Reverse and Render : Texas Appellate Lawyer & Attorney : Cowles & Thompson Law Firm : Court of Appeals, Texas Supreme Court

The end of the courts of appeals' fiscal year is upon us and as a result we are seeing a stream of opinions.   One recent opinion that was of particular note is Crown Asset Management, L.L.C. v. Loring.  It is noteworthy for at least two reasons: (1) it was issued by the Dallas Court of Appeals sitting en banc--a rare occurrence, and (2) its holdings are surprising, if not controversial--controversial enough to draw a three-justice dissent, another rarity   This case may merit watching in the event it proceeds further.  Because of its importance, all three of Reverse & Render's bloggers have decided to review this case en banc, and therefore join the following summary.

Bottom line, the Court held that a trial court did not abuse its discretion by dismissing a case for want of prosecution four months after it was filed while the plaintiff was actively attempting to secure a default judgment.   Readers may want to read the majority and dissenting opinions for themselves.  We summarize and briefly discuss the three holdings below.

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Yet another summary judgment gone wrong.

Sundance Resources, Inc. v. Ole Brook Energy Services, Inc. reminds me of my sixth grade math teacher; she used to deduct points from tests when students failed to show their work.  In this case, the attorneys concluded they were entitled to summary judgment  but they didn't show their work.  They got away with it in the trial court, but weren't so lucky under the 7th Court of Appeals' scrutiny.  

Ole Brook  contracted to perform well services for a group of entities.  When it was not paid for its services, Ole Brook sued the owner of the land, Sundance, even though its name was not in any of the contracts.  Old Brook alleged breach of contract, sworn account, lien foreclosure, and recovery of attorney's fees. 

Shortly after filing suit, Ole Brook moved for summary judgment.  Its motion, however, did not state the basis on which Ole Brook was entitled to summary judgment.  Also, Ole Brook didn't identify the elements of any of its claims.  Instead, the motion merely alleged a contract with Sundance and that the contract obligated Sundance to satisfy the unpaid balance.  Assuming Ole Brook intended this language to mean its breach-of-contract claim, it did not address each element of that claim.

Sundance, unable to determine what exactly Ole Brook was moving for, filed special exceptions to the motion, which the trial court denied.  The trial court then ruled in Ole Brook's favor.  On appeal, however, the Amarillo Court of Appeals reversed the summary judgment holding the trial court abused its discretion for failing to sustain the special exception.

Plain and simple, the attorneys didn't show their work, and lost on appeal.  The lesson: Don't be too casual in filing your summary-judgment motion. 

 The opinion is here.

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If a plaintiff is represented by counsel when filing suit, is the plaintiff immune from application of the vexatious litigant statutes?  According to the Dallas Court of Appeals, the answer is "no."

In Drake v. Andrews, the trial court declared Drake a vexatious litigant under Chapter 11 of the Texas Civil Practice and Remedies Code.  Drake appealed the order to challenge the application of Chapter 11 to his suit and argued that it did not apply because he was represented by counsel at the time it was filed.  After review of the legislative history and text of the statutes, the court of appeals concluded, "we see no clear indication the Legislature intended the statute or its restriction to apply only to pro se litigants."  Thus, the court held that Chapter 11 "is broad enough to reach all vexatious litigants, whether represented by counsel or not."  Nonetheless, the court went on to reverse the trial court's judgment of dismissal because it determined that Andrews had failed to establish that there was not a reasonable probability that Drake would prevail in the litigation against Andrews.  The court's opinion may be found here.

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Civil Procedure Rule 21a allows a party to add three (3) days to any prescribed response period when service of the initial document is accomplished by mail or fax.  But not necessarily, according to the El Paso Court of Appeals--at least not when another method of service is also used.

In Amaya v. Enriquez, Amaya filed her expert report in her medical malpractice suit against Dr. Enriquez.  Amaya first served the report on counsel for Enriquez by fax.  Later that day Amaya also served the report on counsel for Enriquez by hand-delivery.  Taking advantage of his statutory right to object to Amaya's report, Dr. Enriquez filed a motion to dismiss, objecting to the report.  Dr. Enriquez's objection was filed more than the 21 days allowed for by statute.   He relied upon Civil Procedure Rule 21a to argue that he was entitled to an additional 3 days to his time period because Amaya had served the report on him by fax.

The court of appeals rejected Dr. Enriquez's argument, reasoning that the 3-day extension is provided only in connection with mail service and fax service and since Dr. Enriquez had also been served by hand-delivery, the court concluded "there is no logical reason to give the party an additional three days."   The court then remanded the case to the trial court.  The court's opinion may be found at this link.

It is unclear whether Dr. Enriquez may have argued that he should be exempt from this judicially-crafted rule given that it was a case of first impression or whether he argued that the court of appeals should have chosen the longer period for response over the shorter to ensure the  "just, fair, equitable and impartial adjudication of rights of litigants" protected by Civil Procedure Rule 1.

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Ever heard of the continuing contract doctrine?  It's the sister of the continuing tort doctrine.  Both operate as an exception to the statute of limitations that allows a claimant to recover for contract breaches that occur after the accrual date. 

But can the continuing contract doctrine apply to contracts other than an installment contract?

This issue was before the Dallas Court of Appeals in the case Spin Doctor Golf, Inc. v. Paymentech, L.P.

In the case, Paymentech dangled a zero reserve for processing and monthly funds earned from credit card sales to entice Spin Doctor to contractually hire it to process Spin Doctor's credit card needs.  Later, Paymentech imposed a $7,000 reserve and stopped depositing credits in Spin Doctor's account.  After Spin Doctor's sales increased substantially, Paymentech imposed a daunting $940,000 reserve.  The reserve prevented Spin Doctor from maketing its products, and thus, its sales went south.  As you can imagine, Spin Doctor sued Paymentech for breach of contract.  

Paymentech successfully moved for summary judgment on the 4 year statute of limitations because Spin Doctor discovered the $7,000 reserve back on April 13, 2001, but didn't sue until April, 20, 2005.  Spin Doctor appealed claiming the continuing contract doctrine preserved its breach of contract claim.       

Should the continuing contract doctrine apply?

Yes.  Paymentech had contracted to pay Spin Doctor monthly payments for its credit card sales.  Even though Paymentech allegedly breached the contract on April 13, Spin Doctor continued to perform.  As a result, the court decided to treat the contract as continuing in effect so that if Paymentech  failed to make the monthly payments as it agreed after April 13, each failure constituted a new breach.  Thus, all breaches going back four years from April 20, 2005 were actionable.

Here is the opinion.

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The Dallas Court of Appeals recently held that undefined terms in jury charges must be given their "commonly understood meaning."  The Court noted that neither party objected to the lack of a definition.  As a result, the Court held that there was legally sufficient evidence to support the jury's verdict based on the common understanding of the term and the requirement that the appeals court cannot disregard reasonable inferences drawn from the evidence that support's the jury's finding.  The Court's opinion in Dallas Central Appraisal District v. Friends of the Military can be found here.

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The Fort Worth Court of Appeals recently reaffirmed that orders denying a motion to dissolve a prejudgment writ of garnishment are interlocutory and, therefore, not appealable.  Accordingly, the Court dismissed the appeal.  The Court's memorandum opinion in MRI Country Bend Invest. Fund, L.P. v. Capitol Painting & Construction, Inc. dismissing the interlocutory appeal can be found here. 

If you are looking to challenge the denial of a motion to dissolve a prejudgment writ of garnishment, the Dallas Court of Appeals held in In re Texas American Express, Inc. that such an order may be challenged by mandamus.  That opinion can be found here. 

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The Texas State Bar's Annual Appellate Practice courses are right around the corner.  The Nuts and Bolts of Appellate Practice is scheduled for Wednesday, September 9, 2009, and the Advanced Appellate Practice course is scheduled for Thursday, September 10, 2009, and Friday, September 11, 2009.  If you can't make that date, the course will be replayed on video in Dallas on October 7th, 8th, and 9th.  For more information and for registration, click here.

The Defense Research Institute (DRI) Appellate Advocacy section is hosting its eighth Appellate Advocacy Seminar in La Jolla, California.  That seminar is scheduled for Thursday, November 5, 2009, and Friday, November 6, 2009. Distinguished speakers include Texas's own Chief Justice Wallace Jefferson.  For more information and for registration, click here.

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