Voidness, Unenforceability, or Unconscionability of Contract is an Affirmative Defense
The Dallas Court of Appeals has held that "an allegation that a provision in a contract is void, unenforceable, or unconscionable is a matter in the nature of an avoidance and must be pleaded."
In Parks v. Developers Surety & Indemnity Co., Developers Surety and Indemnity Company sued Robert Parks, Jo Ann Parks, and Brinkman Construction on a written indemnity agreement, which had been executed in connection with a surety bond Developers issued on a construction project for the City of Fort Worth. Developers filed a motion for summary judgment asserting that it conclusively established that the defendants were jointly and severally liable for $371,245.81. The trial court granted Developers' motion for summary judgment and the defendants appealed.
On appeal, the appellants (formerly defendants) argued for the first time that a provision in the indemnity agreement providing that evidence of an itemized statement of claims or loss paid is prima facie evidence, was unconscionable and void. The court of appeals first holds that the trial court was entitled to rely upon the contract provision because it was part of the summary judgment record and it did not have to be specifically brought to the trial court's attention. The court also holds that the appellants' allegation that the contract provision was void, unenforceable, or unconsctionable is a matter in the nature of avoidance and must be affirmatively pleaded under Civil Procedure Rule 94. Because it was not raised in response to the motion for summary judgment, the court holds that it could not be considered. The court's opinion may be found here.
This result regarding the affirmative defense is probably correct, however, I question the citation to Shoemake v. Fogel, Ltd., which is an old case of mine. I didn't recall the particular ruling referenced by the Dallas Court of Appeals opinion, so I went back to look at it and refresh my memory. Shoemake involved a failure to plead parental immunity as an affirmative defense and the Supreme Court actually holds that a failure to affirmatively plead parental immunity does not waive the defense. In fact, the opinion expressly states "Rule 94's requirement of pleading is not absolute." To the extent the opinion is applicable, it probably supports the opposite conclusion from the one reached in the Parks opinion.
What a strange little summary-judgment case. The movant wants to rely on a ground not in his motion papers below as a basis to affirm (some contract language about evidence), and the court of appeals lets him -- saying that the order granting summary judgment recites that the district court looked at all "pleadings and papers on file." But when the non-movant tries to counter that argument on appeal, the court of appeals says no, that each of their answers had to be in their summary-judgment papers.
That seems like an obviously bad holding for summary-judgment practice. How is a non-movant supposed to know to answer things that are not in the motion papers? Rule 166a cuts both ways on waiver. The motion must state the grounds, precisely so the non-movant knows what is in play.
Perhaps even more strange, the contract provision is alleged to change the legal standard for the sufficiency of summary-judgment evidence. I'm not persuaded that it even purports to do. But I also wasn't aware that parties could contract to change the procedural rules for summary judgment --- perhaps they can --- but if so, I'm surprised that technique isn't used all the time to shape how litigation works. Why go to arbitration when you can, by contract, rejigger the scales in your favor in the courtroom?
As for the Rule 94 holding, I'm going to withhold judgment until I see it litigated in a more normal context.