Dallas weighs in on no-evidence summary judgment procedure

The Dallas Court of Appeals has written a couple of recent significant opinions addressing no-evidence summary judgment practice.

In the first opinion, the en banc court considered a no-evidence motion that listed the elements of the claim at issue and then asserted that there was no evidence of "one or more" elements of the plaintiff's claim.  A majority of the court held that this motion was legally insufficient and could not support summary judgment as a matter of law.  The majority reasoned that Rule 166a(i) does not authorize general no-evidence motions and this motion did not specify which elements were being challenged.  The majority also held that no objection to the adequacy of the motion was necessary to preserve the challenge for appeal.  Notably, the majority distinguished this motion from one that asserts that there is no evidence of "each and every element."  Three dissenting justices (O'Neill, Lang, and Lang-Meiers) argued that the motion gave "fair notice" and that non-movant should have objected to the motion and gotten a ruling in order to preserve the complaint for appeal.  The majority opinion in Jose Fuentes Co. v. Alfaro may be found here, and the dissent here.  Notably, a petition for review has been filed in this case with the Texas Supreme Court.

In a more recent opinion, in Coleman v. Prospere, a divided panel disagreed as to whether a no-evidence motion was adequate to challenge a specific element in a breach of contract case.   The opinions also disagree regarding the adequacy of briefing and practitioners may want to take note of the liberal reading the majority gives to the Appellant's brief.  With regard to the motion for summary judgment, the movant filed a no-evidence motion that asserted in relevant part: "There is no evidence of Breach of Contract - [Appellant's] cause of action for Breach of Contract against [appellee] is not supported by credible evidence.  [Appellee] did not engage in Breach of Contract..."

The majority opinion, authored by Justice Evans and joined by Justice Fillmore, holds that the no-evidence motion fails to challenge or even mention a single element and rules that the no-evidence grounds are legally insufficient to support the summary judgment.  Justice FitzGerald  dissented.  He opined that if the sum total of the motion for summary judgment had asserted only that there was no evidence of the cause of action for breach of contract, then he would agree with the majority.  However, he argues that the first and third sentences specifically identify the breach element.  Accordingly, Justice FitzGerald would have affirmed the summary judgment.  The majority opinion may be found here.  The dissent may be found here.

As a practitioner, the lesson from these opinions is to clearly and distinctly identify the elements of the cause of action you are challenging.  And if you are the non-movant, you might be wise to object to any lack of clarity.

Conflicts in Summary Judgment Practice

I recently presented a continuing education seminar focusing on current issues in state summary judgment practice.  As a result of that presentation, the Dallas Court of Appeals' holding in Bastida v. Abel's Mobile Home Service, Inc., came to my attention.  In that case, the trial court granted a summary judgment in favor of Richard Aznaran.  Bastida sued Aznaran for personal injuries he sustained on Aznaran's property while delivering a mobile home Aznaran had purchased.

After the trial court granted summary judgment in favor of Aznaran, Bastida appealed and challenged Aznaran's affidavit evidence on grounds that it failed to show the basis of Aznaran's personal knowledge as to the matters on which Aznaran testified.  The court of appeals observes that summary judgment objections fall into two categories: (1) objections to form, and (2) objections to substance.  Form objections are preserved only if they are raised and ruled on by the trial court, while substance objections can be raised for the first time on appeal.  Citing the Texas Supreme Court's per curiam opinion in Grand Prairie ISD v. Vaughan, 702 S.W.2d 944, 945 (Tex. 1990), the court of appeals holds that an objection to lack of personal knowledge is an objection to form that must be raised and ruled on by the trial court in order to preserve it for appeal.  The citation to Vaughan is accurate, but it is notable that there is a split in the courts of appeals on this question and there are opinions from the Texas Supreme Court that reach the opposite result.  In fact, for example, in City of Wilmer v. Laidlaw Waste Sys., 890 S.W.2d 459 (Tex. App.--Dallas 1994), aff'd, 904 S.W.2d 656 (Tex. 1995), the Dallas Court of Appeals held that the failure to specify how the affiant had personal knowledge was a defect of substance, not form.  This opinion was later affirmed by the Texas Supreme Court.  Practitioners should be aware that this is an unsettled issue, making the safest practice to object.

The court's opinion in Bastida may be found here.

Dallas Court of Appeals issues rare en banc decision addressing summary judgment practice

The Dallas Court of Appeals recently addressed summary judgment practice in a rare en banc opinion. At issue was whether the defendants' no-evidence motion for summary judgment adequately challenged the elements of plaintiffs' claims by listing the elements  and then stating that the plaintiffs had no evidence to support "one or more" of the elements of the claims.  In an opinion by Justice Evans, a divided en banc court joined a number of other courts that have addressed this issue and held that a no-evidence motion must expressly identify the challenged element as required by Rule 166a(i). The court also held that there is no "fair notice" exception to the specificity requirement, and that the plaintiffs did not waive their challenge to the motion by failing to specially except because the legal sufficiency of a no-evidence motion for summary  judgment can be challenged for the first time on appeal.  Accordingly, the majority reversed the summary judgment and remanded the case to the trial court. 

In dissent, Justice O'Neill, joined by two other justices, would have affirmed the trial court because the motion "as a whole" gave plaintiffs fair notice that defendants were challenging each and every element, and because plaintiffs waived any challenge by failing to object or specially except in the trial court.  The Court's opinion in Joe Fuentes Co., Inc. v. Alfaro can be found here and the dissent here.

Affidavits and Personal Knowledge

One should always be careful of falling victim to using and reusing forms because it may come back to bite you.  Many drafters of affidavits start out by having the affiant state something like, "I have personal knowledge of the facts set forth below."  This language by itself may not be sufficient to give anything contained in the affidavit weight, as is demonstrated by the opinion in Vince Poscente International, Inc. v. Compass Bank, issued by the Dallas Court of Appeals.

In that case, Compass Bank obtained a summary judgment on a sworn account under a personal guarantee agreement.  Compass supported its motion for summary judgment with an affidavit of Paula Shaw.  In the affidavit, Shaw stated she had personal knowledge of the facts.  She also stated that she was custodian of records at Compass.  She testified that Compass was the owner and holder of the note in question and that the defendants personally guaranteed the debt and then defaulted on paying the note.

On appeal, the defendants challenged the affidavit as conclusory because Shaw had not shown that she was employed by Compass, what her job title was or explain the basis for her personal knowledge.  In analyzing the complaint, the court of appeals noted that Shaw did not show how she came to have knowledge by showing that she was employed by Compass, what her job position and responsibilities were and how those duties gave her personal knowledge.  Because of those omissions, the court determined that the affidavit was conclusory and amounted to no evidence.  Therefore, the court reversed the summary judgment.  The court's opinion may be found here.

Note:  If Shaw had merely proven up the records as business records, her affidavit might have been sufficient.  But here, she went further to attest to who owned and held the note, to the default on the note, and to acceleration of the note.  Nothing in the affidavit shows how she knew any of those substantive facts, therefore more was needed.

Formation of the Attorney-Client Relationship

How and when does an attorney-client relationship form?  The Dallas Court of Appeals says that the attorney-client relationship is contractual in nature and may be either express or implied.  But the relationship must be based upon an intent by BOTH parties to create such a relationship and it is insufficient to create an attorney-client relationship based upon one party's subjective belief.

In Kiger v. Balestri, Kiger sued Balestri for breach of fiduciary duty and alleged that Balestri revealed confidential and trade secret information that Balestri obtained during an attorney-client relationship with Kiger.  The court of appeals affirmed a summary judgment in favor of Balestri and concluded that there was no fact issue raised as to the existence of an attorney-client relationship between Kiger and Balestri.  The facts showed that Balestri had previously represented companies that Kiger had a financial interest in, but Balestri never represented Kiger personally.  Further, Kiger contacted Balestri about the idea that was the subject of the dispute at a time that Balestri was not practicing law, and the exchanges between the two failed to show any effort to retain Balestri or to show that an express or implied attorney-client relationship was formed.  And even if such a relationship had been formed, the Dallas Court of Appeals holds that the relationship would have terminated upon completion of the purpose of the employment absent an agreement to the contrary.  The court's opinion may be found here.

Enforcement of Settlement Agreements

There's been a spate of recent opinions involving enforcements of settlement agreements.  Byron reported on a couple of opinions earlier this week.  Today I report on Green v. Midland Mortgage Co. decided by the Fourteenth Court of Appeals in Houston.  There are four points in this opinion worthy of note:

  • First, in an action to enforce a settlement agreement, you've got to have pleadings and proof.  [That seems obvious enough]
  • Second, the court holds that parties can create an enforceable settlement agreement via e-mail exchanges [One of the many advances of modern technology]
  • Third, a motion for summary judgment can be presented orally or by written submission, but if it is presented orally, no oral testimony may be adduced
  • Finally, there is a difference between an agreed judgment or consent judgment and a settlement agreement.  A court cannot render an agreed judgment absent consent at the time it is rendered.

The court's opinion may be found here.

Summary Judgment Affidavits: Form vs. Substance

The difference between defects in the form of an affidavit versus defects in substance is not always clear and the appellate courts have not always agreed on what is substantive and what is not.  But the difference can be important.  As the Dallas Court of Appeals points out in Stone v. Midland Multifamily Equity Reit, A defect in the form of an affidavit requires an objection to the defect and a ruling on the objection in order to preserve the complaint for appellate review.  However, a defect in the substance of an affidavit may be raised for the first time on appeal.  In Stone, the court holds that a hearsay objection is a defect in the form of an affidavit that requires an objection and a ruling.  However, the Court holds that lack of personal knowledge is a defect in substance and may be raised for the first time on appeal.

The Stone opinion goes on to point out that mere rote recitals that an affiant "has personal knowledge" may not cut the mustard.  The affiant must disclose the basis upon which he acquired personal knowledge.  The affiant in Stone attested to his position with the company but the Court holds that the testimony was inadequate because it failed to state how the affiant's job duties and responsibilities would have afforded him knowledge about the execution of the documents that were in issue in the case.  Stone is an important reminder that it's important to focus upon the basics.  The court's opinion in Stone may be found here.

When to Raise Summary Judgment Grounds

A party seeking summary judgment must raise all its grounds in the motion itself; raising a ground for summary judgment at the summary judgment hearing will not support the summary judgment if the judgment is attacked on appeal.

In Ritchey v. Pinnell, Brenda Ritchey brought suit against Steven and Amy Pinnell after Ritchey purchased a home from the Pinnells and learned that she could not get a certificate of occupancy because many of the home improvements made by the Pinnells did not meet code requirements.  Ritchey asserted claims for breach of contract and real estate fraud.  The contract for purchase contained an "as is" clause. 

The Pinnells sought summary judgment against Ritchey's claims.  With respect to the fraud claim, the motion asserted that there was no evidence Steve Pinnell knew the alleged misrepresentations were false and there was no evidence the misrepresentations induced the sale.  As to the breach-of-contract claim, the Pinnells argued that the "as is" clause defeated the claim.  At the summary judgment hearing, the argument arose that the "as is" clause defeated causation as to the fraud claim.  The trial court granted the Pinnells' motion on all claims and Ritchey appealed. 

On appeal, the Texarkana Court of Appeals holds that the "as is" clause cannot be used to support the summary judgment on the fraud claim since that ground was not raised in the motion for summary judgment.  The court otherwise holds that statutory fraud does not require that the declarant know that the misrepresentation was false and that there was some evidence the false representation induced the sale.  Thus, the court reversed the summary judgmetn on the fraud claim.  However, the court held that the "as is" clause defeated the breach of contract claim and the court affirmed the summary judgment on that claim.  The court's opinion may be found at this link.

Another disagreement over what constitutes no evidence of causation

I have said on various occasions (during admittedly nerdy conversations with colleagues) that this expert opinion or that piece of evidence surely constitutes no evidence as a matter of law and that no court could possibly see it differently.  But we all know that it is never quite that easy and never that clear cut.  The Beaumont Court of Appeals' recent 2-1 opinion in Pink v. Goodyear Tire & Rubber Company illustrates this point.

In Pink, the panel reversed a no evidence summary judgment rendered for Goodyear.  That reversal was based, in part, on the court's determination that the following expert testimony presented by Pink constituted some evidence of causation: 

I was Veryl Pink's treating oncologist. Mr. Pink was diagnosed with renal cell carcinoma, which was confirmed by biopsy. The ultimate cause of Mr. Pink's death was the progression of the disease.

Based upon reasonable medical probability it is my opinion that the cause of Mr. Pink's renal cell carcinoma was exposure to chemicals, more than likely benzene. In rendering this opinion I have reviewed Mr. Pink's medical records, the deposition testimony of Mr. Pink and three of his coworkers, the deposition of Dr. Radelat, and scientific literature.

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Demonstration of Personal Knowledge in Affidavits

Beware of using "form" language in an affidavit to establish the affiant's personal knowledge of the facts A statement such as "I have personal knowledge of the facts in this affidavit," may not be adequate.  And the danger of getting it wrong is that the affidavit is legally insufficient.  

A good discussion of how far an affiant must go to establish personal knowledge is found in the Houston Fourteenth Court of Appeals' opinion in Valenzuela v. State & County Mutual Fire Insurance Co.   The court of appeals held that a "mere recitation that the affidavit is based on personal knowledge is inadequate if the affidavit does not positively show a basis for the knowledge."  "The affidavit must explain how the affiant has personal knowledge." (emphasis added).

 

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Rule 11 not conclusive evidence of attorney's authority to settle case

The Dallas Court of Appeals has held that a settlement agreement by Rule 11 did not support summary judgment because the client challenged her counsel's authority to sign the Rule 11.  In this case, a plaintiff settled a case by a Rule 11 Agreement.  Later, she brought suit against the same party she had settled with years before.  The defendant alleged affirmative defenses based on the Rule 11.  The plaintiff filed an affidavit that she had not authorized her counsel to sign the Rule 11.  The trial court granted summary judgment for the defendant based on the Rule 11 agreement.

The court of appeals held that while an attorney is presumed to have authority to execute a Rule 11 agreement, the presumption may be overcome with evidence.  Note that case law indicates that an attorney's authority to settle a case may be different than the authority to prosecute or defend.  Compare Dunlap v. Villareal, 91 S.W.2d 1124, 1125 (Tex. Civ. App.--San Antonio 1936, no writ) (holding an attorney retained for litigation is presumed to possess authority to enter into a settlement on behalf of a client) with Johnson v. Rancho Guadalupe, Inc., 789 S.W.2d 596, 598 (Tex. App.--Texarkana 1990, writ denied) (noting that there is no implied authority for an attorney to release the very right or interest he is employed to protect).  As a result, the court of appeals reversed because the plaintiff filed an affidavit calling into question that attorney's authority.  The court's opinion in Karle v. Innovative Direct Media Ltd. Co. can be found at this link.

Making Special Exceptions to Summary Judgment Motions

 

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.

To Specially Except or Not Specially Except Grounds for Summary Judgment

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.  

Remember That If You Move For Traditional Summary Judgment, You Will Want To Attach Evidence To Support Your Arguments

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.

 

Rule 193.6 Applies to Summary Judgment Practice

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.

Open Records Act and its Application to E-mail

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.

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Responsible Third Party Statute and Statutes of Repose

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.

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Combining No-Evidence Motions for Summary Judgment with Traditional Motions

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." 

 

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Get Written Ruling on Objections to Summary Judgment Evidence

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.

Notice Defect Precludes Summary Judgment

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.

Judicial Estoppel vs. Judicial Admission

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

 

No-Evidence MSJ Need Only Reference Challenged Element

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