The San Antonio Court of Appeals recently decided two cases dealing with recovery of attorney’s fees for breach of contract.  The court first held that a party who brings an action to enforce a Mediated Settlement Agreement (MSA) is not entitled to attorney’s fees under Chapter 38 of the Texas Civil Practice and Remedies Code unless the party also recovers damages.  More recently, the court confirmed that while a plaintiff that seeks attorney’s fees as a "prevailing party" under a contract must also recover damages, a defendant may recover attorney’s fees as a prevailing party by defeating the breach of contract claim.  These cases, relying on Texas Supreme Court precedent, confirm that parties seeking specific performance under a contract or MSA are not necessarily entitled to attorney’s fees for merely obtaining enforcement of the agreement.  The court of appeals’ opinion in Garza v. Villareal is here and the opinion in Fitzgerald v. Schroeder Ventures II is here.

The Fourteenth District Court of Appeals in Houston has held that a corporation’s jurisdictional contacts could not be imputed to a nonresident that succeeded to the corporation’s contract rights.

Under the core facts in Motor Components LLC v. Devon Energy Corp., Pennzoil Company, a Delaware corporation located in Texas, contracted with its subsidiary, Purolator Products Company, a Delaware corporation located in Oklahoma.  Under the contract, Pennzoil agreed to indemnify Purolator for certain remediation costs of Purolator’s real property located in New York and Michigan.  Motor Components, which is a Delaware corporation with its principal place of business in New York, succeeded to Purolator’s rights under the contract by transactions not described in the appellate record.  Motor Components subsequently invoked certain provisions of the contract and called upon Pennzoil’s successor-in-interest, Devon Energy Corporation, to respond.  Devon is a Delaware corporation with its principal place of business in Oklahoma.  Devon then filed a declaratory judgment action in Texas and sought personal jurisdiction over Motor Components.

Continue Reading Personal Jurisdiction in Contract Case with Successor in Interest

Texas Appellate Rule 52.3(k)(1)(A) requires that an appendix to a Petition for Writ of Mandamus must contain a certified or sworn copy of any order complained of, or any other document showing the matter complained of.  Appellate courts are very strict in enforcing this requirement.  So much so that even when the Respondent trial judge does not dispute how she ruled, the court of appeals will not accept the petition for writ of mandamus unless the order is in the appendix.

Thus, the Dallas Court of Appeals denied a petition for writ of mandamus in In re Oncor Electric Delivery Co., where the relator had not produced a copy of the order complained of–specifically, the trial court’s denial of Oncor’s motion to join responsible third party.  Instead, Oncor pointed the court to the transcript of the hearing on Oncor’s motion for rehearing of that issue wherein the trial judge recited at the outset of the hearing, "My understanding is, is that this is Defendant’s motion to reconsider the court’s denial of the responsible third-party motion."  The appellate court denied the petition for writ of mandamus due to the failure to provide a definite oral or written ruling of the denial of the motion to join responsible third party.  The court’s opinion may be found here.

The El Paso Court of Appeals issued an opinion this week that addresses, in part, application of Civil Practice and Remedies Code Section 41.0105.  There are two takeaways from the Section 41.0105 discussion.

First, the El Paso court joins the  majority of intermediate appellate courts in Texas holding that 41.0105 should be handled post-verdict. Frontera Sanitation, LLC v. Cervantes, No. 08-08-00330-CV, slip op. at 9 (Applying Irving Holdings, Inc. v. Brown, 274 S.W.3d 926, 930 (Tex. App.–Dallas 2009, pet. denied) and holding that "Section 41.0105 must be applied as a limitation on the fact finder’s medical expenses award.").

Second, defendants must present the trial court with evidence of the expenses written-off in order to get a reduction in the expenses awarded.  Although this point seems self-evident, one of the challenges in addressing Section 41.0105 in the trial court is determining when and how to raise the Section 41.0105 issue and objection.  

To that end, I continue to suggest  the following approach when the trial court insists on allowing the jury to consider medical bills that show the amounts "initially incurred" (i.e., initially billed prior to any deductions):

  1. Object to the admission of the unredacted, complete bills and move to  exclude any evidence of medical or health care expenses that were written off.  
     
  2. Present an offer of proof on the record regarding the proper amounts
     
  3. Make necessary objections and requests to the jury charge

For a detailed discussion of the state of this issue in Texas, please see the article written by Bryon Henry and myself, which is available here.

           

Talk about snatching victory from the jaws of defeat.  The Dallas Court of Appeals recently held that an appellee is entitled to voluntary remittitur on rehearing.  In this case, the court of appeals originally issued an opinion in which it found the evidence insufficient to support the amount of damages.  Because liability was contested, the court reversed the judgment and remanded the case for a new trial.  The appellee filed a motion for rehearing and requested a voluntary remittitur of a portion of the actual damages and prejudgment interest.  The court of appeals held that the "voluntary remittitur cures the reversible error and we accept it."  The court went on to vacate its judgment (but not its opinion) and enter a new judgment affirming the trial court’s judgment as modified.

I wonder whether or not offering voluntary remittitur as an alternative in appellee’s brief could ever be considered waiver.  There is some confusing authority as to when an appellee can present an argument for affirmance for the first time on rehearing.  While the better practice may be for appellees to offer the remittitur in their principal brief, this case supports the position that it’s not too late on rehearing.  The court’s opinion in Mesquite Elk’s Lodge #2404 v. Shaikh can be found here. 

I’ve got a couple of interesting Appellate CLE opportunities to report this week.

First, the Dallas Bar Association Appellate Law Section is having its monthly luncheon on March 17, 2011 at noon.   Speakers include Dallas Court of Appeals Staff Attorneys Judy White, David Tobias, and Greg Lensing.  The subject of their talk is called "Something New, Something Blue: Navigating the New Greenbook and Bluebook."  They will also reveal some of their secret writing-style preferences.  One hour of CLE is available.  The meeting will be held in the Haynes and Boone Room at the Belo Mansion.

Second, the Criminal Law Section of the Dallas Bar Association is sponsoring an appellate seminar on Friday, March 18, 2011, at the Belo Mansion from 8:45 to 3:30.  A copy of the registration form is attached here for your convenience.

In a mandamus setting, it can sometimes be a challenge to ensure that you’ve brought forward all the documents and hearing transcripts required to establish an abuse of discretion.  The Houston Fourteenth District Court of Appeals has suggested the record in a death penalty sanctions case may need to be fairly comprehensive.  In In re Le, Le filed a petition for writ of mandamus asserting that the trial judge abused his discretion by assessing death penalty sanctions against her.  In a 2-1 split decision, the majority of the panel concluded that the mandamus record was incomplete such that it could not find any abuse of discretion.  Why?  Because death penalty sanctions necessarily require the court to look back at the whole history of the litigant’s abuses and Le’s record did not include all of the discovery hearing transcripts leading up to the sanctions hearing.  The majority also concluded that Le failed to advise the trial judge that a monetary sanction threatened her ability to continue the litigation.  The majority felt that this requirement was a necessary preservation predicate, and such effort would also establish the inadequate-remedy-by-appeal element of mandamus.  The majority’s opinion may be found here.

Justice Christopher dissented, arguing that the monetary sanctions were almost three times the amount assessed in Braden v. Downey and included a future payment, and yet the Braden court found an abuse of discretion.  Justice Christopher also took issue with the plaintiff’s conclusory affidavit that asserted that the plaintiff was prejudiced by delay in discovery, and she questioned whether that single statement could justify death penalty sanctions.  The dissenting opinion may be found here.

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.

The Chief Justice of New York’s highest court, Jonathan Lippman, is receiving accolades from his announcement this week that the Administrative Board of Courts has proposed a new rule to address when judges must recuse themselves when those appearing before them have contributed money to their campaigns.  The proposed rule was announced as part of Chief Judge Lippman’s annual state of the judiciary address, and it is designed to respond to the U.S. Supreme Court’s Caperton v. Massey Coal decision and the public perception of impropriety that is created by judicial contributions made by parties and their attorneys to judicial campaigns.

The proposed rule requires recusal when a party or an attorney has contributed $2500 or more individually (or $3500 or more collectively by multiple plaintiffs or defendants, or by an attorney and his or her law firm) within two years of the judge being assigned to the case.  The text of the proposed rule may be found here.  The rule is open for public comment until April 29, 2011. 

The consensus on the legal blogs I’ve read seems to be that this is (and should have been) a "no-brainer".  I haven’t seen which direction Texas is headed on this issue, but reading about this New York rule reminds me of the 60 Minutes episode that aired in the 1987-ish time-frame asking the question of whether justice is for sale.

Once again, a court of appeals has weighed in on the question of calculating net worth for purposes of supersedeas.  The Dallas Court of Appeals recently held that a trial court did not abuse its discretion by refusing to include the judgment as a liability in calculating the judgment debtor’s net worth.  The court relied on the fact that there was expert testimony that the judgment should not be included under generally accepted accounting principles.  Noting the standard of review was abuse of discretion, the court of appeals held that the trial court did not abuse its discretion in excluding the judgment from the net worth calculation because evidence was presented that supported the trial court’s ruling.  The opinion does not answer the question of whether a trial court has discretion to include the judgment amount as a liability.  It seems the answer turns on the evidence presented to the trial court.  The court of appeals’ opinion in Anderton v. Cawley can be found here.