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

The Austin Court of Appeals recently held that a plaintiff's notice of non-suit precludes a defendant from recovering attorney's fees as prevailing party under a written agreement.  In this case, the plaintiffs bought a house from defendants under a standard-form sales contract promulgated by the Texas Real Estate Commission.   Plaintiffs brought suit against defendants for failing to disclose alleged defects to the house and sought attorney's fees.  Defendants also requested attorney's fees.  Section 17 of the contract provides that the prevailing party is entitled to attorney's fees.  Plaintiffs nonsuited their claims prior to trial leaving only the defendant's claim for attorney's fees unresolved.  The trial court entered a take nothing judgment against the plaintiffs (despite the nonsuit) and awarded the defendants attorney's fees.

The court of appeals reversed the take-nothing judgment against the plaintiffs because the trial court had no discretion but to dismiss the plaintiffs' claims without prejudice once the notice of nonsuit was filed.  More importantly, however, the court reversed the attorney's fees award and held that the defendants were not prevailing parties because they had not prevailed on the merits of any legal proceeding related to the contract.  The court of appeals stated:

Because the court did not adjudicate the [plaintiffs'] claims, and because the [defendants] brought no claim for relief on which they could prevail other than their request for attorney's fees, the [defendants] did not prevail on any claims that would entitled them to attorney's fees under the terms of contract.

The court of appeals also rejected defendants' argument that allowing parties to nonsuit at the last minute to avoid liability for attorney's fees was poor public policy.  The court distinguished a case in which a party sought statutory attorney's fees after a partial nonsuit.  The court's opinion in Fowler v. Epps can be found here.

• Email This
• Print
• Comments
• Trackbacks

The Dallas Court of Appeals granted a petition for writ of mandamus in In re Hunter, and ordered the trial court to specify the reasons for ordering a new trial.

The court's opinion  relies upon the Texas Supreme Court's opinion in In re Columbia Medical Center, 290 S.W.3d 204 (Tex. 2009), to support its holding.  Interestingly, the relator (Hunter) apparently argued that the trial court was required to vacate or set aside its order granting the new trial.  The court's opinion does not state what reasoning the relator gave to support her argument.  However, the court of appeals cites the Texas Supreme Court's opinion in In re United Scaffolding, Inc., for the proposition that vacating or setting aside the order is not required.  Without knowing what reason the relator gave to support her argument, it's hard to know how United Scaffolding applies.  The opinion in In re United Scaffolding addressed whether the granting of the new trial was improper to the extent it was based upon a lack of sufficient evidence.  The supreme court stated that because it did not know the reason the new trial was granted, it could not grant relief other than requiring the trial court to specify the reasons.  This language almost implies that other relief could be granted in some circumstance.  Here, we don't know if Hunter made the same argument as United Scaffolding, or if some new and different argument was presented and rejected.

The court's opinion in In re Hunter may be found at this link.

• Email This
• Print
• Comments
• Trackbacks

The United States Supreme Court recently resolved a split of authority as to the citizenship of corporations for purposes of federal diversity jurisdiction.  Corporations are deemed citizens of the state in which they are incorporated and the state in which they have their "principal place of business."  In Hertz Corp. v. Friend, the Court adressed the interpretation of the phrase "prinicipal place of business."  The Court first discussed the various tests developed and applied by the courts of appeals focusing on the "nerve center" test  and "business activities" test.  In this case, the Ninth Circuit employed the business activities test and held that because Hertz did more business in California than any other state, it was a citizen of California.  The Supreme Court disagreed and held that 

“[P]rincipal place of business" is best read as referring to the place where a corporation’s officers direct, control, and coordinate the corporation’s activities. It is the place that Courts of Appeals have called the corporation’s “nerve center.”  And in practice it should normally be the place where the corporation maintains its headquarters . . .

The Court concluded by acknowledging that "seeming anomalies" will arise under this test, but the Court was willing to accept them "in an effort to find a single, more uniform, interpretation of the statutory phrase" and "in view of the necessity of having a clearer rule."  Thus, a corporation's dual citizenship for diversity purposes consists of the state of incorportation and the state in which the headquarters is located.  Accordingly, the Court reversed the Ninth Circuit and remanded for reconsideration in light of this test.  The Supreme Court's unaminous opinion can be found here. 

• Email This
• Print
• Comments
• Trackbacks

Supersedeas aficionados will want to take a look at the Austin Court of Appeals' opinion in Shook v. Walden.  The opinion gives a very thorough treatment of the parties' arguments and analysis of the law relating to elements of damages that must be superseded.  To summarize, the court of appeals makes the following holdings:

• Attorney's fees awarded under Civil Practice and Remedies Code Chapter 38 are not compensatory damages that must be superseded under Civil Practice and Remedies Code Section 52.006.  The court distinguishes the Houston Fourteenth Court of Appeals decision in Clearview Props., L.P. v. Property Tex. SC One Corp., 228 S.W.3d 262 (Tex. App.--Houston [14th Dist.] 2007, pet. denied)
• Prejudgment interest is a form of compensatory damages that must be superseded under Civil Practice and Remedies Code Section 52.006.
• The clerk's record for an appeal is not a cost awarded in the judgment and does not have to be superseded under Civil Practice and Remedies Code Section 52.006.
• Post-judgment interest, including the post-judgment interest awarded on prejudgment interest, trial and post-judgment attorney's fees, and costs must be superseded under Civil Practice and Remedies Code Section 52.006.
• Post-judgment interest for one year's estimated is adequate since the trial court has continuing jurisdiction to revisit the matter after a year has passed.

The court's opinion may be found here.  The court's opinion that post-judgment interest on post-judgment attorney's fees must be superseded is interesting in light of the Fourteenth Court's holding that post-judgment interest on post-judgment attorney's fees should not begin to run until the appeals court judgment is final.  Protechnics Int'l, Inc. v. True-Tag Sys., Inc., 843 S.W.2d 734, 736 (Tex. App.-- Houston [14th Dist.] 1992, no writ).

• Email This
• Print
• Comments
• Trackbacks

The Dallas Court of Appeals has held that "due process requires that a party be given the opportunity to present its arguments to a court before the court makes a ruling." (citing TRAP 52.4).

In In re Victor Enterprises, Inc., the trial court (Dallas County Court at Law No. 1) granted a petition for writ of mandamus without requesting a response from Victor Enterprises.  Victor Enterprises sought mandamus relief in the court of appeals.  Interestingly, the court of appeals requested a response from the real party in interest.  The real party in interest filed no response.  The court of appeals concluded that the trial court abused its discretion by granting the petition without requesting a response or allowing Victor Enterprises time to file a response.   The writ of mandamus was conditionally granted.  The court's opinion may be found here.

• Email This
• Print
• Comments
• Trackbacks

The Twelfth Court of Appeals recently held that lack of consideration is an affirmative defense that must be plead.  In this case involving a will contest, the court reversed an order granting a no-evidence motion for summary judgment on the basis that the agreement at issue lacked consideration.  The court ruled that consideration for a written instrument is presumed.  The Court also held, however, that lack of consideration is an affirmative defense.  Thus, the court concluded, it was improper for a movant to utilize a no-evidence motion regarding a claim on which the movant has the burden of proof.  The court's opinion in Burges v. Mosley can be found here. 

In my opinion, there is a problem with treating lack of consideration as an affirmative defense.

• Email This
• Print
• Comments
• Trackbacks

Attorney's Fees for travel time are recoverable under Chapter 38 of the Texas Civil Practice and Remedies Code, according to the San Antonio Court of Appeals.   In Wilkerson v. Atascosa Wildlife Supply, Atascosa sought recovery of attorney's fees inclusive of $5,500 for travel time.  Atascosa offered evidence that the travel time was reasonable and necessary considering the distance traveled.  The evidence also showed that he billed only one-half of his rate for 36 hours of the travel time in which he was driving and not actively working on the case.  After the trial court granted Atascosa's attorney's fees, Wilkerson appealed.

The court of appeals observed that it could find no Texas case precluding an award of attorney's fees that includes travel time.  Based upon the evidence presented, the court concluded that there was nothing in the record showing the award of attorney's fee for travel time was unreasonable or arbitrary and the court affirmed the judgment.  The court's opinion may be found here.  Wilkerson has now been filed in the Texas Supreme Court.  The docketing information can be found here.

• Email This
• Print
• Comments (1)
• Trackbacks

The Houston (Fourteenth) Court of Appeals recently held that a trial court abuses its discretion if it conditions a trial setting on the payment of sanctions.  Here, after a plaintiff and his attorney were sanctioned $45,000 and $5,000, respectively, they challenged the sanctions order by mandamus.  In its memorandum opinion, the court of appeals began by holding that because the plaintiff and his attorney did not claim that the sanctions threatened their ability to continue the litigation, they had an adequate remedy by appeal and, thus, were not entitled to mandamus relief with respect to the sanctions.

In addition to awarding sanctions, however, the order set the trial for the "next available trial date following payment of the fees in full as ordered herein."  Citing precedent, the court held that "[a] sanctions award that impedes the prosecution of the case warrants extraordinary relief."  Accordingly, the court of appeals conditionally granted mandamus and ordered the trial court to delete the language in the sanctions order that conditioned the trial setting on the payment of sanctions.  The court's opinion in In re Gawlikowski can be found here. 

• Email This
• Print
• Comments
• Trackbacks

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.

• Email This
• Print
• Comments (1)
• Trackbacks

At least that's how the Texas Supreme Court's version of Matthew 7:13 reads.  In a per curiam opinion, the Court recently demonstrated its vigilance in policing overly-broad discovery orders.  In this product liability case, the plaintiff sought all documents of consumer complaints regarding "the sidestep on any model backhoe."  John Deere objected to the request as overly broad.  The trial court narrowed the request to models with step assemblies similar to the allegedly defective model, but did not impose a reasonable time limit.  The Court reaffirmed that discovery orders compelling production must set reasonable time limits and that "[a]n order that compels overly broad discovery is an abuse of discretion for which mandamus is the proper remedy."  Accordingly, the Court granted the petition and vacated the trial court's discovery order to the extent it failed to set a reasonable time limit.  The Court's opinion in In re Deere & Company can be found here. 

• Email This
• Print
• Comments
• Trackbacks

In the recent case, Rodriguez v. Crutchfield, decided by the Dallas Court of Appeals, we learn the importance of clearly evaluating all the parties we think may have liability and the importance of considering the statute of limitations in that evaluation.

In the case, Richard Rodriguez, a temporary worker driving a forklift for Dallas Transfer Warehouse Co. was injured on February 4, 2005, while unloading a trailer owned by P & H Transportation.  The accident happened when P & H employee/driver, Milton Crutchfield, pulled the trailer away from the dock causing the forklift which Rodriguez was operating to fall.  Rodriguez received workers compensation beneifts from ALEA North American Insurance Co. 

ALEA then sued Crutchfield and P & H for subrogation.  Rodriguez, on the same date, sued Dallas Transfer and the cases were consolidated.  Crutchfield was never served.  Dallas Transfer got out on summary judgment (presumably under the exclusive remedy provision of the workers comp statute) and ALEA nonsuited Dallas Transfer and  P & H.

On April 22, 2008, Rodriguez attempted to amend his petition and sue Crutchfield and P & H.  The trial court granted summary judgment in favor of Crutchfield and P & H based on the statute of limitations.  The Dallas Court of Appeals affirmed as to Crutchfield because he was never served within the limitations period and Rodriguez did not comply with the due diligence requirement for service.  The Court also granted summary judgment as to P & H because the only claims against it were brought by ALEA and were dismissed with prejudice on January 30, 2008.  Texas law holds that when a case has been refiled following dismissal, the statute of limitations is calculated at the date of refiling, which in this case was well after the limiations period passed. 

It's surprising that Rodriguez did not sue Crutchfield and P & H when it sued Dallas Transfer.  Once a plaintiff collects workers compensation, it's hard for them to avoid the exclusive remedy provision, which bars negligence suits against employers.  Moreover, it appears from the case that if Rodriguez had a negligence claim against anyone, it would be P & H and Crutchfield.  Only subrogation claims were filed against P & H and Crutchfield.  This case demonstrates the need to anticipate suing all parties at the outset of litigation and to be weary of the statute of limitations if you do not.

You can read the opinion HERE.

• Email This
• Print
• Comments
• Trackbacks

The Texas Supreme Court  recently reviewed an eminent domain, State v. Central Expressway Sign Associates, where the trial court excluded the state's expert report on the fair market value of real property because he failed to account for the revenue generated by the use of the property. 

Specifically, the State of Texas condemned a 3,950-square foot parcel of land in Dallas owned  by Central Expressway Sign Associates (CESA) that was needed to improve a highway interchange.  CESA leased the land to Viacom Outdoor, Inc., which in turn managed a billboard on the property.  The sign allegedly generated $168,000 a year in advertising revenue. 

In a pretrial hearing, the trial court excluded the State's expert witness on the value of the property because it concluded the expert's failure to account for billboard advertising revenues in his appraisal made his report unreliable. 

On appeal, the Texas Supreme Court found that the expert did not improperly exclude the revenue generated by the billboard from his estimate.  The court noted that too many variables impact revenue in addition to actual location, including proper permits, constructing, lighting, and employing personnel to sell advertising space and to place and remove the advertisements.  Moreover, the court concluded that because the testimony was directly related to the central issue in the case, the state suffered harm when the trial court excluded its witness.  Thus, the court reversed and remanded for a new trial.

The opinion can be found HERE.

• Email This
• Print
• Comments
• Trackbacks

The Dallas Court of Appeals recently all but held that a non-resident officer and director of a Texas corporation is subejct to personal jurisdiction in Texas.  After reviewing the law on personal jurisdiction, the court decided that there was no general jurisdiction over the defendants who were California residents. 

Turning to specific jurisdiction, the court addressed whether the defendants' ongoing business relationship between Texas and California and the dispute over control of a Texas corporation constituted doing business in Texas.  The court agreed with the reasoning of a Fourth Circuit case:

Excellent reasons exist for alowing a State to assert jurisdiction over non-resident directors of domestic corporations.  A chartering state has a strong, even compelling interest in providing a forum for redressing harm done by corporate fiduciaries, harm endured principally by a resident of that State, the corporation. . . . Given the high degree of regulation over corporate fiduciaries, the State's interst in providing a convenient forum for a derivative suit charging malfeasance or nonfeasance of a director cannot be overemphasized.

The court hedged its bet slightly by acknowledging the lack of authority from the Texas Supreme Court or state legislature on the subject.  Thus, the court went on to find that the defendants' other contacts were sufficient to support personal jurisdiction.  One caveat, the plaintiff in the case, as well as the other shareholders were Texas residents.  Would the analysis change if all of the shareholders, officers, and directors were non-residents?  The court's opinion in TexVa, Inc. v. Boone can be found at this link.

Readers note:  This issue is currently before the Texas Supreme Court in the case of Kelly v. General Interior Constr., Inc.  Readers can go to Don Cruse's Texas Supreme Court blog, or its companion site, docketdb.com and find more infornation about that case here and here.

• Email This
• Print
• Comments
• Trackbacks

When is an affidavit necessary rather than a verification?

In Wimmer v. Hanna Prime, Inc., Hanna Prime brought suit against Wimmer on a sworn account.   Wimmer answered with a verification in which he asserted that he did not contract for the debt in his personal capacity and was not liable.   His verification stated that the facts were true "to the best of [his] knowledge."   Hanna Prime moved for summary judgment.  Wimmer responded with an affidavit wherein he asserted he did not contract with Hanna Prime in his individual capacity.  The trial court rendered summary judgment against Wimmer and Wimmer appealed.  On appeal, Wimmer assered that his affidavit raised a material issue of fact.

Citing Texas Rule of Civil Procedure 93(2), the Dallas Court of Appeals observes Wimmer was required to verify by affidavit his defensive plea asserting no liability in the capacity in which he was sued.  Because Wimmer's answer did not unqualifiedly state that the facts were true and within his personal knowledge and instead stated that they were true "to the best of his knowledge," the court of appeals holds that the verification was "not legally effective as a verification" and the court affirms the judgment.  The court's opinion may be found here.

Practitioners will want to note two things about this case.  First, Rule 93 does require verification by affidavit.  There is case law that draws a distinction between a mere verification and an affidavit.  Affidavits require more than a verification.  Second, it appears that even if your verification is defective, you cannot cure the defect at the time of summary judgment by filing an affidavit as part of your response to the motion.  You will need to amend your answer to include a proper verification "by affidavit."

• Email This
• Print
• Comments
• Trackbacks

This blog entry comes courtesy of Cowles & Thompson's Melinda Newman:

The Eastland Court of Appeals recently held that a trial court abused its discretion by refusing to hear a special appearance motion filed by a California corporation until after the defendant’s corporate representative appeared for deposition in Texas. In IRN Realty Corporation v. Hernandez, Vicenta Hernandez filed suit against IRN, alleging various causes of action stemming from the purchase of real estate in Nolan County. Prior to hearing its special appearance, Hernandez noticed the deposition of IRN’s corporate representative. IRN filed a motion to quash, urging the court to first rule on its special appearance and contending that it would be unjust for a Texas court without jurisdiction to require its corporate representative to appear for a deposition. The trial court granted the motion to compel, awarded monetary sanctions, and ordered IRN to present its representative for deposition before it would rule on the special hearing. After IRN ignored the court’s order and failed to present its representative for deposition, the trial court struck IRN’s pleadings.

The court observed Rule 120a’s mandate that a hearing on a special appearance be heard and determined before any other plea or pleading. It also noted, however, that the rule also specifically provides for the means of obtaining a continuance of the special appearance hearing so a deposition may be conducted: affidavits of the party opposing the special appearance. Here, Hernandez did not file any such affidavit stating that she could not present facts essential to justify her opposition to the special appearance or that she needed to depose IRN’s corporate representative regarding jurisdiction -- she simply noticed IRN’s corporate deposition. Thus, while the court made clear it did not condone the actions of IRN in refusing to obey a court order, it held that the trial court abused its discretion in abating the hearing on the special appearance and striking IRN’s pleadings. The court’s opinion may be found here.  One issue that was not addressed was location: i.e., had Hernandez properly submitted an affidavit and obtained a court order allowing the deposition, could she have forced the IRN representative to come to Texas for his deposition or would she have had to depose him in California?

• Email This
• Print
• Comments
• Trackbacks

The Texas Supreme Court recently narrowed the right to attorney's fees based on uncontroverted evidence.  The Court held that compentent, uncontroverted, unchallenged evidence of attorney's fees does not entitle a party to an award of attorney's fees as a matter of law.  Distinguishing its opinion in Ragsdale v. Progressive Voters League, the Court held that under the well-known factors set forth in Arthur Anderson & Co. v. Perry Equip. Corp., the factfinder (here a jury) was free to award a lesser amount of fees considering "the amount involved and the results obtained." 

In one bright spot for clients and counsel, the Court did note that the jury was not free to award zero attorney's fees stating:

Although it could have rationally concluded that, in light of the amount involved and results obtained, a reasonable fee award was less that the full amount sought, no evidence supported the jury's refusal to award any fees.

The Court remanded the case for a new trial on attorney's fees.  No word on how much is reasonable or whether a formula taking into account the amount invovled and amount incurred should be employed.   It is also unclear why a defendant found liable should benefit from requiring a plaintiff to incur high fees to recover a small amount.  From this opinion, we know that a court may not award attorney's as a matter of law and the jury cannot award zero attorney's fees.  Until further notice, it seems anything in between remains in play.  The Court's opinion in Smith v. Patrick W.Y. Tam Trust can be found here. 

• Email This
• Print
• Comments
• Trackbacks

The Texas Supreme Court recently held that a malpractice plaintiff may recover attorney's fees incurred in a prior suit if those fees were proximately caused by counsel's negligence.  In this long and complex malpractice case, the plaintiff, NDR, sued Akin Gump for malpractice.  The jury rendered a verdict for NDR and awarded damages, including damages for attorney's fees incurred by NDR for its appeal of the underlying judgment. 

In its opinion, the Dallas Court of Appeals reversed the attorney's fees award citing the "American Rule" and a line of cases categorically barring recovery of attorney's fees incurred in a prior suit as damages.  The Texas Supreme Court disagreed and held that the American Rule did not apply because NDR was not seeking attorney's fees incurred in prosecuting its malpractice claim, a claim for which fees were not provided by contract or statute.  Instead, NDR was seeking its fees incurred in a prior suit that it would not have incurred but for Akin Gump's alleged negligence. 

After briefly discussing cases in which courts have disallowed recovery of fees as damages, the Court stated: "The better rule, and the rule we adopt today, is that a malpractice plaintiff may recover damages for attorney's fees paid in the underlying case to the extent the fees were proximately caused by the attorney's negligence."  The Court did not address whether the new rule alters the general rule outside the context of legal malpractice cases, but the holding does not appear to extend beyond legal malpractice cases.  The Court's opinion in Akin Gump. Strauss, Hauer & Feld, L.L.P. v. Nat'l  Devel. & Research Corp. can be found at this link.

• Email This
• Print
• Comments
• Trackbacks

In Aquaplex, Inc. v. Rancho La Valencia, Inc., the Texas Supreme Court appears to have equated intent with causation in a fraud case.  Aquaplex sued Rancho for fraud.  Aquaplex asserted that it lost the sale of a piece of real property due to Rancho having filed a lis pendens on the property.  On appeal following an adverse verdict, Rancho argued that there was no evidence as to why Aquaplex lost the sale of the property and therefore there was no evidence of causation between the alleged fraud and Aquaplex's damages.  In its per curiam opinion, the Supreme Court holds that there was legally sufficient evidence because both parties knew of the offer for the property and Rancho testified it filed the lis pendens to prevent the sale. 

It is unclear how this holding fits with prior precedent holding that evil motive or intent does not necessarily establish a cause of action.  This opinion should give concern to those who file lis pendens. The purpose of lis pendens is give initial notice of a claim to property.  According to the Aquaplex decision, the filing of a lis pendens might well constitute a complete claim for fraud.

For appellate practitioners, there's another holding in Aquaplex that may be of interest.  The court holds that a Respondent need not raise an alternative ground for affirmance as a cross-point in response to the Petition for Review.  Rather, to request that the Supreme Court consider alternative grounds for affirmance raised in the court of appeals but not decided by that court, the respondent may raise those issues in the petition, the response to the petition, the reply, any brief, or a motion for rehearing.  Here, Rancho preserved a cross-point by raising it in its brief on the merits for the first time.

The court's opinion may be found here.

• Email This
• Print
• Comments
• Trackbacks

A recent Dallas Court of Appeals case, MRT, Inc. v. Vounckx, provides some insights on electronic discovery in Texas.

The case essentially involves two main entities: MRT, Inc. and Inter-University Micro-Electronics Center ("IMEC"), though several other related parties and entities were involved.  Basically, IMEC through its agent, Roger Vounckx, persuaded MRT and the several related individuals and entities to invest in a new technology, PhotonLink, which purportedly provided faster and more efficient computer chip communication.

When the investment proved unsuccessful, MRT sued IMEC for fraud, negligent misrepresentation, and breach of fiduciary duty.  During the litigation, MRT served IMEC with requests for production, but did not confer with IMEC beforehand to ascertain how it stored its information electronically.  The requests sought any computer generated or stored information relevant to the lawsuit. 

At depositions, MRT's counsel learned that IMEC had some computer back up tapes it had not produced.  These tapes were apparently used for retrieval if the data base became corrupted and not for archival preservation.  Because IMEC delayed producing the tapes, MRT filed a motion to compel.  IMEC objected to production because: (1) extracting information from the tapes was too burdensome given there was no indication relevant information was stored on the back up tapes, which would take hours to search; and (2) IMEC had destroyed the back up tapes related to the relevant time period after MRT had sued it.

The trial court denied MRT's request for a continuance to review the backup tapes and it denied its spoliation motion.  MRT lost at trial and appealed.

Did IMEC improperly withhold the backup tapes?  Did IMEC spoliate evidence when it destroyed the backup tapes after MRT filed the lawsuit?  Read the extended entry to learn what the court decided.  Or if you would rather read the opinion, you can get it HERE.

• Email This
• Print
• Comments
• Trackbacks

At least since the Texas Supreme Court's 1994 opinion in Transportation Insurance Company v. Moriel, questions of the right to discovery of a defendant's net worth information, the definition of "net worth", and the scope of information relating to net worth have been simmering in the district courts and in the courts of appeals.  The latest opinion on the subject has been issued by the Fourteenth District Court of Appeals and the concurring opinion makes case for why it's time for the Texas Supreme Court to address these thorny issues.  The majority's opinion in In re Jacobs may be found here.  The concurring opinion may be found here.

• Email This
• Print
• Comments
• Trackbacks

The Amarillo Court of Appeals recently concluded that when a probate proceeding is filed in a court that does not have jurisdiction, a judgment from the court is void, rather than voidable.  In Winfield v. Pietsch, Dale Winfield, Gloria Johnson, and James Winfield filed suit in district court in Randall County seeking to challenge a Will executed by Jena Beth Winfield.  Karen Sue Pietsch filed a special exception to challenge the jurisdiction of the district court, but she never sought to have the proceedings dismissed on that basis.  Instead, she sought and obtained a summary judgment.  Dale Winfield, Gloria Johnson, and James Winfield then appealed.

On appeal, Pietsch sought dismissal on the ground that the district court was without subject-matter jurisdiction, which rendered the judgment void.  The court of appeals observed that Probate Code Section 5(c) vested jurisdiction in the county courts, rather than in district court over applications, petitions, and motions regarding probate or administration.  Accordingly, the court holds that the district court's judgment was void.  The court's opinion may be found here.

As a final note, I would point out that some courts of appeals have treated this probate code section as creating concurrent jurisdiction and creating dominant jurisdiction issues where there is more than one proceeding pending--such as where a prior estate administration has been opened.   This treatment appears to be a result of the Texas Supreme Court's opinion in Bailey v. Cherokee Cty. Appr. Dist., 862 S.W.2d 581 (Tex. 1993), which contains some confusing language.  Hopefully the supreme court will one day clarify its Bailey opinion.

• Email This
• Print
• Comments
• Trackbacks

The Dallas Court of Appeals recently held that the major transaction exception to the prohibition on venue agreements only applies if the value of the transaction is contained in the agreement itself.  In this original proceeding, the parties entered into a settlement agreement involving real estate in which the parties agreed that venue of any dispute would be in Dallas County.  Plaintiff brought suit in Dallas County, the defendant moved to transfer to the county in which the property was located.  The plaintiff argued that venue in Dallas County was proper under section 15.020 of the Texas Civil Practice and Remedies Code because the transaction involved consideration of more than $1,000,000.  The Court disagreed and held that in order for section 15.020 to apply, the "agreement must contain the agregated stated value of the consideration."  Because the settlement agreement did not contain the amount, the trial court abused its discretion by denying the defendant's motion to transfer to the county of mandatory venue.  As a result, the Court granted the defendant's petition for writ of mandamus.  The Court of Appeals decision in In re Togs Energy, Inc. can be found at this link. 

• Email This
• Print
• Comments
• Trackbacks

The Houston First District Court of Appeals has held that a trial court abused its discretion by denying the plaintiffs discovery of jurisdictional facts pertaining to the defendants' personal appearance.  In Lamar v. Poncon, John and Nanci Lamar sued Eric Poncon, Morgan's Rock Hacienda, and Ecolodge for negligence in causing injuries arising out of a car accident that occurred when the Lamars travelled to Nicaragua.  Morgan's Rock and Poncon filed special appearances to challenge the exercise of jurisdiction.

On three separate occasions, the Lamars moved for jurisdictional discovery, each time providing additional information as to what information they were seeking and why the jurisdictional discovery sought was needed.  Each time the trial court denied the request.   The trial court eventually sustained the special appearances, after which the Lamars appealed and complained of the rulings on their motions for discovery.

The court of appeals observes that Civil Procedure Rule 120a(3) governs jurisdictional discovery and under the rule, a party opposing a special appearance may have discovery into jurisdictional facts if it presents an affidavit that it cannot provide facts essential to justify its opposition to the special appearance.  The court held that a denial under this rule is governed by an abuse of discretion standard.  The court then recites all of the efforts the Lamars made to obtain the necessary information and concludes that the trial court abused its discretion by denying the jurisdictional discovery.  From a practitioner's standpoint, the court does not explain how the trial court's denial was a failure to follow guiding rules and principles or otherwise arbitrary.   Nor does the court indicate at what point (after the first motion, second motion or third motion, or all three), the denial of discovery constituted an abuse of discretion.

The court reverses an order granting the special appearance and remands the case to the trial court for further proceedings.  The court's opinion may be found here.

• Email This
• Print
• Comments
• Trackbacks

What should you do if you show up for a bench trial and there is no court reporter?

The Fort Worth Court of Appeals recently decided an appeal raising this issue.  In Kohler v. M & M Truck Conversions, M & M contractually hired Kohler to install a wheelchair lift and related hydraulic equipment on a horse truck.  Kohler later sued M & M for failing to pay him for his work. 

The parties had a bench trial on the issues.  At trial, although there was not a court reporter present to make a record of the proceedings, neither party objected.  The court awarded Kohler minimal damages, but the court did not make, and neither party requested, any findings of fact or conclusions of law.

On appeal, Kohler complained that he was denied a court reporter at trial.  The Court of Appeals ruled that the trial court erred by failing to provide a court reporter, but Kohler failed to preserve error because he did not object at trial.  For proper preservation, Kohler should have objected at trial as soon as he realized there was not a court reporter.  Because Kohler did not object, the trial court did not have an opportunity to rule on the matter and correct it if possible.   As the error was not preserved, the court overruled the issue.

The opinion is here.

• Email This
• Print
• Comments
• Trackbacks

The Amarillo Court of Appeals recently issue an opinion in In re Lagaite, in which the Court dismissed the petition for writ of mandamus for want of jurisdiction.  The petitioner complained of medical treatment he received while incarcerated in a Texas prison and evidently named the medical doctor as the respondent.  Noting that Texas Government Code Section 22.221(a) and (b) grant mandamus jurisdiction to protect an appellate court's jurisdiction or to issue writs against a district or county court judge, the court of appeals concluded it did not have jurisdiction.  The Court's opinion may be found here.

I had a similar issue come up in an appeal I handled many years ago and I recall that there were a few cases out there in which mandamus had issued against persons other than a district or county court judge and protection of the appellate court's jurisdiction was not in issue.  I would be interested in hearing from any of our readers whether they are familiar with other cases in which a court of appeals issued a writ of mandamus against someone other than a district or county judge and protection of the appellate court's jurisdiction was not in issue.

• Email This
• Print
• Comments
• Trackbacks

 What is the legal effect of a provision voiding a contract?  This was the issue in the Fourth Court of Appeals case Mr. W. Fireworks Inc. v. Ozuna.

In the case, Mr. W, between September of 2002 and February of 2003, contracted for the exclusive right to sell firework on the land of three different property owners.  Each contract provided two key provisions: (1) the contract was voidable if fireworks became unlawful during the term of the contract; and (2) the lessors agreed not to sell or lease a part of their property to any of Mr. W's competitors for ten years after the lease was terminated. 

Although Mr. W originally was able to sell fireworks at all three locations, by January of 2006, it was no longer legal to sell fireworks on any of them, and thus the contract was void.  In March of 2008, however, the city of San Antonio disannexed the lessors' properties allowing them to sell fireworks on their property again.  The three lessors then contracted with Alamo Fireworks, Inc., one of Mr. W's competitors, to sell fireworks on their property.

When Mr. W learned of the new contracts it sued the three lessors for breach of contract.  Mr. W argued that "[t]he phrase 'shall become void' was a 'contingent limitation' that created 'a voidable agreement, which the restrictive covenant [ten-year restriction] survive[d]."  In other words, the contracts terminated as to the lease, but not as to the ten-year restriction.  The lessors successfully moved for summary judgment arguing the entire contract was void, including the ten-year restriction.  Mr. W appealed.

Was the ten-year restriction enforceable in light of the "void" language?

No, according to the San Antonio Court of Appeals.  As the court explained, when a contract is voidable, it means that the contract may either be set aside or enforced in its entirety.  In other words, Mr. W cannot argue that the illegalization of fireworks made the contract voidable as to its lease obligation, but not to the ten-year restriction.  Thus, the San Antonio Court of Appeals affirmed the trial court's judgment that the entire agreement was void.

Here is the opinion.

• Email This
• Print
• Comments
• Trackbacks

The Dallas Court of Appeals recently held that local rules that are inconsistent with the TRCP are not enforceable.  The case involved a summary judgment response that was supposedly filed and served seven days prior to the summary judgment hearing.  The trial court struck the response for failure to comply with Dallas Local Rule 2.05.  Local Rule 2.05 requires that documents relating to matters set within seven days of filing must be served in a manner to ensure receipt by the opposing party the same day the papers are filed.  The opinion does not mention how the document was filed or served.  Relying on TRCP 3a, the court of appeals held that Local Rule 2.05 was not enforceable to the extent it mandates a different "type of service than that prescribed by rule 21a."

Does Local Rule 2.05 really require a "different type of service"?  It seems to do no more than ensure that in the event a party hand delivers a response or reply to the court, it will deliver the documents to its opponent in a similar manner thus avoiding the situation in which the court receives a document and has time to review it prior to the hearing but the opposing party does not.  I thought the Texas Supreme Court reviewed and approved local rules?  If so, why?  The court's opinion in Esty v. Beal Bank S.S.B. can be found at this link.  Other local rules may be affected as discussed below. 

• Email This
• Print
• Comments
• Trackbacks

In the wake of the Dallas Court of Appeals' en banc decision last week in Crown Asset Management, L.L.C. v. Loring, there's a handful of other opinions addressing dismissals for want of prosecution using the same "aggressive docket management" procedures as in Crown. 

• Email This
• Print
• Comments
• Trackbacks

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.

• Email This
• Print
• Comments
• Trackbacks

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.

• Email This
• Print
• Comments
• Trackbacks

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.

• Email This
• Print
• Comments
• Trackbacks

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.

• Email This
• Print
• Comments
• Trackbacks

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.

• Email This
• Print
• Comments
• Trackbacks

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.

• Email This
• Print
• Comments
• Trackbacks

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. 

• Email This
• Print
• Comments
• Trackbacks

Appellate practitioners will want to take note of the Amarillo Court of Appeals' opinion in In re Z.A.S.  In this case, the Attorney General, as Appellee, filed an "Agreed Motion for Reversal and Remand and for Immediate Issuance of Mandate."  After noting that the motion was technically only an unopposed motion and not an agreed motion due to the fact that it was signed only by counsel for the appellee, the court went on to conclude that it could not grant the requested relief because the appellate rules do not permit it.

The motion sought reversal, remand, and a hearing on the merits.  The court of appeals held that this requested form of relief is not encompassed within Appellate Rule 42.1(a)(2)'s list of dispositions.  Evidently, the court reads Rule 42.1(a)(2)(A) language of "render judgment effectuating the parties' agreement" as only permitting affirmance or reversal, but not remand.  Thus, assuming that the parties reach an agreement that some hearing or trial was improperly conducted, it appears that this decision would not allow court of appeals to remand to the trial court to fix that error merely upon the agreement of the parties.  In support of its result, the court cites to the notes and comments to Rule 42.1.

The court's opinion may be found at this link.

• Email This
• Print
• Comments
• Trackbacks

In Resurgence Financial, L.L.C. v. Foster, the Dallas Court of Appeals followed and applied the Texas Supreme Court's opinion in Thordson v. City of Houston.  From the moment that Resurgence filed its suit the trial court notified Resurgence that the case would be placed on the dismissal docket unless an answer were filed by a date specified.  On October 23, 2007, Resurgence filed a motion for substituted service, supported by affidavit.  The trial court returned the motion with an unsigned letter stating that Resurgence had failed to establish sufficient attempts to serve the defendant.  On the same day the trial court returned the motion, it dismissed the suit for want of prosecution.  Resurgence filed a motion to reinstate and asked for a hearing in its motion.  The record showed no indication that the trial court heard the motion, but there was a docket entry indicating that the judge was aware of the filing.  The motion to reinstate was overruled as a matter of law.

On appeal, Resurgence raised a single issue to complain about the lack of a hearing on its motion to reinstate.  The court of appeals holds that "the trial court's failure to comply with rule 165a(3) is erroneous and requires reversal."  The court's opinion may be found here.

• Email This
• Print
• Comments
• Trackbacks

The Houston First Court of Appeals has held that a voidable attorney-client retainer agreement may not be used as a basis upon which to establish personal jurisdiction in a suit by the attorney against the client on the agreement.   In Cobb v. Sterm, Miller and Higdon, Cobb, a Louisiana resident, was injured in Louisiana while working on an anchor boat in Lousiana for his Lousiana employer.  The law firm went to Louisiana to solicit Cobb as a client.  Two months later, one of the law firm's representatives drove Cobb to Houston where he signed an engagement agreement providing for the application of Texas law.   A few weeks later, Cobb terminated the law firm and three days after that, he settled his claims with his employer and went back to work.

The law firm brought suit in Texas against Cobb to recover its expenses and Cobb filed a special appearance.  The trial court [11th Judicial District] initially sustained Cobb's special appearance, but on rehearing, the court [151st Judicial District] granted the law firm's new trial.  Cobb filed an interlocutory appeal.

• Email This
• Print
• Comments
• Trackbacks

In a case of first impression the Texas Supreme Court  recently held that the issue of whether a party has the mental capacity to contract is an issue for courts, not arbitrators.  The Court traced the history of the so-called "separability" spawned by the United States Supreme Court's decision in Prima Paint Corp. v. Conklin Manufacturing Co., 388 U.S. 395, 404 (1967), that held that challenges to an entire contract should be decided by arbitrators and challenges to an arbitration agreement itself should be decided by courts.

The separability doctrine proved problematic in a third category of cases; those in which a party challenged the very existence of a contract in the first place, so-called "contract formation" issues.  Relying on dicta in Buckeye Check Cashing, Inc. v Cardegna, 546 U.S. 440, 444 n.1 (2006), and numerous other state and federal decisions, the Texas Supreme Court held that contract formation issues, specifically mental capacity, are for courts, not arbitrators.  Accordingly, the Court denied Morgan Stanley's attempt to compel arbitration by mandamus.  Justice Hecht dissented and would have treated lack of capacity as "closer to fraudulent inducement than to lack of signature."  The Court's opinion in In re Morgan Stanley & Co., Inc. can be found at this link.

• Email This
• Print
• Comments (1)
• Trackbacks

The United States Supreme Court’s recent opinion in Caperton v. A.T. Massey Coal Co., raises some unique questions for our own system of electing judges in Texas.  Justice Kennedy, writing for the majority, holds that the campaign contributions of the chairman of the board and president of Massey Coal toward the campaign of a West Virginia Supreme Court candidate raised “the probability of actual bias ris[ing] to an unconstitutional level.” The majority gives little bright-line guidance for future cases, but in apparent recognition of the precedential implications of its holding, the majority is careful to emphasize the extreme nature of the facts of the case, including that the Massey chairman donated the maximum personal contribution to the candidate and $2.5 million to a political PAC, and those donations accounted for more than two-thirds of the total funds raised. The contributions were more than the total amount spent by all other supporters for the candidate.
The dissent, written by Chief Justice Roberts, expresses concern at extending due process to application of judicial disqualification. Instead, the dissent suggests that disqualification is a matter more properly left to the states to regulate by statute or rule. By extending due process to matters of disqualification, the dissent warns that the majority may actually undermine concerns for the need to maintain a fair, independent and impartial judiciary.  The Court's opinions may be found at this link.

• Email This
• Print
• Comments
• Trackbacks

A few weeks ago I wrote about an opinion issued by the Fort Worth Court of Appeals, wherein that court held that Civil Practice and Remedies Code Section 33.004(e) applied to a statute of repose to revive the claims against a responsible third party.  Click here for that discussion.  I questioned whether Section 33.004(e)'s reference to statutes of limitation should be construed to include statutes of repose.  Last Friday, the Texas Supreme Court confirmed that Section 33.004(e) does not  apply to statutes of repose.

In Galbraith Engineering Consultants, Inc. v. Pochucha, Sam and Jean Pochucha bought a house in April 2003, that had been built 8 years earlier by builder Bill Cox.   After the house showed water damage following moderate to heavy rainfall, the Pochuchas sued Cox.  Cox in turn filed a motion for leave to designate Galbraith Engineering Consultants as a responsible third party.  The Ponchuchas joined Galbraith as a defendant within sixty days pursuant to Chapter 33.  Galbraith moved for summary judgment and asserted the applicable statute of repose because the Ponchuchas joined it as a defendant more than ten years after completion of the house.  The trial court granted the motion for summary judgment, but the San Antonio Court of Appeals reversed holding that Section 33.004(e) applies to both statutes of limitation and repose.

The Texas Supreme Court reversed the and affirmed the summary judgment.  Construing Section 33.004(e), the court held that the term "limitations" should be construed narrowly to include only statutes of limitation rather than both statutes of limitation and statutes of repose.  The supreme court's opinion may be found at this link.

• Email This
• Print
• Comments
• Trackbacks

"To the victor belong the spoils" or so said New York Senator William L. Marcy in 1828.  Maybe that's why we award court costs to the winners.  But what happens when both sides win?  Or lose? Can a court award court costs to one side in those instances?

That was the issue the Dallas Court of Appeals case Sullivan v. White. 

Robert Sullivan sued his client, Pam E. White, for unpaid attorney's fees.  She counterclaimed for negligence and DTPA violations.  They went to trial and the jury returned a verdict awarding no damages to either party.  The trial court, however, signed a final judgment awarding White $3,068.58 in costs.  Sullivan appealed arguing White should not get costs because she was not the successful party at trial.

Did the trial court abuse its discretion by awarding costs to White?

Rule 131 allows a successful party in a suit to recover court costs.  But Rule 141 allows a court to award costs for other reasons if there is good cause that is stated on the record.  The Dallas Court of Appeals reversed the lower court's ruling on court costs, but not because the judge did not have discretion to award court costs to one side in a suit that ended in a tie.  Instead, the Court noted the judge failed to specify good cause in the record.  Failing to so do precluded an award of court costs where both sides prevailed.  Consequently, the Court reversed the award and rendered judgment that each side bear its own costs.

Here is the opinion.

• Email This
• Print
• Comments
• Trackbacks

The Houston (First) Court of Appeals recently issued an interesting opinion regarding perfection of an appeal from a small claims court to a county court at law.  The appellant failed to timely file an appeal bond within ten days of the judgment pursuant to to TRCP 571.  Instead, the appellant "deposited $5,000 in cash . . . in lieu of a justice court appeal bond."  The small claims judgment was not in the record, but the judgment was entered on April 12, 2007 at the latest because the appellant attempted to appeal the judgment on that date.  The deposit, however, was not made until May 4, some 22 days later.  Thus, appellant's attempt to perfect the appeal was late regardless of whether the appellant filed a bond or made a deposit.

The court of appeals continued and also stated:

Even if [appellant] had timely filed its cash bond in the justice court, instead of untimely filing it in the county court, when a deposit of cash has not been authorized by statute, such a deposit does not constitute sufficient compliance with the statute that requires a bond to be given.

The court cited two cases, one from 1929 and one from 1952, in support of the proposition that Rule 571 does not authorize the fiing of a cash bond in lieu of a surety bond.  In fact, one case was quoted as holding "we have found no Rule so providing."

That's because the rule didn't exist yet.  Rule 14c was adopted in 1981 and expressly allows any surety bond required by the rules to be satisfied by a cash deposit.  Appellant's appeal in this case could not benefit from the rule because it seems that the attempted deposit was late.  But to the extent the court's holding regarding the deposit was an alternative holding, as opposed to mere dicta, it is contrary to TRCP 14c.  The court's opinion in Gundogan v. Woodgrove Condo. Ass'n can be found at this link. 

• Email This
• Print
• Comments
• Trackbacks

The Dallas Court of Appeals held that plaintiffs were not entitled to take the depositions of George W. and Laura Bush in relation to the ongoing dispute over the location of the proposed Bush Presidental Library.  The Court stated:

For reasons of comity and the policy considerations discussed in [United States v.]Poindexter, we conclude the decision to allow the deposition of a sitting or former President is not controlled by the standards applicable to apex depositions.   . . . Our review of the record indicates that real parties in interest Vodicka and Tafel did not meet either prong of the Poindexter standard.

The bottom line was that the real parties in interest did not establish Bush's testimony was material or necessary and specifically failed to produce a list of proposed questions for trial court review under a "meticulous standard." Accordingly, the Court granted George W. Bush's petition for writ of mandamus and ordered the trial court to enter an order quashing the depositions of the former President and First Lady.   The Court's opinion in In re President George W. Bush can be found at this link.

• Email This
• Print
• Comments
• Trackbacks

When should a party specially except to the grounds of a summary judgment motion?  Should the non-movant specially except when the grounds are ambiguous?  Or if the grounds are not expressly present? 

The Dallas Court of Appeals addressed this issue in Garza v. CTX Mortgage Company, LLC. 

The Garzas sued CTX for various causes of action relating to CTX's management and administration of the loan proceeds used to construct their house.  CTX successfully moved for summary judgment on all of the Garzas' claims.  The Garzas appealed.

On appeal, the Garzas argued for the first time that CTX did not identify and negate an essential element of each of their claims.  CTX argued that the Garzas waived the argument on appeal because they did not specially except in the trial court.  Did the Garzas waive their right to contest the grounds of CTX's motion?

According to the Court, the Garzas did not need to specially except because special exceptions to summary judgment grounds are only required when the motion is ambiguous.  Here, the motion simply failed to identify and negate elements of each of the Garzas' claims, which is an issue that may be presented for the first time on appeal.

Here is the opinion.  

• Email This
• Print
• Comments
• Trackbacks

In its recent opinion in Perkins v. City of San Antonio, the San Antonio Court of Appeals stated "we disapprove of our conclusion in Wu [v. City of San Antonio],  regarding the applicable standard for reviewing the Board's orders." (emphasis added).  By way of background Wu adopted a hybrid standard of review for a challenge to an administrative order, concluding that the review was a substantial de novo review that did not preclude consideration of additional evidence in existence at the time of the administrative hearing, regardless of whether the evidence was introduced at the administrative hearing.  In Perkins, the same court (different panel) holds that a pure substantial evidence review applies so that only the factual record before the administrative body may be used in determining whether substantial evidence supports the administrative body's ruling.  The opinion in Perkins may be found at this link.

 Which standard controls future cases?  The Perkins panel doesn't overrule Wu, which would send a definitive message that Wu should no longer be relied upon.  Instead, the Perkins panel "disapproves" of Wu.  It may be that the Perkins panel did not simply overrule Wu out of respect for an entirely different panel of the same court.  Perkins is a perfect example of when en banc consideration is appropriate.  Generally, en banc consideration by an appellate court is disfavored, but Appellate Rule 41.2(c) explains that it should be used to maintain uniformity of the court's decisions.

• Email This
• Print
• Comments
• Trackbacks

How effective is a motion for summary judgment that has no evidence attached to it?  Not very.  Sometimes you can dodge a few bullets.  Ultimately, you will get hit.  That's what happened in the Dallas Court of Appeals' opinion in  American Board of Obstetrics and Gynecology, Inc. v. Yoonessi.

The American Board of Obstetrics and Gynecology ("ABOG"), a non-profit, sued one of its members, Mahmood Yoonessi, M.D., for breach of contract, abuse of process, and malicious prosecution.  This lawsuit was a response to lawsuits Yoonessi had filed against it in California and New York.

Yoonessi filed a traditional motion for summary judgment, but attached only ABOG's original petition as evidence.  The court was able to use ABOG's evidence attached in its response to dismiss the breach of contract and malicious prosecution claims.  However, Yoonessi was not so lucky with his abuse of process argument.

In the abuse of process argument, Yoonessi claimed that he used process to maintain a lawsuit "which is a proper use of service, regardless of the actual merits of the case."  But Yoonessi failed to provide any evidence that his use of process was proper.  Thus, the court of appeals reversed judgment on the abuse of process claim and remanded to the trial court for further proceedings. 

You may read this short opinion here.

• Email This
• Print
• Comments
• Trackbacks

When a party (or the party's attorney) does not receive actual notice of an adverse judgment within 90 days of that judgment, the party may make use of Texas Civil Procedure Rule 306a to extend deadlines for filing a motion for new trial or to appeal.  But its important that the party invoking Rule 306a file a sworn motion, obtain a hearing on the motion, and get a finding of the trial court as to the date the party (or the party's attorney) first received notice of the judgement.  The Waco Court of Appeals recently explained the consequences of the failure to do so in In the Matter of the Marriage of Rider & Rider.

After Beverly Jane Rider filed an appeal from a final decree of divorce, the clerk of the court noted that it appeared the notice of appeal was untimely.  Ms. Rider responded by pointing out that she did not receive a copy of the final decree until 29 days after it was signed and she filed a motion for new trial "pursuant to Rule 306a."  Noting that Ms. Rider never obtained a ruling on her motion, the court of appeals points out that she had not fully complied with Rule 306a(5), which requires a hearing, proof, and a ruling.  Accordingly, the court holds that the notice of appeal Ms. Rider filed was untimely and the court dismissed the appeal for lack of jurisdiction.  The opinion may be found at this link.

• Email This
• Print
• Comments
• Trackbacks

The San Antonio Court of Appeals has issued an interesting opinion in a mandamus proceeding involving what is described as an unsuperseded judgment.  In In re Romero, Gonzalez & Benavides, L.L.P., there was a dispute between the law firm of Romero, Gonzalez & Benavides (RG&B) and attorney Mark Cantu regarding the right to a portion of a settlement recovery.  The funds in question were placed into the registry of the court and the trial court subsequently ruled that the funds belonged to RG&B and signed a final judgment to that effect. 

After Cantu appealed, RG&B filed a motion seeking the release of the funds.  The trial court ruled that it would not release the funds while Cantu's appeal was pending.  RG&B filed a petition for writ of mandamus seeking to force the release of the funds.

The court of appeals holds that the trial court abused its discretion because Cantu had filed no supersedeas bond to suspend execution on the judgment.  Appellate Rule 24.1 allows for the filing of a cash deposit in lieu of a bond.   Cantu could have deposited one year's worth of post-judgment interest and court costs to be added to the existing funds on deposit with the court and arguably the judgment is fully suspended.   Or, the trial court could have ordered alternate or lesser security and held that the funds on deposit were sufficient to supersede the judgment.  I have not read the parties' mandamus briefs to know of any of this was tried or argued, but from the court of appeals opinion, it does not appear as the trial court treated its order as an order regarding supersedeas (reviewable by motion rather than mandamus) and it does not appear that the parties asserted that the trial court's order was an order relating to supersedeas.  Nonetheless, it seems as though Rule 24 provides a simple avenue for relief for Cantu.  The Court's opinion may be found here.

• Email This
• Print
• Comments
• Trackbacks

The Texas Supreme Court recently held that Rule 193.6 of the Texas Rules of Civil Procedure applies to summary judgment proceedings.  Thus, any discoverable information, including expert information under Rule 194, that has not been properly disclosed or supplemented, should be excluded.  The Court stated that "the 'hard deadline' established by the pretrial discovery rules ensures that the evidence presented at the summary judgment stage and the trial stage remains the same.  Accordingly, the 193.6 exclusionary rule applies equally to both proceedings."  This decision agrees with most courts of appeals that have addressed the issue except for Corpus Christi and Texarkana, both of which had declined to apply Rule 193.6 to summary judgment proceedings.  The Court's per curiam opinion in Fort Brown Villas III Condominium Ass'n, Inc. v. Gillenwater can be found at this link.

• Email This
• Print
• Comments
• Trackbacks

The Texas Supreme Court recently weighed in again on the enforceability of non-compete agreements under Texas law.  Specifically, the Court held that an employer need not expressly promise to provide confidential information to an employee in return for a promise not to disclose the information.  Instead, the Court held that an employer impliedly promises to provide confidential information "when the nature of the work the employee is hired to perform requires confidential information to be provided for the work to be performed by the employee..."  Because the non-compete was ancillary to the parties' otherwise enforceable agreement regarding confidential information, the non-compete was enforceable.  The Court's opinion in Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding can be found at this link.

• Email This
• Print
• Comments
• Trackbacks

This entry comes to us courtesy of Sim Israeloff.

Many elected officials in Texas, including most who are elected to city councils and school boards, serve as citizen volunteers without pay.  Newly elected officials are sometimes surprised to find that their actions and speech are now restricted by statutes such as the Texas Open Meetings Act (TOMA). The Fifth Circuit Court of Appeals has now weighed in on whether elected officials carrying out their official duties retain the same First Amendment protections on speech as private citizens.
 

• Email This
• Print
• Comments
• Trackbacks

The Dallas Court of Appeals has added another opinion to the stack of authority recognizing and applying the corporate fiduciary shield doctrine.  In Nichols v. Lin, Nichols brought suit for breach of contract against Tseng Lin, YJ USA, and others.  Nichols sought to hold Lin responsible for the breach on a theory of alter ego.  Lin filed a special appearance, which the trial court sustained.

In an interlocutory appeal, Nichols complained that the trial court abused its discretion in excluding evidence relating to his alter ego allegation.  He also argued that the special appearance should have been denied. 

In its review of the excluded evidence, the court of appeals concluded that there was no abuse of discretion because the evidence was not relevant to Nichols' argument that Lin was an alter ego.  As to the application of the fiduciary shield doctrine, the court observes that this doctrine protects a nonresident corporate officer or employee from a trial court's exercise of general jurisdiction over the individual when all of his contacts with Texas were made on behalf of his employer.  Here, the evidence demonstrated that Lin's contacts with Texas were all made on behalf of his corporate employer.  The court of appeals observes that proof the individual was an alter ego will defeat application of the fiduciary shield doctrine.   However, in this case, Nichols' citations to the record failed to support his written contentions with respect to alter ego.  Therefore, the court of appeals affirmed the trial court's order.  The opinion may be found at this link.

• Email This
• Print
• Comments
• Trackbacks

After the Texas Supreme Court adopted appellate rules eliminating the old publish/unpublish designations, the debate I heard from some members of the judiciary and practitioners was "how short can a Memorandum Opinion be?"   The Dallas Court of Appeals' Memorandum Opinion in In re Gullatt, appears to test the limits on brevity. 

Appellate Rule 47.1 requires that a court of appeals hand down a written opinion.  It further requires that the opinion must be "as brief as practicable" but it must "address every issue raised and necessary to final disposition."  Rule 47.4 allows the writing of a brief memorandum opinion "no longer than necessary to advise the parties of the court's decision and the basic reasons for it," but the condition on using a memorandum opinion is that the issues must be settled.

 Gullatt is a mandamus proceeding.  The opinion recites that "Relator contends the trial judge erred in not acting on his Application to Determine Heirship."  It represents that "all dispositive issues are clearly settled in law" and no facts are presented because they are "known to the parties."   And the court grants the petition.  So what's the precise legal issue?   Does a written opinion that gives only a thumbs up or thumbs down address every issue and give the basic reasons for the decision?  From a practitioner's standpoint, I can't tell what this opinion is deciding and what issue the court  declares to be "clearly settled in law."

The court's opinion may be found at this link. 

• Email This
• Print
• Comments
• Trackbacks

Must an appellant who seeks to appeal a trial court's order sustaining a challenge to the appellant's affidavit of indigency file a separate notice of appeal?  Answer:  It depends on which court of appeals the appeal is in.

The San Antonio Court of Appeals has held that it is not necessary for an appellant to file a separate notice of appeal.  However, in Basaldua v. Hadden, the court noted that its holding is at odds with the Corpus Christi Court of Appeals, the Texarkana Court of Appeals, and the Waco Court of Appeals--all of which require the filing of a separate notice of appeal.  The San Antonio Court of Appeals joins Amarillo in concluding that no separate notice of appeal is required.  This conflict in appellate decisions seems ripe for resolution by the Texas Supreme Court.

Although the court of appeals allowed Mr. Basaldua to challenge the order sustaining the challenge to his affidavit of indigency, the court upheld the trial court's order.   Noting that it appeared Mr. Basaldua had the capacity to make more income, the court held that the trial court had not abused its discretion in sustaining the contest to the affidavit of indigence.  The court's opinion may be found at this link.

• Email This
• Print
• Comments
• Trackbacks

The more time you spend studying City of Dallas v. Dallas Morning News, the more I.Q. points you lose.  This case may be more important for what it doesn't answer than for what you hope it will answer. 

The primary issue in this appeal is whether e-mails that are sent to and from private e-mail addresses of the Mayor and other city officials and which involve matters of official public business, are public information and subject to the Texas Open Records Act.

• Email This
• Print
• Comments
• Trackbacks

All those "whereas" clauses in congressional resolutions amount to nothing, according to the U.S. Supreme Court. 

In 1993, the U.S. Congress passed a joint resolution expressing its deep regret to native Hawaiians insofar as the United States' overthrow of the Kingdom of Hawaii.  Contained within the resolution was an apology to the Hawaiian people, which acknowledged that the Hawaiian people never directly relinquished their claims to their national lands to the United States.  Apparently, no good deed goes unpunished.

In reliance on the resolution, the Office of Hawaiian Affairs (OHA) laid claim upon certain property so as to preserve any native Hawaiian claims to ownership of the property.   The U.S. Supreme Court rejected OHA's claims, holding that nothing in the joint resolution showed an intent to create substantive rights.   The court reasoned that "whereas" clauses in legislation have no operative effect, and that the "whereas" clause in question demonstrated no intent to amend or repeal prior law.  As to other state-law arguments made by OHA, the court held that it had not authority to decide those questions or provide redress for them.

The court's opinion in Hawaii v. Office of Hawaiian Affairs, may be found at this link. 

• Email This
• Print
• Comments
• Trackbacks

On Friday, April 17th and Saturday, April 18th, the Texas Supreme Court Rules Advisory Committee will be meeting to discuss proposed changes to the Texas Rules of Procedure.  Among the proposed changes are changes that will permit electronic filings in the appellate courts.

For more information on the location and time of the meeting, click on this link.

For more information on the agenda and proposed text of the amendments, click on this link.

• Email This
• Print
• Comments
• Trackbacks

The United States Court of Appeals for the Fifth Circuit has reiterated the pleading standards applicable in federal court for securities fraud and for common-law fraud in Flaherty & Crimrine Preferred Income Fund Inc. v. TXU Corp.

Federal Rule of Civil Procedure 9(b) requires a pleader to state with particularity the circumstances constituting fraud or mistake.  The Fifth Circuit strictly interprets this requirement, and demands that a plaintiff specify (1) the statements alleged to be fraudulent, (2) the speaker, (3) when the statement was made, (4) where the statement was made, and (5) why the statement was fraudulent.  In Flaherty, the court reminds us that a plaintiff cannot satisfy the pleading requirements with global or group allegations such as "all defendants" made the fraudulent statement.  Flaherty further appears to impose a requirement of delineating whether the statement alleged is an affirmative misrepresentation or an omission.  Flaherty also discusses the type of evidence necessary to plead intent in a securities fraud case, which is a higher standard than common law fraud, but still subject to Rule 9(b).

• Email This
• Print
• Comments
• Trackbacks

The Beaumont Court of Appeals has held that the minimum amount in controversy necessary to invoke a district court's jurisdiction is $201.00.

In Acreman v. Sharp, the trial court dismissed Plaintiff Acreman's claims against an employee of the Texas Department of Criminal Justice because Acreman's petition asserted that the value of the property he was complaining of was $400.00.  The trial court concluded that the minimum amount in controversy to invoke a district court's jurisdiction must exceed $500.00.  Acreman appealed.

• Email This
• Print
• Comments (1)
• Trackbacks

The Beaumont Court of Appeals has held that a contractual waiver of jury clause does not extend to non-contractual claims brought against non-signatory joint tortfeasors or alleged conspirators.

In In re Wild Oats Markets, Inc., Kuykendahl-WP Retail, L.L.P. ("Kuykendahl") had a lease agreement with Wild Oats Markets, Inc., which contained a contractual waiver-of-jury-trial clause.  Kuykendahl brought suit against Wild Oats for breach of the agreement.  Kuykendahl also sued Whole Foods Market, Inc. for tortious interference with the lease and for engaging in a conspiracy with Wild Oats to commit fraud.

The trial court struck Kuykendahl's jury demand with respect to its claims against Wild Oats, but set Kuykendahl's claims against Whole Foods for a jury trial.  Wild Oats sought mandamus relief, asserting that the contractual waiver necessarily included Kuykendahl's claims against Whole Foods.  Noting that Wild Oats had not shown that Kuykendahl had waived its right to a jury trial on its tortious interference claim against Whole Foods (for conduct occurring prior to Whole Foods' merger with Wild Oats), the court of appeals denied Wild Oats' petition for writ of mandamus.   From the court's opinion, it is unclear how the trial court intended to try claims for fraud and conspiracy when part of them were to be tried to a jury and part were to be tried to the bench.  The court's opinion may be found at this link.

Update: Wilds Oats and Whole Foods (which was not a relator in the court of appeals) have now filed a petition for writ of mandamus in the supreme court. See Case No. 09-0278.  The supreme court has called for a response.

• Email This
• Print
• Comments
• Trackbacks

The United States Court of Appeals for the Fifth Circuit recently held that the United States Supreme Court's decision in Hall Street Associates v. Mattel  "restricts the grounds for vacatur" of an arbitration award and, thus, "manifest disregard for the law is no longer an indepdendent ground for vacating arbitration awards under the FAA."  Consequently, the only  bases for setting aside an arbitration award are (1) fraud or corruption in obtaining the award; (2) evident partiality by the arbitrator; (3) misconduct or misbehavior by the arbitrator; and (4) where the arbitrator exceeded its power.  See 9 U.S.C. sec. 10(a). 

In reaching its conclusion, the Fifth Circuit disagreed with decisions from the Sixth, Second, and Ninth Circuits holding that "manifest disregard" survived the Supreme Court's decision in Hall.  The Fifth Circuit noted the Supreme Court's "repeated statements [in Hall] that: 'We hold that the statutory grounds are exclusive.' "  As a result, the Fifth Circuit held that "manifest disregard of the law as an independent, nonstatutory ground for setting aside an award, must be abandoned and rejected."  The Court also expressly overruled any precedent to the contrary.  The Fifth Circuit's opinion in Citigroup Global Markets, Inc. v. Bacon is availble at this link.  

• Email This
• Print
• Comments
• Trackbacks

This week the federal Fifth Circuit Court of Appeals issued an opinion in connection with a Petition for Leave to Appeal solely to remind district judges (and presumably practitioners) to demonstrate that the standards governing interlocutory appeals under 28 U.S.C. Section 1292(b) have been met.

Section 1292(b) requires that a district court should state when it believes there is a question of controlling law in a case upon which there is a substantial ground for difference of opinion and upon which an immediate appeal would materially advance the resolution of the litigation.  In Linton v. Shell Oil Co., the district court denied Shell's motion for summary judgment and certified "the issues raised in the Motion for Summary Judgment" to the Fifth Circuit.  The Fifth Circuit noted that orders are certified, not issues; however, the court noted that it is helpful if the district court frames the controlling question.  The district court should also elaborate on why the question presented in the order is a controlling question and why there is a substantial ground for difference of opinion.

Of course, practitioners should be mindful of these requirements as well so that they can assist district courts in rendering orders in conformity with these instructions.  The Fifth Circuit's opinion may be found at this link.

• Email This
• Print
• Comments
• Trackbacks

I've wanted to write something about Boenig v. Starnair, Inc. since I first read it because I believe the analysis is incorrect. 

This case involves the intersection of the responsible third party statute and a statute of repose.

Boenig sued contractor Pulte in November 2005 for injuries she allegedly sustained when she fell through the attic floor of a home Pulte built.  On July 19, 2007, Pulte filed a motion for leave to designate Starnair as a responsible third party.  Starnair was a subcontractor that performed the heating, ventilation, and air conditioning installation in the home.  On August 23, 2007, Boenig filed her fourth amended petition in which she joined Starnair as a defendant.

Starnair moved for summary judgment in reliance upon the ten-year statute of repose set out in Civil Practice and Remedies Code Section 16.009.  The trial court granted the motion and Boenig appealed.

• Email This
• Print
• Comments
• Trackbacks

Can the non-movant in a summary judgment context use the movant's evidence (attached to support a traditional motion for summary judgment) to challenge no-evidence grounds for summary judgment on appeal?

According to the El Paso Court of Appeals, the answer is "no." 

• Email This
• Print
• Comments
• Trackbacks

The Dallas Court of Appeals' opinion in In re Berry leaves more questions than answers.

This is an appeal from probate court action in which Sue Berry brought suit against Comerica, H&R Block, Washington Mutual Bank and the executrix of Eugene Berry's estate for wrongful payment of checks.  Comerica filed a motion for summary judgment contending that the claims against it were barred because Ms. Berry did not report the unauthorized signatures within one year after the statement or items were made available to her, as required by Section 4.406(f) of the Texas Business and Commerce Code.  The trial court granted Comerica's motion for summary judgment and all other claims were dismissed without prejudice.  Ms. Berry appealed the summary judgment.

• Email This
• Print
• Comments
• Trackbacks

The San Antonio Court of Appeals has held that a party challenging a default judgment may well risk losing the opportunity to challenge the exercise of personal jurisdiction over him unless special precautions are taken.

In Boyd v. Kobierowski, Kobierowski, a Texas resident, sued Boyd, a California resident, in Texas for breach of contract, fraud, misrepresentation and DTPA violations.  All causes of action arose from the sale of a vehicle  Boyd sold to Kobierowski. 

Boyd did not answer the suit and Kobierowski took a default judgment against Boyd.  Boyd subsequently filed a restricted appeal to challenge the default judgment.  He prevailed on appeal because of a defect in personal service.  See Appeal No. 04-06-0041-CV. 

On remand, Kobierowski repeatedly tried to get Boyd to answer the suit, but Boyd did not respond.  Kobierowski then took a second default judgment.  Boyd subsequently filed a special appearance and a motion for new trial subject to the special appearance.  The trial court denied the special appearance, but granted the motion for new trial.  In a second (interlocutory) appeal, Boyd argued that it was error to deny his special appearance.

• Email This
• Print
• Comments
• Trackbacks

Apparently the Dallas Court of Appeals is Pro-choice.  At least when it comes to a Plaintiff's choice of forums.

In Signature Management Team, LLC v. Quixtar, Inc., the Dallas Court of Appeals determined that the trial court abused its discretion when it dismissed a case under the doctrine of forum non conveniens even though some substantive and probative evidence existed to support the court's decision.

• Email This
• Print
• Comments
• Trackbacks

The simple answer is yes, they do. See Texas Rule of Civil Procedure 162.

But the defendant's pleading must allege a cause of action independent of the plaintiff's claims on which the defendant can recover.  If a defendant fails to do so, then the plaintiff has an absolute right to a non-suit of all claims, as the Dallas Court of Appeals demonstrated in In re Metropolitan Lloyds Insurance Company of Texas.

• Email This
• Print
• Comments
• Trackbacks

The Tyler Court of Appeals recently held that evidence of medical expenses billed by medical providers is legally insufficient evidence of the amount of expenses "actually paid or incurred."  Plaintiff sued the defendant for injuries sustained in an auto accident.  Prior to trial, the plaintiff filed a motion to exclude any evidence of reductions, insurance payments, or other "evidence of collateral sources."  At trial, the plaintiff introduced evidence of medical expenses billed by medical providers in the amount of $110,069.12.  The defendant was not allowed to rebut this evidence with evidence of reductions even though it was undisputed that the amount of expenses actually paid after reductions was $14,482.02.  The jury found for plaintiff and awarded damages in the full amount requested by the plaintiff.  The defendant moved for jnov arguing the plaintiff had offered no evidence on the correct measure of damages.  The trial court denied defendant's motion and entered judgment on the jury's verdict. 

On appeal, the court held that CPRC sec. 41.0105 "not only limits the amount of damages recoverable, but also affects the relevance of evidence offered to prove damages."  The court further held that medical bills reflecting only the amount "initially incurred" are irrelevant and should be excluded at trial.  Consequently, the court held that the improperly admitted medical bills were legally insufficient evidence of the amount actually paid or incurred by the plaintiff.  However, because the medical bills constituted more than a scintilla of evidence to support at least some of the damages and the amount actually incurred was undisputed, the court suggested a remittitur in the proper amount amount of damages.  The court's opinion in Escabedo v. Haygood can be found at this link.

• Email This
• Print
• Comments
• Trackbacks

The Houston Court of Appeals (14th) recently held that a party may not avoid exclusion of an undisclosed expert by simply calling the witness to rebut previous testimony.  Appellee failed to timely disclose an expert.  The trial court allowed the expert to testify at trial over appellant's objection.  On appeal, the appellant argued that the witness should have been excluded pursuant to TRCP 193.6 because he was not designated timely.  The appellee argued the witness was only called to rebut appellant's expert testimony.  The court of appeals held that although a party need not designate a rebuttal or impeachment witness whose testimony could not reasonably be anticipated before trial, the expert's testimony went to damages that were "a focal point of the lawsuit."  The Court held the witness' testimony could have been anticipated and, thus, the witness should have been disclosed.

Next the court of appeals considered whether the admission of the expert testimony was harmful error.  Because there was no other evidence on the issue, the Court held that the evidence was not cumulative, and the admission probably resulted in an improper judgment.   Accordingly, the court of appeals court reversed the award of damages and remanded the case for a retrial of damages only.  The court of appeals opinion in Jurek v. Herauf can be found at this link. 

• Email This
• Print
• Comments
• Trackbacks

If the Eleventh Amendment to the U.S. Constitution bars your suit against a State, maybe the U.S. Government can bring the suit for you.  That's what happened in EEOC v. Board of Supervisors for the University of Louisiana System. 

Dr. Van McGraw initially filed an age discrimination suit against the University of Louisiana System ("ULS"), after ULS implemented a new policy prohibiting the re-employment of retirees on a regular full-time basis.  McGraw was ultimately unsuccessful.

After McGraw unsuccessfully attempted to be rehired by ULS as an associate dean or as a professor, he filed a discrimination charge with the EEOC.  The EEOC took up his claim and filed an action against ULS seeking injunctive relief and relief for the benefit of McGraw.  ULS filed a motion for summary judgment and a motion to dismiss, arguing that the Eleventh Amendment barred the proceedings.  After the district court denied the motions, ULS filed an interlocutory appeal.

• Email This
• Print
• Comments
• Trackbacks

Assume a foreign insurance company provides auto insurance cards that specifically cover accidents both in the home country and the United States.  If a car accident occurs in Texas, can the insurer avoid personal jurisdiction in the suit by alleging that it did not purposefully avail itself to Texas?

This was the issue before the Dallas Court of Appeals in Assurances Generales Banque Nationale v. Dhalla.

• Email This
• Print
• Comments
• Trackbacks

The Houston First District Court of Appeals has held that an order for temporary injunction must be supported by pleading.

In Easton v. Brasch, the Eastons filed suit against Brasch and filed pleadings for a temporary restraining order, a temporary injunction, and a permanent injunction.  After a hearing on the temporary injunction, the trial court rendered a mutual injunction that was binding on both Michael Easton and Brian Brasch.  The Eastons filed an interlocutory appeal and complained that the trial court had abused its discretion because the injunction in favor of Brasch was not supported by a pleading verified by affidavit.  The appellate court agreed, noting that Civil Procedure Rule 682 requires the existence of a pleading verified by affidavit.  The Court's opinion may be found here.

• Email This
• Print
• Comments
• Trackbacks

The Austin Court of Appeals has held that a court of appeals judgment that affirms the trial court's judgment is the equivalent of a judgment rendered against the appellants.  In Kleas v. BMC West Corp., the Court construes TRAP 43.5 regarding judgments against sureties and holds that its judgment affirming the trial court's judgment is the same as a judgment against the appellants.  The Court's supplemental opinion may be found at this link.

• Email This
• Print
• Comments
• Trackbacks

After reading Combs v. Kaufman County, I can't help but wonder if there is something missing from the Court's opinion or if the opinion contains an error.  Nontheless, I was surprised to learn about a rarely-invoked provision of the Texas Constitution that allows parties to a suit to pick their own judge.

Article V, Section 16 of the Texas Constitution  provides that when the judge of a county court is disqualified, "the parties interested may, by consent, appoint a proper person to try said case."  In Combs, the presiding judge of the Kaufman County Constitutional Court apparently disqualified herself from hearing a guardianship for Wallace Darst.  [Note, the opinion uses the term "recused," which has a different legal meaning, but from the facts, it appears the Court meant to use the term "disqualified"].   The parties subsequently asked Judge Glen Ashworth, who was then district judge for the 86th Judicial District Court, to preside over the guardianship.  Here, the opinion is somewhat confusing or inconsistent as to whether Judge Ashworth merely presided as judge for the constitutional county court or whether the case was treated as having been transferred to the 86th District Court, with Judge Ashworth presiding as judge of that court.  Judge Ashworth subsequently awarded the guardian (Combs) a fee of $143,168.95 and that order was not appealed.

• Email This
• Print
• Comments
• Trackbacks

The Dallas Court of Appeals recently had an opportunity to review and apply the mootness doctrine with respect to appeals and, in the process, expound on the rarely invoked exception to mootness known as "capable of repetition, yet evading review" (CORYER).  In this case, the Plaintiff sought a temporary injunction and declaratory judgment that Duncanville's ordinance prohibiting the operation of Plaintiff's "sex club," known as the Cherry Pit, as a public nuisance.  The trial court denied Plaintiff's request for a temporary injunction and the Plaintiff filed an interlocutory appeal.  While the case was on appeal, Duncanville repealed and amended the challenged ordinance.  Duncanville moved to dismiss the appeal because it was moot.

The Court first addressed mootness generally by stating that "a case on appeal is moot if: (1) there are no live controversies between the parties; and (2) any decision rendered by the appellate court would be an advisory opinion."  The Plaintiff argued that his case fell into the exception to mootness known as CORYER.  The Court rejected this argument and held that: 

"This exception only applies in rare circumstances  . . . .  It is limited to situations where the following circumstances are simultaneously present: (1) the challenged action was in its duration too short to be litigated prior to its cessation or expiration, or the party cannot obtain review before the issue becomes moot; and (2) there is a reasonable expectation that the same complaining party would be subject to the same action again." 

Because there was "no reasonable expectation" that Plaintiff would "suffer the same alleged wrong" by enforcement of the repealed ordinance and would have "ample time to obtain judicial review" of the new ordinance,  the Court held that the CORYER exception did not apply and dismissed the appeal as moot.  The Court's opinion in Trulock v. CIty of Duncanville can be found at this link.     

• Email This
• Print
• Comments
• Trackbacks

I ran across this interesting opinion from the Federal Third Circuit Court of Appeals.  I am reporting on it because the Fifth Circuit apparently has not yet commented on this damage recovery and the issue could impact Texas state law.

In Eshelman v. Agere Systems, Inc., No. 05-4895, the Third Circuit Court of Appeals holds that a plaintiff in a disability discrimination case may recover an additional sum of money to pay for taxes that the plaintiff might be subject to as a result of receiving an award for back pay.  Back pay awards are taxable in the year paid.  To the extent such an award might push the plaintiff into a higher tax bracket causing the plaintiff to pay additional taxes, the Court holds that the plaintiff can recover an additional sum to compensate her for that additional tax burden.  In arriving at this result, the Court joins the Tenth Circuit in that result.  The District of Columbia Circuit reached a contrary result.

As part of its reasoning, the Third Circuit Court observes that the Americans with Disabilities Act  gives the courts broad equitable powers to effectuate the purpose of making the plaintiff whole.  This reasoning may be critical to the Court's logic and to its power to fashion this remedy.  Given that the Texas Commission on Human Rights Act is largely patterned after federal law, it is conceivable that a similar argument might find its way into Texas courtrooms.  The opinion may be found at this link.

• Email This
• Print
• Comments
• Trackbacks

The Houston Fourteenth District Court of Appeals recently held that the Property Owner Rule applies to corporate owners.  The Property Owner Rule is the rule of law that allows a property owner who is familiar with the market value of his property to testify regarding the market value, even if he is not qualified as (or designated as) an expert.

In Speedy Stop Food Stores, Ltd. v. Reid Road Municipal Util. Dist. No. 2, Justice Kem Frost, writing for the majority, observes that the Texas Supreme Court has not addressed the issue of whether a corporate owner may attest to the market value of its property and the courts of appeals are split on the issue.  The majority opinion asserts that the Waco and Corpus Christi appellate courts permit corporate owners to testify to market value, while Fort Worth does not.  The Houston Fourteenth Court of Appeals holds that the Property Owner Rule applies to corporate entities where there is a representative familiar with the market value of the property.  The majority opinion may be found at this link.

Justice Seymore writes a dissent asserting that existing Texas Supreme Court law controls and argues that a corporate representative is not the "owner."  The dissent further challenges the majority's characterizations of the Corpus Christi and Waco opinions on the subject matter.  The dissent maybe found at this link.

Given the dissenting opinion, an argued conflict among the courts of appeals, and the lack of a clearly dispositive opinion from the Texas Supreme Court, this case may bear following should a petition for review be filed.

• Email This
• Print
• Comments
• Trackbacks

A court appointing a receiver has exclusive jurisdiction over property subject to the receivership. When does the court's exclusive jurisdiction end? The court must either relinquish its jurisdiction or order the receiver to restore the property to those entitled to it.

Proper relinquishment of exclusive jurisdiction was the main issue of a recent San Antonio Court of Appeals case: Chimp Haven, Inc. v. Primarily Primates, Inc. You can read the opinion here.

• Email This
• Print
• Comments
• Trackbacks

 Void orders of a trial court may occur in a number of different circumstances.  The Corpus Christi Court of Appeals discusses one such circumstance in Silguero v. State.

The trial court dismissed the State's action for forfeiture for want of prosecution and the State timely filed a motion to reinstate, but the motion was not verified.  More than 30 days after the dismissal, the trial court granted the motion to reinstate.  The trial court subsequently rendered a judgment of forfeiture and the Silgueros filed an appeal as well as a petition for writ of mandamus, each asserting that the trial court's order of reinstatement was void.

• Email This
• Print
• Comments
• Trackbacks

Dallas Court of Appeals.

Urban Television Network Corp. v. Creditor Liquidity Solutions, L.P., No. 05-07-01629-CV.

Westar Satellite Services, L.P. and Urban Television Network Corporation entered into a five year services agreement. The agreement contained a liquidated damages clause. After two years, Urban Television defaulted on its obligations and Westar sued to enforce the liquidated damages clause.

Urban Television tried to invalidate the liquidated damages clause by claiming it was an unenforceable penalty. A line of cases starting in the 1970’s allowed parties to invalidate liquidated damage clauses if they applied equally to the breach of trivial clauses as well as material clauses. Thus, attorneys now search a contract for any minor promise that could potentially trigger liquidated damages in hopes of declaring the provision a penalty.

The usual target of these searches is a provision usually found in contracts that provides for termination for basically any promise made in the contract. These general provisions are put in contracts to protect the drafting attorney from inadvertently failing to specify an important promise that could trigger liquidated damages. However, such provisions are so all-encompassing that any minor promise in the contract could be construed to trigger liquidated damages. Thus, attorneys would get rulings invalidating the clauses where they could find broad termination clauses that would include minor promises.

In this case, the Westar contract avoided such a problem by inserting “material” into the termination clause so as to read ‘either party fails to perform or observe any material term or obligation…” (Emphasis added). By adding “material,” the termination clause excluded any trivial promises that may have been in the contract.  That key distinction made the liquidated damages provision enforceable and allowed Westar to win summary judgment in the trial court and affirm that judgment on appeal.

The opinion can be read here.

• Email This
• Print
• Comments
• Trackbacks

The Dallas Court of Appeals recently held that a provision calling for application of the Texas General Arbitration Act necessarily excludes application of the Federal Arbitration Act.  First, the Court held that because the motion to abate was made under  the FAA, the Court had jurisdiction to review the trial court's order by mandamus.  Next, the Court acknowledged the Texas Supreme Court's test that a general choice of law clause will not be read to exclude federal law unless the clause "specifically excludes the application of federal law."  Third, the Court acknowledged that the FAA generally controls transactions involving interstate commerce.  Lastly, the Court held that the parties excluded application of federal law by agreeing that the Texas General Arbitration Act applied.  The Court noted that a general choice of law provision does not specifically exclude  federal law because "the FAA was part of the substantive law of Texas."  Nevertheless, by naming the Texas Act, the parties excluded the FAA.  The Court's opinion in In re Olshan Foundation Repair Co., L.L.C. can be found at this link.

• Email This
• Print
• Comments
• Trackbacks

In probate proceedings it is not always clear when the court has rendered an appealable order.  Probate proceedings can produce multiple final, appealable orders.   The San Antonio Court of Appeals recently addressed one of those circumstances in In re Guardianship of Glasser. 

In Glasser, the Probate Court appointed litigation counsel to help an Attorney Ad Litem in a guardianship proceeding.  The court's appointment order approved employment of litigation counsel and ordered that costs associated with the representation would be paid by the estate after being presented to the court and approved.  The court subsequently signed two orders approving fees and a final order at the conclusion of the proceeding approving fees and discharging the attorney ad litem and the litigation counsel.  The temporary guardian appealed the fee orders and the ad litem and litigation counsel sought dismissal, contending that the appeal was untimely because the court's initial orders of appointment and approval of fees were final, appealable orders at the time they were signed. 

The Court of Appeals disagreed, noting that the order of appointment simply set the stage for what followed and did not resolve a particular phase of the case.  The parties and the court understood and intended that there would be interim fee awards and that all awards were subject to a final hearing.  Accordingly, the interim orders were not final and appealable. 

• Email This
• Print
• Comments
• Trackbacks

The Houston Fourteenth District Court of Appeals has held that a party may recover attorney's fees that were incurred by another party prior to the date the first party was served in the lawsuit.  In Clearview Properties, L.P. v. Property Texas SC One Corp., Clearview had litigated claims against Defendant Triple Net and others.  Later, as the discovery period was nearing completion, Clearview joined Defendant TRL, which retained the same attorney as Triple Net.  The trial court allowed TRL to recover attorney's fees that Triple Net incurred prior to the time TRL was joined and Clearview complained on appeal.

The court of appeals overruled Clearview's complaint regarding TRI's recovery of fees Triple Net incurred.  The Court reasoned that TRL benefitted from some of the discovery work product and other work its counsel had already done for Triple Net, which saved on the need to conduct additional discovery, etc. for TRL.  The Court held that this result is supported by the Supreme Court's opinion in Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299 (Tex. 2006).

• Email This
• Print
• Comments
• Trackbacks

The Amarillo Court of Appeals' opinion in Block v. Mora could be a law school exam question.   The opinion may be especially  important to jury charge junkies.  Here are the essential facts:

Plaintiff places a spare tire on top of four 5-gallon buckets of hydrolic oil in the bed of his pickup truck.  He does not secure the tire.  Later that day, Defendant pulls her vehicle in front of Plaintiff's pickup truck, causing her to collide with the front end of his truck.  On impact, the spare tire is propelled forward through the truck's rear window, stricking Plaintiff in the back of the neck and shoulder and causing him injury.  Defendant admits that she was driving her mother's vehicle without permission, she had no driver's license, and the accident was her fault.

Plaintiff sues Defendant and Defendant asserts the affirmative defense of contributory negligence.  The trial court submits the following jury question:

Did the negligence, if any, of those named below proximately cause the injuries, if any, to Defendant?
Answer “Yes” or “No” for each of the following:
a. Defendant _______________
b. Plaintiff _______________
 

The jury answers "Yes" for Plaintiff and "No" for Defendant and the trial court renders a take-nothing judgment.  On appeal, Plaintiff complains that his negligence should not have been submitted because there was no evidence he was contributorily negligent.

• Email This
• Print
• Comments
• Trackbacks

The Waco Court of Appeals recently held, once again, that parties should obtain written orders on objections to summary judgment evidence in order to preserve error for review on appeal.  The Court went on to analyze when rulings are implicit and held that while rulings can be inferred, they can only be inferred from the record of which the docket sheet is not a part.  As a result, the Court treated the objections as not having been ruled upon.  The Court's opinion in Willis v. Nucor Corp. can be found at this link.

• Email This
• Print
• Comments
• Trackbacks

The Houston Fourteenth District Court of Appeals highlighted a split of authority in the courts of appeals regarding waiver of immunity in the Texas Whistleblower Act.  In Galveston ISD v. Jaco, the Court considered the question of whether immunity from liability is coextensive with immunity from suit under the Whistleblower Act.  The Court observed that the San Antonio Court of Appeals, the Amarillo Court of Appeals, and the Waco Court of appeals each have treated the elements of a whistleblower claim as jurisdictional.  However, the Houston First Court of Appeals, the Austin Court of Appeals, the Dallas Court of Appeals, and the Corpus Christi Court of Appeals each have concluded that the elements of a claim are not jurisdictional.  The Fourteenth Court of Appeals joined the latter group and held that waiver of immunity from suit is not dependent upon the merits of the claim.  The Court went on to hold that the trial court had not erred in denying the school district's plea to the jurisdiction. The Court's opinion may be found at this link.

In light of the split of authority, this issue would seem to be ripe for resolution by the Texas Supreme Court.   And it appears the supreme court may address this issue in State of Texas v. Lueck, No. 06-1034.  The Court has granted the petition for review and this issue is one of two presented.  The case was argued November12, 2008.  Briefs in the case may be found at this link.  The oral argument may be found at this link.

• Email This
• Print
• Comments
• Trackbacks

Does a party waive its right of appellate complaint by failing to bring an interlocutory appeal when a right of interlocutory appeal exists?  At least one court of appeals has answered that question in the affirmative and one court has answered that question in the negative.  It now appears that the Dallas Court of Appeals may have implicitly held that an interlocutory appeal is required. 

In 2007, in Matis v. Golden, 228 S.W.3d 301, 305 (Tex. App.--Waco 2007, no pet) , the Waco Court of Appeals considered an appeal challenging the denial of a special appearance.  Although there is a statutory right of interlocutory appeal under Texas Civil Practice and Remedies Code Section 51.014(a), the appellant did not bring an interlocutory appeal, instead waiting until the conclusion of the whole case.  Waco considered whether the complaint was waived by virtue of the failure to bring an interlocutory appeal and concluded that there was waiver.  The majority's opinion may be found at this link.  Chief Justice Tom Gray's dissent may be found at this link. 

The Austin Court of Appeals expressly rejected Waco's approach in GJP, Inc. v. Ghosh, 251 S.W.3d 854, 866-67 (Tex. App.--Austin 2008, no pet.).  The court's opinion may be found at this link.  

The Dallas Court of Appeals may have joined Waco's view.  In TCI West End, Inc. v. City of Dallas, TCI brought an interlocutory appeal challenging the trial court's orders granting pleas to the jurisdiction filed by the City of Dallas and the Texas Historical Commission.  As to the Texas Historical Commission, the trial court had granted pleas to the jurisdiction with respect to 3 of TCI's claims.  In its interlocutory appeal, apparently TCI challenged the trial court's order with respect to 2 of the claims it asserted against the City, but TCI did not challenge the dismissal of its claim against the City under the Texas Private Real Property Rights Preservation Act.  With respect to this latter unchallenged ruling, the court affirmed the dismissal, effectively precluding TCI from challenging the dismissal of that claim at the conclusion of the case.  In support of its affirmance, the Court cites as an example Freeman v. Stephens Prod. Co., 171 S.W.3d 651, 657 (Tex. App.--Corpus Christi 2005, pet denied).  However, Freeman is not an interlocutory appeal.

Assuming the Dallas Court of Appeals intended to find waiver of a challenge to the ruling on the Texas Private Real Property Rights Preservation Act claim, one might distinguish TCI on the basis that it involves a circumstance in which the appellant actually invoked its interlocutory appellate rights, and having done so, the appellant might be expected to challenge all rulings over which the appellate court would then have jurisdiction.  The TCI opinion may be found at this link.

• Email This
• Print
• Comments
• Trackbacks

In what appears to be a case of first impression, the Dallas Court of Appeals held that sections 33.012(a) and 41.0105 of the Civil Practice and Remedies Code should be harmonized by applying section 33.012(a)'s "damage" reduction before section 41.0105's "recovery" limitation.  In an opinion by Justice Moseley, the Court reasoned that because section 33.012(a) applies to the assessment of damages by the jury, and section 41.0105 applies to recovery of damages by the claimant, section 33.012(a) should be applied first.  In addition to the distinction between damages and recovery, the Court relied on section 41.0105's introductory phrase, "in addition to any other limitation under law" to support its holding that section 41.0105 gets applied last. 

The order of application can have significant consequences.  In this case, the jury found damages of $89,000, but found that the plaintiff was responsible for 50% of his damages.  Plaintiff had actually incurred just over $45,000 in medical expenses.  The trial court reduced the damages assessed by 50% resulting in damages of $44,500.  Since this amount was less than the medical expenses actually incurred, section 41.0105 did not apply.  Had the trial court applied section 41.0105 first, the damages would have been reduced to about $45,000, which would have been subject to further reduction by 50% under section 33.012(a).  The result would have been a judgment for $22,500 instead of $44,500, or as the Court notes, a $22,000 difference.  The Court's opinion in Irving Holdings, Inc. v. Brown can be found at this link.

• Email This
• Print
• Comments
• Trackbacks

The San Antonio Court of Appeals recently held that the two-year statute of limitations for health care liability claims in section 74.251 of the Civil Practice and Remedies Code cannot be extended by any other law, including section 33.004(e).  The Court focused on the unambiguous language of section 74.251 that the two-year statute applies "notwithstanding any other law."  Obviously, section 33.004(e) constitutes another law.  Consequently, the Court held that section 33.004(e) cannot be used to extend the two-year statute of limitations on health care liability claims.

Justice Simmons concurred and noted in her opinion that this ruling, while statutorily correct, creates an imbalance in the third-party designation practice created by the legislature and implored the legislature to correct the problem.  Justice Simmons' concerns are well-founded, especially since a defendant does not have to designate responsible third parties until very late in the case under section 33.004(a) (sixty days prior to trial date).  Assuming a plaintiff filed suit within one year of injury, a defendant's deadline to designate responsible third parties would almost certainly be later than two years after the plaintiff's injury.  As a result, claims against a designee joined by the plaintiff would be subject to the two-year statute  of limitations for health care liability claims.  As her concurrence explains:

The designation of responsible third parties within the proportionate responsibility framework developed by the Legislature was balanced. The defendant was given more latitude to designate time-barred responsible third parties and the claimant was given a counterbalancing right to join the designees in the suit. The application of section 74.251 to remove the plaintiff’s ability to join the designated responsible third party results in an imbalance in the framework. There is no deterrent to designating as many time-barred responsible third parties as possible, and no incentive for such designees to vigorously contest responsibility. In essence, the plaintiff is left in the position of having to prove the liability of the party defendant while at the same time defending the empty chair designees. The Legislature developed the proportionate responsibility framework with checks and balances to preclude such an unfair result, but it may not have considered the impact of section 74.251 which bars plaintiff’s statutory right to join a time-barred responsible third party in a health care liability case. Unfortunately for proportionate responsibility, without further clarification from the Legislature, there is no check and the balance is gone.

The Court's opinion in Kimbrell v. Molinet can be found at this link.  Justice Simmons' concurrence can be found at this link.

• Email This
• Print
• Comments
• Trackbacks

"A dissent does many things—it pinpoints perceived faults in the Court’s opinion, it speaks to a future Court, it may suggest a legislative fix—but it is not the law." In his dissenting opinion, Chief Justice Jefferson argues that stare decisis mandates that the majority not adopt his dissent in a previous case.

Six years ago by a vote of 5-4, the Texas Supreme Court held in Continental Casualty Co. v. Downs that a worker's compensation carrier had seven days to contest compensability of a worker's injury under section 409.021(a) of the Workers’ Compensation Act ("Act"). Nine months later, the Texas Legislature amended the Act to allow sixty days to contest compensability. In this case, the petitioner's argued that because the Texas Worker's Compensation Commission always construed section 409.021 to allow sixty days and the Court's opinion in Downs was only in effect for one year, Downs should be reversed. The majority agreed. 

Chief Justice Jefferson's dissent, however, argues that Downs is good law despite the fact that he authored the dissent. Chief Justice Jefferson makes a powerful case relying primarily on two grounds. First, noting that its decisions apply retroactively unless special circumstances exist (not present here), the Court in construing the Act was simply exercising its duty under Marbury v. Madison to say what the law is and has been since its passage. Second, Chief Justice Jefferson argued that the "democratic process generally works as intended." Responding to a potentially incorrect interpretation of the Act, the legislature amended the Act. But in a key provision, the legislature expressly provided that the amendment apply prospectively, thus signaling that the legislature was not correcting the Court's opinion in Downs.

Though I'm sure it has happened before, it marks the first time I have seen a dissenting judge argue against adoption of his dissent in a subsequent case. The Court's majority opinion in Southwestern Bell Tele. Co. v. Mitchell, can be found at this link. Chief Justice Jefferson's dissent can be found at this link.

• Email This
• Print
• Comments
• Trackbacks

In a 6-3 opinion, the Texas Supreme Court held that requests for admissions sent to an insurance carrier in one capacity cannot be used against it in different capacity. USF&G appeared in two capacities represented by two different law firms--as a defendant to the insured's claim under the underinsured motorist policy and as subrogee to recover funds from the plaintiff. Plaintiff served requests for admission on the firm representing USF&G as subrogee, not as defendant. The Court stated:

Requests for admission are a tool, not a trapdoor. [Plaintiff's] attorneys knew perfectly well that defendant USF&G was denying underinsured coverage. Accordingly, they are not entitled to use a response against it when they sent it to the law firm representing it in a different capacity.

The majority opinion in United States Fidelity and Guaranty Co. v. Goudeau can be found at this link. The dissent can be found at this link.

• Email This
• Print
• Comments
• Trackbacks

Ever wonder what it takes to get an Appellant's appeal dismissed?  The Dallas Court of Appeals has given us the answer in at least two circumstances, one involving defective briefing and one involving a failure to make arrangements to pay for an appellate record.

In Bridwell v. McMillin, the Court granted what appears to be a 60-day extension of time to file an Appellant's Brief.  Later, the Court granted a second extension of time to file the Appellant's Brief--this time for 30 days.  The Appellant filed his Appellant's Brief 9 days early, but it contained a number of briefing deficiencies.  The Court ordered the Appellant to correct the briefing deficiencies within 10 days or his appeal would be dismissed.  By letter, the Appellant requested that the Court treat his defective brief as his amended brief--in effect refusing to correct the deficiencies.  In response, the Appellee moved to dismiss the appeal for non-compliance with the Court's order.  The Court granted the motion to dismiss.  The Court's Memorandum Opinion in Bridwell can be found at this link.

• Email This
• Print
• Comments
• Trackbacks

If you've got a venue selection clause and you are wondering whether you can file in state or federal court, or whether you can remove a state-filed case to federal court, you might look at the Fifth Circuit's opinion in Alliance Health Group LLC v. Bridging Health Options LLC.

The venue clause in this case  provided that "exclusive venue for any litigation related hereto shall occur in Harrison County, Mississippi."  The Court held that the particular language of this clause and the fact that Harrison County, Mississippi has a federal courthouse in that county permits venue in federal court.  Significantly, the Court discusses a number of other permutations to the language in venue clauses and draws distinctions that may be of use to practitioners.

For your convenience, I've extracted from the court's opinion its commentary on some of the permutations of venue selection language and what result attaches to the language.

• Email This
• Print
• Comments
• Trackbacks

In an interesting opinion regarding dominant/servient jurisdiction and abatement, the Houston (First) Court of Appeals made this observation regarding the proper relief on a motion to abate:

Generally, the proper relief on a motion to abate on the ground of dominant jurisdiction is abatement.   . . . However, there is also authority that that if a party files a plea in abatement . . . the subsequent case must be dismissed.  The Texas Supreme Court has noted the split in authority , but has not resolved it.

Here, the trial court dismissed the case, but the court of appeals did not have to address the proper remedy because the plaintiff did not challenge the dismissal.

I wonder whether this quandry can be resolved by analyzing whether the claims asserted in the subsequent lawuit can and should have been asserted in the first suit.  In other words, the answer may depend on whether res judicata would apply in the subsequent lawuit.  If so, then dismissal may be proper if for no other reason than to require the plaintiff to bring the claims in one suit.  The court of appeals' opinion in French v. Gilbert can be found at this link.

• Email This
• Print
• Comments
• Trackbacks

The Dallas Court of Appeals recently held that CPRC 12.002 prohibiting use of a fraudulent court record or lien requires evidence of intent to cause harm at the time of filing the alleged fraudulent record or lien. 

In this case, the Plaintiff argued that Defendant's (an attorney) knowledge of lien law satisfied the knowledge element; and "common knowledge" that interfering with a person's real property rights will cause harm to that person satisfied the intent to cause harm element. 

The Court disagreed and, invoking the "equal inference rule," held that the evidence was also consistent with no intent to cause harm.  The Court also rejected Plaintiff's argument that failing to remove the lien once notified of its invalidity violated 12.002 and demonstrated an intent to cause harm by citing precedent that requires intent to cause harm be present at the time the lien or court record is filed.  The Court's opinion in Aland v. Martin can be found at this link. 

• Email This
• Print
• Comments
• Trackbacks

The U.S. Supreme Court has agreed to consider the case of Caperton v. A.T. Massey Coal Company, involving a judicial recusal in West Virginia where judges are elected.  The precise question presented is "whether Justice Benjamin's failure to recuse himself from participation in his principal financial supporter's case violated the Due Process Clause of the Fourteenth Amendment."  Factual background indicates that Justice Benjamin challenged incumbent Justice Warren McGraw in the 2004 elections, and during that election cycle the CEO of A.T. Massey Coal Company gave approximately $3 million dollars in direct and indirect contributions to a fund opposing reelection of Justice McGraw, who eventually lost the election.  Some years later, A.T. Massey Coal sought review by the state supreme court of a $50 million verdict against it.  Justice Benjamin declined to recuse himself.   The case has not yet been set for argument.

This case bears watching as it could impact recusals in Texas and other states that elect members of the judiciary.

For further discussion of this case, go to SCOTUSblog.

• Email This
• Print
• Comments
• Trackbacks

Cleantech filed a suit on sworn account on July 10, 2007, against Eugene Owens.  On August 13, 2007, Mr. Owens handwrote and signed a letter to the court that stated "Please be advised I am employing an attorney for case number 07-1267-336."  Mr. Owens included his address on the letter, but he did not include a verfied affidavit as Tex. R. Civ. P. 93(10) requires.  Cleantech moved for a no-answer default judgment, which the court granted.

Did the handwritten and signed letter without the verified affidavit constitute an answer sufficient to defeat the no-answer default judgment?

According to the Dallas Court of Appeals, yes.

In Owens v. Sumola Investments, Inc., the court held that the letter was defective, but still constituted an answer sufficient to preclude a no-answer default judgment.  The Court did note that such a letter (without the verified affidavit) is ripe for summary judgment because it is prima facie evidence of a debt.  Nevertheless, Texas law indicates that "a letter from a pro se defendant to the district clerk that confirms receipt of the citation and provides the defendant's current address is sufficient to constitute an answer."  A copy of the court's opinion can be found at this link.

• Email This
• Print
• Comments
• Trackbacks

The Fort Worth Court of Appeals issued a couple of opinions in Young v. Thota addressing an alleged jury charge error.  In this medical negligence case, the alleged charge error relates to whether the trial court should have submitted an issue asking whether the plaintiff was contributorily negligent or whether the plaintiff's acts raised mitigation of damages questions.  The majority concludes that it was error to submit the plaintiff's contributory negligence, while the dissent argues that it was proper to submit the question.  This discussion in itself may merit further review.

Perhaps the more interesting disagreement between the majority and the dissent relates to the analysis of harmful error.  The majority concludes that harm occurred because of the submission of an improper contributory negligence question along with an improper inferential rebuttal instruction on new and independent cause.  The dissent argues that it is clear that if any error occurred, it was not harmful.  The dissent points to the negligence question in which the negligence of Dr. Thota and Ronnie Young were submitted in the same question, but with two separate answers.  Because the jury found no negligence attributable to Dr. Thota and found Young negligent, the dissent concludes there was no commingling so as to trigger a presumed harm analysis.  The Court's opinions may be found at this link. 

• Email This
• Print
• Comments
• Trackbacks

In an otherwise lengthy opinion, the Fort Worth Court of Appeals provided a reminder to civil practitioners regarding the difference between failure of consideration and lack of consideration.  The Court noted:

[L]ack of consideration refers to a contract that lacks mutuality of obligation.  Failure of consideration, however, occurs when, due to a supervening cause after an agreement is reached, the promised performance fails.  The distinction between the two is that lack of consideration exists, if at all, immediately after the execution of a contract while failure of consideration arises because of subsequent events.

The distinction is also important because failure of consideration requires a verified pleading under TRCP 93, while lack of consideration, as an element of the claim, does not.  The Court's opinion in City of The Colony v. North Texas Mun. Water Dist. can be found at this link.

• Email This
• Print
• Comments
• Trackbacks

With its opinion in In re Butler, the Dallas Court of Appeals reminds us that there has been an important change to mandamus procedure.  Appellate Rule 52.3 was amended effective September 1, 2008, and now requires a certification by the person filing the petition for writ of mandamus that he or she has reviewed the petition and every factual statement is supported by competent evidence in the appendix or record.  Previously, Rule 52.3 required factual statements to be verified by affidavit, which sometimes presented difficulties for appellate counsel who might not have the requisite personal knowledge.

Despite the change in Rule 52.3, the Dallas Court of Appeals reiterates that a sworn or certified copy of the order or other document complained of still must be included in the appendix to the petition.  An affidavit swearing that the order is "to my knowledge" a true copy of the original is an equivocal statement implying something less than personal knowledge and it does not comply with the requirement for sworn copies.  The Court's opinion may be found at this link. 

• Email This
• Print
• Comments
• Trackbacks

The Amarillo Court of Appeals recently confronted an issue not addressed by the appellate rules.  While Rule 38.8(a) applies in the event the appellant fails to file a brief, the rules are silent with respect to an appellee's failure to do so.  The Court weighed its options:

Appellees'  failure to file a brief leaves this Court with several mutually unpleasant options.  On the one hand, we could accept [appellant's] arguments at face value and summarily reverse.  On the other hand, we could abandon our role as impartial jurist and become an advocate for Appellees by advancing arguments in order to affirm.  Neither option is acceptable.

The Court decided to follow other courts of appeals that have faced this dilemma and "conduct an independent analysis of the merits of the appellant's claim of error, limited to the arguments raised by the appellant . . . ."  The Court made clear that by doing so, it was not acting as an advocate for the appellees.  The Court went on to affirm the trial court.  The Court's opinion in Dillard's, Inc. v. Newman can be found at this link.

• Email This
• Print
• Comments
• Trackbacks

Here's an interesting factoid you can make use of to amaze and astound your opposing counsel.  The Best Evidence Rule, Texas Rule of Evidence 1002, applies only when the the originals are located in Texas.  It's true.  It surprised me too. 

Kerlin v. Arias, a per curiam opinion issued by the Texas Supreme Court on November 14, 2008, has some interesting allegations and facts relating to challenges to historical chain-of-title to property on South Padre Island and some more routine reaffirmations of what must be contained in affidavits to constitute an affidavit.  But what jumped out at me was the holding that Petitioners did not need to produce the original of a deed located in Mexico in response to a Best Evidence objection.  Why?  Because the Best Evidence Rule has an exception set out in Rule 1004.  The Best Evidence Rule does not apply when "no original is located in Texas."

• Email This
• Print
• Comments
• Trackbacks

Following rendition of a final, appealable judgment, does a notice of appeal have to name all preceeding interlocutory orders as a prerequisite to complaining of those orders?  Apparently not.  This has been a question of concern for many appellate practitioners and it's a question that's been percolating around in the courts of appeals.  We now have an answer. 

In Perry v. Cohen, Defendants filed special exceptions to the Plaintiffs' petition, which were sustained and the trial court ordered Plaintiffs to replead.  Subsequently, Plaintiffs filed an amended petition, and Defendants moved to dismiss because the amendment failed to comply with the order on the special exceptions.  The trial court dismissed Plaintiffs' claims.

On appeal, Defendants argued that Plaintiffs had waived their complaints because their notice of appeal listed only the order of dismissal, and not the order sustaining the special exceptions.   The Texas Supreme Court held that Plaintiffs "were required only to state the date of the judgment or order appealed from--in this instance the order dismissing their suit."  The Court's opinion also goes on to examine whether Plaintiffs also preserved error by challenging both orders in their brief and concludes under its rules requiring liberal construction of briefs that Plaintiffs preserved error.  The Court's opinion may be found at this link.

• Email This
• Print
• Comments
• Trackbacks

The Corpus Christi Court of Appeals recently held that a respondent is entitled to notice and an evidentiary hearing before having its counsel disqualified.  First, the court determined it had jurisdiction to issue a writ of mandamus against a presiding judge of a administrative judicial district because the judge was acting in the capacity of a district judge when he heard the oral motion to disqualify.  Second, the court determined that a party is entitled to notice and hearing prior to disqualification.  The court stated:

While we agee that the alleged disqualifiying conflict is significant, if the disqualifyig status is proved, we disagee that one party's bare allegation of the conflict is sufficient to establish disqualification as a matter of law when the opposing party is seeking to enforce its right to an evidentiary hearing on the constitutionally protected right to counsel of the party's choosing.

The court of appeals' opinion in In Re Lopez can be found at this link.

• Email This
• Print
• Comments
• Trackbacks

In Shaw v. Radionic Industries, Inc., the plaintiff moved for summary judgment against the pro se defendant on a claim for a suit on a sworn account. The court set a hearing for the motion on April 2, 2007. Later, the plaintiff sent a transmittal letter dated March 22, 2007 to the defendant to inform him of the hearing. The letter did not contain a certificate of service.

Did the defendant receive proper notice?

The trial court did grant the summary judgment, but the Dallas Court of Appeals later overturned the judgment in a restricted appeal. Because summary judgment is such a harsh remedy, the court scrutinized the record and discovered that the plaintiff was dilatory in sending the notice of hearing letter.  As a result, the defendant only received 11 days notice of the hearing.  But Tex. R. Civ. P. 166a(c) requires that the non-movant receive notice 21 days before the hearing. So the court reversed the summary judgment and remanded the case back to the trial court for further proceedings.

Because the untimely notice was sufficient to overturn the judgment, the court did not reach the other complaints regarding service. One involved the lack of a certificate of service in the letter. Incidentally, if a party sends notice of a hearing by way of a transmittal letter as oppposed to a completed fiat, notice may be defective unless the letter contains a certificate of service.  See Tex. R. Civ. P. 21a.

• Email This
• Print
• Comments
• Trackbacks

In a dispute over the assessment of costs on appeal, the Houston (First) Court of Appeals recently held that bond forfeiture cases are criminal as opposed to civil.  Accordingly, the court redesignated the two appeals at issue as criminal cases with the abbreviation "CR."  But for those hoping to avoid civil filing fees as a result of the court's decision (see report at this link) -- not so fast.  The court of appeals also held that civil filing fees may be assessed despite the cases' new designation.  To top it off, the court held that costs could be assessed against the bond company under established criminal rules despite its success on appeal.  For those unfamiliar with Texas's judicial system, the criminal vs. civil designation is important for reasons other than filing fees.  Texas has a bifurcated system with two courts of last resort, the Court of Criminal Appeals for criminal cases and the Texas Supreme Court for civil cases.  The court of appeals' opinion in Safety Nat'l Cas. Corp. v. State of Texas can be found at this link. 

• Email This
• Print
• Comments
• Trackbacks

The Beaumont Court of Appeals recently addressed the difference between judicial estoppel and a judicial admission.  Plaintiff filed a claim with the EEOC and brought suit against defendant for gender discrimination.  After her federal suit was dismissed, she sued the defendant in state court for unlawful termination based on her refusal to perform an illegal act.  Defendant sought summary judgment arguing that plaintiff's federal pleading consituted a judical admission that plaintiff had been fired because of her gender.  In deciding the case, the court of appeals noted that the defendant moved for summary judgment on the basis of plaintiff's alleged judicial admission, but the plaintiff's response only addressed judicial estoppel.   The court explained the difference:

Judicial admission and judicial estoppel are separate principles.  Judicial estoppel is a rule of procedure based on justice and sound policy that bars a party from taking a position inconsistent with one taken in a earlier proceeding.  A judicial admission, by contrast, results when a party makes a statement of fact which conclusively disproves a right of recovery or defense currently asserted.

The court then held that plaintiff's statment in her federal pleadings that she was fired for gender discrimination constituted a judicial admission barring recovery on her state claim under Sabine Pilot that she was fired for refusing to perfom an illegal act.  The court affirmed summary judgment for the defendant.  The court's opinion in Louviere v. Hearst Corp., can be found at this link. 

• Email This
• Print
• Comments
• Trackbacks

Howard Bashman over at How Appealing had a post yesterday regarding an Eleventh Circuit decision denying a petition for rehearing en banc on the issue of whether obtaining an extraordinary result justifies increasing attorney's fees awarded under various federal statutes.  The order denying rehearing en banc, with multiple dissents, can be found at this link. The orginal panel decision consisting of three separate opinions can be found at this link.

• Email This
• Print
• Comments
• Trackbacks

The Amarillo Court of Appeals recently held  that a party may be ordered to sign a medical records authorization in response to a request for disclosure pursuant to TRCP 194.2.  The defendant served a request for disclosures including a request for execution of an authorization to release medical records under Rule 194.2(j).  The plaintiffs argued they could respond by either producing the medical records or executing an authorization permitting  the release of  medical records.  The trial court disagreed and ordered the plaintiffs to execute the authorizations.  Plaintiffs sought mandamus relief from the court of appeals.  In denying the plaintiffs' petition, the court of appeals stated that "the option belongs to the party requesting disclosure, not the one responding to it.  If a legitimate request is sought, then the respondent cannot unilaterally comply with the request by simply delivering selected medical records."  The court's opinion in In Re Soto can be found at this link.  

• Email This
• Print
• Comments
• Trackbacks

What is the proper procedure to preserve error when a trial court refuses to rule on a motion for default judgment?

In Old Republic Insurance Co. v. Sisavath, the trial court refused to rule on the plaintiff's motion for default judgment and eventually dismissed the case for want of prosecution. 

On appeal, the plaintiff argued that the trial court improperly denied the motion for default judgment. 

The Dallas Court of Appeals, however, explained that the court did not deny the motion, it merely returned the proposed default judgment unsigned and identified several items for the plaintiffs to ameliorate before it could sign the judgment. To complain on appeal that the trial court refused to rule on a motion, the record must show that the complaining party objected to the refusal. But the record was void of any objections to the trial court's refusal to sign the default judgment. Thus, the error had not been preserved for appeal. 

• Email This
• Print
• Comments
• Trackbacks

The Dallas Court of Appeals held that a pro se letter from an Illinois resident denying liability and requesting an extension of time to retain counsel and file a "complete answer" waived the defendant's subsequent special appearance.  The defendant argued that the letter did not consitute an answer.  The court held that  the letter constituted an answer.  Because an answer constitutes a general appearance, the court held the defendant waived any challenge to the trial court's personal jurisdiction.  The court's opinion in Triad Realty Servs., Ltd. v. Green can be found at this link.

• Email This
• Print
• Comments
• Trackbacks

In a case involving application of the mandatory venue provision in section 15.011 of the Texas Civil Practice and Remedies Code, the Dallas Court of Appeals held that a suit to remove a lis pendens constitutes an action to quiet title.  The Court, therefore, held that "[o]nce it is demonstrated that the court's judgment would have some effect on an interest in land, then the venue of the suit is properly fixed under the mandatory venue statute."  The trial court had denied the defendant's motion to transfer venue to Harris County (where the land was located) and rendered judgment on behalf of the plaintiff.  The court noted that "a trial court's erroneous denial of a motion to transfer venue is not harmless and requires reversal of the judgment and remand for new trial."  Accordingly, the court of appeals reversed and remanded the case with instructions to transfer the case to Harris County.  The court's opinion in Airvantage, L.L.C. v. TBAN Props. #1, L.T.D. can be found at this link. 

• Email This
• Print
• Comments
• Trackbacks

To all you appellate gurus out there, here's an appellate procedure question: When does the court of appeals' mandate issue when the Texas Supreme Court has denied a petition for review and subsequently denied a motion for rehearing of the petition for review?

TRAP 18 controls issuance of the appellate mandate.  The timetable is based upon the steps a party is entitled to take after the court of appeals renders its judgment.  But there are no other steps to take after the Texas Supreme Court denies a motion for rehearing of a petition for review.  Or are there?  Should the mandate issue ten days after the denial of the motion for rehearing of the petition for review (because that's the amount of time added to the expiration of the other steps)?  Should its issuance be tied to the timetable for filing of a petition for writ of certiorari in the United States Supreme Court?  What do you think?

• Email This
• Print
• Comments (2)
• Trackbacks

In a longstanding dispute over which agency has the authority to regulate engineers, the Austin Court of Appeals recently held that the Texas Society of Professional Engineers (Society) lacked standing to bring suit against the Texas Board of Architectural Examiners (Board) on behalf of its members because it failed to meet the test for associational standing.  The court of appeals applied the test set forth by the Texas Supreme Court in Texas Association of Business v. Texas Air Control Board:

[A]n association has standing to sue on behalf of its members when (a) its members would otherwise have standing to sue in their own right; (b) the interests it seeks to protect are germane to the organization's purpose; and (c) neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit.

Because the Society failed the third prong, the court of appeals affirmed the trial court's dismissal for lack of standing.  The court of appeals' opinion in Texas Society of Professional Engineers v. Texas Board of Architectural Examiners can be found at this link.

• Email This
• Print
• Comments
• Trackbacks

A plaintiff sued a defendant for breach of contract. Instead of serving the defendant, the plaintiff served the Secretary of State. As the time for answering lapsed, the trial court sent notice of dismissal to the parties (according to Texas Rule 165a ) warning them of dismissal if no answer was filed by a specified deadline.

When the deadline passed with no answer, the court dismissed the case for want of prosecution. After the dismissal, the defendant's attorney received notice that the Secretary of State had been served with the underlying lawsuit. A few days later, the court reinstated the suit sua sponte and eventually entered a default judgment in the plaintiff's favor.

Was the defendant properly served?

The Fifth Court of Appeals, in DC Controls, Inc. v. UM Capital, L.L.C., explained that service after a case has been dismissed for want of prosecution is defective. Because the defendant did not receive notice until after the court dismissed the suit, regardless of the fact that the court reinstated the suit days later, the Court of Appeals held that service was defective and an error apparent on the face of the record, and thus reversed the default judgment and remanded the case for further proceedings.

• Email This
• Print
• Comments
• Trackbacks

There are three holdings in DiGiuseppe v.Lawler that are noteworthy.  First, the Texas Supreme Court, reaffirms the principle that a party who obtains a favorable judgment need not file a separate notice of appeal to preserve its right to judgment on a lesser alternate ground of recovery in the event an appellate court reverses the trial court's judgment.

Second, the majority (5-4) holds that a party seeking specific performance has the burden to plead and prove that he he was ready, willing, and able to perform the contract at the time his performance was due.

Finally, the majority holds that a finding of "ready, willing, and able" could not be deemed under Rule 279 when no "ready, willing, and able" question was submitted to the jury.  The plaintiff did not conclusively establish this essential element on the evidence submitted.  And, a finding could not be deemed because there must be at least one element of the ground of recovery submitted to the jury and that element must be "necessarily referable" to that ground of recovery.  The court concluded that the finding as to whether the plaintiff complied with the contract is not essential to, or necessarily referable to, the plaintiff's claim for specific performance.  Accordingly, the plaintiff failed to obtain findings necessary to support specific performance.  The majority opinion may be found at this link.  Justice Green's dissenting opinion may be found here.  For other insightful comments regarding this opinion, see Todd Smith's blog or Don Cruse's blog.

• Email This
• Print
• Comments
• Trackbacks

The Texarkana Court of Appeals held that a no-evidence motion for summary judgment need only identify the challenged element in order to comply with Rule 166a(i).  Plaintiff argued that the motion must list all of the elements and identify the challenged element(s).  The court of appeals disagreed and held the motion sufficient if it "merely reference[s] the element on which there is no evidence,"  in this case cause-in-fact.  The opinion in Driskill v. Ford Motor Co. can be found at this link. 

• Email This
• Print
• Comments
• Trackbacks

A divided panel of the Amarillo Court of Appeals held that a dismissal with prejudice operates as an adjudication on the merits for purposes of res judicata even if the trial court erred by including the phrase "with prejudice" in the dismissal order.  The majority followed Amarillo precedent while the dissent called for it to be overruled.  Because the Amarillo court has only four justices, it is unlikely that the dissent could muster the three votes necessary to overturn the controlling precedent en banc.  The majority opinion in Rodriguez v. ICON Benefit Administrators, Inc. can be found at this link.  Justice Pirtle's dissenting opinion can be found at this link.

• Email This
• Print
• Comments
• Trackbacks

In this mandamus action, the Eastland Court of Appeals held that federal tax returns are not relevant or material to the issue of the defendant's net worth.  While the court of appeals held that a plaintiff seeking exemplary damages need not make a prima facie showing of entitlement of exemplary damages in order to obtain discovery on net worth, it held that tax returns do not reflect net worth.  The court also held the trial court abused its discretion by ordering production of  "all documents that evidence or reflect net worth" because it was overbroad.   The court of appeals' opinion in In re House of Yahweh can be found at this link. 

• Email This
• Print
• Comments (1)
• Trackbacks

The Houston (First) Court of Appeals held that a plaintiff cannot restart the clock on the 120-day deadline to serve an expert report pursuant to Chapter 74.  The plaintiff nonsuited its case prior to the expiration of the deadline.  The plaintiff refiled the suit and filed an expert report within 120-days of the new filing.  Relying on a prior decision, the court held:

"[A]llowing a plaintiff to re-start the period for serving an expert report by non-suiting his claim and then subsequently refiling the same claim effectively expands the expert report peiod well beyond 120 days, which is inconsistent with the policies and goals of the statute.

Consequently, the court of appeals affirmed the dismissal of the plaintiff's case.  The Court of Appeals' opinion in Runcie v. Estate of Dorothy Runcie can be found at this link. 

• Email This
• Print
• Comments
• Trackbacks

The defendant moved for summary judgment on the plaintiff's claims based on the statute of limitations. To show the accrual date, the defendant attached several documents to his motion. But the defendant's motion did not specifically identify where the evidence was in those documents. Did this meet the summary judgment requirement that a party must specifically identify its proof in the motion?

According to the Amarillo Court of Appeals, in West v. Hamilton, the answer is "no." The court held that generally referencing documentary evidence in a motion does not relieve the movant from the duty to direct the trial court and the non-movant specifically to where the issues are located in those documents, even if the documents are not voluminous.

The specificity requirement directs the movant to provide "fair notice" of the summary judgment contentions and refer the court and parties to the evidence on which the movant is relying for judgment. Because the defendant in this case failed to specifically direct the court and the plaintiff to the evidence he relied on to prove the accrual date, his summary judgment victory in the trial court was reversed on appeal.

• Email This
• Print
• Comments
• Trackbacks

 "The overarching question before the en banc Court is whether a writ of mandamus should issue directing the transfer of this case from the Marshall Division of the Eastern District of Texas--which has no connection to the parties, the witnesses, or the facts of this case--to the Dallas Division of the Northern District of Texas--which has extensive connections to the parties, the witnesses and the facts of this case."

So begins the majority opinion in a case addressing whether mandamus is appropriate to correct a district court's ruling on a motion to transfer venue pursuant to 28 USC sec. 1404(a).  By a 10-7 vote, the United States Court of Appeals for the Fifth Circuit answered in the affirmative and ordered the case transferred.  The majority and dissenting opinions in In re Volkswagen of America, Inc. can be found at this link.

• Email This
• Print
• Comments
• Trackbacks

The Dallas Court of Appeals vacated a portion of a district court's order directing the Office of Attorney General to remit payments to a private company that collects and disburses child-support payments for a fee.  Pursuant to Texas Government Code sec. 22.002(c), the court of appeals held that only the Texas Supreme Court has the authority to issue a writ of injunction against officers of the executive branch.  The court found that the portion of the order directing the OAG to remit payments to the private company was void.  The court's opinion in In the Interest of A.B., Jr. can be found at this link.

• Email This
• Print
• Comments
• Trackbacks

The Fort Worth Court of Appeals recently held that participating in board meetings via telephone with Texas residents is sufficient to establish specific jurisdiction in Texas. The court of appeals distinguished the Texas Supreme Court’s opinion in Michiana Easy Livin’ Country, Inc. v. Holten as follows:

“Although the supreme court has disapproved opinions holding that . . . specific jurisdiction is necessarily established by allegations or evidence that a nonresident committed a tort in a telephone call from a Texas number, Michiana, 168 S.W.3d at 791 (emphasis added), it has not held that telephone calls are never sufficient to establish minimum contacts.”

Like Michiana, the Texas plaintiffs in this case telephoned the out-of-state defendants. Unlike Michiana, in which the plaintiff made one phone call, “this case involves many telephonic board meetings at regular intervals over a span of years.” This is a close case.  But, at the very least, it stands for the proposition that phone calls alone can constitute sufficient minimun contacts to establish specific jurisdiction.  A copy of the court of appeals’ opinion in Glencoe Capital Partners II, L.P. v. Gernsbacher can be found at this link
 

• Email This
• Print
• Comments
• Trackbacks

The Texas Supreme Court recently reversed a decision by the Houston Fourteenth District Court of Appeals, which held harmless the trial court’s admission of evidence related to the defendant’s wealth.  Reliance Steel & Aluminum Co. v. Sevcik, No. 06-0422, 2008 Tex. LEXIS 861 (Tex. Sept. 26, 2008). 

• Email This
• Print
• Comments
• Trackbacks

For the purpose of determining diversity jurisdiction, is a limited liability company a citizen of the state where it is organized or is it a citizen of the states of which its members are citizens? 

In an issue of first impression, the Fifth Circuit, in Harvey v. Grey Wolf Drilling Co., held that a limited liability company, for diversity jurisdiction purposes, depends on the citizenship of its members.

In Grey Wolf, the plaintiffs, Louisiana residents, sued Grey Wolf in the Eastern District of Louisiana on diversity jurisdiction grounds. Grey Wolf was a Texas LP with members that included an LLC with members in Texas and Nevada, but was organized in Louisiana. The district court applied 28 U.S.C. § 1332(c), a statute governing citizenship of corporations, to the LLC, and held that (1) an LLC's citizenship is determined by where it is organized; and (2) that the parties lacked diversity jurisdiction.

The Fifth Circuit reversed the district court's opinion because:

·          Every Circuit Court that had dealt with the issue held that citizenship would be determined by the LLC’s members;

·          The district court's holding was inconsistent with Supreme Court jurisprudence;

·          The district court’s opinion conflicted with § 1332(c)(1)’s language;

·          Louisiana law clearly distinguished LLCs from Corporations.

*For more insight on the district court's reasoning, see Debra R. Cohen’s article "Limited Liability Company Citizenship: Reconsidering an Illogical and Inconsistent Choice", 90 Marq. L. Rev. 269 (2006).

• Email This
• Print
• Comments
• Trackbacks

A divided en banc Fourth Court of Appeals held that a court may award sanctions for both expenses and attorney's fees as well as for inconvenience and harassment and order them paid to the moving party.  Applying the Texas Supreme Court's recent opinion in Low v. Henry, the majority held the trial court had broad discretion to deter future misconduct and that the list of sanctions in section10.004(c) was not exclusive.  The dissents disagreed and argued that the additional sanction for inconvenience was improper and that the list of availble sanctions did not include payment of a penalty to the opposing party.  The majority opinion in Unifund CCR Partners v. Villa can be found here.  The dissenting opinions are here and here.

• Email This
• Print
• Comments
• Trackbacks

The Houston Fourteenth District Court of Appeals has held that a Relator must challenge all possible grounds supporting a trial court's ruling by its Petition for Writ of Mandamus or the Relator waives its complaint.  In In re TCW Global Project Fund II, Ltd., No. 14-08-00116-CV (Sept. 24, 2008), the Relator filed a Petition for Writ of Mandamus complaining of the trial court's order denying a motion to dismissed based on a forum selection clause.  The Court of Appeals holds that TRAP 52.5's requirement that a Relator "may file a reply addressing any matter in the response" is indistinguishable from TRAP 38.3's language providing that the Appellant "may file a reply brief addressing any matter in the appellant's brief."  The opinion of the court may be found here.

• Email This
• Print
• Comments
• Trackbacks