who was later forced to file in Chapter 13 bankruptcy.  In response to the suit, appellants sought legal advice from appellee, McKay, who told appellants that they did not have to do anything and that “it would go away.”  The City ultimately obtained a default judgment of $562,275 against appellants, who then turned around and sued McKay for legal malpractice.  The Court of Appeals upheld the trial court’s decision, finding that the appellants had not presented any evidence of “causation.”  According to the Court, in a legal malpractice action, “[c]ausation requires that a plantiff prove a meritorious defense to the underlying case.”  Based on principles of bankruptcy law—which established that under the vendor’s lien held by appellants, they held legal title to the property in question—the Court found the appellants would not have been able to establish a meritorious defense in the code violations lawsuit even if McKay had filed an answer.  Accordingly, the Court concluded that the appellants could not establish the causation element of their malpractice claim and upheld the trial court’s dismissal.

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

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

by Chris Patton

Citibank sued a credit card account holder for breach of contract and account stated to collect the balance due on a cardholder’s credit card account.  In the trial court, Citibank moved for summary judgment, which the trial court granted in its favor.  On appeal, the defendant challenged the trial court’s decision on a number of grounds.  However, because the defendant, who was proceeding pro se, repeatedly cited to exhibits and other evidence that were not in the record, the court refused to address the issues related to breach of contract raised by the defendant.  The court also refused to address the issues related to account stated claim.  Because Citibank moved for summary judgment  on the alternative grounds of breach of contract and account stated, and because the trial court did not specify the grounds on which summary judgment was granted, the court found that it need not resolve the issues related to the suit on account claim.  Because “even if we resolved it in [Defendant’s] favor our decision would not change the outcome of this appeal.”

Burruss v. Citibank, No. 05-10-01376-CV

The court reversed and rendered judgment in a breach of contract action related to a letter of intent (“LOI”) to acquire the stock of a corporation. Corilant and FFSS executed an LOI for Corilant’s acquisition of FFSS’s stock. The LOI provided for future “Definitive Agreements” memorializing the precise terms and conditions of the sale. FFSS scuttled the deal before executing the Definitive Agreements. Corilant sued for breach of the LOI and a jury awarded it $1.8 million.

On appeal, the court held that the LOI was not an enforceable contract because the essential terms of two of its provisions were uncertain. First, the LOI provided for structured earn-out payments to Corilant but failed to sufficiently characterize the payments. The evidence showed the parties’ lack of mutual understanding with respect to this provision. Second, the LOI provided that FFSS’s Chairman would continue to be involved in management of the company but failed to specify the terms of his employment. This provision also specifically contemplated a future management agreement, which was actually drafted but never executed. Finally, the court rejected Corilant’s argument that enforceability of uncertain terms is a factual determination. In doing so it distinguished an earlier case in which parties disputed whether an LOI was intended to be the final expression of a contract, which neither Corilant nor FFSS argued.

Fiduciary Financial Services of The Southwest v. Corilant Financial, No. 05-10-00471-CV

The court issued a significant ruling related to the remedy for shareholder oppression, holding that the equitable relief of a “fair value” buy-out was not precluded by a provision in an Agreement mandating a “book value” buy-out. Joubran, the sole shareholder of a cardiac perfusion company, hired Hughes, sold him 10% of the corporation’s outstanding shares, and entered into an Agreement requiring Joubran to purchase Hughes’s stock at book value upon the severance of his employment. Years later a dispute arose, Hughes was terminated, and Hughes sued Joubran for shareholder oppression. The trial court held that that Joubran engaged in shareholder oppression and awarded Hughes what the jury found to be the fair value of his shares in the company.

On appeal, Joubran argued that the trial court should have calculated the value of the shares based on their book value as required in the Agreement because a party to a contract generally cannot recover equitable relief inconsistent with that contract. But the court held that the trial court had the equitable power to order a buy-out at fair value because the book value of Hughes’s shares was reduced by Joubran’s oppressive conduct and, additionally, Hughes was not suing for breach of contract. This holding squares with the court’s recent decision in Ritchie v. Rupe that the “enterprise value” method for determining stock’s fair value, i.e. determining the pro rata value of each share without any discount based on the stock’s minority status or marketability, is appropriate in shareholder oppression suits when the oppressive conduct of the majority forces a minority shareholder to relinquish his ownership position. 339 S.W.3d 275, 289 (Tex. App.—Dallas 2011, pet. filed)

As a secondary issue, the court addressed whether a shareholder that exercises dominating control over a corporation owes a formal fiduciary duty to the minority shareholders. In its verdict, the jury found that no informal fiduciary duty existed between the shareholders, but nonetheless found that Joubran breached a fiduciary duty to Hughes and awarded Hughes almost $2 million in actual and exemplary damages. The trial court declined to render judgment in favor of Hughes, who argued on appeal that the trial court should have disregarded the first jury finding because, under the circumstances, Joubran owed Hughes a formal fiduciary duty. The court disagreed, citing numerous Texas cases to the contrary and noting that the Texas Supreme Court expressly declined to recognize such a duty in Willis v. Donnelly, 199 S.W.3d 262, 276 (Tex. 2006).

Cardiac Perfusion Services, Inc. v. Hughes, No. 05-10-00286-CV

The court reversed a no-summary judgment against the employees of a lawn service company. The employees alleged that the lawn service issued them worthless paychecks for two months. The employer filed a no-evidence motion for summary judgment that neither referred to the facts alleged nor specified in what way the evidence failed to support the claims. The employees responded, attaching affidavit evidence and wage statements. The employers objected to the evidence as hearsay, but the court ruled that objection was waived because they failed to obtain a ruling from the trial court on their objection. The court also held that the affidavits and wage statements were sufficient evidence to defeat summary judgment because they indicated at least an implied employment contract that the employer breached, damaging the employees.

Gaspar, et al., v. Lawnpro Inc., No. 05-11-00861-CV

The court has issued some interesting comments in connection with the denial of a motion for rehearing in a condemnation case.  In the jury charge conference, Dallas County objected to the property owner’s proposed definition of “Cost to Cure,” but the specific basis of the objection was unclear.  The trial judge eventually summarized the objection as being that the instruction amounted to a comment on the weight of the evidence, and the County agreed.  The trial judge fixed that problem by modifying the instruction to award cost to cure damages, “if any.”  On appeal, the County attempted to argue that the definition was actually “an incorrect statement of Texas law,” but the court of appeals rejected that claim:

A party objecting to the jury charge must “point out distinctly the objectionable matter and the grounds of the objection.” Tex. R. Civ. P. 274. When the complaining party’s objection is, “in the opinion of the appellate court, obscured or concealed by voluminous unfounded objections, minute differentiations or numerous unnecessary requests, such objection or request shall be untenable.” Id.
Reviewing the reporter’s record of the charge conference, we cannot determine the County’s exact complaint to the trial court concerning “cost to cure” except that it constituted a comment on the weight of the evidence. The trial court addressed that complaint by modifying the statement of the definition.

The court also rejected the County’s argument that the property owner’s expert had offered conclusory opinion testimony, since the County had failed to raise an issue as to the legal sufficiency of the testimony.  In its appellate briefing, the County had challenged the trial court’s admission of the expert testimony as being an abuse of discretion, but did not attack the legal sufficiency of the testimony.  For that reason, the court declined to evaluate whether the testimony was conclusory, and therefore denied the County’s motion for rehearing.

Dallas County, Texas v. Crestview Corners Car Wash, No. 05-09-00623-CV

In a consolidated appeal, the court affirmed a district court’s summary judgment and a  county court at law’s forcible retainer judgment related to the foreclosure sale of the property. The court held that Texas Property Code Section 51.002(b)(2), which requires notice of a foreclosure sale to be filed “in the office of the county clerk of each county in which the property is located,” does not require notice to be recorded in the permanent deed records. The court also rejected the argument in the forcible retainer lawsuit that the mortgage servicer had no authority to sell the property because the only issue in a forcible retainer action is the right to actual possession – not the merits of the title.

Montgomery v. Aurora Loan Services, LLC, No. 09-11836

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

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

In a simple breach of guarantee case, the court of appeals issued a memorandum opinion affirming a summary judgment in favor of a creditor against a debtor on the debtor’s personal guaranty of an open account for his business.  The debtor raised several issues, contending that (1) the court erred by failing to grant his motion for continuance of the summary judgment hearing; (2) the summary judgment affidavit evidence was conclusory; (3) the motion failed to identify evidence in the record to support summary judgment; (4) the motion for summary judgment did not specifically seek attorney’s fees; and (5) both the guaranty and underlying contract were unenforceable and lacked consideration.  The court overruled each issue, holding that the motion for summary judgment was sufficiently specific to support the award, that it was supported by adequate evidence proving the creditor’s claims, and that the court’s refusal to continue the hearing was not an abuse of discretion.

Long v. Motheral Printing Company, No. 05-10-01128-CV

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

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

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

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

In a construction contract case, the court has reversed summary judgment in favor of an electrician subcontractor against a retail property leaseholder. The subcontractor alleged that he had performed 80% of the work at the property when the general contractor’s check bounced, and the subcontractor sued the property leaseholder for the difference. The district court granted summary judgment in favor of the subcontractor. The court of appeals reversed and remanded, holding that (1) a fact issue existed as to the proper amount of retainage the leaseholder was to retain and (2) the court erroneously awarded the subcontractor certain amounts under the Texas “Fund Trapping” statute that the leasehold had paid to replacement contractors.

Jewelry Manufacturer’s Exchange, Inc. v. Tafoya, No. 05-11-00065-CV

The court also issued a memorandum opinion in another governmental immunity case.  In this instance, the court of appeals affirmed the trial court’s denial of a plea to the jurisdiction, concluding that the plaintiff had properly alleged a waiver of sovereign immunity based on the government body’s use or condition of tangible personal property – namely, the 4×8-foot, improperly secured whiteboard that had fallen on the plaintiff’s head.

Dallas Metrocare Services v. Juarez, No. 05-11-01144-CV

In a governmental immunity case, the court has sustained a plea to the jurisdiction asserted by the City of Dallas in response to a slip-and-fall case.  The plaintiff alleged she had fallen while trying to open a locked door that had a puddle of fallen rainwater in front of it.  The City filed an interlocutory appeal after the trial court denied its plea to the jurisdiction.  The court of appeals reversed and rendered judgment dismissing the plaintiff’s claims, concluding that (1) the plaintiff had failed to raise a fact issue showing the City had knowledge of the allegedly dangerous condition, and (2) a plaintiff injured by a premises defect on governmental property can only assert a premises defect claim under the Texas Tort Claims Act, not a claim for general negligence.  Without an express waiver of governmental immunity under the TTCA, the court dismissed the case for lack of subject matter jurisdiction.

City of Dallas v. Prado, No. 05-11-01598-CV